Thesis Essays Report 1071119018

8/8/2019 Thesis Essays Report 1071119018

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Jollibee Case 1. The fast food business is like any other industry; to make money one has to be efficient, flexible, and serviceable. Most importantly, it helps to have brand recognition. When customers enter a Jollibee, McDonald's, or Burger King, they do not want to wait long for their food.The time from when they get in line until they get their food has to be minimized. I know from myown experience that if I wait more than five minutes I am dissatisfied. To help reduce time, kitche

ns in fast food restaurants must have a good flow. The grill cannot be too far from the counter. The burgers have to come off the grill and be able to get to the counter very quickly. If the grillis in the back and the counter in the front, the time it takes to move the food will increase. People who frequent fast food establishment are often pressed for time so every second counts. Also, people want the food tailored to their own tastes. Some people may demand a sandwich without mayonnaise. If this request cannot be completed, then customers will go elsewhere. Jollibee's often triedto tailor their menus to meet the needs of consumers. In Muslim countries, they eliminated all porkfrom their food and menu (pg 9.) Similarly, customers may ask for changes at the counter. A person may ask for a Big Mac without the special sauce. If a person requests no sauce, he wants his order to be handled accurately and timely. If he receives a sandwich with sauce, he will have to go back to the counter and wait for a new sandwich. This will waste his time and give him a bad sense of customer service. Another important key to success is name recognition and first entry into the market. Jollibee's often found it very difficult to enter a market where McDonald's already existed. McDonald's was able to set a standard that customers were familiar with. Also, people were familiar with McDonald's. Their stores are located all over the world and their profits allow them to have a

lavish advertising budget. McDonald's is a sponsor of the Olympics, which is seen all over the wor ld. Jollibee's is not. This brand recognition allowed McDonald's to successfully enter markets where Jollibee's already existed. In the early 1980's, McDonald's was able to quickly enter the Phillipine market, have per store sales surpass Jollibee's, and grab a 27% share of the fast food market (pg 2). McDonald's was able to do this even though the Phillipine people preferred the taste Jollibee's hamburgers by a wide margin. This success can be traced back to McDonald's brand recognition.

2. Jollibee had several advantages, which allowed it to build a dominant position in the Phillipine market. Jollibee was the first to enter the market. They established themselves and a way of doing business that satisfied customers. Also, they tailored their hamburgers to the taste of the Phillipine people (pg 2). Jollibee's was the first to enter the market and according to the Phillipinepeople had the better tasting burgers. This was major factor in their ability to beat McDonald's. Another major factor was the assassination of Benigno Aquino, a political leader coming back from exile, in 1983 (pg 2). This event led to a political and economic crisis, which scared off many foreign investors like McDonald's. During this time, Jollibee pulled further ahead by using riding a waveof national pride. At this time they further tailored their menu, adding "taste-tested offerings of chicken, spaghetti, and a unique peach mango dessert pie, all developed to local consumer tastes"(pg 2). By 1984, McDonald's popularity was evaporating. Furthermore, Jollibee went head to head with McDonald's. They responded to the BigMac with the Champ. Instead of two small bland patties, the Champ was one big, spicy burger. 3. Tony Kitchner came to Jollibee in January 1994 and was a great success over his three years. During his time, there was great expansion and increase in wealth. He used a plant the flag strategy to expand Jollibee overseas. Kitchner built stores in countries that had little or no fast food presence. Also, he felt that by expanding he could build brand r ecognition, which would increase sales (pg 6). He turned out to be right. According to Exhibit 1 the total number of stores increased 65% to 205 from the end of 1993 to the end of 1996. Also totalsales increased over 94.5% over the same period. Furthermore, according to exhibit 3 total assets increased over 230% in the same period. Also, according to Exhibit 4 operating income increased about 114% while net income increased over 100% during the same period. These increases are dramatic.Very few companies can experience rapid growth like this. It is very rare. (Because Kitchner camein the beginning of 1994 and stayed until the beginning of 1997 I used the statistics at the end of 1993 and 1996 to calculate returns during his tenure.) Kitchner also made in-house changes to helpimplement a more successful business. One of his first moves was to implement a dress code. Herequired all employees to wear ties because according to one employee, "We had to look and act multinational, not like a local chain. You can't have someone in a short-sleeved open-neck shirt askinga wealthy businessman to invest millions" (pg 5). Kitchner gave the International side of Jollibeea more professional persona. He increased his staff by hiring mangers of marketing, finance, and quality control and product development (pg 5). He prepared the company for great expansion. Kitchner also understood the need to customize local stores. His team created the Jollimeal, a rice-basedmeal with a topping that varied according to country (pg 9). Also, to ensure good quality and atmosphere he created the FSM who visited three times per quarter to give one thorough check and two quick checks (pg 7). This ensured that each store was run as best it could. 4. Noli Tingzon is ina precarious position. Jollibee has experienced increased sales, net income, operating income, androyalties and franchise fees for three straight years before he came. (Exhibit 2, 3, and 4). Also, inventory decreased from about 9.5% in 94 to just under 5% in 96 (Exhibit 3). This informs us that less of the current assets are tied up inventory. There is more cash on hand. This is very positi

ve and suggests and very good future, but there are aspects Tingzon must examine. However, everything is not on the up and up. According to Exhibit 3, there was 28.9 million pesos of long-term debt.Also cost of sales has increased each year with an increase of about 46% from the end of 95 to theend of 96 (Exhibit 4). During this same period, total sales only increased about 28.7%. Tingzon must find a way to decrease the cost of sales. Furthermore, accounts payable and accrued expenses increased about 156% from 94 to 96 (Exhibit 4). In addition, earnings per share decreased 19% to .68 pesos per share from 94 to 96 and for the first time Jollibee had to pay back a bank loan in 96 (Exhi



bit 4). Tingzon has to clean up the books. Jollibee has debt and some financial instability; however it is not something they can't overcome. They have 24 stores in foreign countries, which accountfor roughly $9. million in sales (Exhibit 10, US dollars). This is a very good sign. Jollibee willbe able to pay off their debts and loans. One thing they should consider doing is slowing down expansion. Jollibee should consider opening a store and giving it time to grow and turn a profit befor

e 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 willincrease debt. They must remember that it took McDonald's 20 years for their international operations to account for 50% of total sales (pg 13). Jollibee has plenty of time left to match and possibly beat McDoanld's in that area. They must give themselves time and not be too ambitious or greedy.Also, they must reduce cost of sales. They cannot have cost of sales increase at a greater rate than total sales. Being more cost conscious will help business. 5. Each investment option is ver y intriguing. In New Guinea there are five million people with extremely limited fast food options.The only supplier has three poorly managed stores. Jollibee can come in set a high standard, attr

act many customers, and scare future investors away; however they would have to quickly add three tofour stores to be competitive and cover costs. There was also question as to whether the area could handle 20 stores. In Hong Kong, they are located near a very densely populated area, which has avery loyal Filipino customer base. These people gave them great business on the weekends, but salesfell off during the week because the local Hong Kong people rarely frequented the Jollibee establis

hment. Also, there were tremendous problems with the Chinese stores. All of the managers resignedand many employees quit because the Chinese like to work for Chinese. There was obvious friction between the Chinese and Filippino's. The California expansion seems to be the best option for severalreasons. First and most importantly, the United States is largest fast food market in the world. We have hundred of millions of people living here. There are much more potential customers than Guam. Also, Jollibee first venture was going to be in San Francisco. There was a large Filipino population in this area and relatively low fast food competition. Furthermore, they also discovered thatthere were many elements of their restaurants that appealed to Americans. Simialrly, there was great support from Filippino-Americans. Likewise, Jollibee was going to expand throughout California before it moved east. They were determined to gain recognition. Another helpful aspect is the diver sification of America. In any given city a person can find Chinese, Italian, Greek, Spanish, Japanese, American, German, Polish, Indian, and other ethnic restaurants. Americans like to try food of different cultures. It is considered chic and popular. There is no reason to believe that we will not try Filipino food. While we are at it, let's not forget that Americans are supposedly fatter than ever. This is because many of us consume fast food, which is high in fat, very often. If someonebuilds a fast food restaurant, we will come. There is very little reason to believe that Jollibeecannot successfully enter the fast food market in the United States. jollibee case fast food business like other industry make money efficient flexible serviceable most importantly helps have brand r ecognition when customers enter jollibee mcdonald burger king they want wait long their food time fr om when they line until they their food minimized know from experience that wait more than five minutes dissatisfied help reduce time kitchens fast restaurants must have good flow grill cannot from counter burgers have come grill able counter very quickly grill back counter front time takes move will increase people frequent fast establishment often pressed every second counts also people want tailored their tastes some people demand sandwich without mayonnaise this request cannot completed thencustomers will elsewhere jollibee often tried tailor menus meet needs consumers muslim countries eliminated pork menu similarly customers changes person without special sauce person requests sauce wants order handled accurately timely receives sandwich with sauce will back wait sandwich this wastegive sense customer service another important success name recognition first entry into market oftenfound very difficult enter market where mcdonald already existed mcdonald able standard that were f amiliar with also were familiar with stores located over world profits allow them lavish advertisingbudget sponsor olympics which seen over world this brand recognition allowed successfully enter mar kets where already existed early able quickly phillipine market store sales surpass grab share eventhough phillipine preferred taste hamburgers wide margin success traced back brand several advantages which allowed build dominant position phillipine first established themselves doing business thatsatisfied also tailored hamburgers taste first according better tasting burgers major factor abilitybeat another major factor assassination benigno aquino political leader coming exile event political economic crisis which scared many foreign investors like during pulled further ahead using ridingwave national pride further tailored menu adding taste tested offerings chicken spaghetti unique peach mango dessert developed local consumer tastes popularity evaporating furthermore went head head r esponded bigmac champ instead small bland patties champ spicy burger tony kitchner came january great success over three years during there great expansion increase wealth used plant flag strategy expand overseas kitchner built stores countries little presence felt expanding could build would increase sales turned right according exhibit total number stores increased total sales increased same per iod furthermore according exhibit total assets increased same period exhibit operating income about

while income during same period these increases dramatic very companies experience rapid growth likerare because kitchner came beginning stayed until beginning used statistics calculate returns tenur e made house changes help implement more successful business moves implement dress code required employees wear ties because employee look multinational local chain someone short sleeved open neck shirt asking wealthy businessman invest millions gave international side more professional persona staf f hiring mangers marketing finance quality control product development prepared company great expansion understood need customize local team created jollimeal rice based meal topping varied country en



sure good quality atmosphere created visited three times quarter give thorough check quick checks ensured each store best could noli tingzon precarious position experienced income operating royaltiesfranchise fees three straight years before came inventory decreased about just under informs less current assets tied inventory there cash hand positive suggests good future there aspects tingzon mustexamine however everything million pesos long term debt cost each year about only tingzon must find

decrease cost furthermore accounts payable accrued expenses addition earnings share decreased pesosshare bank loan clean books debt some financial instability however something overcome foreign countries account roughly million dollars sign debts loans thing should consider doing slowing down expansion should consider opening store giving grow turn profit before finances opening opening requiresfinancing study markets determine location furniture purchase kitchen appliances train managers employees multiple hurt bottom line debt remember took years international operations account plenty left match possibly beat mcdoanld area give themselves ambitious greedy reduce cost cannot greater rate than being conscious help each investment option intriguing guinea five million extremely limitedoptions only supplier poorly managed come high standard attract many scare future investors away however would quickly four competitive cover costs question whether area could handle hong kong locatednear densely populated area loyal filipino customer base these gave them weekends fell week becausehong kong rarely frequented establishment were tremendous problems chinese managers resigned many employees quit chinese work chinese obvious friction between filippino california seems best option several reasons most importantly united states largest world hundred millions living here much potential than guam venture going francisco large filipino population relatively competition discovered el

ements restaurants appealed americans simialrly support filippino americans likewise going expand throughout california before moved east determined gain another helpful aspect diversification americagiven city person find italian greek spanish japanese american german polish indian other ethnic restaurants americans different cultures considered chic popular reason believe filipino while forgetsupposedly fatter ever consume high someone builds restaurant come little reason believe successfully united statesEssay, essays, termpaper, term paper, termpapers, term papers, book reports, study, college, thesis, dessertation, test answers, free research, book research, study help, download essay, download term papers

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Thesis Essays Report 1071119018