Fast food industry


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Fast food industry

  1. 1. Fast Food Industry <ul><ul><li>Ianne Patrick Santiago </li></ul></ul><ul><ul><li>Marivic Mariscal </li></ul></ul><ul><ul><li>Michael Lualhati </li></ul></ul><ul><ul><li>Jay-ar de Castro </li></ul></ul><ul><ul><li>Chaofan Zhu </li></ul></ul>
  2. 2. Industry Background
  3. 3. <ul><li>Prepared and served quickly in a restaurant. </li></ul><ul><li>Inexpensive foods. </li></ul><ul><li>Begins on the mid-twentieth </li></ul><ul><li>In the Philippines, fast-food restaurants specialize fried chicken, french fries, burgers, spaghetti and a beverage. </li></ul><ul><li>The largest fast-food industry in the Philippines is the Jollibee food corporation. </li></ul><ul><li>Jollibee Corporation is composed of several fast foods chains like Jollibee, Chowking, Greenwich, Red Ribbon and Mang Pepe's. </li></ul><ul><li>Quick Service Restaurant or QSR </li></ul>Definition
  4. 4. Fast Food Operation
  5. 5. <ul><li>Nationwide market coverage </li></ul><ul><li>Caters to all ages / broad market segment </li></ul><ul><li>Slow service vs. commitment to quick food preparation </li></ul><ul><li>Menu is limited to the products the store offers </li></ul><ul><li>Lack of food stock </li></ul><ul><li>Space for fast food is small </li></ul><ul><li>Capacity is 100 sq m at the minimum </li></ul><ul><li>Cleanliness of the store sometimes is not properly maintained due to underman staff. </li></ul>Scope and Limitations
  6. 6. <ul><li>Regulated by the Department of Trade and Industry. </li></ul><ul><li>RA 7394 or the Consumer Act of the Philippines. </li></ul><ul><li>Department of Health and Bureau of Food and Drugs </li></ul><ul><li>According to Omana (2005), the fast-food market is dominated by the Filipino-owned Jollibee Foods Corporation with 52% market share. </li></ul><ul><li>It is being followed by American food brands like McDonald’s, Wendy’s, Burger King, and KFC. </li></ul>Total Industry
  7. 7. Key Player / Brands Jollibee Food Brands
  8. 8. Market Structure
  9. 9. <ul><li>Population growth rate more than 4% per year. </li></ul><ul><li>Consumer preference: quick, quality, clean, convenient, and affordable dining experience. </li></ul><ul><li>Customization products (e.g. rice meals for Filipinos, potato fries for Americans) </li></ul><ul><li>Domestic: </li></ul><ul><ul><li>3-8% annual growth rate in the Philippines </li></ul></ul><ul><ul><li>Average annual income of Php 62,000 for “poor” families and Php 268,000 for “rich” households. </li></ul></ul>Market Structure - Demand
  10. 10. <ul><li>Status – Domestic Fast Food: </li></ul><ul><ul><li>Entrants of foreign cuisine (e.g. Asian, European, Western) </li></ul></ul><ul><ul><li>Jollibee as market leader for Philippine Fast Food </li></ul></ul><ul><li>Export: </li></ul><ul><ul><li>Jollibee branches in other countries (Middle East, North America, Southeast Asia) </li></ul></ul><ul><ul><li>Chowking’s expansion abroad </li></ul></ul><ul><li>Projections: </li></ul><ul><ul><li>Improving food and service quality over time </li></ul></ul><ul><ul><li>Expansion by opening more stores </li></ul></ul><ul><ul><li>Product Development </li></ul></ul>Market Structure – Demand (cont.)
  11. 11. <ul><li>Mixture of local and foreign brands: </li></ul><ul><ul><li>Jollibee (operated by Jollibee Foods) </li></ul></ul><ul><ul><li>McDonalds (locally controlled by Alliance Group) </li></ul></ul><ul><li>Domestic: </li></ul>Market Structure – Supply Sources: Annual Reports from JFC and AGI and corporate websites.
  12. 12. <ul><li>Imports: </li></ul><ul><ul><li>Rice importation </li></ul></ul><ul><ul><li>Other products </li></ul></ul><ul><li>Projections: </li></ul><ul><ul><li>Largest index of value among other industries </li></ul></ul><ul><ul><li>Continuous increase in population </li></ul></ul><ul><ul><li>Sales growth of leading brands </li></ul></ul><ul><ul><li>Business expansion </li></ul></ul>Market Structure – Supply (cont.)
  13. 13. <ul><li>Cost and Prices: </li></ul><ul><ul><li>Ala-carte meals at Php 50-150 </li></ul></ul><ul><ul><li>Combo meals at Php 82 on the average / Premium items at Php and above </li></ul></ul><ul><ul><li>Factor goods (Source: Bureau of Agricultural Statistics, 3/2011) </li></ul></ul>Market Structure – Cost and Prices Commodities Average Price (in Php) Potatoes 60 / kilo Ground Beef 240 / kilo Well-Milled Rice 35 / kilo Cooking Oil 54 / liter Dressed Chicken 130 / kilo
  14. 14. <ul><li>Average of 100 seats for dining customers </li></ul><ul><li>Number of Consumers: 200 pax / branch / day (at 110 sq. m store size) </li></ul><ul><li>Number of Transactions: 100 orders (from 11AM-2PM) </li></ul><ul><li>Number of Meals per Transaction: two (2) meals </li></ul>Market Structure – Capacity Utilization Source: Mang Inasal Baclaran branch
  15. 15. Financial Structure
  16. 16. <ul><li>Financial Performance </li></ul><ul><ul><li>Jollibee Foods Corp grew a net profit last year by 16 percent to P3.09 billion </li></ul></ul>Financial Structure
  17. 17. Financial Structure
  18. 18. Strengths , Weaknesses, Opportunities and Threats
  19. 19. SWOT Analysis <ul><li>Strengths: </li></ul><ul><li>Quickest Serving Time Among Other Food Industry </li></ul><ul><li>Cost Saving / Systematic Food Preparation </li></ul><ul><li>Option to Deliver Food to Houses, Offices, and Other Establishments </li></ul><ul><li>Wide-Range of Food Options/Choices </li></ul><ul><li>Customization of Meal Servings Tailor-Fit to Consumers’ Appetite </li></ul><ul><li>Positions in Strategic Location in Populated Areas </li></ul><ul><li>Flexibility on Preparing Food Time </li></ul><ul><li>Weaknesses: </li></ul><ul><li>Product Development for New Offering Takes Too Long / Does Not Change Products Often </li></ul><ul><li>Known to Serve Unhealthy Meals </li></ul><ul><li>Limited Menu Offered to Consumers </li></ul><ul><li>High Employee Turnover (Operation) </li></ul><ul><li>Opportunities: </li></ul><ul><li>Growing Philippine’s Economy per Capital </li></ul><ul><li>Continuous Products and Service Expansion </li></ul><ul><li>Adaptation on Products and Services to Culture and Tradition </li></ul><ul><li>Threats: </li></ul><ul><li>Consumers Look for a Healthier Lifestyle </li></ul><ul><li>Industrialization </li></ul><ul><li>High Number of Foreign Companies Entering the Fast Food Market vs. Local Brands </li></ul><ul><li>Non-Compliance to Sanitary Standards </li></ul>
  20. 20. Strategic Trends
  21. 21. Current Trend for Fast Food
  22. 22. Strategies Strategies Strengths / Weaknesses Addressed Opportunities / Threats Addressed 1. McDonald’s “Made-For-You” Strengths: 1. Quickest Serving Time Among Other Food Industry 2. Flexibility on Preparing Food Time Opportunity: Adaptation on Products and Services to Culture and Tradition Threat: High Number of Foreign Companies Entering the Fast Food Market vs. Local Brands 2. Freebies and Budget Meals (All Brands) Strengths: 1. Customization of Meal Servings Tailor-Fit to Consumers’ Appetite 2. Cost Saving / Systematic Food Preparation Weakness: Limited Menu Offered to Consumers Opportunity: Continuous Products and Service Expansion 3. Healthy Meal Offerings Weakness: Known to Serve Unhealthy Meals Threats: 1. High Number of Foreign Companies Entering the Fast Food Market vs. Local Brands 2. Consumers Look for a Healthier Lifestyle
  23. 23. Outlook and Summary
  24. 24. <ul><li>Fast food industry will continue to grow </li></ul><ul><li>Extreme popularity of dining outside </li></ul><ul><ul><li>more than 18% of total food expenditure went toward food for consumption outside of the home (Agri-Food Past, Present & Future Report 2007) </li></ul></ul><ul><ul><li>Popularity of food retailers in malls and shopping centers than shops-on-site </li></ul></ul><ul><li>Filipino consumers are by nature price-sensitive </li></ul><ul><ul><li>best value for money (value menus) </li></ul></ul><ul><ul><li>Popularity of items sold for around PHP25 or PHP50 </li></ul></ul>Outlook / Summary
  25. 25. <ul><li>Fast food industry has helped to transform not only diet, but also landscape economy, workforce, and popular culture </li></ul><ul><li>Whole experience of buying fast food has become so habitual </li></ul>Outlook / Summary
  26. 26. Conclusion and Recommendation
  27. 27. <ul><li>Opportunity for economic growth </li></ul><ul><li>Rapid increase of opening new food chains </li></ul><ul><li>Exploring the international market </li></ul><ul><ul><ul><li>helps advertise our country that we offer good food </li></ul></ul></ul><ul><ul><ul><li>markets tourism and build awareness </li></ul></ul></ul><ul><ul><ul><li>increase sales of the company </li></ul></ul></ul><ul><ul><ul><li>strengthens GNP </li></ul></ul></ul><ul><li> </li></ul>Conclusion And Recommendation
  28. 28. <ul><li>Rising concerns for “health and wellness’’ </li></ul><ul><li>Offer nutritional items on the menu </li></ul><ul><li>Possibility of creating a policy that will address the health and wellness concern </li></ul><ul><li>Positive brand - promote an ambience of being caring to customers </li></ul>Conclusion And Recommendation
  29. 29. Thank You