NEED , WANTS and DEMAND
Benefit Positioning v.s. Brand Matrix
* Pioneer in Fast-food industry
* Increasing population in the Philippines
* Increasing number of working mothers that need to give food to their children given the time they have * Increasing number of single parent household
* Raising demand in fast-food market
Jollibee Daily Production:
* The chicken marination line can produce as many as 150,000 pieces a day * 480,000 burger patties a day is turned out by the frozen patty line * The pie line can produce 157,000 pocket pies in a 20-hour operating day Product Category:
Price Difference among Competitors:
Pricing Strategy Analysis:
Relatively, the solo products of McDonald’s are relatively cheaper by P 2-5. The combo meals of Jollibee are cheaper by 10% compared to McDonald’s. As for the chicken, though the price of Jollibee is cheaper than McDonald’s but their chicken size is bigger.
Jollibee was able to attain a competitive advantage in Philippines over McDonald's by doing following things: • Jollibee was the first to enter the market.
• Retaining tight control over operations management, which • Allowing it to price below its competitor.
• Having the flexibility to cater to the tastes of its local consumers. As Jollibee entered international markets, it faced new challenges. The fast food industry is highly competitive and price wars and marketing innovations are seen frequently. The rivalry is also centered on the key success factors of the industry, which are good food, good, service and reasonable pricing. Rivals are somewhat equal in capabilities and opportunities, thus making the competition stiffer. Internationally well-established players like KFC and McDonalds had high brand values that Jollibee found difficult to compete with. The threat of substitute products is considerable. Local street food and high-end restaurants form two ends of a range of substitutes. Potential entrants face entry barriers that will hinder them from entering the industry. These are the inability to gain access to technology and specialized know-how, brand preference and customer loyalty, capital requirements, economies of scale, and strategically situated distribution channels. Financial Management Perspective
Jollibee's sales, net income, operating income, and royalties and franchise fees has been increasing rapidly for the period under study. The total number of stores increased 65% to 205 from the end of 1993 to the end of 1996. By 1996, sales had increased to 8.57 billion which translates to a market share of more than 50% among all hamburger fast food chains. Total assets increased over 230% in the same period. Moreover operating income increased about 114% while net income increased over 100% during the same period. These increases are dramatic. Significantly Inventory decreased from about 11.5% in 1992 to just 7.5% in 96. This implies that less of the current assets were tied up inventory. During the same period the trade accounts receivables has increased from 8.4% in 1992 to 12.7% in 1996. Jollibee was able to compensate for this increase by corresponding increase in sales and hence this need not be a cause of concern. On the other hand, all is not well with the financials of Jollibee. There was 28.9 million pesos of long-term debt outstanding at the end of year 1996. Cost of sales has increased each year with an increase of about 46% from the end of 95 to the end of 96. But during this same period, total sales only increased about 28.7%. This escalation in the cost of sales must be brought under control Accounts...
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