Business Strategy ass 1 - Final

Desert Group Member: - Bùi Xuân Cương – Calvin F02E - Leader - Ninh Toàn Thắng – Tonda F02E - Nguyễn Ngọc Trung – K.O F02E - Dương Đăng Bảo – Billy F02F - Hoang Cong Buu Thien – Jerry F02E Table of contents page Coversheet 1-3 Introduction I Context of Jollibee Food Corporation business strategy II Key of stakeholders of the company in Vietnam III External environment and organizational audit 16 IV The strategic position of Jollibee Food Corporation in Vietnam 25 V Strategically explaining the possible considerations for strategic analysis 31 Conclusion 40 Reference 41 Introduction Jollibee is the 1st brand fast food in Philippine In 1997, Jollibee went to Vietnam market and established Jollibee Vietnam Since 1997 to now, Jollibee develops fast and becomes one of biggest fast food brand in Ho Chi Minh City In this report, I will mention about main parts: firstly, the content of Jollibee Food Corporation business strategy; secondly, the key stakeholders of Jollibee Vietnam; thirdly, Jollibee’s expansion plan, conduct an external environment and organizational audit of the company; fourthly, strategic position of JFC Vietnam; Finally, strategically explaining the possible considerations for strategic analysis I Contexts of Jollibee Food Corporation business strategies The context of Jollibee Food Corporation business strategy includes parts: Vision, Mission, Value, Objectives, Goals, Core competences, Strategic Intent, Strategic architecture and Strategic control a Vision Definition of vision is “A vision statement is sometimes called a picture of your company in the future but it’s so much more than that Your vision statement is your inspiration, the framework for all your strategic planning.” A vision statement may apply to an entire company or to a single division of that company Whether for all or part of an organization, the vision statement answers the question, “Where we want to go?” (sbinfocanada, accessed on 2010) We can see the important of vision with the company The vision of Jollibee “We are the best tasting QSR… The most endearing brand… that has ever been… We will lead in product taste at all times… We will provide FSC excellence in every encounter… Happiness in every moment … By year 2020, with over 4,000 stores worldwide, Jollibee is truly a Global Brand (and the Filipino will be admired worldwide) (Jollibee, accessed on 2010) b Mission Mission is defined that “ a mission describes an organization’s basic function in society, but originally the term was used to describe specific journeys made to discover somewhere or something, or to spread knowledge and belief (such as the journeys made by missionaries to spread religion)” (BPP, 2004, pg 10) The mission of Jollibee “To serve great tasting food, bringing the joy of eating to everyone” (Jollibee, accessed on 2010) The mission of Jollibee is very important to serve the customer with the best fast food c Value Values – the goals or aims of the organization will have an ideology based on beliefs, values and attitudes (BPP, 2004, pg.26) Values of Jollibee “ Customer focus – Excellence – Respect for the Individual – Teamwork – Spirit of Family and Fun – Humility to Listen and Learn – Honesty and Integrity – Frugality” (Jollibee, accessed on 2010) d Objectives Objectives are the specific outcomes that an organization wishes to achieve by carrying out its activities (BPP, 2004, pg.4) Objectives of Jollibee company are “By year 2020, Jollibee has over 4,000 stores worldwide” (Jollibee, accessed 2010) And according to Dannis Flores, Jollibee’s vice president for international operations, Vietnam has been a key market for JFC’s global operations in next years (scenario, nd) Objective of Jollibee in mid-term is to transform the Commissary to a Centre of Manufacturing and Logistics Excellence through its people, System and Process (elsalvadorcompite, accessed on 2010) e Goals Mintzberg (1997) defines goals as “the intentions behind decisions or actions, the states of mind that drive individuals or collectives of individuals called organizations to what they do” (BPP, 2004, pg.28) Goals of Jollibee are: lead in product taste at all time; provide FSC excellence in every encounter and make customers happy in every moment Moreover, Jollibee will become a centre of supply chain excellence that ensures the dominance of Jollibee Foods Corporation in Asia (Elsalvadorcompite, accessed on 2010) f Core competences Core competencies are resources, processes or skills which provide distinctive competitive advantage (BPP, 2004, pg.113) Core competencies of Jollibee are: Jollibee company has products better than McDonalds For example, spaghetti, which is one of the best seller, tastes sweeter than the pasta offered by its rival, McDonalds When Filipino use products, Filipino values resonate throughout all jollibee marketing campaigns and advertisement This is the reason why Jollibee stores all over the country are viewed as wholesome place to dinner with the family Moreover, Jollibee’s product has cheaper price, compare with competitor such as KFC and Mc Donald This means that Jollibee’s product has more advantages than KFC and Mc Donald (Jollibee, accessed on 2010) g Strategic Intent Definition of Strategic Intent is strategic intent is the immediate point of view of a long term future that company would like to create It is the intent of the strategies that company may evolve (alagse, accessed on 2010) Strategic Intent of Jollibee is to achieve its long-term goal to be the country’s Quick Service Restaurant (QSR), will expand market coverage by acquiring foreign enterprises (Jollibee, accessed on 2010) h Strategic Architecture Strategic Architecture is combination of resources, process and competences to put strategy into effect (BPP, 2004, pg.113) Strategic architecture include elements: Strategic apex, Middle line, Operating core, Tehnostructure and Support staff (BPP Professional Education, 2004, pg.56) Strategic Apex – owner, board of directors It ensures that the organization follows its mission and serves the needs of its owners (BPP, 2004, pg.57) Jollibee Food Corporation was established by Tony Tan Since 1978 to now, with mission is to serve great tasting food, bringing the joy of eating to everyone (according to scenario), Jollibee develops incessantly and creates new products such as chicken joy; Jolly Spaghetti; Jolly Hotdog; Burgers; etc (Pldonline, accessed on 2010) Middle Line – people in this area administer the work done It coverts the wishes of the strategic apex into work of the operating core (BPP, 2004, pg.57) In 1981, Jollibee had only 10 stores but now, Jollibee has 1,686 stores nationwide and 50 restaurants with 600 stores in countries (Jollibee, accessed on 2010) In Vietnam, Jollibee has 11 restaurants with 10 restaurants in Hochiminh City and restaurant in Dong Nai (Saigongpdaily, accessed on 2010) Operating Core – People directly involved in production, perhaps the primary activities of the value chain (BPP, 2004, pg.57) Jollibee company in Vietnam has over 500 employees with mainly employees to be Vietnamese With Vietnamese employees, Jollibee company can be easy approach cultural, traditional as also taste of Vietnamese Technostructure – administrators and planners standardize work (BPP, 2004, pg.57) One of factors helps Jollibee successful to be labor Jollibee always cares to train employees because recipe for success of Jollibee is made by well-trained teams that work in a culture of integrity and humility, fun and family-like (Jollibee, accessed on 2010) Beside, Jollibee also update technology to create healthy and safety products, etc so employees must be trained to use machine Support Staff – ancillary services such as public relations, legal counsel, or the cafeteria not plan or standardize production (BPP, 2004, pg.57) Jollibee supports staffs to complete their responsibility by award i Strategic Control 10 Strategic Control is defined that: "Strategic control focuses on the dual questions of whether: the strategy is being implemented as planned; and the results produced by the strategy are those intended." (strategic control, accessed on 2010) The control of Jollibee is performed by various stages as well superiors at company Jollibee is successful due to the company has good owners, excellence strategy and experiences in marketing product with the line ‘focus on value and product taste, can serve better-tasting and better quality food at more affordable prices’ (Jollibee, accessed on 2010) II Identify the key stakeholders of company in Vietnam a List of stakeholders Stakeholders are individuals or groups who have an interest in how the enterprise performs because it affects them in some way – that is they have a stake in the organization (BPP Professional Education, 2004, pg.37) Inside, key stakeholders are the most important people with company Because key stakeholders have influence over what happens to you; others say it's the people who hold the budget, the ones who make the final decisions, the ones who are affected by your decisions, the people who have to implement decisions, the people who are going to buy the product/service, etc (Impactfactory, accessed on 2010) List of stakeholder includes internal stakeholders, connected stakeholder and external stakeholder Inside, internal stakeholders include employees and Management; connected stakeholder such as shareholders, suppliers, financier and customers; external stakeholders involve local authorities and government, and so on Figure 1: The power/interest matrix 11 Low High Power A B Public authority Shareholder High customers Interest Low C D Supplier Corporate finance Vietnamese Government Bank - Internal stakeholders (Management and employees) There are two groups of Internal stakeholders Firstly, about Management, Managements are people who have impact directly for the continuation and growth of organization And in the Jollibee company, the Shareholders of Meeting are people who have highest authority Next, it is the Board of Management and then is General Director (Mr.Joji Subido), lower than General Director is Director Lastly, it is Staff of department Inside, the Director and the Staff of departments are people who employed for the owners of company to operate and control all business activities of company Secondly, about Employees In Vietnam, employees of Jollibee company have over 500, they work for company with many reasons such as salary, awards, bonus or they want to develop and improve about skills and talents of them, or recognition, so on The fact, employees in Jollibee company have major effect on the success of business activities of company, they are people who have responsibility with all aspects of work carried out in company - Connected Stakeholders (shareholders or owners, suppliers and customers): There are three groups of connected stakeholders 12 Firstly, about the Shareholders or owners, they are people who own Jollibee Shareholders may receive an annual dividend which simply is a cash payment from company based on profit, besides, from any increase in the share price over the year, they can have benefit Shareholders have the right to vote and intervene for most of the decision for development of company in a meeting Overall, shareholders are now being asked to take a more involved interest in a work of company and influence significantly for development of company Secondly, about Supplier, production of Jollibee company depends on its suppliers Raw ingredients for all of their products are shipped daily to their warehouse for safekeeping, inspection and production The suppliers of these raw ingredients are adjusted by Jollibee itself The Chicken now comes with an exclusive supplier, actually, the Jollibee controlled based in China mainland Thirdly, about Customers, they have important power over procedures and prices The office employees, and young families with medium or above average income ( 3.5 million VND/person/month) are the main customers They ultimately determine what product is, what quality is needed, what development is needed and what is charged, for example, the quality of chicken that supplied from Jollibee company - External stakeholders (Vietnamese government): About government, Vietnamese government has a big role with Jollibee company to operate the success of business activities, they interest the profit of Jollibee on tax and to try to prevent the unemployment in the local Vietnamese Government does it through the passing of laws and policies The Jollibee company must follow this laws and policies, besides, the company also must follow other relevant policies under the law for its business activities b Stakeholder Mapping of Jollibee Vietnam Stakeholder analysis is the identification of a project's key stakeholders, an assessment of their interests, and the ways in which these interests affect project riskiness and viability It is linked to both institutional appraisal and social analysis: drawing on the 13 Jollibee are not only in Ho Chi Minh City, it is expanding to other cities that are around Ho Chi Minh City In the future, Jollibee’s restaurants will be opened all cities in Vietnam Jollibee has Market development strategy: Opening extra outlets: restaurants in Ho Chi search market, etc outlets in Ho Chi Minh Using Marketing strategy: focus on Minh City City; outlet in Can Tho; products for family and kid Price is outlet in Dong Nai lower than competitors Give more Total restaurants in 2010 promotion on holidays Restaurants are 13 restaurants are built at trade centre to attract customers d Ansoff’s Matrix Ansoff’s matrix: Ansoff's matrix is one of the most well know frameworks for deciding upon strategies for growth (marketingteacher, accessed 2010) 28 In Vietnam, the Jollibee company is applying Market Penetration and Market Development in Ansoff’s Matrix Firstly, Market Penetration focuses on selling existing products into existing markets At present, products of Jollibee focus on Ho Chi Minh market with current products such as Spaghetti, Sandwiches; and Chicken rice; so on (Jollibee, accessed 2010) This strategy makes Jollibee maintain and increase market share of current products by a combination of competitive pricing strategies, advertising, sales promotion, more resources dedicated to personal selling The fact, the number of restaurants of Jollibee is increasing with 10 restaurants in Ho Chi Minh City and all restaurants are working well It helps Jollibee increases market share and becomes one of three famous brands about fast food in Vietnam Besides, in this strategy, Jollibee can restructure a mature market by driving out competitors Jollibee has more aggressive promotional campaign supported by a pricing strategy designed to make the market unattractive for competitors The fact, Jollibee decreased price of products; make more promotion for customers when they have to pay only 50,000 VND for a meal in while Lotteria is 90,000 VND and KFC 29 is 120,000 VND To sum up, in Market Penetration, Jollibee collects all resources such as marketing, human, materials, so on to exploit existing market; competes with competitors and creates a firm market in Ho Chi Minh before the company penetrates into other markets such as Hanoi, Hue, so on; building brand of Jollibee Secondly, Market Development focuses on selling existing products into new markets In 2010, Jollibee opened the first two restaurants in Bien Hoa and Can Tho (outside Ho Chi Minh City) With this strategy, Jollibee has new geographical areas and export markets.Besides, when enter a new market; Jollibee has more customers and more market share It is sound basis that help Jollibee to enter into other market in Vietnam and compete with main competitors- KFC and Lotteria However, Jollibee also has threats Threats are about human; materials; equipment; experience; etc especially Jollibee has to compete with existence competitors in new market So that, in my opinion, before Jollibee enters into a new market, it must research about this market (human, income, demand, opportunities to develop, so on) to cut risk down to a minimum Besides, Jollibee must train employees, build infrastructure, especially have a good marketing strategy to attract customers Comparison Market development strategy between Jollibee and KFC, Lotteria: KFC has 75 restaurants that spread over Vietnam in while Jollibee has only restaurant in Bien Hoa and restaurant in Can Tho It means KFC has more experience in this strategy than Jollibee so that Jollibee will have many difficulties when it enters new markets V Strategically explaining the possible considerations for strategic analysis a Strategic Gap Strategic Gap is to search for, or create, wide open spaces, free from existing competition Jollibee can use five opportunities to set up strategic gap They are: 30 Opportunity in substitute industries; Opportunities in other strategic groups / spaces; Opportunities in targeting buyers; Opportunities for complementary products/services; Opportunities in new market segments Firstly, is opportunity in substitute industries Jollibee has to face competition from industries that are producing substitutes such as products from rice (noodle; Rice vermicelli) In Hanoi and Ho Chi Minh City, there are many famous restaurants sell these products and they attract many customers such as Hang Manh; Nam Giang; etc Although substitute industries bring threat to Jollibee but it also provides many opportunities for Jollibee to develop Opportunities at here are Jollibee can sell these products with Jollibee’s products This way makes Jollibee to have diversified products; customers have different choices and especially when customers go to Jollibee they will feel convenient because they can eat foods that they want and they don’t have to go different places Secondly, is opportunities in other strategic groups/ spaces Particularly if changes in the macro-environment make a new market spaces economically viable The severe inflation situation is happening every country in the world, in EU: 4%, in USA-highest in (Higher 6.6% in July), in Vietnam: 15.6% (Vu Minh, accessed nd April, 2008) make the Consumer Price Index (CPI) in Vietnam increases 20.71% (11months 2008), increases 24.22% than at the same time in 2007 (baovietnam, accessed 26 th November 2008) The inflation influences all countries in the world and Vietnam is one of them According to Mr Nguyen Tien Dung, the Prime Minister of Vietnam said: “development economy is slower, it is difficult to achieve the goal growth the economy 7%” in 2008 and according to Mr Ha Van Hien, Chairman of the Economy Committee, GDP in 2009 will be 6.5% to 7% (Xuan Linh, 2008) Under the effect of inflation, CPI increases, many small companies in Vietnam was bankrupt and Jollibee also is influenced because customers save money However, it also opportunity of Jollibee because if Jollibee salvages this situation to invest strongly such as diversified products; step up marketing (promotion, advertising, so on) and etc, Jollibee will maintain existing market and develop in new markets When economic increase again, customers spend more money to shopping, Jollibee had restaurants chain therefore it can lead in fast food market in Vietnam 31 Thirdly, is targeting buyers Nature of the buyers can be complex, with the strategic customer critically important There may be several people involved in the overall purchase decision Also, be opportunities in targeting neglected strategic customers or influencers of purchasing decisions Targeting buyers help Jollibee determines main customers; from that Jollibee can focus strategies on it For example, main customers of Jollibee are family and kid so that they spend time and money to invest products for this target With family, Jollibee makes warm environment such as their family with chicken rice (rice, chicken, vegetable) When customers go to Jollibee, they will feel it is like their family Besides, taste of Pilipino is nearly like taste of Vietnamese so that Jollibee is easier to attract customers with chicken rice With kid, Jollibee makes taste of products sweeter such as spaghetti Understanding demand of customers will help Jollibee attract customers and in the future Jollibee will develop further more Fourthly, is Opportunities for complementary products/services It involves a consideration of the potential value of complementary The main complementary of Jollibee is atmosphere that is for children, customer will not see this character in competitors so that it is strength of Jollibee Beside, Jollibee built a town where customers can play the game, have parties and so on Complementary services make Jollibee to be different with competitors so that it can attract customers than competitors, especially kid Finally, is new market segment Looking for new market segments may provide opportunities for Jollibee but products/service features of its may need to change New market segment makes Jollibee has new products, has more profit and increases market share However, if Jollibee wants to be success in new market segment, it has to search market (demand, culture, competitors, so on) In new market segment, customers can accept or refuse products of Jollibee therefore Jollibee must be carefully before decide investment in new market b Porter’s Generic Strategies Generic strategies were used initially in the early 1980s, and seem to be even more popular today They outline the three main strategic options open to organization that 32 wish to achieve a sustainable competitive advantage The generic strategies are: Cost leadership, Differentiation, and Focus (marketingteacher, accessed on 2010) Source: (mindtool, accessed on 2010) Firstly, about Cost leadership Strategy Cost leadership means being the lowest cost producer in the industry as a whole (BPP 2004, pg.75) In the Vietnam market, there are many competitors such as KFC, BBQ and Lotteria who are competing with Jollibee The price of products of Jollibee company gives to customer is about 50,000 VND , the customers can accept because it is medium price in market The first, comparing price between Jollibee with small restaurants, the price of Jollibee is higher than the price of small restaurant but Jollibee is a big brand, also famous in the market so that most of customers will pay more money to eat at Jollibee’s restaurants The second, comparing price between Jollibee with main competitors such as KFC and Lotteria; the price of Jollibee is smaller than competitors – KFC (120,000 VND), Lotteria (90,000 VND), so on, although quality of service is similar; so that most of customers will accept Jollibee, especially in inflation situation in Vietnam nowadays With the lowest price, Jollibee can 33 compete with main competitors but still ensure profit for the company; can say that when Jollibee attracted customers, they are really successful Secondly, about differentiation Differentiation is the exploitation of a product or service which the industry as a whole believes to be unique (BPP 2004, pg.75) Jollibee penetrated in Vietnam market from 1999 The first time when the company appeare in Vietnam, Vietnamese don’t know about Jollibee although it is st famous fast food chain in Philippines Besides, at that time, KFC, Lotteria build their brand in customers, so that everybody only know about KFC, Lotteria and don’t care products of other brand But after that, about 11 years, Jollibee becomes one of biggest brands fast food in Ho Chi Minh City The main factor that makes Jollibee arrives and develops before competitors to be specific Filipino taste According to Dennis Flores, Jollibee’s vice president for international operations “Perhaps, Jollibee’s strong appeal to families resonated well with the Vietnamese who, like Filipinos, also value strong family ties We now see a lot of Vietnamese families going out on weekends, spending time together and celebrating fun times also in fast food joints” (scenario, nd) It means that products of Jollibee focus on families, example chicken rice with vegetable soup or sweeter taste of spaghetti, so on, which competitor such as KFC and Lotteria can’t compete with Jollibee The products with specific Filipino taste, Jollibee has loyal customers who like family environment and attract customers who want to know different taste of other countries Thirdly, about Focus strategy Focus involves a restriction of activities to only part of the market (a segment) Focus strategy has two parts: Cost-focus (low cost) and differentiation focus Cost focus: In the market, there are many competitors that compete with Jollibee The price that company gives to customer is 50,000 VND – it is medium price that most of customer can accept Comparison price between Jollibee with small restaurants such as Tran Chau Tea-milk (25,000 VND), so on; Jollibee is higher than them However, Jollibee is a big brand in the market therefore most of customers will pay more money to eat at Jollibee’s restaurants Comparison price between Jollibee with main competitors such as KFC, Lotteria; with the same quality of service but price of Jollibee is smaller than competitors – KFC (120,000 VND), Lotteria (90,000 VND), so on; so that most of customers will accept Jollibee especially in inflation situation as now With 34 50,000 VND, it is the lowest price that Jollibee can give to customers, compete with main competitors but still ensure profit for the company; Jollibee is successful partly to attract customers Differentiation focus: Jollibee entered in Vietnam market in 1999 First time, when the company appeared in Vietnam, Vietnamese didn’t know about Jollibee although it famous in Philippines At that time, KFC, Lotteria affirmed their brand in customers However, after 11 years, Jollibee becomes one of biggest brands fast food in Ho Chi Minh City The main factor that makes Jollibee arrives and develops before competitors to be specific taste According to Dennis Flores, Jollibee’s vice president for international operations “Perhaps, Jollibee’s strong appeal to families resonated well with the Vietnamese who, like Filipinos, also value strong family ties We now see a lot of Vietnamese families going out on weekends, spending time together and celebrating fun times also in fast food joints” It means that products of Jollibee focus on family, example chicken rice with vegetable soup or sweeter taste of spaghetti, so on – that competitor can’t compete with Jollibee With specific taste of products, Jollibee has loyal customers (people who like family environment) and attract customers (people who want to know different taste of different restaurants) c GE McKinsey Matrix The General Electric GE McKinsey Matrix template is a nine-cell (3 by 3) matrix used to perform business portfolio analysis as one of the steps in the strategic planning process The GE/McKinsey Matrix identifies the optimum business portfolio as one that matches the company's strengths to the most attractive industry sectors or markets So that, the objective of the analysis is to position each Strategic Business Unit (SBU) on the chart depending on the SBU's Strength and the Attractiveness of the Industry Sector or Market on which it is focused (Business tools templates, accessed on 2010) To determine position of Jollibee in McKinsey Matrix, we will analysis business unit strength and industry attractiveness of Jollibee The first is about Business Unit Strength 35 • Market share: JFC is one of three famous brands about fast food in the market of Vietnam Market share of Jollibee is lower than KFC & Lotteria but higher than many brands such as Tran Chau, BBQ and so on So that market share of Jollibee is high • Sales force: Jollibee has 13 restaurants in while KFC has 75 restaurants; Lotteria has more than 30 restaurants It means that sales force of Jollibee is lower than competitors => low sale force • Marketing: Jollibee applies 4Ps in marketing strategy and it achieves affective However, Jollibee hasn’t invested too much into Vietnam so that marketing only helps customers in Ho Chi Minh and around it knows about Jollibee => average marketing • Manufacturing: Jollibee has two main the way supplies material (local suppliers and import materials from Philippine by TanVietHuong Company) so that Jollibee has high manufacturing • Distribution network: Jollibee has 11 outlets in Hochiminh; outlet in Bienhoa and outlet in Can Tho It is lower than KFC and Lotteria, but higher than Kinh Do So that, distribution network of Jollibee is average • Quality: Jollibee Vietnam has to follow requirements of government about safety foods so that Jollibee must ensure input and output following requirements Jollibee has many suppliers so that if supplier doesn’t satisfy requirements, Jollibee can change supplier to ensure quality of materials always best Equipment of Jollibee is modern and clean; employees are trained so that customers always have good quality foods It means that Jollibee has high quality • Competitive competence: specific taste with price is lower than competitors Besides, Jollibee uses SFC system (service, food and cleanness) to attract customers To sum up, Business unit strength of Jollibee is average The second is about Industry attractiveness 36 • Market size: Vietnam has more than 85 million people; economic is developing; income of Vietnamese also is increasing Demand of Vietnamese is high So that market size is high • Market growth rate: there are many fast food restaurants in cities of Vietnam Not only local domestic brands such as Kinh Do, Tran Chau, Chao coffe, etc, but also foreign brands such as Jollibee, KFC, Lotteria, BBQ Chicken and in next years McDonald’s will enter into Vietnam market Fast food industry is developing very high, customers can see that in supermarket, cinema, etc => High market growth rate • Competitive structure: Franchisee training is structured => average competitive structure • Industry profitability: fast food industry brings many profits for business because demand of customers is very high Material is easy to have; employees don’t need many experiences; etc => high industry profitability • Workforce availability: the available workforce in this industry is high because it doesn’t require staffs to have experience (especially students, they can work part time) Beside, there are many training centre where trainers are trained by short courses or long courses before they start working => high work force availability • Inflation: world economy decreases, inflation increases therefore it influences to economy of Vietnam The inflation in Vietnam has up trend => high inflation • Intensity of competition: at present, Vietnam has four famous brands They are KFC, Lotteria, Jollibee and BBQ Chicken The competition between these companies is too high because all of them want to be lead in Vietnam Small businesses are difficult to compete with big brands => high intensity of competition To sum up, Industry attractiveness is high 37 With average in Business unit strength and high in Industry attractiveness, Jollibee stands in cell two of McKinsey Matrix GE / McKinsey Matrix Business Unit Strength High High Medium Low Cell Medium Low JFC Cell Cell Cell Cell Cell Cell Cell Cell (Quickmba, accessed on 2010) Recommendation: Cell also means high product attractiveness and medium competitive position therefore Jollibee Corporation should spend more money, strategies to invest into Vietnam market: maintain existing market and search new markets First is to maintain and growth existing market (Ho Chi Minh) Jollibee should attract customers by price, advertising, promotion and so on to have more market share In fact, Jollibee decrease price to compete with competitors Beside, Jollibee Vietnam also invests $150,000 - $200,000 to have a good place - center trades (doanhnhansaigon, accessed on 2010); so that the company can attract customers Second is to search new market segments Jollibee does not have more restaurants in new market so that competition of Jollibee is smaller than competitors New market brings to Jollibee many opportunities to develop such as customers, profit Hanoi is one of two largest cities in Vietnam but Jollibee have not had any restaurants, customers also not know about Jollibee so that Hanoi is main market that Jollibee must stay if the company wants to become number one However, in new market, Jollibee has to compete with existing competitors so that 38 before the company enters new market; it should spend time, human and financial to search market d Strategic methods Jollibee is worldwide brand which a company already has a successful fast-food product It is desiring to expand Vietnam market as well other ones by many fast-food restaurants to compete with competitors like KFC, Lotteria, it is important to build a powerful distribution system, accessing customers base at local market when expanding In this situation Jollibee use Alliance to exploit new chances and obtaining more market share from local market It cooperate with two or more organizations in Vietnam like KinhDo, BaoNgoc to work together at particular fast-foods field, so that each benefits from the strengths of the other, and gains competitive advantage by wide distribution systems and the customers base from these partners (Bnet, accessed on 2010) When selecting prospective partners, Jollibee will be gaining access to more research, more products and more presence in Vietnam by the network from local partners Strategic alliances also involve the sharing of knowledge and expertise between partners as well as the reduction of risk and costs in areas such as relationships with suppliers and the development of new products and technologies in order to meet its strategic objective (Bnet, accessed on 2010) 39 Conclusion Nowadays, fast food is one industry developing in the world and specially in Vietnam, one country is developing, and one of brand fast food penetrate in Vietnam market which is a phenomenon in fast food industry in Philippine, also in over the world is Jollibee The Jollibee company has made so many great successes under controlled by the good managers since it was established Moreover, in the next time, by use Alliance strategy, Jollibee will get more success in the world market, also in Vietnam’s market Base on the advantages in economic developing of Vietnam and the experience expanding of the company, we can completely believe that the Jollibee company has the bright future in Vietnam 40 References Alagse, 2010, Strategic intent is about clarity, focus and inspiration [online], available from http://www.alagse.com/strategy/s9.php, [accessed on November 5, 2010] BPP (2004) Mandatory Unit 7: Business Strategy 1st ed., London: BPP Professional Education BPP HNC&HND Business (2004) Mandatory Unit 14: Working with and leading people/Course book 1st ed., London: BPP Professional Education Elsalvadorcompite, (2010), 1st Intra 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[online], available from (http://www.vietfranchise.com/index.php? Module=Content&Action=view&id=324, [accessed on November 12, 2010] 42 [...]... growth and low market share) Jollibee entered in Vietnam market in 19 97, contemporary with KFC (19 97) and Lotteria (19 97) However, after 14 years (19 9 6-2 010 ), Jollibee has only 15 restaurants in while KFC has 75 restaurants (KFCVietnam, accessed on 2 010 ) and Lotteria has more than 30 restaurants over Vietnam (Yeusaigon, accessed on 2 010 ) Other main competitor of Jollibee is BBQ Vietnam (it is of BBQ... This is later to become the 1st Jollibee Outlet In 19 79, Spaghetti Special is introduced and the 1st Franchise owned store opens at Ronquillo Sta Cruz In 19 81, Jollibee Foods Corporation enters list of Top 10 00 Corporations; Jollibee ended the year with 10 stores In 19 88, Jollibee system wide sales hit P9 21 million, further leading market share of 31% in the fast food industry and a dominant 57% share... Vietnam a Tow’s matrix Strengths S Weaknesses W - - - unique with Filipino taste strong brand with wide range fast-food chains Jollibee have much experience to work in East environment - Strong reliance on a few groups of customer service delivery is inconsistent from store to store supplying is from abroad Opportunities O SO strategies WO strategies - - - Growing urban lifestyle Supply of demand increases... 21 e Culture Organisational culture is the basic assumptions and beliefs that are shared by members of an organisation that operate unconsciously and define in a basic taken-for-granted fashion an organisation’s view of it and its environment Source: (Cabinetoffice, accessed on 2 010 ) Stories: in 19 75 Mr Tony Tan and his family opens a Magnolia Ice cream parlor at Cubao This is later to become the 1st... company can borrow money with the low interests to invest in business activities Social: Vietnam is one of high population countries with over 87 million people and about 67% of young people who like tasting fast-food So that demand for fast-food in Vietnam is large Majority Vietnamse people belong to 15 -6 4 years old which bring many advantage for fast-food industry because young people have a trend of receing... Jollibee's 30th anniversary Total of more than 11 7,000 toys and books collected were the highest ever in the campaign's 14 -year history (Jollibee, accessed on 2 010 ) Symbols: symbol of Jollibee is a bee with a nice smile and red clothes so that when customers talk about Jollibee, they will remember symbol of Jollibee with friendly smile (image.google.com, accessed on 2 010 ) Power structures: Tony Tan Caktiong... Vietnam Jollibee has 9 Market development strategy: Opening extra 4 outlets: 2 restaurants in Ho Chi search market, etc outlets in Ho Chi Minh Using Marketing strategy: focus on Minh City City; 1 outlet in Can Tho; products for family and kid Price is 1 outlet in Dong Nai lower than competitors Give more Total restaurants in 2 010 promotion on holidays Restaurants are 13 restaurants are built at trade centre... groups/ spaces Particularly if changes in the macro-environment make a new market spaces economically viable The severe inflation situation is happening every country in the world, in EU: 4%, in USA-highest in (Higher 6.6% in July), in Vietnam: 15 .6% (Vu Minh, accessed 2 nd April, 2008) make the Consumer Price Index (CPI) in Vietnam increases 20. 71% (11 months 2008), increases 24.22% than at the same... lifestyle Supply of demand increases Threat T ST strategies Building strong customer network, especially in urban customers - Overcoming way to meet customer needs and meet the quantity of goods in the shop Strive to develop dishes with traditional flavors WT strategies - - - - Health concerns from people Developing products and taste the Philippines in line with customer needs Improve the operational... employees, build infrastructure, especially have a good marketing strategy to attract customers Comparison Market development strategy between Jollibee and KFC, Lotteria: KFC has 75 restaurants that spread over Vietnam in while Jollibee has only 1 restaurant in Bien Hoa and 1 restaurant in Can Tho It means KFC has more experience in this strategy than Jollibee so that Jollibee will have many difficulties ... in 19 97, contemporary with KFC (19 97) and Lotteria (19 97) However, after 14 years (19 9 6-2 010 ), Jollibee has only 15 restaurants in while KFC has 75 restaurants (KFCVietnam, accessed on 2 010 )... Saigon-gpdaily, 2 010 , Jollibee to strengthen business in Vietnam [online], available from http://www.saigon-gpdaily.com.vn /Business/ 2009/3/69068/, [accessed on November 11 , 2 010 ] Sbinfocanada, 2 010 ,... 9, 2 010 ] 41 Saigon-gpdaily, 2 010 , Jollibee to strengthen business in Vietnam [online], available from http://www.saigon-gpdaily.com.vn /Business/ 2009/3/69068/, [accessed on November 7, 2 010 ] Saigon-gpdaily,