Suppose you have been appointed like a marketing consultant for Jollibee. As part of the international expansion plan, the supervision wants one to prepare a report to identify marketing opportunities. The report should certainly cover the following information: a) Identify 3 potential marketplaces for enlargement Jollibee Food Corporation (JFC) is banking on franchising and abroad expansion to continuously enhance its income in the long run. The aggressive growth program is line with doubling the company’s revenue in five years, firm officials said.
JFC plank chairman Tony Tan Caktiong said the best business mixture is 50-50 for franchising and company-owned expansion. JFC’s branches outside the Philippines are all company-owned, other than those at the center East. In the Philippines, 45% of the shops are company-owned while 54% are franchised.
For its abroad expansion, CEO Ernesto Tanmantiong said the quick-service restaurant chain plans to expand its global footprint simply by putting up stores in Malaysia, Myanmar, Europe and Japan after five years because we need to give attention to China as well as the US. JFC is usually branching in Canada the coming year while the company is still studying prospects in Indonesia, one of many fastest growing economies in Southeast Asia.
The potential marketplaces for expansion are the subsequent: b) Standard information about the potential markets (geographical location, capital, population, per capita cash flow, literacy rate, language spoken) Geographical Location Jollibee started with five divisions in 1978 and has grown to a strong network of a total of 801 stores in the area, and 96 stores internationally. In total, Jollibee has 896 stores worldwide as of The fall of 2013. It’s the largest take out chain in the country with international locations in Brunei, Hong Kong, Philippines, Kuwait, Malaysia, Qatar, Saudi Arabia, Singapore, Vietnam, the United States, and Canada.
JFC is going to expand Jollibee to other markets like Europe. Asia The initial Jollibee part in Vietnam was opened up on October 1996 with the Super Bowl in Ho Chi Minh City. Thus far, Jollibee recieve more than 31 stores in Vietnam, they are located in the cities of Ho Chihuahua Minh, Hanoi, Da Nang, Nha Trang, in the provinces of Vinh Phuc, Dong Nai and provinces in the Mekong Delta Region. In Hong Kong, there exists currently one particular branch located in Central. At the moment, it is in the process of being refurbished, while the starting of a second branch in the country is currently under consideration.
As of end-September 2012, Jollibee was operating 2, 040 stores in the Philippines for every its brands: 765 intended for Jollibee, 383 for Chowking, 201 to get Greenwich, 209 for Crimson Ribbon, 457 for Mang Inasal and 25 pertaining to Burger King. PAPUA NEW GUINEA: There are five million people in Papua New Guinea with extremely limited take out options. Jollibee can come in make a high standard, attract a large number of customers, and scare future investors apart. However they would need to quickly put three to four shops to be competitive and cover costs.
There were also issue as to whether the location could take care of 20 stores. Either they are going to get the first mover benefits or they may sustain enormous loss. Since the benefits proposed by the local spouse are unsure and income potential can be low, Jollibee should not seek to enter Fresh Guinea at this point.
HONG KONG: In Hong Kong, Jollibee are located around a very densely populated location, which has a incredibly loyal Philippine customer base. They gave them great organization on the trips, but sales fell off during the week because the neighborhood Hong Kong people rarely seen the Jollibee establishment. Likewise, there were incredible problems with the Chinese shops. All of the managers resigned and many employees leave because the Chinese language like to improve Chinese. There were obvious chaffing between the Oriental and Filipino’s.
While the last store in Hong Kong signifies a valuable learning opportunity, you will not regret generate the revenues had to build a global empire. Wedding caterers to the local Chinese colour pallette would allow Jollibee to build it is competitive advantage by understanding how to balance versatility in menu offerings with consistency through the global manufacturer. Additionally , a hit in cosmopolitan Hong Kong could give Jollibee the brand publicity it needs to draw better companions. However , offered the staffing requirements issues and uncertainty relating to the local Oriental customer, it will be better for Jollibee to improve its current operations, rather than to make additional methods to a fresh store.
CALIFORNIA: It will be an excellent idea to target the Oriental community living in U. S and Cal is the best place to start from. The extreme competitive ambiance of US junk food market provides Jollibee tremendous opportunity of global learning. Furthermore, they also discovered that there were many elements of their restaurants that become a huge hit to Americans.
Similarly, there was clearly great support from Filipino-Americans. Likewise, Jollibee was going to increase throughout A bunch of states before it moved east. They were decided to gain reputation. Another useful aspect is definitely the diversification of America.
In different given town a person can find Chinese, Italian, Greek, The spanish language, Japanese, American, German, Gloss, Indian, and other ethnic eating places. Americans want to try meals of different civilizations and there is no reason to think that we will never try Filipino food. There is very little reason to believe that Jollibee are unable to successfully your fast food industry in the United States. But on the other hand, United States houses some of Jollibee’s most formidable competitors. Like a late-mover, it will be difficult to get Jollibee to get access to the distribution stations, suppliers, and store places which allowed it becoming a cost leader in the Philippines.
Additionally , aside from its encounter in Guam, Jollibee would not have any kind of real knowledge operating in a Western organization environment. c) Specific info on each market (legal and ethical requirements, market trends, competitors, scale the market, potential sales volume) Legal and ethical requirements When market segments in international countries give a higher profit potential than your home marketplace, it makes sense to expand internationally. As you ready your expansion and research concentrate on markets in other countries, you will frequently find that the legal structures and ethical frameworks change substantially by those in the United States. You have to address the legal and moral issues of your entering these kinds of markets to generate your growth a success.
Traditional Small Scale Bribery- involves the payment of small sums of money, commonly to a foreign official as a swap for him/her violating a few official responsibility or responsibility or to acceleration routine authorities actions (grease payments, kickbacks). Large Scale Bribery- a relatively large payment designed to allow a violation of the law or perhaps designed to effect policy indirectly (eg, personal contribution). Gifts/Favours/Entertainment- includes a range of items including: lavish physical gifts, contact girls, opportunities for personal travel around at the company`s expense, gifts received after the completion of purchase and other luxurious expensive entertainment.
Pricing includes unfair differential pricing, questionable invoicing where the buyer demands a crafted invoice displaying a price apart from the actual cost paid, prices to power out local competition, dumping items at rates well under that in the house country, pricing practices which have been illegal in the home country nevertheless legal in host country (eg, cost fixing agreements). Products/Technology includes companies technology which might be banned use with the home nation but permitted in the host country and/or appear unsuitable or inappropriate for use by people of the number country.
Duty Evasion Methods used specifically to avoid tax just like transfer costs (i. elizabeth., where prices paid among affiliates and/or parent firm adjusted to affect revenue allocation) including the use of tax havens, in which any revenue made is in low taxes jurisdiction, modified interest payments in intra-firm loans, questionable supervision and assistance fees billed between online marketers and /or the mother or father company. Illegal/Immoral Activities in the Host Nation practices such as: polluting the environment, retaining unsafe functioning conditions; product/technology copying where protection of patents, logos or terme conseille has not been forced and brief weighting international shipments in order to charge a country a phantom weight.
Sketchy Commissions to Channel Members unreasonably large commissions of charges paid to channel people, such as sales people, middlemen, consultants, dealers and importers. Ethnic Differences between civilizations involving potential misunderstandings associated with the traditional requirements of the exchange process (e. g., transactions) may be deemed by a single culture as bribes nevertheless be acceptable business practices in another lifestyle. These procedures include: gifts, monetary repayments, favours, entertainment and politics contributions.
Participation in Political Affairs- related to the mixture of marketing activities and governmental policies including the pursuing: the exercise of personal influence by multinationals, participating in marketing activities when possibly home or host countries are at battle or illegal technology transactions. Market styles Competitors Total sales of JFC claiming 65% market share is Php 82 billion dollars. The total business is Php 126 billion dollars Potential product sales volume Regional fast food big Jollibee Food Corp. grew its 2013 net gain 24. 5 percent year-on-year to P4. sixty four billion as sales from its restaurant network here and abroad expanded by a double-digit pace.
Inside the fourth 1 / 4 alone, JFC’s net revenue rose by simply 20. three or more percent year-on-year to P1. 52 billion dollars. System-wide retail salesa measure of consumer sales from company-owned and franchised storesgrew by 13. on the lookout for percent in the fourth one fourth and by 12. 8 percent for the total year, to P28.
87 billion and P104. one particular billion, correspondingly. The full-year retail product sales growth noticeable the highest charge of rise in organic product sales in six years and allowed JFC to break the P100-billion mark the first time, JFC key operating officer and inbound chief executive officer Ernesto Tanmantiong stated in a statement. Apart from developing its sales volume and distribution network, JFC as well unlocked bigger margins by simply improving the operating performance of it is growing retail store chain.
Net gain margin for 2013 increased to 5. eight percent by 5. a couple of percent the prior year. JFC opened an overall total of 98 stores inside the fourth quarterthe highest quantity opened in one quarter in the company’s 35-year record. It finished 2013 with an international store network of two, 764, which 2, 181 are in the Philippines. Our progress in building the company has been going on across the brands in different countries.
In the years forward, we look forward to further conditioning our brands and accelerating our profitable growth by keeping our strong focus on the fundamentals of our business for the main benefit of our buyers: Superior merchandise quality and taste, value, service, restaurant experience and store locations made possible by simply an even stronger JFC corporation, Tanmantiong said. Intended for 2014, Jollibee has reserved P6. a few billion in capital spending. It will be accustomed to open fresh stores and renovate older ones.
The budget is more than the P4. 1 billion dollars capital items in 2013, when the business opened 235 new stores. In the next quarter of 2013, system-wide sales in the Philippines exclusively rose by 12. two percent, whilst business grew by nineteen. 2 percent in Chinese suppliers, 17.
2 percent in the us, and thirty five. 3 percent in Southeast Asia as well as the Middle East. In Southeast Asia, growth was led by Vietnam, where organization rose simply by 40. 2 percent. Same store sales across the global network for the fourth quarter grew by 8-9 percent year-on-year on higher customer targeted traffic and purchases per store.
With higher net revenue last year, JFC’s return upon equity superior to a 15-year high of 21 years old. 3 percent from the 18. 3 percent seen in 2012. Aside from the range topping Jollibee company, JFC runs Chowking, Greenwich, Red Bow, Mang Inasal and Burger King.
In Chinese suppliers, it runs the Yonghe King, Hong Zhuang Yuan and San Pin Wang chains. That likewise contains a 50-percent share in the partnership operating Highlands Coffee (in Vietnam and the Philippines), Pho24 (in Vietnam, Indonesia, Thailand, Hong Kong, Macau and Cambodia) and doze Sabu (China). d) An assessment of external elements for each market (PEST analysis) The general environment consisting of six segments as well as the analysis of its effects on Jollibee is as shown below. Market In the local Korea context, the million buyers walking in Jollibee’s stores daily represent strong with regard to its products. The uniqueness in the geographical scenery of Thailand has also achieved it a challenge intended for fast-food companies.
Globally, there are many Filipinos workers situated in the overseas industry, especially in the Us where there are estimated to be around 2 million Filipino immigrants. Besides the US, a large number of Filipinos are situated in regions of Asia including Hong Kong, Brunei and Philippines. Not restricting to Filipinos, their shops have also attracted other Asians to eat by their eating places.
Economic The growing economical capabilities of developing countries have attracted major players in the fast food industry to determine their shops there. Also for Jollibee, the developing market choices in Indonesia for Chinese food allowed Jollibee to venture into the market by introduction of Chowking Brand. The potential Chinese suppliers market pertaining to fast food likewise led Jollibee to acquire eighty-five percent possession in Yong he King Chain.
Sociocultural The sociable and social of each region differs in one another. For example , a Chinese might prefer to have noodles instead of rice in Japan. In our circumstance of Jollibee, the langhap-sarap concept adopted by these people may be massively popular to Filipinos customers, but idea may not do this well in global markets. Overseas consumers might not like the traditional taste of Jollibee’s food, as compared to bigger global players such as McDonald.
Global The ever changing global landscape is among the critical elements Jollibee has to consider. As illustrated in case study, Israel have seen main global players entering the fast-food industry having a undertake this cake. Although Jollibee have always been the dominant through this segment, competing in international markets seems to be in a different story.
Not simply they have to sink into the foreign industry with their verified and successful local recipe, they would also need to compete against already set up players such as McDonald, Wendy’s and KFC. e) Estimation the costs, risks, financial stability for each industry. Papua New Guinea: Bringing up the Standard At the begining of 1996, at the recommendation of Quality Assurance Administrator Gil Salvosa, a local Fresh Guinea businessperson in the fowl business got into contact with Tony Kitchner about a Jollibee franchise. This individual described a country of five million people served by only one poorly been able, 3-store fast-food chain, that had just lately broken ties with its Aussie chicken cafe franchise.
Port Moresby would not have a single decent place to eat, he told Kitchner. He presumed Jollibee may raise the service quality and foodstuff enough to take much of the Australian chain’s market share while disheartening further entrants. Although the first plan had been to open just one single store inside the foreseeable futurein the capital, Dock MoresbyTingzon was certain that the franchisee could only cover the costs of developing the industry if this individual put in in least three or four stores right after. But having been uncertain whether Papua New Guinea may support the 20 shops that this individual saw as the target important mass for new markets. (For comparison, in the Philippines, about 1, 2 hundred fast food outlets competed to get the business of 75 million people.
GNP per household in both equally countries was almost in US$2, 500. ) Hk: Expanding the Base Also in Tingzon’s menu was a pitch to expand to a fourth store in Hong Kong. The franchise, possessed by Jollibee in partnership with neighborhood businessmen and managed simply by Tommy King, TTC’s brother-in-law, opened it is first shop in Sept 1996 to instant, mind-boggling success. Located near a serious transit centre in the Central district, it probably is a gathering place to get Filipino expatriates, primarily home workers. Nevertheless , appealing to the locals experienced proven more difficult.
While volume level was at the top of weekends, when the Filipinos came to Central to socialize, it fell off during the week, when business was generally from local office workers. Even though two even more stores in Central had attracted many Filipinos, that they both counted extensively in Chinese consumers and made sales of only about a third of the 1st outlet. One particular problem was that, despite strenuous efforts, Jollibee had been struggling to hire various local Chinese language as team members. Relating to one supervisor, Chinese buyers who did not speak English language well were worried that they would be uncomfortable if these people were not recognized by the predominantly Philippine and Nepalese table staff.
An additional problem was that in a town dominated by simply McDonald’s, Jollibee’s brand acknowledgement among people was weakened. Working with Henry Shih, the sub-franchisee who have owned the 2nd store, Jollibee staffs were trying to help launch a thematic marketing campaign, but due to the Hong Kong operation’s small size, the business could not utilize sufficient cash. California: Promoting the Settlers Soon after putting your signature on his deal, Tingzon acquired learned of year-old want to open one Jollibee shop per one fourth in California starting inside the first quarter of 98.
Supporting TTC’s long-held idea that Jollibee could earn enormous prestige and publicity by simply gaining footing in the birthplace of fast food, Kitchner experienced drawn up ideas with a number of Manila-based business men as 40% partners in the venture. As soon as the company stores were established, they expected to operation in Cal and further than in 1999. Much of the confidence for this bold growth plan originated in Jollibee’s success in Guam, a terrain of the ALL OF US.
Although they in the beginning targeted the 25% of the population of Filipino removal, management found that their menu appealed to other categories of Americans based there. In addition they found they could adapt the labor-intensive Philippine working methods by developing different equipment and cooking procedures more in keeping with a high labor cost environment. In the phrases of one International Division seasoned, In Guam, we learned how to conduct business in the United States.
After succeeding presently there, we sensed we were looking forward to the mainland. The program called for the first retail store to be found in Daly City, a community which has a large Filipino population although relatively low concentration of fast-food competitors in the San Francisco area. (With more than a million immigrants from your Philippines living in California, most relatively wealthy, this condition had one of the highest concentrations of Filipino expatriates in the world. ) The menu will be transplanted from the Philippines with out changes.
Following initially concentrating on Filipinos, the routine was to branch out geographically to the S . fransisco and North park regions, and demographically to appeal to other Asian-American and, ultimately, Hispanic-American consumers. The hope was that Jollibee would after that expand for all consumers through the entire U. H. Like the enlargement strategies in PNG and Hong Kong, this kind of project acquired momentum behind it, including visible support via Filipino-Americans, solid interest of local buyers, and, certainly not least, TTC’s great desire for succeeding in McDonald’s back-yard. f) Get ranking the opportunities in terms of their viability and likely contribution towards the business In line with the corporate internet site, Jollibee International currently offers over 55 locations in Brunei, Hong Kong, Vietnam, Saudi Arabia, Qatar, and U. H. There are now a total of 21 Jollibee stores in the U. S. which includes 9 stores in Northern California, 12-15 stores in Southern California, 1 store in Las Vegas, and one retail store in Ny.
According to Jollibee’s site, the company offers modified its global strategy and ended international franchising momentary. The Washington dc franchise is a success. Since opening the first U. S. store in Daly City in 1998, the company provides expanded all their U. S i9000. presence into a total of 26 stores. The company has the advantage inside the California industry because there are a whole lot new immigrants entering the state of hawaii with 70, 000 Filipino migrating annually. Jollibee currently has only 1 Hong Kong store located in Central, implying that at least two Central stores had been closed as 1998 beyond the Kowloon section store.
Finally, there is no Jollibee presence in Papua Fresh Guinea indicating that efforts to expand to this country are not successful. References: http://www.pinoyinvestor.com/smartinvestor/jollibee-banks-on-franchising-overseas-expansion-to-boost-long-term-earnings-04-aug-2014 http://en.wikipedia.org/wiki/Jollibee http://www.allfreepapers.com/print/JollibeeCase-Study-Analysis/1794.html http://cdn.intechopen.com/pdfs-wm/12111.pdf http://business.inquirer.net/164038/jollibee-13-profit-up-24-5 http://nhobeelab.weebly.com/industry-analysis.html