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Dimalibot, Danica A.

AT3A

Reaction Paper

September 16, 2015


Lots of topics were discussed during the seminar. We had discussed about PAL, Globe Company,
BDO, Jollibee, San Miguel Corporation, and how to analyze and distinguish the things presented in their
financial statements. As for my reaction paper, I will discuss about Jollibee Food Corporation, and what I
learned from the speaker, Mrs Rosalinda Evangelista. Also, I will tackle in this reaction paper things I
learned from the speaker regards their company financial status, some of the cases and problems
mentioned by her about Jollibee.
Jollibee Foods Corporation

Jollibee was founded by Tony Tan and his family in the year 1975 with its humble beginnings
as an Ice Cream Parlor which later grew into an emerging global brand. At the heart of its success is
a family-oriented approach to personnel management, making Jollibee one of the most admired
employers in the region with an Employer of the Year Award from the Personnel Management
Association of the Philippines, Best Employer in the Philippines Award from Hewitt Associated and a
Top 20 Employer in Asia citation from the Asian Wall Street Journal. As of October 2014, not only
that Jollibee Foods Corporation (JFC), the country's largest fast-food chain in the Philippines, is
planning to secure the spot of the Asia's largest quick service restaurant (QSR), but it is also eyeing
a rank in the 10 best QSRs in the world.

Case
Noli Tingzon, newly-appointed international division VP at Jollibee, the Philippines-based
hamburger chain, is faced with the challenge of expanding fast food operations in Asia in the face
of stiff competition. The case describes Jollibee's six-year international expansion history and the
lessons the company has learned. Against this background, Noli must decide among expansion
opportunities in New Guinea, Hong Kong, and California. The case gives an idea about how the
competition influenced Jollibee's strategy, both domestic and international.

Problems

The problem in franchisees/joint venture. It is still one of the troubles of Jollibee now, how they can
select good franchise partners and suitable locations in the international investments.
The problem in operation management and human resources. Jollibee have two main parts:
international division and local division, and the challenges for them now is that how they can
coordinate the activities between 2 parts.
The problem in changing menu, taste diversification. Even though the fast food industry had been
accepted by the global community, it still has its own preferences and environments which
differentiate them from other countries. Therefore it is not possible for the Jollibee in the industry to
apply a standard set of menu throughout the world.

The problem in enhancing Jollibees visibility and brand recognition in global environment.

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.

Solutions

Restructure the organization chart into regional based structure so that each market has the same
power and resources.
Develop clear cut instructions regarding the resources that the international division can utilize and
its authority of decisions, avoid the conflict between the view points of the staff in the headquarters
and the international division can make the business delay.
Concentrate on researching the taste diversification, changing menu for suitable the local country,
concurrently remain their Pilipino unique character.
Take more resources in marketing and advertising, to enhance their visibility and brand recognition
in the local countries.

Strategy
Jollibee should consider opening a store and giving it time to grow and turn a profit before it
finances the opening of a new store. Opening new stores requires a lot of financing. They must
study markets to determine a location, buy furniture, purchase kitchen appliances, and train new
managers and employees. Opening multiple stores at the same time will hurt the bottom line and
will increase debt. It took McDonald's 20 years for their international operations to account for 50%
of total sales. Also, they must reduce cost of sales. During the period under study the cost of sales
has increased at a faster pace than the sales increase, which is not acceptable.

The company has good internal financial resources but a certain code should be maintained
in the relationship with the franchisee. Also, the allocation of the financial resources needs to be
done wisely and judiciously. This is where there has to be collaboration between the marketing and
finance department. The feasibility (financial) of opening up a new store needs to be studied before
going ahead with the decision.

Recommendation

International operations should be completely separated from domestic ones.


Strategy of varying the menu to local taste should be implemented.
Smooth supply chain management system should be put in place to increase efficiency and

productivity.
In case of expanding the menu, economies of scale and operational efficiency should be kept in

mind.
Some items which increase inefficiency should be removed from the menu.

Conclusion
I learned that success in any industry is achieved by a variety of factors, amount of capital,
market segment targeting, and values held by company founders and the type of people who are
hired has a big impact as well. These changes were mostly focused on creating more structure and
taking advantage of more resources. The Jollibee story is an inspiring saga of corporate vision,
commitment to quality and customer service, and state-of-the-art strategic marketing. Over the
years the Jollibee Foods Corporation changed in so many ways but still managed to keep and
strengthens its identity, the changes they made are those that made their product and services
better and kept true to their values thus giving them unimaginable success and making them a true
Filipino Fast food.