Employees: over 500 of Jollibee employees in Vietnam work for company with many reasons, it can be salary, recognition; the demand to develop their potential to fullest extent-skills, talents. Jollibee’s employees have major effect on the success of business as it is they who are responsible for all aspects of work carried out in Jollibee. Employees when motivated, will usually be more productive, produce a better quality product/service, provide ideas for improvement and guarantee that all objectives are met to the best of their ability to make a positive Jollibee’s brand in all over Vietnam market and international one.
(BPP, 2004).
There are several groups of connected stakeholders.
In the other words, shareholders are now being asked to take a more involved interest in a company’s affairs and influence significantly on Jollibee’s development.
Moreover, Vietnamese people have an interest in information about the continuance of Jollibee, especially when Vietnamese have a long-term involvement with, if Jollibee’s image is blacken by some negative reasons they will turn around to choose McDonald, KFC, BBQ or anything else, as a result Jollibee is lost its sales.
Jollibee needs to consider carefully the needs from stakeholders to identify the best way to satisfy them in order to make the highest benefit. Besides, to use the positive influence, say, opportunity of support in food industry from government, or discount from suppliers etc for getting the competitive advantage among other competitors both Vietnam market and international one. V – External environment and organizational audit 1. PESTEL analysis of the macro-environment While operating in Vietnam where there are many factors in the macro-environment that effect the decisions of the managers of Jollibee.
Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To analyze these factors managers can categorise them using the PESTEL model. This classification distinguishes between Politics, Economy, Society, Technology, Environment and Legal (Att, 2009) basing on it to outline the view of Vietnam that influences business of Jollibee.
Vietnam is a communist state, with the Communist Party of Vietnam playing the central role in the politics of the country. The country has obtained steady economic growth rates in recent years and its government has improved the business environment business through attempting to limit protectionism, new tariffs and taxes or new restrictions on both domestic and foreign enterprises like Jollibee to trade (AsiainInfo, 2007). In the developing process, Vietnam government has chosen key groups of industry to focus the mainly resource with many of different policies to develop them in long term.
The heavy industry and light one are most supported to grow by Foreign Direct Investment (FDI) and government funds which accounted for over 72% on total Vietnam’s disbursement whereas the service industry is just 1.55%. Although the total turnover of the fast food industry (service industry) in Vietnam is expected to reach VND500 billion in 2009 but it is not still put on a highly priority in developing plan of Vietnam government.
The economy of Vietnam is a developing mixed economy. Over the past 20 years, Vietnam has made a shift from a centrally planned economy to a Socialist-oriented market economy. The economic growth of Vietnam in 2009 was not fairly good compared to 2006, 2007 which had been answered by the overall global slowdown. The economy of Vietnam faced many challenges in 2009 and its growth decline. The global financial crisis triggered concerns of a possible economic crisis and put all economies under severe pressure, including Vietnam’s. IMF forecast the Vietnam GDP Growth will just over 6.2 percent by 2010.
Vietnam GDP Growth (IMF estimated 2009) In addition, the Consumer Price Index (CPI) recently up to 8.31% (IMF) which means there is a raise in overall price of goods in Vietnam plus the inflation threat might happen again due to the government’s stimulus package of 8 billion USD (12% GDP) which is filled on business for saving them in crisis. In a recently report, the world’s crude oil price is forecast to increase again to hover around $60 per barrel in 2009 and around 75 per barrel in 2010 (IMF’s forecast, released July 8, 2009). The rice price tends to increase to reach the average level of $600 per tonne in 2010. In that case, it leads to the forecast scenario that the economic growth rate will be 6.2-7 percent in 2010, while inflation 7.5-8.5 percent. In 2009-2010, high economic growth rates will be maintained, but inflation will increase, which means that comprehensive measures need to be carried out in the monetary policy’s implementation.
Once inflation of Vietnam goes up so it may provoke higher wage demands from employees and raises costs in process of Jollibee which makes a raise in price of end products while penetrating Vietnam market. Moreover, this brings much more concerns for Vietnam economy as well as Vietnamese people in decision-making of spending (Kotler, 2006). In this situation, Vietnamese customers who have low and average income they had to consider more careful before buy something, rein money in their pocket and focusing on necessary purchase instead of spending fast-food services.
Population of Vietnam is 86,210,860 (CIA, July 2008 est.) which is ranked thirteen in the world. They have medium or above average income of per capita income $1,024 and is ranked 128 in the world. Besides, most of population in Vietnam is young people with over 69 percent of Vietnam population they account for majority in market. The distribution of the population according to age (CIA estimated 2009)
Majority Vietnamse people belong to 15-64 years old which bring many advantage for fast-food industry because young people have a trend of receing new things from modern world, they are easy to allow overseas values than elders who usually prefer traditional values. Young peope contributed sinificantly on the modernization of many living quarters prompted quality services in Vietnam.
Moreover, in 1990s to 2007, the rate of urbanization was rapid due to the large number of construction and city planning projects all over Vietnam, the Population Reference Bureau also estimated that 20% of Vietnam population lived in urban areas in 2001. Hence, when people started to live in city, there was considerable demand for foodservice outlets. This transform in Vietnam social pace and growing affluence and busy works at offices which made more people to spend an extra buck on a quick meal out rather than spending time to cook at home. A recent survey conducted by Nielsen about trends in the Vietnamese food market showed that the regular customers of the fast food shops are high income earners. Most customers use fast food if they need quick meals, and 84% said they will use fast food services in the next six months.
Technology: there is recently an evolution of technology in the fast food industry is picking up the pace – and making the fast food arena one full of strong franchise opportunities. Technology brings many advantages for both Jollibee and its customers, especially is to push its brand up. The concept of touch-screen kiosks and self-checkout centre which were performing today with lanes in grocery stores and post offices.
They give customers more freedom, ease long lines and, in some cases, cut labor costs in restaurant. It includes colorful, animated touch-screen menus that give customers the option to browse through the entire menu, customize their order, and then pay with cash or a credit card (Techfoods, 2009). Nowadays, software providers now offer systems that can automatically generate the purchase order for the chicken materials by utilizing inventory application software. Other systems can track refrigeration temperature, humidity, and even energy usage – preserving those ever-important perishables (Novation, 2009). These technology tools are becoming a key ingredient in running the whole place at Jollibee in future and other systems in order to cut labor costs, to serve consumers better as well as take the competitive advantage.
Vietnam’s weather varies from the sub-tropics in the North to the tropics in the South. The humidity is high, with average ranging around 84% a year. Northern Vietnam (from Hue up North) has four seasons with a cold winter and hot summer. The temperature ranges from 5-6C in winter to up to 35C in summer. Temperatures are high all year round. The temperature tends to be warmer and more humid than the South in the middle of the year and cooler during the dry season. Southern Vietnam has a distinct dry season) and wet season. Average temperature ranges from 25-30C (AsianInfo, 2009).
Under Vietnamese law, goods related to food, safety, hygiene, human health must meet Vietnamese standards which were set by Ministry of Health of Vietnam. Any changes in the quality standards, except for those that relate only to appearance of the label or packaging must also be announced. These standards were specific including certificate that the company has met food hygiene and safety conditions or a copy of an application to grant such a certificate of MOH, such as any location where food is processed manufactured, stored, sold or served must meet hygiene environmental requirement and Label of product has to be stamped by the company and owning a certificate of tradermark registration. These requirements forced Jollibee when penetrating to the Vietnam market it is going to face many paperwork on bureaucracy to take the certificate as well as the registration, besides increase cost and wage demand to meet those quality standards.
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