Business_Strategy_of_Jollibee.pdf

School of Business
BTEC HND in
Management/Marketing/Human Resource

UNIT 7 - Business Strategy

Mr. Anoche
Adrianne Galvez
Section B
Business Management

1.1 Assessment on business missions, visions, objectives, goals and core competencies
inform strategic planning
Based on the business dictionary, a vision statement is an ambitious description of what
an organization would like to accomplish or achieve in the mid-term or long-term future. It is
intended to serves as a clear guide for choosing current and future courses of action. A mission
statement is a written declaration of an organization’s core purpose and focus that normally
remains unchanged overtime. The difference between the two is that a mission is something to be
accomplished whereas a vision is something to be pursued for that accomplishment.
Core competencies are what give a company or organization one or more competitive
advantages, in creating and delivering value to its customers in it chosen field.
Goals are an observable and measurable end result having one or more objectives to be
achieved within a more or less fixed timeframe.
Jollibee is the largest fast food chain in the Philippines, operating nationwide of over 750
stores. The company has also embarked on an international expansion plan in the United States
(26 stores), Hong Kong (1 Store), Vietnam (32 Stores), Saudi Arabia (7 stores), Brunei (11
stores) and Qatar (1 Store), firmly establishing itself as a growing international player.
(Jollibee.com.ph, n.d.)
Jollibee, a dominant market leader in the Philippines, brings its vision and mission
international. With a mission of “To serve great tasting food, bringing the joy of eating to
everyone” and a vision of
“We are the best tasting QSR..
The most endearing brand...
that has ever been...
We will lead in product taste at all times...
We will provide FSC excellence
in every encounter...
Happiness in every moment...
By year 2020, with over 4,000 stores worldwide,
Jollibee is truly a GLOBAL BRAND. (and the Filipino will be admired worldwide)”,

Jollibee has honored it to this very day. The reasons for its growth are all mentioned in its
mission and vision, due to its delicious menu and reasonably prices, it has given Jollibee
customer satisfaction worldwide.
Jollibee aims to be the largest homegrown quick fast food chain in Asia by 2020. To
support this long-term goal, Jollibee is motivated to have continuous expansions abroad.
Knowing the fact that Jollibee’s target market abroad is mostly Filipino’s, they have a huge
advantage due to the OFW’s (Overseas Filipino Workers). Jollibee has stayed true to its mission,
to remain the good tasting and signature foods that they serve.
So far, Jollibee is the largest homegrown fast food chain in Southeast Asia and the second
in the entire Asia continent in terms of sale.
Jollibee’s top performing outlet abroad is there branch in Singapore’s Lucky Plaza
shopping center, which attracted 35,000 overseas Filipinos and inquiring foreigners in its first
week of operations. (Morales, 2013)
1.2 Analysis of the factors that have to be considered when formulating strategic plans
Jollibee Food Corporation:
From 1980’s
Goal: to beat and compete with McDonald’s fast food chain
A strategy determines the direction in which an organization needs to move to fulfill its
mission. A strategic plan is like an outline for carrying out the strategy and achieving long-term
results.
Strategic planning is to set your overall goals for your business and to develop a plan to
achieve them. It includes stepping back from you day-today operations and asking where your
business is headed and what it priorities should be.
As with any business activity, the strategic planning process itself needs to be carefully
accomplished. When it comes to strategic planning, one shouldn’t do it alone. Try to find people
who show the kind of logical skills that successful strategic planning alters upon. Consider the
opinions of other staffs like key employees, accountants, department heads, board members and
those of external stakeholders, which include customers, clients, advisors and consultants.
(Infoentrepreneurs.org, 2009)

The scheduling for the strategic planning process depends on the nature and needs of the
business and its immediate external environment. Like, based on the example in
managementhelp.org, planning should be carried out frequently in an organization whose
products and service are in an industry that is changing rapidly. In a situation like this, planning
might be carried out once or even twice a year and done in a very broad and detailed manner.
Strategic planning should be done when an organization is just getting started. It should
also be done in preparation for new major venture. Strategic planning should too be conducted at
least once a year in order to be ready for the coming fiscal year. It should be conducted in time to
identify the organizational goals to be achieved at least over the coming year; resources needed
to achieve those goals, and funded needed to obtain the resources. (Fleming, 1991)
1.3 Evaluation on the effectiveness of techniques used when developing strategic business
plans
BCG Growth share matrix is a portfolio-planning model developed in the 1970’s, which
is constructed on the observation
that a company’s business unit can
be classified into four categories
based on combinations of market
growth and market share relation
to the largest competitor, hence the
name “growth-share”.
(Netmba.com, n.d.)
The four categories are:
 Stars (High growth and
high market share) are leaders in
business. They generate huge
amounts of cash due to their strong
relative market share, but also
consume large amount of cash because of their high growth rate. Attempts should be
made to hold the market share otherwise; the star will become a CASH COW. (Wadekar,
2007)

 Cash Cows (Low growth and high market share) are the foundation of the company and
often the stars of yesterday. As leaders in a mature market, cash cows exhibits a return on
assets that is greater than the market growth rate, and thus generate more cash than they
consume. Such business units extract the profits by investing as little cash as possible.
(Wadekar, 2007)
 Dogs (Low growth and low market share) do not have the potential to generate nor
consume a large amount of cash. However, dogs are known as cash traps because of the
money tied up in a business that has little potential. (Wadekar, 2007)
 Question marks (High growth and low market share) are growing quickly and thus
consume large amount of cash, but they have low market shares they do not produce
much cash. The result is a large net cash consumption. Question marks have the potential
to become star and eventually cash cow when the market growth slows. They also have
the potential to become a dog, if they do not succeed in becoming the market leader and
the market growth declines. Question marks must be analyzed carefully in order to
conclude whether they are worth the investment necessary to grow market shares.
The BCG matrix is a good starting point for resource allocation decisions across a
portfolio. It’s popularity and ease of understanding makes it a powerful communication to assess
the profiles of products/businesses, the cash demands of products, the development cycles of
products and resource allocation and divestment decisions. (Netmba.com, n.d.)
The BCG matrix also has its limitations, like, it uses only two dimensions, relative market
share and market growth. The market growth rate is only one factor in industry attractiveness,
and relative market share is only one factor in competitive advantage. It also has problems on
getting data on market share and market growth.
2.1 Analysis of the strategic positioning of a given organization by carrying out an
organizational audit
SWOT analysis is a scan of the internal and external environment, which is an important
part of the strategic planning process. It is classified as Strength (S) or weakness (W) for the
internal factors and opportunities (O) or threats (T) for those external to the firm. The SWOT
analysis caption provides a good framework for reviewing strategy, position and direction of a
company or business position, or any other idea. (Businessballs.com, n.d.)

Below is the SWOT Analysis of Philippine’s fast food restaurant, Jollibee:
Strength - Jollibee is a stronghold of Filipino victory and is well known throughout the
Philippines. It is also an experienced business unit, considering that they have been in the
business since 1975, when the company opened its first ice cream parlor at Cubao. It has
efficient manufacturing and logistics facilities and they have a skilled workforce.
Weakness – Jollibee is not as internationally known as other fast food chains. The company has
a weakness against future competitors and there future profits.
Opportunities – Jollibee is known to be the first food service company to be listed in the
Philippines Stock Exchange. The employees also receive extensive training, in order for them to
learn the corporate values of integrity. They also offer new services and products from time to
time, like the party catering and floats.
Threats – Jollibee has a fear of growing competition and lower profitability. As well as
government regulations and increase labor cost and interest rates. Media can also be a threat
since there have been reports of Jollibee using earthworms in its beef patties for many years to
get customers ‘addicted’ to certain so-called chemical elements in earthworms.
Product positioning is a marketing technique intended to present products in the best
possible way to different target audiences. The method is somewhat like “market segmentation”
in that an early step in major marketing campaigns is to discover the core market most likely to
buy a product or the bulk of product. (Inc.com, n.d.)
Jollibee’s product positioning is Jollibee’s signature Chicken Joy. It is its best seller and
is sold with either rice or spaghetti. Jollibee offers value meals that include chicken joy. There
chicken joy has a spice of a truly pinoy taste.
2.2 An environmental audit for a given organization
Porter’s five forces is a simple tool for understanding where power lies in a business
situation. It helps in understanding both the strength of the company’s current competitive
position, and the strength of a position you’re considering moving into. Usually, the tool is used
to identify whether new products, services or businesses have the potential to be profitable.

Although it can be very illuminating when used to understand the balance of power in other
situations.
There are five forces that determine competitive power in a business situation. These are:
Supplier Power – it is the power of suppliers to drive up the prices of your inputs. This is
focused by the number of suppliers of each key input, the uniqueness of their product or service,
their strength and control over you, the cost of switching from one to another, and so on.
(Mindtools.com, n.d.)
Jollibee has a low supplier power; items are readily available from numerous suppliers.
The switching cost is low and there is a flow in the availability of supplies.
Buyer Power – it is the power of the customers to drive down your prices. This is driven
by the number of buyers, the importance of each individual buyer to your business, the cost to
them of switching from your product and services to those of someone else, and so on.
Jollibee has a medium bargaining power of buyers. Buyers purchase the items in small
quantities. Quantity and quality of information are available to buyer improves. And buyers have
the ability to postpone purchase until later.
Competitive Rivalry – it is the strength of competition in the industry. If you have many
competitors, and they offer equally attractive products and services, then you'll most likely have
slight power in the situation, because suppliers and buyers will go elsewhere if they don't get a
good deal from your business. (Mindtools.com, n.d.)
Jollibee is high when it comes to rivalry among competing sellers. Jollibee has numerous
competitors, like KFC, McDonalds, etc.
Threat of Substitution – is the extent to which different products and services can be used
in place of your own. If substitution is easy and substitution is viable, then it weakens the power
of the company.
With so many firms in quick service, burger industry, similar products, switching costs,
and even healthier options, Jollibee has a high threat of substitute products.
Threat of New Entry – it is the comfort with which new competitors can enter the market
if they see that you are making good profits.
Jollibee is medium in threat of new entrant. A lot of Jollibee’s new competitors are
coming into the market, although, Jollibee has a lot of fast food restaurants, like Greenwich, Red

Ribbon, Delefrance, etc. so that gives them a bit of an advantage since they have a lot of
investments.
A PESTEL analysis is a framework or tool that is used by marketers to analyze and
monitor the external marketing environment factors that have an impact on an organization.
PESTEL stands for:
Political factors are about how and to what point a government intervenes in the
economy. This includes government policy, political stability or instability in overseas markets,
foreign trade policy, tax policy, labor law, environmental law, trade restrictions and so on.
(Professionalacademy.com, n.d.)
Jollibee are being affected by government policy on the regulations of Fast Food
Company such as health and hygiene policy. The government realized health problem have been
a big problem for everyone, people are having diseases because they are eating too much fast
food.
Economic factors have major impact on how an organization does business and also how
profitable they are. Economic factors are very difficult to assess. Unemployment levels,
exchange rates, inflation, and so on.
Jollibee cannot tell how the economic factors will turn out. Sometime in the future,
inflation could either be high or low. Also, the taxation policies, with is granted by the
government.
Social factors affect the areas that involve he shared belief and attitudes of the
population. For example, redesigning the workplace to attract workers. Social trends, such as a
preference of on-demand mobile media devices, can also influence which products a company
manufacturers and where it chooses to spend advertising.
Jollibee’s social factors are affected depending on the population growth, age
distribution, health consciousness and so on. Jollibee has meals certain meals for certain groups.
Like the kiddie meal, which is for the kids and the value meals for those who want to spend less
on a meal.
Technological factors can affect how an organization does business. Any new type of
technology or product created through research and development can help a company stay
modernized and on top of the market.

Jollibee has free Wi-Fi in most of their branches. They also have up to date machines this
is used for producing their foods. Jollibee also uses the Internet to their advantage for advertising
products and promos. Companies, like Jollibee, look into the use of IT to enhance their inventory
operations.
Environment factors is important due to the increasing scarcity of raw materials, pollution
targets, doing business as an ethical and sustainable company, carbon footprint targets set by
governments.
Jollibee has banned the use of Styrofoam and plastic when it comes to take-outs.
Legal factors concerns health and safety, equal opportunities, advertising standards,
consumer rights and law, product labeling and product safety.
Jollibee has a problem with health since eating too much fast food can lead to diseases
and obesity.

2.3 Assessment on the significance of stakeholder analysis when formulating new strategy

Figure 1: Stakeholder Analysis for Jollibee
Stakeholder Analysis is the method done to identify the important people who have to be
won over. You then use Stakeholder Planning to build the support that helps you succeed.
Based on the figure above, the CEO of Jollibee has high power and is interested. The
CEO is someone that people need to impress. He is one that puts most efforts in the company’s
future. He works hard with the other company leaders in maintaining the company.
Jollibee’s customers is high power but low interest. This is due to the fact that Jollibee
values their customers that whatever review the customers give, it has a big affect on the career
of Jollibee.
The government is high interest but low power. The government may be interested in
Jollibee due to it being one of the largest fast food chains although; the government does not
have much power over the company.

Most suppliers has high power but not for Jollibee. Jollibee has numerous supplies, which
means they are interested and replaceable.
The employee’s of Jollibee is high interest and low/medium power. These people are
interested in either making the company succeed or the company’s salaries. They don’t have a lot
of power because to the company, they are easy to be replaced.
2.4 Presentation of a new strategy for a given organization
Jollibee is known to be the largest fast food chain in South East Asia, but their goal is to
be known globally. One strategy is to open more stores internationally. Jollibee has several stores
abroad but not all are successful. If they’re to open a branch in a foreign land, it should be
somewhere where most Filipino’s are staying.
Another new strategy is to introduce meals that are healthy for the customers. Customers
nowadays are not eating right. Most fast foods have a problem with health issues. If Jollibee
were to introduce a delicious yet healthy meal, they not only will get healthy customers but a
good review as well.
Lastly, since Jollibee is quite a well-known company in the Philippines, Jollibee should
invest in making an amusement park. The Philippines needs more parks for tourists to visit. This
would give Jollibee the opportunity to advertise their company to travelers since most Filipino
companies have little exposure to foreign competitors.
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