Marketing Planning – College Essay Example
Marketing Planning – College Essay Example

Marketing Planning – College Essay Example

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  • Pages: 10 (2624 words)
  • Published: September 16, 2017
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Jollibee aims to increase profits by expanding through franchising and overseas expansion as part of its international growth strategy. The company's objective is to double its earnings within five years, with an equal focus on franchising and company-owned expansion. Currently, most of JFC's branches outside the Philippines are owned by the company, except for those in the Middle East. In the Philippines, 45% of shops are owned by the company while 55% are franchised.

After prioritizing China and the US for five years, JFC plans to expand into Malaysia, Myanmar, Europe, and Japan for future overseas expansion. They also have plans to expand into Canada next year and explore opportunities in Indonesia due to its fast-growing economy. One potential opportunity for further expansion includes Papua New Guinea where Tingzon has offered capital for a new branch establishment


in their three-shop fast food chain.

Hong Kong is also seen as a potential market where they plan to add a fourth location targeting Filipinos and limited Chinese customers primarily. Additionally, after successful operations in Guam, Jollibee sees potential in California's large Filipino population and aims to target Asian and Hispanic Americans as well.Jollibee, which started with five branches in 1978, now has a strong network of 801 shops within the country and 96 internationally. As of November 2013, Jollibee has a total of 896 shops worldwide, making it the largest fast food chain in the country. JFC's locations include Brunei since 1987; Hong Kong since September 1996; Indonesia (to be launched in 2015); Kuwait since 1995; Malaysia (to be launched in 2015); Philippines as hub; Qatar; Saudi Arabia since 1995; Singapore since Vietnam since October. They also have plans

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to expand Jollibee to other markets such as Europe. In North America, Jollibee was launched in the United States and Canada (to be launched).The first subdivision of Jollibee opened in Super Bowl Ho Chi Minh City, Vietnam. Currently, there are over thirty subdivisions located in various states within the Mekong Delta Region. Additionally, one subdivision is currently being renovated in Hong Kong. The opening of a second subdivision is under consideration.

In the Philippines, Jollibee operates a total of 2,040 shops under different trade names. This includes 765 Jollibee shops, 383 Chowking shops, 201 Greenwich shops, 209 Red Ribbon shops, 457 Mang Inasal shops, and 25 Burger King shops.

Papua New Guinea presents a potential market for Jollibee due to its limited fast food options and a population of five million people. However, to be competitive and manage costs effectively in this market, Jollibee would need to quickly add three to four more shops. There is uncertainty about whether the country can handle having 20 Jollibee shops. This situation could either result in gaining an advantage as the first mover or experiencing significant losses. The benefits of partnering with local businesses are uncertain and potential income is low at this time; therefore it is not advisable for Jollibee to enter Papua New Guinea.

On the other hand, in Hong Kong where Jollibee already has a presence, the restaurant is located in a densely populated area with a loyal Filipino customer base. While business is good during weekends, sales decrease on weekdays due to limited visits from local Hong Kong people.In addition, Chinese-owned Jollibee branches have faced significant problems as managers and employees resign due to the preference of

Chinese workers for fellow Chinese establishments. This has led to clear conflict between Chinese and Filipino employees. While acquiring the fourth shop in Hong Kong offers growth potential, it will not generate sufficient revenue to establish a global empire for Jollibee's expansion plans. To gain a competitive edge, Jollibee could cater to the preferences of local Chinese customers while maintaining menu flexibility and consistency across their worldwide brand. Success in Hong Kong could also attract better partners through increased brand exposure. However, considering staffing issues and uncertainties related to local Chinese customers, it would be more advantageous for Jollibee to focus on enhancing their current operations rather than investing resources in a new shop. Targeting the Asian community in California, particularly within the United States, presents an encouraging opportunity for Jollibee to expand globally in the fiercely competitive fast food market. The brand has discovered that their restaurants appeal both to Americans and Filipino-Americans who have shown strong support. Therefore, Jollibee intends to initially expand throughout California before venturing eastward in order to gain recognition.The diversity in America supports Jollibee's strategy as Americans enjoy exploring different culinary cultures, making them likely to try Filipino cuisine. Overall, there is little doubt that Jollibee can successfully enter the fast food market in the United States. However, they may face challenges accessing distribution channels, suppliers, and store locations that played a significant role in their cost leadership position in the Philippines. Additionally, they will encounter tough competition from established rivals already operating in the United States. Moreover, Jollibee's lack of experience operating within a Western business environment complicates their expansion plans. Successfully expanding into foreign markets requires gathering

specific information about each market including legal and ethical requirements, market trends, competitors' strategies,and market size. It is crucial to note that legal structures and ethical frameworks often differ significantly from those prevailing in the United States; hence addressing these issues becomes vital for successful expansion efforts by Jollibee. When dealing with legal and ethical concerns in foreign markets, it is important to address issues related to small-scale bribery practices involving giving small amounts of money to foreign officials to violate their duties or expedite government actions.In addition, there are various forms of corruption in international business that involve making large payments to violate laws or influence policy-making. These corrupt practices can also include giving gifts, favors, and entertainment experiences. Unfair pricing is another important consideration in global business, which involves questionable practices like invoicing discrepancies, setting lower prices to eliminate local competition, dumping products at low prices to undercut competitors, engaging in illegal pricing agreements such as price fixing, including banned products or unsuitable options for the host country market, and utilizing tax evasion techniques. Another concern is charging fees between affiliated or parent companies without fairness or justification.Engaging in illicit or unethical actions in the host nation, such as environmental pollution, unsafe work conditions, unauthorized copying of products or technologies, and using fake weights for shipments is a cause for concern. There are various fees paid to different types of members like sales agents, jobbers, advisers, traders, and importers that form questionable committees within channel members. Cultural differences can lead to potential misunderstandings regarding traditional exchange process requirements between civilizations. Practices that may be perceived as bribes in one culture might be considered

acceptable business practices in another; these practices include gifts, monetary payments, favors entertainment and political contributions. Involvement in political affairs involves merging marketing activities with political relationships; this encompasses multinational corporations attempting to exert political influence and engaging in marketing activities during times of war or illegal technology transfers. Current market trends revolve around the preferences of young individuals; trendy cafes that offer Wi-Fi internet access and unique locations are popular while multi-branding and cleanliness also play important roles. Market rivals are determined by the size of the market and claimed market size. Jollibee, a local fast food giant in the Philippines has achieved tremendous success within the burger industry.
Jollibee Foods Corp. currently holds a 65% market share and reported gross revenue of Php 82 billion by the end of 2011. The total worth of this market segment is Php 126 billion. In 2013, JFC experienced significant growth in net income, reaching P4.64 billion, which was attributed to expansion both domestically and internationally. Net income rose by 20.3% to P1.52 billion in the fourth quarter alone, while system-wide retail sales saw positive growth with a 13.9% increase in the fourth quarter and a 12.8% increase for the full year, reaching P28.87 billion and P104.1 billion respectively.

This marked six years of organic sales growth for JFC and allowed them to surpass P100 billion for the first time.The company also improved operating efficiency leading to higher profit margins with a net income margin of 5.8% in 2013 compared to 5.2% in the previous year.Additionally, JFC achieved a significant milestone by opening an unprecedented number of new stores - a total of 98 - in the fourth quarter

alone.By December 31st,2013 they had established an international store network consisting of2764 stores with2181 located within Philippines.Their successful expansion has been observed across various countries and brandsAccording to Tanmantiong, JFC is committed to enhancing its brands and driving profitable growth by focusing on aspects that benefit consumers such as superior product quality and taste, value, service, restaurant experience, and shop locations. In order to achieve this objective, JFC plans to allocate P6.3 billion for capital expenditure in 2014. This funding will be used for opening new stores and renovating existing ones. The budget exceeds the amount spent in 2013 when the company opened 235 new stores with a total investment of P4.1 billion.

During the fourth quarter of 2013, system-wide sales in the Philippines increased by 12.2%. Additionally, business expanded by 19.2% in China,17.2% in the United States,and35.3%in Southeast Asia and the Middle East.Southeast Asia experienced its highest growth rate in Vietnam at40 .2%. Furthermore ,same store sales across their global network saw a year-on-year increase of8-9%, driven by higher customer traffic and purchases per store.

JFC's return on equity reached a high point of 21.3% last year compared to 18.3% in 2012.This was its highest level achieved within fifteen years.JFC operates several brands including Jollibee Chowking, Greenwich , Red Ribbon , Mang Inasal , Burger King Yonghe King Hong Zhuang Yuan ,and San Pin Wang chains which are mainly found within China.Jollibee has a fifty percent interest in joint ventures operating Highlands Coffee Pho24,and Sabu.PEST analysis is conducted by Jollibee to assess external factors affecting each market.
In the demographic environment, Jollibee experiences strong demand for its products from daily consumers visiting its shops in the Philippines.

The unique geographical landscape of the country poses challenges for fast-food companies. Additionally, there is a significant number of Filipino workers abroad, particularly in the United States, Hong Kong, Brunei, and Indonesia. Jollibee's restaurants attract not only Filipinos but also other Asians.

In terms of the economic environment, major players in the fast food industry have been attracted by developing countries' growing economic capabilities. Similarly, Jollibee ventured into the Indonesian market with Chowking Brand due to the growing potential for Chinese food there. Moreover, Jollibee expanded into China and acquired an 85% ownership stake in Yong he King Chain.

Sociocultural preferences vary across different countries; for example, China and Japan prefer noodles over rice. While Jollibee's "langhap-sarap" concept is well-liked by Filipino consumers, it may not be as successful in global markets where foreign consumers might not appreciate the traditional taste.

The case study highlights how major global players entered the fast-food market in the Philippines and presented new challenges for Jollibee despite their dominance locally. As Jollibee considers expanding into new markets like Papua New Guinea, they must consider costs, risks, and financial viability.In 1996, an entrepreneur approached Tony Kitchner to obtain a Jollibee franchise for the poultry industry. They believed that Port Moresby, the capital of Papua New Guinea, lacked good dining options and saw an opportunity for Jollibee to improve service and food quality. The goal was to capture a significant share of the market from a poorly managed fast-food chain serving five million people. Initially, they planned to open one store in Port Moresby but felt that three or four stores would be necessary shortly after to cover market development costs. However, there were

concerns about whether Papua New Guinea could support the required 20 new stores for expansion.

Comparatively, in the Philippines, there were around 1,200 fast food establishments competing for business from a population of 75 million people. Both countries had similar GNP per capita at approximately $2,500. Additionally, Jollibee proposed opening a fourth store in Hong Kong through collaboration with local businesses. Tommy King, who is Tony Kitchner's brother-in-law would manage this store.

The first Jollibee store opened successfully in September 1996 and quickly gained popularity among Filipino exiles and domestic workers due to its location near a major hub in Central territory.However, it was difficult to attract local customers. On weekdays, there was a decrease in customer volume from office workers, while on weekends, there was a high turnout from Filipinos socializing. Two more stores opened in Central but mostly attracted Filipino and Chinese customers, generating only about one-third of the sales compared to the first store. One challenge they faced was hiring local Chinese crew members despite their efforts. The language barrier with mainly Philippine and Nepalese counter staff caused potential embarrassment for Chinese clients when not being understood. Another challenge was that locals had weak brand recognition in a city dominated by McDonald's. To address this, Jollibee staff worked with sub-franchisee Henry Shih to launch an advertising campaign but lacked sufficient funds due to the small size of the Hong Kong operation.

Shortly after signing his contract, Tingzon discovered a plan that had been made a year ago to open one Jollibee store per quarter in California starting from Q1 1998. TTC has long believed that establishing a presence in Kitchner would bring prestige and promotion

to Jollibee as it is the birthplace of fast food. To achieve this goal, Kitchner collaborated with Manila-based business communities as 40% partners in the venture. After opening company-owned stores, they aimed to franchise in California and beyond following the success of Jollibee in Guam, a US territory which gave them confidence for their ambitious expansion plan.Originally created for the Filipino population in Guam, the menu of Jollibee also attracted other American groups. They were able to adapt their operating methods to accommodate higher labor costs in the US. With their success in Guam, they felt ready to expand to mainland USA. The first store was located in Daly City, which had a large Filipino population and few fast-food competitors in San Francisco. California had a significant number of affluent Filipino immigrants, so the plan was to expand geographically and demographically by targeting Asian-American and Hispanic-American consumers. Ultimately, Jollibee aimed to attract consumers from all backgrounds throughout the US as part of its growth strategies like those utilized in PNG and Hong Kong.

According to Jollibee's corporate website, this project received support from Filipino-Americans, local investors, and TTC's strong interest in succeeding against McDonald's.Currently,Jollibee has over 50 locations across various countries including Brunei,Hong Kong,Vietnam,Saudi Arabia,Qatar,and the U.S.In the U.S., there are a total of 26 Jollibee stores with 9 in Northern California,15 Southern California one Las Vegas,and one New York.The company has temporarily halted international franchising and adjusted its global strategy as mentioned on their website.The success of their expansion efforts since opening their first store in Daly City in 1998 has led to a total of 26 stores being established in CaliforniaJollibee has an advantage

in the California market due to the high number of new immigrants entering the state. They previously had two closed shops in Central Hong Kong but currently only operate one there. However, they have not yet established a presence in Papua New Guinea where their expansion efforts have been unsuccessful so far. Their focus on franchising and overseas expansion is aimed at increasing long-term profits. For more information about Jollibee's history and analysis of the case study, visit their Wikipedia page ( or read the case study analysis (–Case-Study-Analysis/1794.html). Additional references for further reading include a PDF document at and an article at Furthermore, you can find an industry analysis at

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