Problem Statement:
The newly appointed head of International division Mr Manolo .P. Tingzon is pondering into three key opportunities that the firm Jollibee Food Corporation facing whether to enter the small PNG(Papua New Guinea) market where it will be a first mover, to expand into Hong Kong where is an existing base but the local people doesn’t like Jollibee’s Philippines-based fast food model, and a proposal to share the huge benefit in U.S. market by establishing an operation in California.
Objectives:
1. Keep the original business model: franchising
2. Maintaining Marketing investment in building image (symbolization)
3. Local market penetration with strong local brands
4. Highly customer responsiveness
5. Maintain customer value and loyalty
6. Establishing the commercial spots in foreign countries
Alternatives:
1. Market entry strategies such as Franchising, Alliances, Joint ventures, Wholly owned subsidiaries 2. Substantive growth strategies: Horizontal and vertical integration strategies 3. Limited growth strategies: Do nothing, Market penetration strategies 4. Retrenchment strategies: Retrenchment, Turnaround strategies
Consequences of Alternatives:
When analyzing the case study it is clear that Jollibee Inc.
has higher pressure to respond to local wishes in Philippines due to the entry of global giants like McDonalds. This is due to the fact that Jollibee had a strong presence in Philippines but at the same it should tackle the adaptation pressure from McDonalds. This is also supported by the fact that Jollibee was franchising their brand to foreign countries on very strict terms which do not allow any changes to the menu.
And we can use the goals including Keep the original business model: franchising, Maintaining Marketing investment in building image (symbolization), Local market penetration with strong local brands, Highly customer responsiveness, Maintain customer value and loyalty and Establishing the commercial spots in foreign countries with the four strategy (Market entry strategies, Substantive growth strategies, Limited growth strategies and Retrenchment strategies to established the table 1.
Tradeoffs/ Analysis of Alternatives:
Tingzon’s decision can based on the table 2 shows below, it can be seen clearly that the Substantive growth strategies (Horizontal and vertical integration strategies) has the highly scores. Because Jollibee entering the markets without any clear cut idea, since Mr. Kitchner strongly believe in gaining the first mover advantage, Jollibee is expanding into the markets where the competitors little are no presence, to “plant the flag” without any long term perspectives. The company’s strategy can be more identified with the international strategy where the locus of power lies with the parent company in the Philippines. With much of happening in the international arena too. After Kitchners got hired, he encouraged localization by separating international business completely from the domestic ones.
Recommendations:
Papua New Guinea
As evident from the data given in the case, it is quite evident that the company is having immense opportunities in Papua New Guinea. As the market there is untapped and the only competitor there is an unorganized and unprofessional local company, Jollibee can literally get a first mover advantage, therefore JFC must choose the Horizontal and vertical integration strategy. Hong Kong
Currently all the three stores established in Hong Kong are facing lot of management issues as mentioned in the problem statement hence it is required that first this management issues must be sorted out rather than putting additional resources in expansion plans California
The company has to start with focusing on both the Filipinos as well as local people and design the menu that would help maintaining the brand identity along with catering to the local interests. To put it simple and straight, Company needs to adapt a trans-national strategy.
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