Mktg1417 a2 _ Assignment 2 Country Analysis Part of BrandLaunch Project

The deliverable for the Country Analysis is a fleshedout outline regarding the countries you selected, covering the points listed below. The report should be wellresearched, with recent sources (ideally no more than 5 years old) and information from all sources cited in correct Harvard citation style and including a correctly formatted reference list. You need to demonstrate your proposed brand is appropriate to launch in the chosen country. You should approach your research with your brand in mind and be thinking about how the cultural factors and other environmental factors you discover will affect the launch of your brand. While the deliverable will be in outline form, it must follow all rules of correct grammar, syntax, spelling, and writing mechanics. Introduction (appx.250 words) You should identify: 1. Company (E.g. Loreal) 2. Specific brand of focus (E.g. Lancome) (Tips: Positioning, Mission, etc.) 3. Leverageable strengths of brand 4. Brand vulnerabilities 5. Opportunity assessment: What is your rationale for launching this brand in the new host country? EconomicGeographic Environment (appx.300 words) The natural infrastructure (such as rivers and seaports) and physical infrastructure (transportation and communication systems) of a nation provide the foundation for economic development. Considerations for research are: Geographic factors (climate, terrain, waterways, etc.) that influence business activities in the country. (In some countries, for example, mountains make movement of raw materials and production supplies difficult and expensive.) Geographic distance should be considered as long distances affect costs in a significant way. Major products (natural resources, agricultural products), major industries, and importexports in the market area. Note that you should focus on the current output, import and export value of products in the particular industry of your brand and some related industries if any. Do not cover all types of nonrelated industries. Current economic conditions related to GDP, inflation, interest rates, currency value (exchange rates), personal income, and employment that may attract or deter foreign investment. Infrastructure of a country with regard to availability of transportation, communication, and utilities. As an example, in some countries, wireless (cell) phones may be more cost efficient rather than build infrastructure for landlines. SocialCultural Environment (appx. 300 words) A country’s business environment may be influenced by the importance of family, religious beliefs, and demographic trends. Interviewing a person who has lived in, worked in, or traveled to a country that you are researching will be beneficial in understanding what influences business there. Considerations for research are: Demographic trends (birth rates, literacy rates etc.) that might influence business activities (e.g., lower birth rates result in an aging population with expanded demand for health care). Cultural analysis of language, customs, traditions and beliefs of a country that are related to your product category. (Religious beliefs may make the sale of certain products inappropriate in some countries.) Most importantly, you should include research on the cultural aspects of the buyer behaviors specifically related to the product category of your brand. Country of Origin impact should also be researched on if possible. Social institutions analysis that influence business (i.e., family, church, labor organizations). Informal trade barriers created by social and cultural factors (communication styles and negotiating tactics vary around the world resulting in the need to adapt to the host country’s culture). PoliticalLegal Environment (appx.300 words) Political stability is commonly related to the type of government and degree of corruption present in a country. A company may face various business regulations when conducting international business. You should identify political and legal factors that could affect global business decisions. Considerations for research are: Government and politics describing the type of government and recent political developments that could influence the economic and business environment (i.e., events in the Middle East contributing to an uncertainty when doing business with some countries; or the communism influencerestrictions in China). Political and trade relationships between host country and home country should be looked at to see if there are any particular issues or advantages. Formal trade barriers (tariffs and other taxes, foreign exchange controls, ownership restrictions) that might require a company to adapt its business strategy. Promoting global business analysis – how is the host country attracting foreign investments? (Some nations offer tax incentives to attract foreign capital.) Intellectual property (brand names, copyrights, patents, software, music, videos) protection and regulation by countries. Some countries (i.e., China) do not regulateenforce, which allows for pirating that results in lost profits for companies. Evaluation (appx. 250 words) Conclude with core issues you have discussed then propose two standardization and two adaptation factors (e.g. product, or price, or target customer segment, etc.) that the company should consider when launching the brand in your chosen country.

Lecturer: Phuong Phung

Group: 07 Course Name: Global Branding Course Code: MKTG1417 Campus: SGS Campus Due date: 15 December 2022 Word Count: 1500 (excluding cover page, reference list, figures)

COUNTRY ANALYSIS-PART OF BRAND-LAUNCH

PROJECT

I INTRODUCTION

1 Company

Jollibee is the largest Philippines fast-food brand owned by Jollibee Foods Corporation (JFC), with a network of more than 1,500 stores in 17 countries (Daga & Ngui 2022)

1 Specific brand of focus

Jollibee is well-known for great-tasting, high-quality, hygiene and super affordable food products (Shastri 2021); provides joyful, warm and luxurious culinary locations for customers to enjoy their meals in the most relaxing way (Gagliardo 2021)

2 Leverageable strengths of brand

Jollibee offers an attractive menu with more than 50 dishes, including various Western and Asian taste cuisines to serve multicultural customers in Germany market (Thompson 2022) Jollibee develops “Quick Service Restaurants order” (QSRs) to provide customers with food as quickly and efficiently (Shastri 2021) Jollibee uses “Quality Improvement Cycle for Operational Excellence” framework to maintain consistent management system to minimize unexpected costs, allowing Jollibee to price below its competitors with cheaper menus (Bucketeer 2021)

3 Brand vulnerabilities

Jollibee initially operates as a fast-food brand, hence, its food ends up being labeled as unhealthy products, causing health issues that seriously affects Jollibee’s brand image and sales (Shamsul 2022) Lacking effective and viral marketing strategies for products, Jollibee’s brand awareness and brand association are still significantly limited (Shamsul 2022)

4 Opportunity assessment

Germany is in “top 10” countries that consume the most fast food in the world (Said 2013), with 42% of German population favoring consuming fast-food frequently, which benefits Jollibee Germany is the biggest market for food and beverages in the EU, with higher

purchasing power (Beck 2022) Furthermore, Germany is the leading agricultural product producer in Europe_a potential ingredient supplier for Jollibee (Beck 2022) Hence, Jollibee should launch business in Germany

This paper analyzes cultural insights to help Jollibee establish proper standardization and adaption strategies to launch business to Germany

1 Geographic factors

Germany is favored with a generally temperate climate, with an extremely low frequency

of natural disasters Without many disruptions, fast transportation can be facilitated to help ingredients or food avoid damage if longer delivery time (Münch & Kreibich n.d) Germany is the fourth largest country and is strategically located at the center of the European Union, convenient for potential firms to connect to EU markets, consequently, by expanding into Germany, Jollibee can reach a wider customer range (Wolters Kluwer 2020)

2 Major products

German agriculture has a high self-sufficient rate which satisfies 60% of national demand (Klöckner 2020) Half of Germany's plants is used for agricultural purpose, producing high-quality products Some of Germany’s agricultural production is excessive (over 100% production) (Figure 1) resulting in agri-goods surplus (S>D), leading to lower prices (ITA 2022) Utilizing domestic agricultural products for fast-food production will save importing costs and ensure freshness of ingredients for Jollibee dishes (ITA 2022)

Figure 1: Average rate of self-sufficiency in Germany for selected products from 2016-2018

(Klöckner 2020)

3 Economic conditions

Germany’s inflation is still high due to Covid-19 and Russia-Ukraine war (TrandingEconomics 2022) Germany's GDP tends to increase every year until 2026 (O’Neil 2022) Germany has a high living standard, good education, a strong & stable economy, and a good work-life balance The German workforce is highly skilled Germany has one of the lowest unemployment rates in Europe, with an increasing employment rate of 77.3% in 2022 recovering from Covid-19 period due to strict vaccination progress of German government (European Commission n.d) with higher average household income (€52,200/person/year), and high customer purchasing power (OECD 2021)

4 Infrastructure

Germany includes the 4th largest airport system (Frankfurt Airport), the longest and largest railway network in Europe, 74 important seaports, transshipment hubs, and costless motorways, assisting in the convenient and affordable transit of commodities across the world (GTAI 2022) Germany develops easy-to-use food door-to-door delivery service systems making ordering food quick and easy "in 10 minutes" (Expatrio 2022)

III SOCIAL-CULTURAL ENVIRONMENT

1 Demographic trends

Jollibee's primary target segmentation is kids 3-10 years old, Gen Z (10-25), and Millenials (26-41) Kids, GenZ, and Millennials dominate approximately 42% of Germany’s population, resulting in large potential consumer range for Jollibee (Figure 2)

Figure 2: Germany Population (Statista 2021) German has had a higher level of birth rate since 2016-2021, average of 1.57, compared

to 2010-2015, average of 1.43 (Figure 3) Birth rate increases resulting in young population growth with expanded fast & convenient food demand, subsequently, rising the number of Jollibee’s sales

Figure 3: Germany’s fertility rate (Statista 2020).

Germany shows a high literacy rate - a total population of 99% (OECD n.d), leading to significantly higher per capita income (OECD 2022), increasing purchasing power for fast-food Thus, Jollibee benefits from this

2 Cultural analysis

English is used as one of the official languages in both Germany and the Philippines so the language barrier is not serious (Cabigon 2015)

The main religion in Germany is Christianity The Christian religion isn’t restricted to eating Most traditional German meals focus on bread, potatoes, and meat (Expatrio 2022) Subsequently, Jollibee can become a good choice for Germans meals because it has a diverse menu to sufficiently serve German preferences

Males consume fast-food more than females (over 58.5%) German males occupied 49.46% of the population (nearly half of population), also considered a high demand for fast-food in Germany (UN 2021)

Filipino cuisine is considered one of most world’s richest cuisine (BusinessWorld 2022), Jollibee can maximize its perceived quality thanks to its Country-Origin impacts

3 Social institutions

Over 67% of German parents believe in healthy eating habits and encourage their children to limit fast-food (MOTTPoll.org 2021), which gradually switch younger to buying organic, healthy products (ITA 2020), exposing a challenge for Jollibee Germany is multicultural due to the large immigrant number, with food preference diversity (Heider et al 2020) Thanks to diverse menus, Jollibee still can meet demand of German customers

4 Informal trade barriers

German communication and negotiation values honesty, directness, explicitness, and transparency (Takhtarova 2020) Being too direct caused Germans to be evaluated as “rude” and

“difficult” Thus, humor, kindness, and friendliness are suggested to use in communication, especially in shared lunches and drinks to create trust with German colleagues, and reach common topics, which matches up with Jollibee’s attributes as fun, kind-hearted, and friendly,making Jollibee more welcome in the German market

1 Government and politics

There are virtually no volatile political issues in Germany affecting businesses, placing 4th position of top countries viewed as most politically stable globally (U.SNews 2021) Germany and the Philippines have had friendly relations for more than 68 years of diplomatic establishment (since1954) (Federal-Foreign-Office 2022) “EU-Philippines Framework Agreement on Partnership and Cooperation” and “EU-Philippines FTA” were established that facilitate Philippine-Germany trade (Germany is an EU member) (European Commission n.d) That is in favor of Jollibee expanding its business in Germany

2 Formal trade barriers

German tax laws are extremely complicated Businesses must make nine tax payments per year, consuming on average 218 hours of business time (Wolters Kluwer 2020) Registering property ownership is a burden, new companies must seek an extract from the land registry,

notarize the transfer agreement, acquire a waiver of pre-emption rights with the municipality and pay a transfer tax (Wolters Kluwer 2020) Furthermore, Germany’s tariff is also high

3 Promoting global business analysis

The program of lowering the corporate tax rate in Germany from 15% to 10%, would reduce the tax burden on corporate profits from 30% to 25%, benefiting new entering businesses

in Germany (IFO 2020) The incentive scheme provides a 25% tax incentive for in-house R&D activities in Germany, available to companies regardless of their size or economic position (Deloitte 2020) Small foreign companies can access German government grants as high as 40%

of the set-up value, and maximum of 20% for large companies (LawyersGermany 2018)

4 Intellectual property

In Germany, intellectual property is protected from imitation through the granting of intellectual property rights (IPR) Germany encourages early registration of creators for trademarks, brand logos or images, words, or phrases to retain property rights Germany is also a member of many major organizations providing safety for business with strong protection of IPR (ITA 2019)

Due to German government's incentives, Political-legal environment is favorable and ideal but there are still numerous trade hurdles In terms of the Economic-Geographic environment, Germany's geographical and economic conditions are generally steady but still hurt

by Covid-19 epidemic and Russia-Ukraine war consequence Social-Cultural Environment

shows an increase in fast-food demand in Germany becasue of Jollibee's broad customer range, high birth rate, literacy rate, but struggling with social status of fast-food being unhealthy Consequently, standardization and adaption strategy should be used to address those issues

Standardization should be applied to price, product & service quality, and brand image Jollibee’s brand essence as ‘super affordable, great-taste high-quality, bringing the joy of eating

to all customers’ should be consistent globally to build global brand equity Due to varied economic conditions through Covid-19 pandemic and war, consumers will become more price-sensitive Hence, Jollibee should maintain product budget-friendly with all its business models and standardized management systems to avoid increases in operating costs, to maintain consistently affordable price for products

Jollibee should handle adaptation strategies in place, promotion, and product categories Firstly, Germany is a famous destination for immigrants from around the world, thus, Germany

is multicultural and multi-religious belief Jollibee’s recipes and menus should be adjusted to serve different customer ranges (Statista 2022) Secondly, Jollibee stores should adaptably be placed at well-known goods chains or Mall Centers, where German children, Gen-Z, or Millenials often go Therefore, Jollibee can seek partnerships with German store chains such as Edeka or Steinecke (food chains) or Westfield CENTRO (Germany's largest shopping mall) (Statista 2022) to approach target customers Jollibee should implement an adaptation promotion strategy to fit the German young inviting viral food reviewers or bloggers in Germany to review, ratings, and public word of mouth about the product because they have a huge influence on German youth

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