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2009 Angeles City, Philippines College of Business and Accountancy Strategic Management Module 2 Activity: Environmental Scanning and Industry Analysis Submitted by: AYSON, Francis Neil C. BENGCO, Mikaella Antonette O. BONDOC, Ianne Renwin Y. LUGTU, Aimee Marie S. MUÑOZ, Renz Joshua Q. OCAMPO, Joshua D. QUIZON, Arian Angel L. TUAZON, Angelie R. Submitted to: Ms. Donna May Estimada, MBA Date: April 10 , 20 21
Environmental Scanning Jollibee Foods Corporation’s environmental scanning includes the gathering of information about events and their relationships with the internal and external environment and analyzing data to make their strategy and tactics. The business environment of JFC is composed of the macro- environment which includes the external factors such as the sociocultural, technological, economic, ecological, and political-legal and also micro-environment that includes the internal factors such as the company’s buyers, competitors, suppliers, and other stakeholders. A. Natural Environment Jollibee Foods Corporation ensures that every action they commit abides with the environmental laws and ethics. In fact, the practice of going green is integrated in the business processes of JFC. As a support in their environmental advocacy, in the year 2011, they decided to join the steering body of the Climate Change Summit. Furthermore, in 2016, JFC launched their Go Green Project which aims to inspire residents of different barangays to promote vertical vegetable gardening. And in 2019, Jollibee in some chosen branches in Manila uses E-bike delivery which does not use gasoline and fuel to run but electricity only. ECOS Environmental Foundation, Inc. is the partner of JFC in using environmental transportation in delivering their products. B. Societal Environment The set of influences on consumers’ behavior are called the social factors. Since Jollibee Foods Corporation operates locally and internationally, factors like culture, societal norms, social class, reference group, gender, demographic trends and different attitudes towards consumption are to be considered by the company. The culture as well as societal norms a person has grown up to greatly affects the needs and wants of a person. This is the reason why JFC is required to provide Halal-approved products especially in countries where there are Muslims. So far, Jollibee had been doing attempts in localizing their menu to cater to the food preferences of different countries. For example, a southeast Asian dish Nasi Lemak is paired with ChickenJoy in Singapore while in UAE, they offer ChickenJoy with biryani rice – a local rice of the Indians and Muslims. JFC also considers the attitudes of consumers towards health, safety and savings since these three factors influence one another. JFC had launched various marketing campaigns that highlight their efforts in producing healthy meal options at a low price. Its success in advertisement continues since the launch of the valentine’s special #KwentongJollibee in 2016 that gained awards and recognition both here in the Philippines and abroad. The commercial videos aim at touching the hearts of everyone with consideration to gender, age and demographic trends. C. Technological Environment Technology is rapidly changing business model to different industries. Some of the technological factors that affect the macro-environment of JFC are: improvement in artificial intelligence, usage of machine learning and big data analytics, and extending platforms over service providers.
F. Political – Legal Environment Political Factor This factor plays an enormous part in making investment decisions among corporations and companies. It does not only affect the cost of a business but also its sustainability in a long run. The political environment composed of different factors that gives impact to the corporations are law, government, military conflict, democracy, etc. Political stability is very important for the investors because it gives a steady and agreeable business context which creates trust. Notwithstanding, political confusion is unavoidable which can hinder the investors and damage the trust on organizational performance. As we all know, Jollibee Food Corporation can be seen in different countries which has its own political tensions. These tensions can affect the growth of the industry that could result limitations on the growth of opportunities on Jollibee Food Corporation. Moreover, there is a consistency in policy making and these changes can possibly harm the performance of the business which creates uncertainties on the market. Studying the current trends about the political scenario of a country is essential to know the top priorities of the government towards the development of the industries. In line with this, protests like pressure groups, worker unions and activists are very influential in making policies and building a society. Caktiong Values must connect the bridge and collaborate with them. This will help the Jollibee Food Corporation to connect with communities and accomplish its long-term goals. Moreover, international business organizations are more interested with a good governance system with good political support. On a sad note, corruption is very common on different countries. If Jollibee Food Corporation entered into a corrupt market, the sustainable development of the organization will be threatened in terms of business operations, contracting, licensing, etc. Weak enforcement of law and high corruption will give Jollibee Food Corporation an unpredictable business environment. Moreover, tax is inseparable from any kind of business. It has a great impact on the profitability of a business. Jollibee Food Corporation should invest on research and development to avoid high taxation. It should study the taxation policies and make better business strategies. Legal Factor A company or corporation should always consider legal environment before entering a business. This is very important to avoid causing trouble during the operation of business. Ignorance about this factor can create undesirable product and business environment. Be mindful about the violations and it is essential to always know your rights and protection standards. Each country has different laws and regulations. Employment system of Philippines is not the same with America. Regardless the location of Jollibee Foods Corporation, it must follow the strict regulations of their employees regarding labor health and safety. It is the responsibility of the Jollibee Foods Corporation to secure the workforce of the employees for safety. Moreover, data protection has been in demand nowadays not only on corporations but also to different companies. It has been an issue because of privacy concerns and consumers’ security. Jollibee Foods Corporation is responsible to know the regulations on protecting the data of consumers. The corporation should know the different laws and standards to ensure compliance on protection law. Another important factor to know is the intellectual property rights of the corporation. This right
is intended to ensure that the patents and ideas of the Jollibee Foods Corporation are safe. Powerlessness of securing the intellectual property rights of the corporation can result weakening upper hand which can cause inefficiency among the markets Task Environment The task environment is composed primarily of external industry forces that have a direct and specific influence on the company and are, in essence, impacted by the organization's operations. The task environment of Jollibee Foods Corporation will be presented through the utilization of a tool that is normally used in analyzing the company’s competitive environment – Porter’s Five Forces, which includes competition in the industry, potential of new entrants into the industry, power of suppliers, power of customers, and threat of substitute products. This framework can be employed as a guide by business owners in the formulation of their strategies so as to increase the company’s competitive advantage. These will be further discussed in the industry analysis of this paper.
The bargaining power of buyers is medium-high. With the numerous available choices of fast-food in Philippines buyers are able to choose which restaurants they would want to patronize. Switching from eating at Jollibee to McDonalds has little impact on the buyers’ wallet and this poses one of the main blocks in determining if the firm is able to earn above-average returns. By expanding and diversifying their customer base, Jollibee Foods Corporation will control buyer bargaining power. It can be accomplished through the introduction of new goods, the targeting of new consumer segments, and the implementation of product diversification strategies. In this respect, marketing and promotional campaigns may also be beneficial. Building loyalty by integrating creativity and providing an outstanding customer experience will increase switching costs, reducing customers' bargaining power. These tactics will help Jollibee Foods Corporation improve its competitive position in the market. C. Suppliers Bargaining Power of Suppliers Bargaining Power Of Suppliers are High when: High Medium Low Concentration of suppliers relative to buyer industry (^) ✔ Availability of substitute products (^) ✔ Importance of customers to suppliers (^) ✔ Differentiation of the suppliers products and services (^) ✔ Switching cost of buyer (^) ✔ Threat of forward integration by the supplier (^) ✔ The bargaining powers of suppliers are low. The availability of raw materials for the fast-food industry is readily available not only locally, but available from neighboring countries as well. For example, due to the high rice prices in the Philippines, Jollibee can reduce its costs and source for rice in Thailand, Vietnam or Cambodia. By that its reliance on one or a few suppliers, Jollibee Foods Corporation will improve its position against suppliers. It will become more prices sensitive. Developing long-term contractual agreements with suppliers from various regions reduces their bargaining power while also allowing Jollibee Foods Corporation to boost its supply chain productivity. Finally, if product demand is strong enough and the company has the necessary competencies and skills, Jollibee Foods Corporation will find alternative ways to produce the product. However, determining its viability necessitates a thorough cost-benefit study. D. Substitutes Threat of Substitute Products or Services
The presence of substitute products or services makes the competitive environment challenging for Jollibee Foods Corporation and the other players in its industry. A high substitute threat exhibits that consumers can use alternative products/services from other industries to meet their necessities. Many factors can determine the intensity of this threat for Jollibee Foods Corporation such as: The Threat of Substitute Products or services increases when;
How Jollibee Foods Corporation can tackle the Rivalry among existing firms? Jollibee Foods Corporation should set its focus on the implicit needs and expectations of its customers in order to enhance the differentiation basis. It should increase switching costs by developing long-term customer relationships. JFC should also identify new customer segments by investing in research and development activities. Collaborating with competitors may also be an option as it can be mutually beneficial. F. Other Stakeholders Stakeholders As discussed below, three groups of JFC stakeholders have been identified who are impacted by the strategic outcomes. Capital Market Stakeholders Shareholders with a vested interest in JFC are among the company's stock market partners. Jollibee has been able to use this crucial opportunity through going public on the Philippine Stock Exchange to broaden its horizons both within and outside of the local Philippine market. The role of capital market players is also noticeable in the corporation’s expanding activities over the past years. Product Market Stakeholders Customers and manufacturers of the corporation’s food businesses are among the company's commodity sector partners, both locally and internationally. Thanks to its awareness of local tastes, as well as the consistency and attractive pricing of its products, the company has been able to grab a significant share of the fast food industry. The large daily requirement of food resources had enabled Jollibee to enjoy better prices through economies of scale from its suppliers. Organizational Stakeholders Jollibee Food Corporation’s organizational stakeholders include its large number of employees under its corporation, its managers, and its franchisees. In maintaining its high standards, JFC’s compensation, benefits, and comprehensive training programs ensure they have the best employees that are available.
SWOT Analysis of Jollibee Foods Corporation STRENGTHS WEAKNESSES
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