Background of the Company:

Jollibee is the biggest fast food chain in the Philippines, with over

1,150 stores nationwide. A dominant market chief in the Philippines,

Jollibee enjoys the lion’s share of the neighborhood market that is extra than

all the other multinational manufacturers combined. The business

enterprise has also embarked on an

aggressive worldwide enlargement design in Vietnam, Brunei, Hongkong,

Singapore, Macau, Malaysia, US, Canada, Saudi Arabia, UAE, Qatar, Kuwait,

Bahrain, Oman, Italy and the United Kingdom.

VISION & MISSION, GOALS & OBJECTIVES

Mission:

To serve great tasting food, bringing the joy of eating to everyone.

Vision:

We excel in providing great tasting food that meets local preferences better
than anyone.We provide superior dining experience, through FSC (Food,
Service, and Cleanliness) excellence in every encounter.

We are the most cost efficient restaurant company in our business segments,
allowing us to price at the most popular levels.
Our people are passionate about their work and thrive in a high performance
culture.

We strive to become a model corporate citizen by being relevant to the

communities we serve.

Our brands are either #1 or #2 in each of our market segments.

It is the vision of JFC to become one of the three largest and most profitable
restaurant companies in the world by 2020.

A company that values family:

Jollibee was founded by Tony Tan and his family 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.

Aside from promoting a family oriented work environment, the brand’s values

also reflect on their advertising and marketing. Jollibee knows their target

audience very well: the traditional family and all communication materials

focus on the importance of family values, making Jollibee the number one
family fast food chain in the Philippines and a growing international QSR

player.

A Well-Loved Brand:

Customer satisfaction has always been key to Jollibee’s success. Never losing

sight of its goals, Jollibee has grown to be one of the most recognized and

highly preferred brands in the Philippines. Now the market leader among fast

food chains in the Philippines, claiming a market share that totals to more

than half of the entire industry.

Great tasting products and quality systems:

Jollibee’s growth is due to its delicious menu line-up – like its superior-tasting

Chickenjoy, mouth-watering Yumburger and Champ hamburger, and

deliciously satisfying Jollibee Spaghetti –ably complemented with creative

marketing programs, and efficient manufacturing and logistics facilities. It is

made possible by well-trained teams that work in a culture of integrity and

humility, fun and family-like. Every Jollibee outlet welcomes customers with a

clean and warm in-store environment and friendly and efficient service.

And it is this tried and tested formula of delivering great-tasting food,

adherence to world class operating standards and the universal appeal of the

family values the brand represents that are driving the expansion of Jollibee

both locally and in the overseas market.

Widest store network in the Philippines and an emerging global player:

Jollibee is the largest fast food chain in the Philippines, operating a nationwide

network of more than 750 stores. A dominant market leader in the Philippines,

Jollibee enjoys the lion’s share of the local market that is more than all the

other multinational brands combined. The company has also embarked on an

aggressive international expansion plan, and currently has 80 stores outside

the Philippines-USA (26), Vietnam (32), Brunei (11), Jeddah (7), Qatar, Hong

Kong, and Kuwait (1 each), firmly establishing itself as a growing international

QSR player.
 JFC Competitive Advantage

Analysis of Tony Kitchner's Strategy

a. First mover advantage - Jollibee was the first to enter the market.

In 1994 Tony Kitchner was hired to head the International Division. He

was successful over his three years. He was successful in creating wealth and
increasing the presence in countries that had less or no competition. During
his time the total number of stores increased 65% to 205 from the end of 1993
to the end of 1996. Moreover the total sales increased over 94.5% over the
same period these increases are dramatic. Very few companies can experience
rapid growth like this. He always had the idea to be the first -mover into
untapped markets as he believed that although you may incur losses in the
initial years, which can be cross subsidized from Philippines operation, the
company will be able to restrict the entry of its competitors. But these do not
show the whole picture of his strategy implementation. There were instances of
shutdown of stores due to mounting losses the chaotic strategy of investments
unsupported by proper research failed costly for the company. His strategy of
targeting expats had the risk of targeting a narrow segment. The lifestyle,
tastes and preferences of the expats was also not considered during
international expansion- Marketing Perspective

Jollibee was able to attain a competitive advantage in Philippines by doing

following things:

• Jollibee was the first to enter the market.

• Retaining tight control over operations management, which

• Allowing it to price below its competitor.

• Having the flexibility to cater to the tastes of its local consumers.

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. Internationally well-established players like
KFC and McDonalds had high brand values that Jollibee found difficult to
compete with. The threat of substitute products is considerable. Local street
food and high-end restaurants form two ends of a range of substitutes.
Potential entrants face entry barriers that will hinder them from entering the
industry. These are the inability to gain access to technology and specialized
know-how, brand preference and customer loyalty, capital requirements,
economies of scale, and strategically situated distribution channels.

Tony Kitchner was hired to build the global Jollibee brand with the dual
goals of positioning Jollibee as an attractive partner, while generating
resources for expansion. In order to become one of the top 10 fast food brands
in the world. Kitchner implemented a two-part international strategy which
comprised of targeting expats and planting the flag.

b. Financial Management Perspective

Jollibee's sales, net income, operating income, and royalties and

franchise fees has been increasing rapidly for the period under study. The total
number of stores increased 65% to 205 from the end of 1993 to the end of
1996. By 1996, sales had increased to 8.57 billion which translates to a market
share of more than 50% among all hamburger fast food chains. Total assets
increased over 230% in the same period. Moreover operating income increased
about 114% while net income increased over 100% during the same period.
These increases are dramatic. Significantly Inventory decreased from about
11.5% in 1992 to just 7.5% in 96. This implies that less of the current assets
were tied up inventory. During the same period the trade accounts receivables
has increased from 8.4% in 1992 to 12.7% in 1996. Jollibee was able to
compensate for this increase by corresponding increase in sales and hence this
need not be a cause of concern.

On the other hand, all is not well with the financials of Jollibee. There
was 28.9 million pesos of long-term debt outstanding at the end of year 1996.
Cost of sales has increased each year with an increase of about 46% from the
end of 95 to the end of 96. But during this same period, total sales only
increased about 28.7%. This escalation in the cost of sales must be brought
under control

Accounts payable and accrued expenses increased by about 156% from

94 to 96. In addition, earnings per share decreased 19% to 0.68 pesos per
share from 94 to 96. Jollibee has debt and some financial instability; however it
is not something they can't overcome. They have 24 stores in foreign countries,
which account for roughly $9 million in sales. This is an encouraging sign as
far as Jollibee is concerned and they will be 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 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.

c. Operations Management Perspective

From the very beginning Jollibee Foods Corporation had focused on

delivering quality food and service at an affordable cost to the customers. This
had been possible only due to excellent operational control.

They enjoyed a dominant position in the fast food market in Philippines

until McDonalds entered the market. To take on McDonalds, they focused on
their main asset, their knowledge of taste and preferences of the local
population. This strategy paid off initially but slowly McDonalds caught up. To
maintain their market share and counter the growing popularity of McDonalds
Big Mac sandwich they came up with their USP, a large hamburger named
Champ which contained a wide hamburger patty as against Big Mac which had
two small patties.
 Once Jollibee Food Corporation was well established in Philippines, TTC's
decision to expand overseas was a good bet. But due to their inexperience and
wrong choice of partners they suffered losses in their initial foreign ventures. In
Singapore there were too many partners thus hindering smooth operation.

In Taiwan there were disputes over management of local operations. In a

franchise arrangement standardization of operations is the most essential
factor. But in this case the local partner was objecting to the presence of
company employees.

Methods of Strategy Implementation

A business process is a collection of related, structured activities or tasks that

produce a specific service or product (serve a particular goal) for a particular
customer or customers. It often can be visualized with a flowchart as a
sequence of activities with interleaving decision points or with a Process Matrix
as a sequence of activities with relevance rules based on the data in the
process.

Business processes must include up-to-date and accurate Information reports

to ensure effective action. An example of this is the availability of purchase
order status reports for supplier delivery follow-up as described in the section
on effectiveness above. There are numerous examples of this in every possible
business process.

Another example from production is the process of analysis of line rejections

occurring on the shop floor. This process should include systematic periodical
analysis of rejections by reason, and present the results in a suitable
information report that pinpoints the major reasons, and trends in these
reasons, for management to take corrective actions to control rejections and
keep them within acceptable limits. Such a process of analysis and
summarization of line rejection events is clearly superior to a process which
merely inquires into each individual rejection as it occurs.

Business process owners and operatives should realize that process

improvement often occurs with introduction of appropriate transaction,
operational, highlight, exception or M.I.S. reports, provided these are
consciously used for day-to-day or periodical decision-making. With this
understanding would hopefully come the willingness to invest time and other
resources in business process improvement by introduction of useful and
relevant reporting systems?

Re-engineering
Business process re-engineering (often referred to by the acronym BPR) is the
main way in which organizations become more efficient and modernize.
Business process re-engineering transforms an organization in ways that
directly affect performance.

The two cornerstones of any organization are the people and the processes. If
individuals are motivated and working hard, yet the business processes are
cumbersome and non-essential activities remain, organizational performance
will be poor. Business Process Re-engineering is the key to transforming how
people work. What appear to be minor changes in processes can have dramatic
effects on cash flow, service delivery and customer satisfaction. Even the act of
documenting business processes alone will typically improve organizational
efficiency by 10%.

The best way to map and improve the organization's procedures is to take a top
down approach, and not undertake a project in isolation. That means:

Starting with mission statements that define the purpose of the organization
and describe what sets it apart from others in its sector or industry.

Producing vision statements which define where the organization is going, to

provide a clear picture of the desired future position.

Build these into a clear business strategy thereby deriving the project
objectives.

Defining behaviors that will enable the organization to achieve its' aims.

Producing key performance measures to track progress.

Relating efficiency improvements to the culture of the organization

Identifying initiatives that will improve performance.

Job Redesign

restructuring the elements including tasks, duties and responsibilities of a

specific job in order to make it more encouraging and inspiring for the
employees or workers is known as job redesigning. The process includes
revising, analyzing, altering, reforming and reshuffling the job-related content
and dimensions to increase the variety of assignments and functions to
motivate employees and make them feel as an important asset of the
organization. The main objective of conducting job redesigning is to place the
right person at the right job and get the maximum output while increasing
their level of satisfaction.

Job Redesign Process

Revising the Job Content: Job redesigning process involves recollecting and
revising job-related information to determine the inconsistency between person
and the job.

Analyzing Job-related Information: Once the job analyst is through with

recollecting and revising the job content, analyzing the discrepancies is the
next step. It is done to determine the hindrances in performing job-related
tasks and duties and investigate why an employee is not able to deliver the
expected output.

Altering the Job Elements: The next step is to amend the job elements. It may
include cut back on extra responsibilities or addition of more functions and a
higher degree of accountability. The basic aim of altering the job content is to
design a job in such a manner that encourages employees to work harder and
perform better.

Reformation of Job Description and Specification: After altering the job

elements, a job analyst needs to reform the job description and specification in
order to make sure that the worker placed at a particular place is able to
deliver what is expected of him.

Reshuffling the Job-related Tasks and Duties: Next is to reallocation of new or

altered tasks and functions to employees. It may be done by rotating,
enriching, enlarging and engineering the job. The idea is to motivate the
performers while increasing their satisfaction level.

Advantages of Job Redesigning

Enhances the Quality of Work-Life: Job redesigning motivates the employees

and enhances the quality of their work life. It increases their on-the-job
productivity and encourages them to perform better.

Increases Organization’s and Employees’ Productivity: Altering their job

functions and duties makes employees much comfortable and adds to their
satisfaction level. The unambiguous job responsibilities and tasks motivate
them to work harder and give their best output. Not only this, it also results in
increased productivity of an organization.

Brings the Sense of Belongingness in Employees: Redesigning job and allowing

employees to do what they are good at creates a sense of belongingness in them
towards the organization. It is an effective strategy to retain the talent in the
organization and encouraging them to carry out their responsibilities in a
better fashion.

Creates a Right Person-Job Fit: Job Redesigning plays an important role in

creating a right person-job fit while harnessing the full potential of employees.
It helps organization as well as employees in achieving their targets or goals.

Therefore, the purpose of job redesigning is to identify the task significance and
skill variety available in the organization and reallocating the job-related tasks
and responsibilities according to the specific skills possessed by an employee.

Six Sigma
Six Sigma seeks to improve the quality of process outputs by identifying and
removing the causes of defects (errors) and
minimizing variability in manufacturing and business processes. It uses a set
of quality management methods, including statistical methods, and creates a
special infrastructure of people within the organization ("Black Belts", "Green
Belts", etc.) who are experts in these methods. Each Six Sigma project carried
out within an organization follows a defined sequence of steps and has
quantified financial targets (cost reduction and/or profit increase).

The term Six Sigma originated from terminology associated with

manufacturing, specifically terms associated with statistical modeling of
manufacturing processes. The maturity of a manufacturing process can be
described by a sigma rating indicating its yield or the percentage of defect-free
products it creates. A six sigma process is one in which 99.99966% of the
products manufactured are statistically expected to be free of defects (3.4
defects per million).

Management By Objective (MBO)

Management by objectives (MBO) is a process of defining objectives within an
organization so that management and employees agree to the objectives and
understand what they need to do in the organization in order to achieve them.

Unique features and advantages of the MBO process

The principle behind Management by Objectives (MBO) is for employees to have
a clear understanding of the roles and responsibilities expected of them. They
can then understand how their activities relate to the achievement of the
organization's goal. MBO also places importance on fulfilling the personal goals
of each employee.

Some of the important features and advantages of MBO are:

Motivation – Involving employees in the whole process of goal setting and

increasing employee empowerment. This increases employee job satisfaction
and commitment.

Better communication and coordination – Frequent reviews and interactions

between superiors and subordinates helps to maintain harmonious
relationships within the organization and also to solve many problems.

Clarity of goals

Subordinates tend to have a higher commitment to objectives they set for

themselves than those imposed on them by another person.
Managers can ensure that objectives of the subordinates are linked to the
organization's objectives.

Total Quality Management or TQM

An integrative philosophy of management for continuously improving
the quality of products and processes.

TQM functions on the premise that the quality of products and processes is the
responsibility of everyone who is involved with the creation or consumption of
the products or services offered by an organization. In other words, TQM
requires the involvement of management, workforce, suppliers, and customers,
in order to meet or exceed customer expectations.

Considering the practices of TQM as discussed in six empirical studies; Cua,

McKone, and Schroeder (2001) identified the nine common TQM practices as:

cross-functional product design

process management

supplier quality management

customer involvement

information and feedback

committed leadership

strategic planning

cross-functional training

employee involvement

Appropriate Method for the Company

I choose Job redesign, as the most appropriate for the selected company to
utilize in order to implement the recommended business policy.

The goal of job design and job redesign is to create or reconstitute jobs or work
roles in terms of work functions and worker capabilities that are both
appealing to individuals and re in alignment with the organization’s strategy
and vision. Job design involves the planning of the job including its contents,
the methods of performing the job, and how it relates to other jobs in the
organization. Job design and redesign’s goal is to connect the needs of the
individuals performing various jobs with the productivity needs of the
organization. An important aim for job design and redesign is to provide
individuals with meaningful work that fits effectively into the flow of the
organization. The goal of job design is simplifying, enriching, enlarging, or
otherwise changing jobs to make the efforts of each employee fit together better
with jobs performed by other workers. Redesigning one job can make the
overall system work more efficiently methods would be most appropriate for the
selected company to utilize in order to implement the recommended business
policy.
Job Redesign Approaches
Motivational Approach-Grounded in the earlier work on job enrichment,
job enlargement and various characteristics of jobs, the motivational approach
has primarily been developed within the domain and scope of organizational
psychology. The motivational approach has generally searched for job
design constructs that will be correlated with such primary outcomes variables
as satisfaction, motivation, involvement, absenteeism, and job
performance. Mechanistic Approach-The mechanistic approach to job redesign
has generally been on improving the efficiency with which jobs can be
performed. Jobs that are constructed according to the mechanistic approach
require less training and less expensive to staff. In essence the jobs are
simplified and have lower levels of responsibility. With mental demands being
lower, output quality may increase. Perceptual-Motor Approach-The presumed
benefits of the perceptual-motor approach include the increase in output
quality and a predicted decrease in accident rates due to the emphasis on the
reliability and safety of the job. The reduced mental demands of the job would
also reduce employee stress and fatigue.

Specialized to Enlarged Jobs

Job enlargement = same-level activities

Job rotation = moving from one job to another
Job enrichment = redesigning to experience more responsibility, achievement,
growth and recognition

JFC Comparative Advantage:

The STRATEGIC ANALYSIS is intended to give an extremely far reaching

strategic analysis of the Target Company and thereby explore the medium and
long term problems and opportunities for the Target Company. This provides a
vital input to Corporate Planning and Development.

MEDIUM + LONG TERM STRATEGIC CONSIDERATIONS: Long Term Market &

Product Forecast, Consumption Forecast, Long Range Forecast for Products,
Product Growth, and Factors for Profitability.

MARKET ENVIRONMENT: Growth, Structure, Service, Customers.

THE PRODUCT: Life Cycles, Market Share, Product Quality, Product range,
Profitability, Pricing, Service Quality, New Products.

COMPETITION: Market Share, Profitability, Competition, Market.

THE INDUSTRY: Industry Growth, Costs, Capacity, Productivity, Labor,

Unionization, Capital Structure, Investment, Margins, Integration, Marketing
costs, Process, Distribution, Market Penetration.

MEDIUM + LONG TERM STRATEGIES: Build, Hold or Harvest

MEDIUM + LONG TERM CHECKLIST: Profitability, Productivity, Market

Shares, Customers, Sales Promotion, Product Availability, Competence,
Products, Quality, Pricing, Competitors, Performance, Service, Customer Base,
Costs & Margins, Distribution Channels, Forecast of Financial + Operating
Data.

MEDIUM + LONG TERM CHECKLIST is a working plan or document for the

critical factors which influence the Target Company in strategic terms. The
data is given as a matrix by Subsidiary, Division, Unit or Market sector.

CRITICAL LONG RANGE FORECASTS - Long Term Market & Product Forecast
- Overall Market Forecast for the Industry - Long Range Country / Trade Cell
Forecasts - Long Term Product Growth

THE LONG-TERM MARKETS The Market section consists of a LONG-TERM

MARKET CONSUMPTION forecast giving data for each year from 2018-2028.
Market Consumption & Market Trend figures are given:- by each Country/
State / Region by each Product Group and/or MARKET by YEAR 2018-2028
LONG-TERM PRODUCT PROFILES Figures are given by each Country / State
or Region by each Product and by Year (2002-2028). Market data for each
Product or Market Sector in a matrix for all the countries or states in the Long-
Term.

LONG-RANGE PRODUCT SUMMARY Figures are given by EACH Country /

State or Region by each Product. The PRODUCT SUMMARY will give a forecast
for each Product or Market Sector in the Long-Term.