Republic of the Philippines
ACES POLYTECHNIC COLLEGE
Tadeco Road, San Francisco, Panabo City
A Written Analysis of the Case
(Name of the company)
In Partial Fulfillment of the Requirements
MERY JOJI C. PANTINOPLE
MATTHEW LARR G. ESTOPEREZ
Name of student
July 5, 2008
BACKGROUND OF THE STUDY
The case gives an idea about how the competition influenced Jollibee's strategy, both domestic and international. Jollibee ,which was a Filipino chain of restaurants, was forced to change their strategy with the entry of McDonalds in Philippines, which later transformed the company into a global company .The company faced serious challenges with their international exposure. The challenges included the conflicts with franchisees/Joint venture and conflicts between divisions. Another issue that the company faced was the entry into Papa New Guinea, United States of America and expansion plans in Hong Kong. The company has to consider the financial instability it faces while considering their plans. In the analysis we have tried to cover the effectiveness of strategies adopted by Mr. Tony Kitchner (Former International Division head).
This case analysis report deals with, firstly the key management challenges faced by the company, followed by some supporting arguments. In the management issues, the report focuses into the conflicting areas or the need to establish a greater cooperation and coordination between the Domestic and International divisions.
STATEMENT OF THE PROBLEM
Being an agricultural country, full integration in sourcing raw materials could be done. For international markets, locating commissaries in the same country through joint ventures could be a potential source of success for the company. Jollibee could facilities had the idea to be the first -mover into untapped markets as he believed that although you may incur losses in the initial years, which can be cross subsidized from Philippines operation, the company will be able to restrict the entry of its competitors. But these do not show the whole picture of his strategy implementation. There were instances of shutdown of stores due to mounting losses .The chaotic strategy of investments unsupported by proper research failed costly for the company. His strategy of targeting expats had the risk of targeting a narrow segment. The lifestyle, tastes and preferences of the expats was also not considered during international expansion.
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.
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