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Statement of the Problem:

In order to make certain the growth and advancement

of its company, JFC (Jollibee Food Corporation) aims
to expand further and delves into opportunities available
in foreign markets.

What effective investment should JFC make in order

to penetrate foreign countries and expand its foreign
market share?
open 100 new restaurants within the
rrent year in foreign countries

o get 50% of their income from foreign

arket after 10 years.

o penetrate Asian countries, primarily

hina and India which have big
tential market.
Areas of Consideration:
> 2009 Significant Financial Data of JFC

Current Assets 13,936,928,132.00

Liquidity Ratio 144.67%
Current Liabilities 9,633,836,229.00

Total Debts 8,103,632,109.00

Debt to Equity Ratio Total Stockholders 34.81%
Equity 23,281,239,667.00

Total Long Term Debts 2,437,980,374.00

Long Debt to Equity Ratio 10.47%
Total Stockholders
Equity 23,281,239,667.00

Net Debt 4,928,145,889.00

Net Debt to Equity Ratio 24.51%
Net Debt and Equity 20,105,753,447.00
Cont... Areas of Consideration:
> India, being JFC’s primary target market
avoids meat, which is a basic ingredient
in Jollibee products.
> Fast food industry growth is
continuously increasing.
> Research on the health consequences of
too much fast
food consumption is also continuously
Alternative Courses of Actions:
Alternative 1
Invest in specific country’s local
food chain with big growth
Many Asian countries have established their own local
fast food chains competing with the international brands.
Some of these have grown building many branches in
their own nation and have even penetrated other countries.
JFC can invest in these local chains. Mr. Pizza Korea
established just in 1990 has a strong growth potential.
Pizza Corner of India with more than 50 outlets is also
making name in its local market. Also Cafe de Coral in China,
one of the largest Chinese Fast Food, has around 540 outlets
around the world can be a big investment move for JFC.
ntages (Strength and Opportunities):

hough it has not fully break-through the other Asian country

ets, have build a name for itself among fast food chain compani
have achieve credibility as it continued to invest and diversify in
tries it was able to gain entry. It is also prided with many award
ecognitions, to name some: in 2001 one of the "Top 20 Best
oyers in Asia”. The Asia Money Magazine adjudged JFC as "Best
erational Efficiency" based on the financial rations and
agement Man of the Year" - Tony Tan Caktiong by MAP.
helps make investment in foreign companies possible.

g so, JFC can enter the local market immediately, and eventually
understand the food preferences of the people in that certain r
n which will be helpful in the future establishment of its own line
l have a preview of the local market, thus, research cost
be lessen
dvantages (Weakness and Threat):

building of its reputation in foreign countries is taken aside.

opportunity to establish its own line will take a long time. And s
there is a rapid growth of demand in fast food products at
ent time there are many local companies developed and many
west side companies penetrate Asia. Without taking this
rtunity, JFC’s competitive advantage, being an already-establish
any, may decrease. And in time it has familiarize the market and
ed on pushing its own line, other companies has already
nated the industry
Alternative Courses of Actions:
Alternative 2
Open own food chain line in the
desired country, primarily
Jollibee Restaurants, Chowking,
Greenwich, Red Ribbons, etc..
There are millions of Filipinos who have already
migrated to Asian countries (both illegal and legal) as
many nations open an entry for employment
opportunities. With this, if JFC opens its food chain
line, they are assured of ready market which is these
migrant Filipinos who, by nature, long for any
Philippine packs, like food.
tages (Strength and Opportunities):

ompany is well established in the Philippines and it is safe

that around 90% of Filipinos are acquainted with Jollibee.
oes as well to those Filipino migrants across Asia.
if establish in countries where there are Filipinos, there is
ubt that they will utilize what Jollibee has to offer.

since fast food chain industry is growing in Asia. Many fast food
s began opening in Asia, like Mcdonalds, Wendy’s, Taco Bells, et
ina, it is estimated that the demand will increase by 9% annually
lly Indian fast-food industry is estimated to be only $135 million
with over 300 million Indians hankering to follow the lifestyles of
ern world, the sky is the limit for this sector. Other Asian countr
outh Korea and Japan are following the trend.
Disadvantages (Weakness and Threat):

JFC reputation as a leading fast food chain in the Philippines

is unquestionable, but its reputation is not yet well-established
in all Asian countries. Chowking may serve Chinese cuisines
that can penetrate China, and/or Taiwan but cooking may vary,
even ingredients vary, like noodles and spices used by Chinese.

JFC chains, especially Jollibee, cater mostly meats that may

not be acceptable in India since Indians avoids meat due to their
religious beliefs. Most eat vegetable and love spices, which are
rare in typical JFC food.
Every country has its own food preferences; Jollibee may not
meet the taste of each country’s local. Additional and material
cost may incur in modifying its product or food lines to satisfy
the foreign market. Filipino customers will not be enough if JFC
aims to have 50% of their income comes from outside the Philippines.
Also, it has some bigwig competitors like the aforementioned
McDonalds, which remains the number one fast food chain in the
world and other US originated company that had already penetrated
Asia, not to forget the fast food chains established by each country
that surely know what their locals prefer.
Alternative Courses of Actions:
Alternative 3  
Invest in country’s local fast
food chain and open own food
chain in selected areas where
there are Filipino migrants.

With enough funds for investment, JFC can

purchase stocks from local fast food chain in
certain Asian country and open restaurant at
the same time carrying its own chain of stores.
Advantages (Strength and Opportunities):

Investment in foreign-owned food chains will give JFC access

to local market and pre-study the nature of people towards
eating and their food preferences. Initial establishment of their
own food chain stores will introduce their own name in this country.
On the process, modification of some foods that were originally
made for Filipino taste will be applied base from experience and
information gain from those foreign chains where it had invested.

An integration of original JFC products and local taste can be made.

An entry of other JFC lines can then be open to the market.
Again the increasing trend of Asian imitating west lifestyle and
of course the convenience and affordability in eating, JFC’s
growth potential is big.
Disadvantages (Weakness and Threat):

Because of the market trend, local businessmen are getting

aggressive to supply fast food chain in their locality. These
businessmen have an advantage in their own land since they
are more acquainted with the market. International Companies
carry its name that is widely celebrated in other areas in the world.
It automatically has edge over JFC and achieves credibility even
before it enters the Asian market. JFC on the other hand, must still
work more to be highly regarded and be at the same foot with these
national brands.

The adjustment of JFC according to local food taste may lead to

lost of its own identity, since they have to adapt local ingredients
and materials which can be very different with Jollibee’s o
riginal offering.
Conclusion &
Alternative 1- Investing in foreign food chain,
especially in big companies, may meet the company’s
aim to increase and eventually get 50% of their total
annual income from foreign market. But this
disregards the company’s aim to mark its name in
Asian countries as early as the movement of fast food
chain demand 2 –isPutting up all Jollibee chain of
still increasing.
stores in different Asian countries, (100 in the
current year) is highly risky due to the food
preference of the locals and competitive
environment with international brand leading
the industry. The 50% goal is hardly achievable.
Conclusion &
With JFC data in 2006, it is financially capable of making
investments in foreign countries. I therefore conclude that
alternative 3 which is to invest in country’s local fast food
chain and open and introduce own food chain in selected
areas where there are potential market can be most helpful
in solving the problem. This alternative meets the three
objectives. The 100 restaurants can be met by investing in a
foreign company that has an established reputation in its
home country and have already penetrated other countries
and then there are the JFC owned restaurants opening in
parallel to this investment.
Conclusion &
The importance of investing in foreign countries is that
this move will assist JFC in understanding the market it
wanted to enter. The food preference, which is a main
issue in opening a local food chain in a foreign market,
can be taken in-depth. It can also learn and manipulate
the spending pattern of the natives.
Conclusion &
This investment is also a research activity, thus,
the cost of R & D can be lessened. Opening more
Jollibee stores will not be very difficult then.
Opening for franchise and setting up new stores in
areas where there are already Jollibee can also be
effective in its expansion plan.
It is now not a choice between opening its owned
stores and investing in foreign stores but
integrating both strategies to effectively meet the
JFC’s objectives.