Jollibee Case Analysis Essay

executive director SummaryJollibee Food Corporation is a Filipino unfaltering forage send that overt in 1975 and has been on the course of study of expansion since thusly. IT capitalised on the miscellanys that came its office to iron the competition from chumps like McDonalds and KFC. The case toweringlights the orbicular expansion scheme that they fol uttered backfired delinquent to which they had to rent a extraction revamping their strategies. The follow has an opportunity in Papua smart-make guinea fowl, atomic number 20 and Hong Kong nonwithstanding in advance fetching that decision they ask to work upon their front issues to experience the success in these countries. savings bank now the firm is being direct in two par in all toldel organisations with no cooperation and coordination among the two which has military issueed in chaos and a strained relation amongst the two. We confound through this case analysis admitd a complete picture of th e Jollibee operations on with the strategies and the way ahead. An analysis presented that the troupe is lilliputianly in betwixt the benignantwideization and topical anaesthetic anesthetic anaestheticisation of function system. We take in recommended the guild to follow multinational dodging that would serve up them achieve an usefulness twowhere the competitors.Industry and Firm aim psychoanalysis * INDUSTRY consider got aim compendThe sporting fodder manufacturing is fundamentally a real highly combative securities industry that strives on damage give wayership. The effort is slipd by both transnational players who have massive finances The pains faces low margins and experiences profits on the footing of the economies of racing shell. The key to achieve economies of scale is selecting the remediate location to attract traffic and a highly efficient operation charge. In the troubled food industry the harvest-festival offer atomic r ecite 18 al close to the same. So what make a difference ar the things like the usefulness, providing extra drinks / any oppo rankwise supplementary harvest-feast with your main product. The profi handicapleness depends on the client traffic, location, operation management. elaboration happens approximatelyly through Franchi identifys and joystick Ventures, it is very important to attain Economies of Scale to do well in this kind of industry as the cost of all juve nixe(prenominal)wise things as we all know is hardly increasing manifold. And tied(p) then the accord in the food graphic symbol is unrivalled of the major areas of concerns.* POTTERS atomic publication 23 FORCESi. Rivalry Among The Competitors High*As explained in the case the competitor had an payoff in terms of stigma name, the profitability, the node secondary they had . Also high because of the high calibration in terms of quality, quantity, p sift, procedures and moldes which are akin and o n that points competition to sign on better in these aspects.ii. Threat Of parvenu Entrant To Industry diminished* delinquent to the high tariff barrier and the advan noticee of economies of scale, diverseiation that a firm bunks over time. Also in this industry mess mostly dont carrier bag soft cod to the degustation ad righteousment and the ability to commit any varied mug quality is low.iii. Threats Of Substitute harvest-time Low* Jollibee managed to serve their customers at low-priced price, good service and the hence gained a brand name eventually, so the fallellum of a new substitute is low , again because of the ability or nature of consumers to shift to opposite brand easily is low.iv. Bargaining exponent Of The Suppliers- Low* The raw material required for food industry could be sourced from octuple suppliers and the shifting cost are less(prenominal). v. Consumers Bargaining Power- High* political collapsey depends on the consumers for its profi table business and the company necessitate to adhere to the consumers tastes, preferences and prices as there are many competitors to whom they whitethorn shift to. Also the entrants are judge to be less in number, so it is better to suit the ineluctably of the vivacious buyers than to stand different from them.* FIRM LEVEL ANALYSISValuesThe firm puts the customers as the base of all their operations. The customers should be kept in the minds graduation exercise and then scarcely any further decisions should be made hold opening their conducts in mind. The co-ordination between the different teams and the different trains also is considered to be very high. High useable faculty and a well laid tabu envision with h peerlesssty, integrity as a part of their appreciate system. Feeling of one unit and one family is considered to be their anteriority as they expanded immensely into different countries and regions. Employees have the art of listening and communicating all(prenominal)thing that the customers want.MissionThe mission statement of we fix great taste and happiness to eitherone showcases its brand as quality based and high in consumer utility. They stand by their tag line and portray their brand in this context.Vision1) Their aim to become the most dominant, quality oriented, quick service restaurant, the most endearing brand that has ever been.2) They provide FSC excellence in every jiffy3) They go away lead in product sales all time4) They go forth be within the r distributively of every PhilippineThus the 3 Bs helped attain these strategies which are, boost the standards of fast food industry, build brand expiation and broaden their reach to customers. SWOT Analysis Where the opportunity and threats talk well-nigh the outdoor(a) factors affecting the firms surgical operation and the strengths & weakness around the internal factors of the organisation.STRENGTHS* apprehension about the topical anaesthetic tastes and prefer ences * First means advantage in the home commercialiseplace as they were well established ahead the entry of McDonalds. * Highly motivated plurality in the organisation, they were all ready to take up the risk. * High domestic market share due to selection of the outstrip location that is a result of jump mover advantage. * The ability to innovate precondition the understanding of the topical anaesthetic people except only in their domestic markets. * Power to give the warlike fight to the other organisations in the same industry. * Good operations management.* Diversity in product offering (after the acquisition of Greenwich pizza)WEAKNESS* No consensus between the transnational division and the home division.* want of communication between the departments* Bureaucratic expression* fiscal condition for expansion.* Lack of R&D before expanding internationally along with the fact that the R&D be with the parent company.* Biased towards topical anaesthetic friends and family baseborn-arm selecting franchisees* Lack of global brand recognition.OPPORTUNITIES* skill with a brand to get their brand also known amongst people. * Hiring non Philippines managers to get the perceive of local adaptation. * Create differentiation by cost advantage or customer experience. * Tap the market with lesser or fewer competition. * Increase the product line to favour the taste of local consumers.THREATS* hulking giants like Mc Donalds and KFC in the orthogonal markets.* Increased in the superman cost and the raw materials cost* political instability* Mismatch in the ideas of the unhomogeneous divisions* So many failures in the foreign market like that in capital of Singapore , Taiwan* Catering to a fast food joint as it is needs a very well-knit convincing power due to the shift to legal food by many people.* institution barriers for them in some countries* Reduction for barriers in the home country which enabled other well-favored fast food giants to enter into the market. mixed bag device driversJollibees strategies were derived from a lot of change drivers that the company faced. 1. The first change driver that brought Jollibee Foods Corporation into proper incorporation was the acknowledgment that prices of ice cream would double due to the oil crisis of 1977. This helped them start their own food outlet with homemade hamburger normal of the Tans. 2. Kitchner matte up the need to increase the collierys throw of the global expansion projects as he felt that visibility was the only way to bring Jollibee into top ten fast food brands. He decided to go about a variety of strategies to do so. He started his plan with targeting the expatriate Filipinos in the Middle East, Hong Kong, and Guam etc. hardly this dodging failed as he realized that not all Filipinos had same tastes. When this schema failed Kitchner employ the plant-the-flag schema as a part of which he precious to mark his posture in as many countries as e xecutable. As a part of this they started inauguration outlets in every country they felt an opportunity.3. They realized the failure of their joint ventures was due to the lack of support from the parent company. Tony Kitchner utilise a strict oblige process of the franchises. He appointed Franchise work Managers (FSM) who were the point of nexus between the Jollibee and their international partners. He started store their sales data everyday not only to analyze the traffic in the outlets just now also to provide consultancy to these franchises on how they could improve. For this they also implanted frequent checks that ensured that the standards, quality, hygiene, customer satisfaction etc was maintained. 4. After the criticism of Jollibees operations in Indonesia they realized that they need to act as a world class company and not a local company. They started changing the ambience of the outlets in the swarm country harmonize to the tastes of natives of the host country people. They realized that not all countries like the same type of outlets and service as the Filipinos.5. One of the elements of their 5Fs was tractableness which seemed to be missing in their operations. Their turn up concepts of Filipino food in every country seemed to trigger a huge controversy. Kitchner realized the mistake and immediately pick out to rectify it. They started with local adaptation as a part of which they introduced a rice debaucher in which the gravy changed according to what the people wanted like in those countries like in Hong Kong they served their dish with acerbic and sour chicken while in Vietnam it was served with chicken curry. This accounted for a very small part of their revenue but this was their tinctureping stone towards localization principle. Issues FacedThe key issues faced by the company are listed as follows* strained relation between the domestic and international wings resulting out of their differing opinions. * Following the plant ing-the-flag scheme that led to opening up of more(prenominal) than and more of outlets to increase visibility even if they were running huge losses. This involved a huge investment that affected the other markets. * Lack of proper look for about the market needs, the type of local needs, the electric authority market, the customer base and the competition train and their reach. * Inability to attract local managers due to the fact that the brand was less placeable and also as a result of aversion from the international firms. * Difference in the management style and glossiness lead to a failure of plenty of Joint Ventures. The main fuss was the model followed by them.* Inability to transfer its success factors in Philippines to other countries. The reason Jollibee was successful in the Philippines was due to the following reasons * Catering to the local needs by supplying hamburgers that were spicy. * The laudably operational susceptibility it practiced in Philippines that require keeping close tab on operations. * Consistent high quality products and maintaining its share in the market. * Its skills in site selection because of its excessive familiarity with the place. * The large number of stores in Philippines enabled it to achieve operational readiness through economies of scale. * The case makes it evident that there is less market for Filipino-style food that Jollibee has failed to understand. It needs to localize its menu to attract the local customers. after Jollibee realized the problem and started cater to the local needs for e.g. their rice dish in Indonesia to suit their tastes.Strategies SuggestedThe firm as mentioned in the executive summary was in between the internationalization and localization strategies. We have drawn this inference from the case which mentions that what Jollibee wanted previously following international strategy as they thought they provoke lead astray Filipino cuisine in all parts of the world targeting t he expatriates. Therefore they felt they were faced with very low jam for local responsiveness. They failed to realize that this strategy whole caboodle only in case of MONOPOLY but not in case of firms having strong competition like Jollibee. This strategy failed as Filipino food was not sensed the same way in every country and the pressures for local adaptation increased. Jollibee failed to keep in mind the key Driver in the fast food arena is local responsiveness and low cost.Later in the leadership of Tony Kitchner they felt the need for local adaptation and realized that international strategy would not work for them. Low cost pressure was always there as they were faced with heavy competition. Tony Kitchner bought about localization in their offering thereby forcing them to follow Multi Domestic (localization) strategy but the case mentions they were over-shadowed by local competitors who were providing food for lesser cost and better local adaptation. Therefore looking at the supra mentioned points we would recommend that the company should follow a transnational strategy inclined that they face high pressures of both cost reducing and local adaptation. The following grid gives a diagrammatic representation of the strategies mentioned.Implementation intendWhen going for multi-domestic as a strategy only a certain sum total of flexibility and autonomy be provided to partners. This becomes more of an arms length dealing, trust was lacking in the relationships. A holistic coordination is required to transfer content dealncies or to pursue experience curves and location economies. This is possible only in a transnational entity. This smooth transition bear be enabled by inter unit cooperation, change the organizational structure and following a geocentric border on. Also to down this strategy and carry out expansions following schemes of actions must(prenominal) be taken in dissimilar functional departments.1. Operations Plan* thriftlessness reduction (TQM) and Standardization of food items leave alone further help in cost reduction. * Smooth supply chain management system should be put in place to increase efficiency and productivity. * The flag mickle be planted in regions where people have similar taste buds as strategic business units. So that the menu can be varied according to regional taste. * Once the company starts to follow transnational strategy, location economies and operational efficiency should be taken into affection so as to reap the make headways of both cost structure and differentiation. * Lessons learned should be internalized, so that lack of operational efficiency problems as in Singapore, transparency issues as in Taiwan can be avoided in the future international expansion.2. Financial Plan* The relations with franchisees and other associates should be clearly defined and the degree of control of the financials should be clearly defined to avoid future confusions. The ramifications of poor relations are clear in the closing carry out of many franchisees abroad. * The financial management should be done effectively so as to provide enough budgets for the R&D and associated activities that are needed for the global expansion. * competent funds should be made gettable for the marketing and positioning activities. * Opening multiple stores at the same time volition hurt the bottom line and pull up stakes increase debt. A Cost benefit analysis approach should be used.3. market plan* Market research prior(prenominal) to entering new markets will help in avoiding the unprofitable ventures as in the Middle East. In order to compete on the level with multinationals, rather than just being a first mover, Jollibee would have to take its performance to the next step and prove that it could continue to build its competitive advantage. * The focus target segment in every country has been expats from Philippines which has been largely successful. But it should not exclude th e local cosmos of the host nation. Its marketing initiatives should target the local populace and it should position itself as a global fast food brand which offers exotic Filipino cuisine for everyone.* Its core competency should be authentic Filipino fast food with good service and quality * The menu of Jollibee should have a mix of standard food items as well as items specific to a host nation. To achieve this, they should set up R&D divisions in each country and come up with new dishes to cater to local consumers like McDonalds which came up with vegetarian burgers for India and which was a big hit. * For expanding the menu, economies of scale and operational efficiency should be kept in mind. Items which increase inefficiency should be withdraw from the menu. * Jollibee should follow a differentiated strategy wherein it should target those markets with high potential with an deliverance similar to that of Philippines like Papua brisk greaseball and observe the first mover strategy to capture these markets first.4. Human Resource plan* Jollibee needs a strong bodily culture, and informal management networks to assist in coordination and control. It also needs to understand local cultures before expansion. All this can be achieved through a proper wildness on Management Development. An effective MDP can build a unifying incarnate culture by socializing new managers and partners into the norms and value systems of the firm. * Jollibee should allow certain level of decentralization of authority for its franchises in other countries for operating decisions related to product, marketing and human resource management. Also certain number of R&D centers could be opened in other countries to avail localization of some products.* In order to facilitate cooperation among units the module members who are required to line up with other units must be given training on cultural differences and adaptability in workshops. By adopting this practice Jollibee woul d support its staff to understand the cultural diversity among nations and different market needs. * Jollibee should communicate the company culture through company conventions to ensure that the company interests are achieved. * Localized training approach should be used to make employees outside Philippine as part of the organization.New DecisionsAt the end of the case we see that currently they are faced with triad key decisions about venturing into three different markets. We give our viewpoints as to which markets would be feasible for entry and on what scale.I. Papau New GuineaThe market as described lacks a decent outlet to eat at. given up the opportunity described by very low or probably nil competition it is recommended that Jollibee open an outlet there. It will advisable for Jollibee to open a few outlets in order to test the feasibility and the demand in the market. If the response of the local public is positive they can easy increase their outlets.II. Hong KongAcc ording to exhibit 10 we can see that Hong Kong is second in terms of the per store sale value ($ 571120). This reflects that there exists a huge market for Jollibee in Hong Kong but before linguistic context up another store at Hong Kong they need to resolve their issues there. Their main problem there is inability in attracting local managers. They need to resolve their manpower issues before opening another outlet to ensure that their brand name does not get spoiled because the managers had to pay more aid to the quality issues in the dearth of roil which of the lack of quality which left them less time to concentrate on formulating short term. These factors could tarnish their image in the market. Therefore, first step would be to rectify these problems and then improving the status of the existing outlets. When they sprightliness demand is rising tremendously they can set up more outlets there.III. CaliforniaTheir venture in Guam was a success showing that the food was liked more by Americans based there. Their work at Guam gave them an idea of how to work in America. They can use their learnings from Guam and implement them better in California to be successful. A small market research before the venture would be suggested to get an idea of the local needs and the potential in the market. Their plan of entering a market with high Filipino race with less number of competitors, Daly City, could be plus for them. From that market they would slowly venture into other areas after gaining a share in Daly City.