Sometimes in 1978, they shifted the business focus from ice cream to hamburger because of greater market opportunities. They started to serve hot meals, sandwiches, fries. Spaghetti. And their very own fried chicken which they called “chickenpox’ which was being patronized by Filipinos thus was born the company that revolutionized fast-food in the Philippines. The company’s name was inspired by Tan’s vision of employees working happily and efficiently, like bees in a hive. In 1984, Jollied hit the Phi million sales mark, landing In the Top 500 Philippine Corporations.
In 1987, barely 10 years in the business, Jollied landed into the country’s Top 100 Corporations. It became the first Philippine fast food chain to break the Phil billion sales mark in 1989. In 1993, Jollied became the first food service company to be listed In the Philippine Stock Exchange; thus broadening Its capitalization and laying the groundwork for sustained expansion locally and beyond the Philippines. The company has also introduced its large bee mascot dressed in a blazer, shirt, and chef’s hat introduced by the brand in 1980.
It also capitalists on its very much intensive trim-media advertising campaigns which promotes closeness of family ties, something that is highly valued among Filipinos. Services also include Jollied Delivery, Jollied Kids Party, Jollied Drive-Thru, and Jollied Open 24-Hour Service. CUSTOMERS Jollied specializes on its local market and serves almost all customers. Jollied is a company that values family and setting children with superior value. The food chain’s mascot is very appealing to kids that they gathered towards the mascot whenever it appeared in the public.
Jollied knows their target audience very well: the traditional family and all communication materials focus on the importance of family values, making Jollied the number one family fast food chain in the Philippines and a rowing international USSR player. Customer Satisfaction has always been the company’s mission. With this goal, it provides a wide range of various products which everyone could enjoy in their almost 752 outlets operating nationwide.
Jollied fast food chain is situated near the schools and universities which their target markets are the students and its faculty members. Along the road or highway Jollied is also located to serve customers from a long traveling and tiring trip. It could also found within the vicinity of the mall which serves the customer of the mall after having their grocery and shopping done. Jollied is also situated near some gasoline station and established drive-thru services for those who dropped-by the gasoline station and wants to buy foods to eat while traveling.
Competitors in the Philippine fast-food industry are both international and local companies which include KEF, Pizza Hut, Shakes, Wendy, Goldbricks,7-eleven, Kenny Rogers and its chief rival McDonald’s. For the international market of Jollied, it has the same rivals such as McDonald’s’ and KEF especially in the US market. McDonald’s is one of the most famous fast food restaurants in the world. McDonald’s became No. L in every country of more than 100 countries in the world except Philippines where JEFF has overwhelming strength against McDonald’s.
McDonald’s doesn’t satisfy local taste in Philippines that is why, like any other competitor, it can’t capture the market. And Jollied charges prices from 5-10% lower than McDonald’s. Jollied has captured more than 65% share of the hamburger market in the Philippines. This is more than half of the fast-food market as a whole and about twice McDonald’s sales in the country. Jollied was able to attain a competitive advantage in Philippines over McDonald’s by doing following things: 1 . Differentiated Menu and atmosphere from Competitors 2. Association with Filipino roots 3.
Creating brand loyalty with customers 4. Competitive Costs for products 5. Offering a portfolio of food products that complement each other Figure 3 Figure 4 Jollied has completely taken over the fast food industry in the Philippines by captivating the masses with their top of the chart food line and profits. But things shifted slowly out of Jolliness’s control and competition became tougher and people preferred to dine at other fast food restaurants like McDonald’s and KEF. Jollied started to focus on increasing their profits by merging and purchasing other food companies to widen their market.
Merging and acquisition have been an effective strategy for Jollied because it increases revenue through decreased manufacturing USSR in the Philippines can be leveled close to a perfect competition especially between Jollied, McDonald’s and KEF since they offered the same products and services to the same market. Whenever one USSR introduce new product in the market, it is also expected that others will follow and that is always the trend which making competition tougher. However, Jollied is not also far from monopoly by acquiring and merging with other companies.
Competition in the market is declining because f this strategy and this might drives up prices. The threat of substitute products is considered to be medium-high. Products from local street food can be considered a major substitute, as well as food from its direct and indirect competitors in the industry which include kiosk, hubs, restaurant, and home foods. The cost of these substitute products which can be relatively cheaper might shift the interest of some food chain customer. With this position, the demand curve for Jollied will quite change taking price as cost driver.
Can be renewable or non-renewable * Labor – physical and mental effort of people in organizations * Capital – man- dad resources, such as buildings, machines, tools * Enterprise – bringing together the other three factors of production threat of substitute products is considered to be medium-high. Products from local street footman be considered a major substitute, as well as food from its direct competitors in the industry These factors of production are significant in every business operation. Every trade incurs cost throughout its operation.
Operating costs are divided into fixed and variable costs. Fixed costs are those costs incurred regardless of production or sales volume. Variable costs are those costs which vary according to production. Variable costs coupled with fixed costs make up the two aspects of total costs. Variable costs incur in production: * Wages/labor * Cost of sales/production * Direct material * Inventory * Supplies Normally, Jollied hires student as service crew. It is their way of helping students in their finances. Hourly rate ranges from PH 25 – PH 30 depending on their location.
Outlets in the cities are paid higher because of higher demand while those working in the provinces get a lower rate although difference is very minimal. The more hours a crew work, the higher pay he gets. Cost of uniforms for crews also varies accordingly. As the company hires more because of expansion and demands, costs also increase. Moreover, cost of production is also dependent on the volume of sales. The higher the demand of Jollied products and services, the more supply is produced, thus the higher the costs of labor, material, inventories, and supplies are incurred.
However, variable cost works otherwise when demand for production and labor decreases. Fixed costs incur in production: * Management salaries ( executives, managers, staffs) * Rent/building leases * Insurance * Depreciation ( equipment, machinery, furniture and fixtures) * Repayments/ Interest of loans Utility bills ( telephone, water, electric, internet) * Advertising and management cost ( media, print ads, foundation) Irrespective of sales and production, management salaries is fixed.
The company also needs to pay monthly rent or leases, loans and bills. Yearly insurance and depreciation is also noted. Cost for advertising is also significant to attract more customers and provide information regarding events, promotions and new products. Although these costs are normally fixed, it could vary and change over the period of time regarded as period cost. Taking utility bills as an example, demand for production might change he rate consumed. Higher production means higher expense and lower production means otherwise.
Thus, a high and low production will not change the company’s need to pay for monthly bills, rent and salaries for the business to run. Jollied operates as a large scale business. It generates billions of revenues. In gaining such revenues, the company’s cost of production and management is relatively high tantamount to its size. Jollied significantly implements strategy of costs production regulating and monitoring fixed cost in relation to variable costs incurred during production and within the management as well ensuring that the many is optimizing and maximizing these cost to generate revenue.
The company as well minimize operating cost by creating an efficient production to increase its profitability. They adopt new technologies that can speed up the company’s operation. Jollied also patronizes local suppliers which affect costs positively. Since fixed cost do not vary much to production and volume sales, the company’s variable costs change in an incline manner due to expansion, acquisition of common trade and increase of production to meet demands in the market.
Business is affected by the external environment as it is by the competitors. It is important that firms are aware of the changes in the external environment to be successful. Understanding the influence of Macroeconomic factors helps the firms to determine the current market conditions and how beneficial will they be for decision making for the success of their business. Various macroeconomic factors that influence business are political factors, economic factors, coloratura factors, technological factors, environmental factors, and legal factors.
Figure 5 Political factors: * Taxation policy * Government stability * Foreign trade regulations * Trade and tariff controls * Business regulations Economic factors: Interest rates * Inflation * Economic growth (GNP trends) * Disposable income * Money supply Coloratura factors: * Income distribution * Attitudes to work and leisure * Levels of education * Lifestyle changes * Population demographics Technological factors: * Rate of obsolescence * Rate of new discoveries and development * Government spending on research * Government and industry focus of technical efforts * Speed of technology transfer Environmental factors: * Global warming * Environmental protection laws * Availability of natural resources * Energy consumption Legal factors: * Employment law * Health and safety * Product safety Monopolies legislation * Consumer law POLITICAL STABILITY AND GOVERNMENT SYSTEM Philippines have been on economic trajectory since the end of World War II going from one of the richest countries in Asia to one of the poorest. During Marco’s regime, there was economic stagnation which resulted to macroeconomic instability that slowed economic growth. Recession from 1984 through 1985 ended into an economic shrink by more than 10% and political instability during Corcoran Aquinas administration dampened economic activity.
Economic reforms were designed to spur business growth and foreign investment during sass’s and the Philippines saw period of higher growth, although the Asian financial crisis in 1997 slowed Philippine economic development once again. The government continues to face threats from domestic insurgencies, terrorism and security issues which negatively impact the Philippines’ ability to attract foreign investment. Poor investment also resulted in inadequate infrastructure. Population grow rate is relatively high wherein approximately one third of the Philippine population is younger than the working age of 15 putting pressure on the labor pool. Government debt is also high but through Philippines’ fiscal consolidation efforts, credit rating is improving.
Tight government spending had restricted growth but President Aquinas announced a PH 72 billion stimulus package targeting infrastructure and poverty alleviation last year. The Government has shown a commitment to economic reform which has the potential to open up areas for economic cooperation in both trade and investment. Legal system is also strong and unique with the blend of civil law (Roman), common law (Anglo-American), Muslim (Islamic) law and indigenous law. Laws on corporate governance is being imposed and implemented through Department of Trade and Industry and Security of Exchange and Commission. The macroeconomic fundamentals for the Philippine economy remain strong.
Long-term deals have been developed with these partners and the supply chain works in a reliable working environment between the supplier and Jollied. However, Jollied might consider scraping international sourcing due to global trade barriers such as tax, increase in crude prices, and exchange rates which could affect cost and product pricing. When mommies currency goes down against foreign currency, importing would be expensive and exporting would be cheaper which is not profitable for the company. This could lead to reinventing the corporation’s procurement process and will patronize local suppliers. At present, US dollar is equivalent to PH 42. 47.
