Marketing planning composition

Presume you have been appointed as a marketing specialist for Jollibee. As part of the worldwide expansion software, the managing wants you to prepare a report to identify marketing opportunities. The report ought to cover this information:

a) Identify three potential marketplaces for expansion

Jollibee Foods Corporation (JFC) is financial on franchising and offshore expansion to continuously increase its revenue in the long run. The aggressive growth program is in line with doubling you’re able to send earnings in 5 years, company officials said.

JFC table chairman Tony Tan Caktiong said the perfect business mix is 50-50 for franchising and company-owned expansion. JFC’s branches away from Philippines are company-owned, besides those in the centre East. In the Philippines, 45% of the stores are company-owned while 54% are franchised.

For its abroad expansion, CEO Ernesto Tanmantiong said the quick-service cafe chain strategies to expand its global footprint simply by putting up retailers in Malaysia, Myanmar, The european union and Asia “after five years since we need to give attention to China as well as the US.

 JFC is usually branching in Canada the coming year while the organization is still learning prospects in Indonesia, one of many fastest developing economies in Southeast Asia. The potential marketplaces for development are the pursuing:

Three Alternatives for Expansion

Papua New Guinea- Raising the normal

Fresh Entrant into 3 store fast food cycle

Tingzon offered to set up all capital required

Hong Kong- Expanding the camp

3 Store already established, probability of a 4th one.

High volume with Filipinos but not with residents (Chinese)

fourth store position high traffic but few Filipinos

California-Supporting the Settlers

Success in Guam led them to believe US had potential

Foodstuff Appealed to Filipinos and Americans

Decided on Daly City-Large Filipino population

Plans to appeal to Asian Us citizens and then Mexican Americans

b) General information about the potential markets (geographical area, capital, inhabitants, per household income, literacy rate, vocabulary spoken)

Location

Jollibee started out with five branches 33 years ago and is growing to a strong network of your total of 801 shops in the country, and 96 shops internationally. As a whole, Jollibee has 896 retailers worldwide as of November 2013. It is the most significant fast food cycle in the country with international locations in Brunei, Hk, Indonesia, Kuwait, Malaysia, Qatar, Saudi Arabia, Singapore, Vietnam, the us, and Canada. JFC is usually planning to expand Jollibee to other marketplaces like Europe. Asia

Brunei (launched 1987)

Hk (launched Sept 1996)

Indonesia (to be released 2015)

Kuwait (launched 1995)

Malaysia (to be released 2015)

Philippines (main hub)

Qatar

Saudi Arabia (launched 1995)

Singapore (launched 2013)

Vietnam (launched October 1996)

North America

United States (launched 1998)

Canada (to be released 2015)

The first Jollibee branch in Vietnam was opened upon October 1996 at the Extremely Bowl in Ho Chihuahua Minh City. To date, Jollibee has more than 30 retailers in Vietnam, they are positioned in the metropolitan areas of Ho Chi Minh, Hanoi, De uma Nang, Nha Trang, in the provinces of Vinh Phuc, Dong Nai and all provinces in theMekong Delta Area. In Hong Kong, there is presently one department located in Central. At present, it is in the process of being renovated, while the opening of a second department in the country is currently under consideration. Since end-September 2012, Jollibee was operating two, 040 shops in the Thailand for all of its brands: 765 for Jollibee, 383 for Chowking, 201 for Greenwich, 209 for Red Bow, 457 pertaining to Mang Inasal and twenty-five for Burger King. PAPUA FRESH GUINEA: You will find five million people in Papua Fresh Guinea with extremely limited fast food options. Jollibee is and set a higher standard, entice many customers, and discourage future shareholders away. Nevertheless they would have to quickly add three to four stores to get competitive and cover costs. There was as well question as to whether the area can handle twenty stores.

Possibly they will find the first valerse advantage or they will support huge reduction. Since the rewards offered by the local partner are uncertain and profit potential is low, Jollibee must not seek to enter in New Guinea at this time. HK: In Hk, Jollibee can be found near a really densely inhabited area, with a very loyal Filipino consumer bottom. These people provided them wonderful business for the weekends, although sales chop down off during the week since the local Hk people rarely frequented the Jollibee business. Also, there were tremendous issues with the Chinese stores. All of the managers retired and many personnel quit for the reason that Chinese love to work for Oriental. There was apparent friction between your Chinese and Filipino’s. While the fourth retail outlet in Hong Kong represents an invaluable learning option, it will not create the earnings needed to create a global disposition. Catering for the local China palette would allow Jollibee to make its competitive advantage by learning to balance flexibility in menu offerings with consistency across the global brand.

Additionally , a success in cosmopolitan Hk could give Jollibee the brand name exposure it requires to attract better partners. However , given the staffing issues and uncertainty involving the local Chinese consumer, it would be better for Jollibee to improve its current businesses, rather than to commit added resources to a new shop. CALIFORNIA: Will probably be a very good idea to target the Asian community living in U. S and California is the foremost place to start coming from. The intense competitive atmosphere of US fast food marketplace will provide Jollibee tremendous chance of global learning. Furthermore, additionally, they discovered that there are many components of theirrestaurants that appealed to Americans. Likewise, there was superb support coming from Filipino-Americans. Likewise, Jollibee was going to expand through California prior to it relocated east. We were holding determined to gain recognition. One more helpful element is the diversity of America.

In any presented city an individual may find Chinese, Italian, Greek, Spanish, Japanese people, American, German, Polish, Indian, and other ethnic restaurants. People in america like to try food of different cultures and no purpose to believe we will not try Filipino food. There is hardly any reason to think that Jollibee cannot successfully enter the take out market in the United States. But on the other hand, United States is home to some of Jollibee’s most formidable competitors. As a late-mover, it will be hard for Jollibee to obtain use of the circulation channels, suppliers, and shop locations which allowed it to become a cost leader inside the Philippines. In addition , aside from the experience in Guam, Jollibee does not possess any real experience within a Western business environment.

c) Specific information about each market (legal and ethical requirements, industry trends, opponents, size of industry, potential product sales volume)

Legal and ethical requirements

When ever markets in foreign countries offer a bigger profit potential than your house market, it feels right to grow internationally. Whenever you prepare your enlargement and study target marketplaces in other countries, you can expect to often realize that the legal structures and ethical frames differ greatly from individuals in the United States. You have to address the legal and ethical concerns of your entering these marketplaces to make your expansion profitable. Traditional Small Scale Bribery- entails the payment of small sums pounds, typically into a foreign standard in exchange intended for him/her violating some official duty or responsibility in order to speed routine government actions (grease obligations, kickbacks). Mass Bribery- a relatively large payment intended to enable a infringement of the legislation or created to influence plan directly or indirectly (eg, political contribution). Gifts/Favours/Entertainment- includes a range of things such as: magnificent physical presents, call young ladies, opportunities for private travel on the company`s price, gifts received after the completing transaction andother extravagant high-priced entertainment.

Costs ” comes with unfair differential box pricing, questionable invoicing ” where the client requests a written bill showing an amount other than some of the price paid out, pricing to force out local competition, dropping products for prices well below that in the home country, pricing techniques that are unlawful in the home nation but legal in web host country (eg, price fixing agreements). Products/Technology ” comes with products and technology that are banned for use in your home country nevertheless permitted inside the host nation and/or look unsuitable or inappropriate for use by the people today belonging to the host country. Tax Evasion Practices ” used specifically for evade duty such as copy pricing (i. e., in which prices paid out between affiliates and/or mother or father company adjusted to have an effect on profit allocation) including the utilization of tax havens, where any kind of profit manufactured is in low tax jurisdiction, adjusted interest rates on intra-firm loans, doubtful management and service service fees charged between affiliates and /or the parent firm.

Illegal/Immoral Actions in the Number Country ” practices such as: polluting environmental surroundings, maintaining unsafe working circumstances; product/technology burning where safeguard of us patents, trademarks or copyrights will not be enforced and short weighting overseas deliveries so as to impose a country a phantom pounds. Questionable Commissions to Route Members ” unreasonably significant commissions of fees paid out to funnel members, including sales agents, middlemen, consultants, sellers and importers. Cultural Differences ” between cultures including potential uncertainty related to the traditional requirements in the exchange method (e. g., transactions) may be regarded by simply one lifestyle as morceaus but end up being acceptable organization practices in another culture.

These practices contain: gifts, financial payments, favours, entertainment and political advantages. Involvement in Political Affairs- related to the combination of advertising activities and politics such as the following: the exertion of political affect by multinationals, engaging in advertising activities once either home or web host countries are at war or illegal technology transfers.

Marketplace trends

Even more focus on youths

Well-known trendy cafe

Wi fi internet access

Creative area

Multiple branding

Cleanliness environment

Competitors

Scale the market

Claimed industry size

Jollibee could capture 65% of the market share in hamburger market inside the Philippines.

The JFC reported Php 82 billion by the end of 2011

Based on the annual record of JFC, Jollibee received Php 55 billion income on 2011

Total sales of JFC claiming 65% market share is definitely Php 82 billion. The whole market share is definitely Php 126 billion

Potential sales quantity

Local take out giant Jollibee Foods Corp. grew the 2013 net profit by twenty-four. 5 percent year-on-year to P4. 64 billion dollars as revenue from its cafe network below and overseas expanded by a double-digit tempo. In the last quarter alone, JFC’s net profit went up by twenty. 3 percent year-on-year to P1. 52 billion. System-wide retail sales”a measure of client sales coming from company-owned and franchised stores”grew by 13. 9 percent in the fourth quarter and by 12. almost eight percent to get the full year, to P28. 87 billion dollars and P104. 1 billion dollars, respectively. The full-year full sales development marked the best rate of rise in organic sales in six years and allowed JFC to breach the P100-billion mark for the first time, JFC chief functioning officer and incoming chief executive officer Ernesto Tanmantiong said within a statement. In addition to growing the sales volume level and division network, JFC also revealed higher margins by improving the working efficiency of its developing store chain.

Net income perimeter for 2013 increased to 5. 8 percent from five. 2 percent the previous 12 months. JFC opened a total of 98 stores in the next quarter”the highest number opened in a single one fourth in the company’s35-year history. It ended 2013 with a worldwide store network of 2, 764, of which two, 181 will be in the Israel. “Our progress in building the business have been taking place around our brands in different countries. In the years ahead, functioning forward to further strengthening the brands and accelerating each of our profitable expansion by keeping each of our intense give attention to the fundamentals of the business pertaining to the benefit of our consumers: Superior product top quality and style, value, support, restaurant encounter and shop locations authorized by an even stronger JFC organization,  Tanmantiong explained. For 2014, Jollibee provides earmarked P6. 3 billion in capital spending. It will probably be used to open new shops and refurbish old kinds.

The budget is definitely higher than the P4. one particular billion capital outlays in 2013, when the company opened up 235 fresh stores. In the fourth 1 / 4 of 2013, system-wide product sales in the Korea alone rose by 12. 2 percent, while organization grew by simply 19. 2 percent in China, seventeen. 2 percent in the United States, and 35. three or more percent in Southeast Asia and the Central East. In Southeast Asia, growth was led simply by Vietnam, in which business went up by forty. 2 percent. Same shop sales across its global network to get the fourth quarter grew simply by 8-9 percent year-on-year in higher consumer traffic and purchases every store. With higher net profit this past year, JFC’s returning on value improved into a 15-year high of 21. a few percent from the 18. 3 percent observed in 2012. Besides the flagship Jollibee brand, JFC operates Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King.

In China, it operates the Yonghe Full, Hong Zhuang Yuan and San Pin Wang stores. It also has a 50-percent stake inside the joint venture working Highlands Caffeine (in Vietnam and the Philippines), Pho24 (in Vietnam, Indonesia, Philippines, Hk, Macau and Cambodia) and 12 Sabu (China). d) An analysis of exterior factors for every single market (PEST analysis) The general environment composed of 6 sectors and the analysis of the effects in Jollibee is really as shown listed below.

Demographic

From your Philippines context, the million consumers strolling into Jollibee’s stores daily represent good demand for usana products. The uniqueness of the geographical landscape of Philippines has additionally made it challenging for fast-food companies. Globally, there are many Filipinos workers operating out of the overseas market, especially in the United States where there are approximated to be about 2 million Filipino foreign nationals. Besides the united states, many Filipinos are also situated in parts of Asia such as Hong Kong, Brunei and Indonesia. Not limiting to Filipinos, their stores also have attracted additional Asians to have at all their restaurants.

Monetary

The developing economic features of developing countries have attracted key players inside the fast food sector to establish their stores right now there. Likewise to get Jollibee, the growing market possibilities in Indonesia for Chinese foodstuff enabled Jollibee to opportunity into the market by intro of Chowking Brand. The actual China marketplace for take out also led Jollibee to get 85 percent ownership in Yong he King Chain.

Sociocultural

The social and cultural of every country may differ from one another. For example , a Chinese may possibly prefer to have noodles rather than rice in Japan. Inside our case of Jollibee, the “langhap-sarap concept adopted by them might be hugely popular to Filipinos consumers, nevertheless this concept might not do so well in global marketplaces. Foreign customers might not like the traditional flavor of Jollibee’s food, when compared with bigger global players just like McDonald.

Global

The changing global scenery is one of the critical factors Jollibee has to consider. As illustrated in the case study, Philippines have experienced major global players getting into the prêt à manger market having a take on this pie. Even though Jollibee have been the prominent in this portion, competing in foreign marketplaces seems to be in a different tale. Not only they must penetrate the other market with the proven and successful local recipe, they might also have to contend against already established players such as McDonald, Wendy’s and KFC. e) Estimate the expenses, risks, economical viability for each and every market.

Papua New Guinea: Raising the typical In early mil novecentos e noventa e seis, at the suggestion of Quality Assurance Manager Gil Salvosa, an area New Guinea entrepreneur in the poultry business approached Tony Kitchner of a Jollibee business. He explained a country of five million persons served by only one terribly managed, 3-store fast-food string, that got recently damaged ties having its Australian chicken restaurant business. “Port Moresby does not have asingle decent place to consume, “he told Kitchner. This individual believed Jollibee could raise the quality of service and food enough to take much of the Australian chain’s market share while discouraging further entrants. Although the original prepare had been to open just one retail store in the not far off future”in the administrative centre, Port Moresby”Tingzon was sure that the franchisee could just cover the expense of producing the market in the event he place in at least three or four shops soon after. But he was doubtful whether Papua New Guinea could support the 20 stores that he saw as the point critical mass for new markets. (For assessment, in the Israel, approximately 1, 200 take out outlets taken part for the business of 75 million persons. GNP every capita in both countries was nearly at US$2, 500. )

Hong Kong: Expanding the Base Also on Tingzon’s plate was a proposal to expand to a fourth retail store in Hk. The franchise, owned by simply Jollibee in partnership with local business people and managed by Tommy King, TTC’s brother-in-law, opened its first store in September 1996 to instant, overwhelming achievement. Located around a major transportation hub inside the Central region, it became a gathering place for Filipino expatriates, mostly domestic workers. However , appealing to the people had proven more difficult. When volume was high on weekends, when the Filipinos came to Central to interact socially, it chop down off throughout the week, when business was primarily from local workers in offices. Although two more retailers in Central had fascinated many Filipinos, they equally relied substantially on Chinese language customers and generated product sales of just about one-third with the first outlet. One problem was that, irrespective of strenuous work, Jollibee was unable to work with many community Chinese because crew members.

According to one manager, Oriental customers who also did not speak English very well were concerned that they would be embarrassed if perhaps they were not really understood by predominantly Filipino and Nepalese counter staff. Another difficulty was that in a city focused by McDonald’s, Jollibee’s company recognition between locals was weak. Working with Henry Shih, the sub-franchisee who possessed the second retail store, Jollibee employees were trying to help start a thematic advertising campaign, nevertheless due to the Hong Kong operation’s small size, the franchise could hardly inject sufficient funds. Washington dc: Supporting the Settlers Right after signing his contract, Tingzon had learned of year-old plan to open up one Jollibee store per quarter in California starting in the initially quarter of 1998. Helping TTC’s long-held belief that Jollibee could win enormousprestige and promotion by attaining foothold in the birthplace of fast food, Kitchner had drafted plans using a group of Manila-based businessmen while 40% associates in the endeavor.

Once the company stores had been established, they hoped to franchise in California and beyond it happened in 1999. Much of the self-confidence for this daring expansion program came from Jollibee’s success in Guam, a territory in the US. Even though initially targeted the 25% of the populace of Filipino extraction, management discovered that their menu become a huge hit to additional groups of People in the usa based there. They also located they can adapt the labor-intensive Filipino operating strategies by developing different tools and cooking food processes even more in keeping with an increased labor expense environment. Inside the words of just one International Division veteran, “In Guam, we all learned tips on how to do business in the usa. After doing well there, all of us felt we were ready for the mainland. “The plan needed the 1st store to get located in Daly City, a community with a significant Filipino populace but comparatively low attentiveness of fast-food competitors in the San Francisco location.

(With higher than a million migrants from the Thailand living in Washington dc, most fairly affluent, this state acquired one of the top concentrations of Filipino expatriates in the world. ) The menu would be transplanted from the Korea without changes. After primarily targeting Filipinos, the plan was to branch away geographically for the San Francisco and San Diego areas, and demographically to charm to different Asian-American and, eventually, Hispanic-American consumers. The hope was that Jollibee would then grow to all customers throughout the U. S. Just like the expansion approaches in PNG and Hk, this project had momentum behind it, including visible support from Filipino-Americans, strong curiosity of community investors, and, not least, TTC’s wonderful interest in being successful in McDonald’s back-yard. f) Rank the opportunities when it comes to their stability and likely contribution to the business

According to the company website, Jollibee International presently has more than 50 places in Brunei, Hong Kong, Vietnam, Saudi Arabia, Qatar, and U. S. Nowadays there are a total of 26 Jollibee stores in the U. H. including being unfaithful stores in Northern Cal, 15 retailers in Southern California, one shop in Las Vegas, and 1 store in New York. According to Jollibee’s website, the corporation has modified its global strategy and stopped internationalfranchising temporary.

The California operation has been a achievement. Since beginning the 1st U. S. store in Daly City in 1998, the business has widened their U. S. existence to a total of dua puluh enam stores. The company has the advantage in the California market since there are a lot new immigrants getting into the state with 80, 000 Filipino migrating per year. Jollibee currently features only one Hong Kong store positioned in Central, implying that at least two Central retailers have been shut down since 98 in addition to the Kowloon district retail store. Finally, there is not any Jollibee occurrence in Papua New Guinea indicating that work to grow to this region were not good.

References:

http://www.pinoyinvestor.com/smartinvestor/jollibee-banks-on-franchising-overseas-expansion-to-boost-long-term-earnings-04-aug-2014

http://en.wikipedia.org/wiki/Jollibee

http://www.allfreepapers.com/print/Jollibee”Case-Study-Analysis/1794.html

http://cdn.intechopen.com/pdfs-wm/12111.pdf

Jollibee ’13 profit up 24.5%

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

1