jollibee foods corp

7/15/2019 Jollibee Foods Corp

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CHAPTER 7 Group

ANTONIO, Arjay

ANTONIO, Elizabeth B.

AQUINO, Herold Hanes

BATARIO, AdrienDARIO, Johanna Mariz S.

FANG-ASAN, Vyan Tantanee D.

LARANANG, Lora May C.

July 8, 2013

Mgmt 12 MWF 12:30-1:30

JOLLIBEE FOODS CORPORATION

1. Laws and Regulations. What are some key laws and regulations under which this

company and the food industry must operate?

The laws and regulations in the food industry is governed by the Corporation Code of the Philippines and also Republic Act No. 8976, also known as the Philippine Food

Fortification Act of 2000.Section 15 of Article II of the Constitution provides that the State shall protect and promote the right of health of the people and instill health consciousness among them.

State recognizes that nutritional deficiency problems in the Philippines, based on nutrition

surveys, include deficiency in energy, iron, vitamin A, iodine, thiamin and riboflavin. To aminor extent, the Filipino diet is also deficient in ascorbic acid, calcium and folate. The

State recognizes that food fortification is vital where there is a demonstrated need to

increase the intake of an essential nutrient by one or more population groups, as manifested

in dietary, biochemical or clinical evidences of deficiency. Food fortification is consideredimportant in the promotion of optimal health and to compensate for the loss of nutrients

due to processing and/or storage of food. Food fortification, therefore, shall carried out to

compensate for the inadequacies in Filipino diet, based on present-day needs as measuredusing the most recent Recommended Dietary Allowances (RDA).

Other laws that govern the food industry are The Right to Adequate Food (Article 11

of the Covenant, UN Committe on Economic, Social and Cultural Rights, CESCR); humanrights instruments relevant to the right to food also form part of Philippine law through the

process of incorporation, a constitutional declaration governed by Section 2, Article II of

the 1987 Constitution; Presidential Decree No. 856, known as the Code on Sanitation of



the Philippines and implementation of Executive Order No. 307 establishing an

occupational safety and health center in the employees’ compensation commission.

2. Economy. How does the state of the economy influence the sales of this company’s

products?

One of the vital forces that gears up the sales of such company is that the sales

growth of Jollibee Foods Corporation is said to be broad-based and volume driven

resulting from the better-value-for-money recognition of the consumers. Likewise, thegrowing market possibilities for countries like Indonesia for Chinese food enabled the

company to venture in by introducing the Chowking brand. Other factors also come in

the form of financial crisis in the region and in the country it is operating in. The

government is a major object of analysis in macroeconomics—for example, studying therole it plays in contributing to overall economic growth or fighting inflation.

Macroeconomics often extends to the international sphere because Jollibee Foods

Corporation is linked to foreign markets through trade, investment, and capital flows.

But microeconomics can have an international component as well. Jollibee FoodsCorporation is not confined only in the Philippines but has also embarked on an

aggressive international expansion plan in the USA, Vietnam, Hong Kong, Kuwait andJedah in Saudi Arabia, Qatar, and Brunei, firmly establishing itself as a growing

international QSR player. Microeconomics of Jollibee concerns itself in such issues like

demand theory, production theory (also called the theory of the firm), and related topicssuch as the nature of market competition, economic welfare, the role of imperfect

information in economic outcomes, and at the most abstract, general equilibrium as the

effects of minimum wages, taxes, or price supports. It has applications in trade,

industrial organization and market structure, labor economics, public finance, andwelfare economics. Microeconomic analysis offers insights into such disparate efforts as

making business decisions or formulating public policies especially policies that

concern the food industry.The state of the economy is conventionally divided into the study of national

economic growth in the long run, the analysis of short-run departures from equilibrium,

and the formulation of policies to stabilize the national economy—that is, to minimizefluctuations in growth and prices which will be a factor on Jollibee Foods Corporation’s

increase or decrease in its sales. Those policies can include spending and taxing actions

by the government or monetary policy actions by the central bank.

3. Technology. What new technologies strongly affect the company you have

selected?

One of JFC’s innovations is the Happy Plus Card which seems to be the

company’s way to condition the minds of Filipinos to adopt Near Field Communication

(NFC) as a part of their daily lives. Near field communication, abbreviated NFC, is aform of contactless communication between devices like smartphones or tablets.

Contactless communication allows a user to wave the smartphone over a NFC

compatible device to send information without needing to touch the devices together or

go through multiple steps setting up a connection. It is a cashless payment (in partner



with BPI) and rewards system for faster transactions. Other technologies include their

cooking facilities, touch screen automated cash registers, and information system for

faster orders and transactions. JFC also provides free Wi-Fi to its customers. This is agreat advantage and strategy to attract customers to eat and/or hang-out at their food

chains because being online social networking nowadays is incorporated in Filipino

lifestyle. Threats for the company may include high tech vendo food machines, andkiosks and restaurants with touch screen devices strategically situated in some cities

and provinces in the Philippines.

4. Demographics. What changes in the population might affect the company’s

customer base?

In the Philippines, the million consumers patronizing Jollibee’s stores dailyrepresent the strong demand for its products. This is because JFC fashioned ways to

match their products to the “lasang pinoy” making it suitable to the target market. The

substantial creative menus with unique Filipino recipes and reasonable price brought

fantastic consumer feedbacks and a good reputation to the company. And it has alreadyChowking which caters to the Chinese cuisine lovers. Globally, there are also many

overseas Filipino workers in the, making the international expansion of Jollibee verysuccessful. Not limiting to Filipinos, their stores have also attracted other Asians to eat

at their restaurants because they really are making their flavors suitable to the country’s

cuisine.

5. Social Issues. What changes in society affect the market for your company’s food

products?

Social issues affecting the company include the dynamic tastes of Filipinos

especially that they are already very knowledgeable about the different flavors of

different countries and are hooked into such. On the other hand, foreign consumers alsomight not like the traditional taste of Jollibee, as compared to bigger global players

such as McDonald’s.

Not only is JFC the one affected by the society but also they taking intoconsideration the values, the system, the tools, and the years of experience that has

made Jollibee what it is today and sharing it with the people they most ascribe their

success to: the everyday Filipino. These values–Customer Focus, Excellence, Respect

for the Individual, Teamwork, Spirit of Family and Fun, Humility to Listen and Learn,Honesty and Integrity, and Frugality–are passed on from corporation to employee to

customer that results in what the Foundation calls “jollifying” communities. Among the

Foundation’s programs, the two major projects are the Busog, Lusog, Talino schoolfeeding program and the Farmers Entrepreneurship Program.

6. Suppliers. How does your company’s relationship with suppliers affect its

profitability?

The availability of raw materials for the fast food industry is readily available not

only locally, but available from neighboring countries as well. For example, due to the



high rice prices in the Philippines, Jollibee can reduce costs and source for rice in

Thailand, Vietnam or Cambodia. The hamburgers served in Jollibee not only provide

superior taste and quality but also farmers realize their dream of better lives for their families. One of Jollibee Foundation’s major programs aims to help small farmers to

earn more and learn new technology. JFC Supply Chain project, now called Farmer

Entrepreneurship Program, Jollibee Foundation together with its major project partners,Jollibee Foods Corporation (JFC), Catholic Relief Services (CRS) and National

Livelihood Development Corporation (NLDC), have agreed to expand the program in

2010 to cover more farmers in new sites. Concentrating in key products required byJFC such as onion, bell pepper, salad tomatoes and rice, the project will continue to

help communities in Bukidnon and Nueva Ecija while adding new partners

in Quezon and Misamis Oriental. The project provides farmers with technical

assistance in the application of effective farming technologies that would ensure their reliability as suppliers.

7. Competitors. What companies compete with the firm you have selected? Do they

compete on price, on quality, or on other factors?

The strongest rival of JFC’s Jollibee is Mcdonald’s. In the global set up, thecompany’s competitors include the Café de Coral Holdings Limited and Fairwood

Holdigs Limited, Kentucky Fried Chicken, and Burger King are the major competitors

of Jollibee Foods Corporation in the global set up. The aforementioned companies andother fast food chains compete as to the quality of food, service time, menu variations

at a low price and product perks (e.g. innovation on desserts). Among the companies, it

can be observed that Jollibee’s products and services would typically cater people of

the younger bracket. JFC is continuously attaining competitive advantage over other fast food industries (especially McDonalds) by providing cheaper products with local

taste. Also, the company has alliances and acquired different fast food companies in the

Philippines (e.g. Greenwich, Red Ribbon, Deli France, Chowking, Yonghe King, C.S.Tea, Manong Pepe’s, and Hongzhuangyuan). JFC is popular in the Philippines because

it introduces fun atmosphere, friendliness and customer focus and the joy and spirit of

family while eating in their restaurants. These support the good family ties and familyvalues which are the most adhering qualities of Filipino families.

8. New entrants. Are new competitors to the company likely? Possible?

New competitors to Jollibee Foods Corporation are likely and possible. JFC has

high economies of scale and brand identification as well as medium incumbent controlof distribution channels; therefore, threat of new entrants is considerably low. In

addition, the company has low incumbent proprietary knowledge and control of access

to materials; therefore, threat of new entrants is high. Also, the company has mediumexperience effects, product differentiation, capital requirements and switching cost;

therefore, threat of new entrants is medium. Overall, threat of new entrants would be

considered medium. New entrants would need to face high entry barriers since they

would have to have high economies of scale, capital requirements and product



differentiation, etc. They would also have to compete against the high standards and

present loyal customer base JFC has set in the industry.

9. Substitutes. Is there a threat of substitutes for the fast food industry’s existing

products?

The threat of substitute products is considered to be just right or in the middle.

Products from competitors such as McDonald’s Corporation, Café de Coral Holdings Limited, and Fairwood Holdings Limited local street food can be considered a major

substitute, as well as food from its direct competitors in the industry.

The fast food substitutes include other forms of food service and retails likeready-to-eat meals and also frozen foods for home cooking. As fast food is cheaper

than any other form of food service, substitutes do not challenge the price of fast food

and the main purpose of fast food does not comply with substitutes as the convenience

factor in fast food goes missing. Fast food has faced many forms of criticism of beingunhealthy while retail food promises to consumers of being healthy. Substitutes also

offer a wide range of products. Therefore substitutes pose a moderate threat to the fastfood industry.

10. Customers. What characteristics of the company’s customer base influence the

company’s competitiveness?

The company’s customer base, the traditional family, ranges from the kids up to

the senior citizens looking for budget-friendly and quick meals. Generally, customersseek for restaurants with light prices, quality products, and convenience through their

services. Their target market being a huge number in the population increases

competitiveness. Customers in the food industry would also look to satisfy their newtastes in shifting seasons and periods. Accordingly, such customers are continuously

attracted to the varying meals, drinks, and desserts of Jollibee.

Sample Responses to Discussion Questions

1. What has the company done to adapt to its environment?

In order to adapt to its environment, Jollibee has continuously varied its products

to match current seasons and customer tastes. Jollibee has constantly equaled with new

market trends such as movie characters which they combined with their products toform Jollibee Kids Meals. From the Annual Report of JFC it states that, “The world is

global, but its tastes are local. People adapt foreign foods but change them to their

tastes. This is natural. Taste preference along with those of aroma, texture, and presentation evolved over hundreds of years, influenced mainly by the kinds of plant

and animal food that grow in their geography. Local preferences are hard to change.

This presents challenges and opportunities for those serving food in many countries.

They should understand and satisfy the local tastes. If they do, they would have new

http://www.hoovers.com/company-information/cs/company-profile.Caf%C3%A9_de_Coral_Holdings_Limited.33569a8fb374784e.html






markets. Their array of cuisines and flavors would also expand, giving them even more

chances to serve a wider variety of food to other peoples in other places. For Jollibee

Foods Corporation, this is one of the meanings of “growth”.” With these statement, it isclear that their strategical plan is of accordance with high adaptability of JFC to its

environment.

2. How does the company attempt to influence its environment?

The company has attempted to influence its environment through its expansionto different places of business in the country, in nearby schools and convenience areas,

as well as in certain places abroad. Jollibee has also provided new and enticing

products to customers that also marked new trends in the market. Advertisements with

popular celebrities in them are major influences to the market. The company has alsoinfluenced the people through family values and the spotlighted traditional Filipino

family image as customers enter their doors.



References:

http://www.franchising.com/articles/fast_food_franchise_industry_is_rushing_to_acquire_t

echnology_tools_that_wi.htmlhttp://www.jollibee.com.ph/investors

http://www.jollibee.com.ph/downloads/reports/2008/annual_2008.pdf

http://nhobeelab.weebly.com/industry-analysis.htmlhttp://technoodling.net/jollibee-formally-introduces-the-happyplus-card-and-why-it-

matters/

http://www.chanrobles.com/republicactno8976.htm#.Udh8yTs3Ck8http://www.lawphil.net/statutes/presdecs/pd1975/pd_856_1975.html

http://www.oshc.dole.gov.ph/122/

http://www.fao.org/righttofood/publications/publications-detail/en/c/152814/

http://www.imf.org/external/pubs/ft/fandd/basics/bigsmall.htmhttp://www.studymode.com/essays/Jollibee-131145.html

http://www.jollibeefoundation.org/content/view/74/43/


http://www.slideshare.net/ElainroseEsberto/10-steps-marketing-plan-jollibee-philippineshttp://philippinetimesofsouthernnevada.com/news/business/jollibee-foods-on-aggressive-

expansion/

http://www.franchising.com/articles/fast_food_franchise_industry_is_rushing_to_acquire_technology_tools_that_wi.html


http://www.jollibee.com.ph/investors


http://nhobeelab.weebly.com/industry-analysis.html

http://technoodling.net/jollibee-formally-introduces-the-happyplus-card-and-why-it-matters/


http://www.chanrobles.com/republicactno8976.htm#.Udh8yTs3Ck8

http://www.lawphil.net/statutes/presdecs/pd1975/pd_856_1975.html



http://www.imf.org/external/pubs/ft/fandd/basics/bigsmall.htm

http://www.studymode.com/essays/Jollibee-131145.html





http://www.jollibee.com.ph/investors


http://nhobeelab.weebly.com/industry-analysis.html



http://www.chanrobles.com/republicactno8976.htm#.Udh8yTs3Ck8

http://www.lawphil.net/statutes/presdecs/pd1975/pd_856_1975.html



http://www.imf.org/external/pubs/ft/fandd/basics/bigsmall.htm

http://www.studymode.com/essays/Jollibee-131145.html



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