International Business Solved Assignment (Doc)

Business

ExecutiveSummary:
Entering a new market is very tough for any company nowadays. Competition is very
much increased and major changes need to be done by any company if it wants top enter
international market. Rules and Regulations are totally different of various countries. Jollibee is a
food corporation which is thinking to expand its business in other countries. It should follow
different strategies before entering new market and it should various innovation in its product
and different other innovative techniques should be used by him to enter and compete in new
market.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Strategy Applied for Foreign Entry.............................................................................................1
Competitive Dynamics.................................................................................................................3
Organisational Structure of Jollibee Food Corporation...............................................................4
Knowledge management in organisation.....................................................................................5
Innovation...................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
International Business means commerce of products, technology, service,
knowledge or capital across national borders or can be said at a global level. It is also
called as globalization. It consists of transactions of goods and services cross borders
that is in between two or more countries. Economic Resources contains people, capital
and skills that can be transferred across borders with the intention of producing physical
goods and services like banking, construction and insurance. To start a business
overseas the companies, need to establish a separate market into global market.
Jollibee is one of the biggest fast food chains established in Philippines. The company
has a wide network and is operating in over 750 stores. Jollibee is a dominant leader of
the Philippines and enjoys such a big share of market that is in total more than all other
multinational brands combined. The report will highlight the facts about the foreign
strategies that company is adopting to enter the international business. The competitive
dynamics that the company will face, which organisational structure should the
company choose. Furthermore, the knowledge management of the company, from
where the sources will be collected and finally the innovation in the goods and services
of Jollibee would be there that will help them to capture the international market as well
(Sestu, Majocchi and D’Angelo, 2018).
MAIN BODY
Strategy Applied for Foreign Entry
The Filipino multinational fast food chain Jollibee, started out as an ice-cream
parlour in 1975 and opened up as a small family restaurant in 1978. Since then, Jollibee
has expanded into more Asian countries such as Malaysia, Vietnam, and Singapore as
well as into the Middle East, Europe, and North America. Jollibee announced its
entrance into the Australian market in 2017 but the project was postponed till 2020
(Sayson & Wong, 2017). It has become one of the largest franchises with over 4,000
stores across 23 countries (Escobar & Blancaflor, 2018).
Jollibee’s strategy is to enter into markets with significant Filipino population and once
establishing the brand name crossover to the mainstream local customers (Santos,
2019, p.1).The new opening store locations has been carefully selected to be areas with
a large Asian population such as California and Hawaii (Escobar & Blancaflor, 2018).
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According to Li (1993, p. 219) knowledge about the target market is critical for
international expansion and entities are more likely to invest in a similar market. By
opening Jollibee stores in areas that the population is familiar with the cuisine is
important as it allows Jollibee to have a customer base from the start. Goldberg’s five-
dimension personality model suggests (Goldberg, 1971, p.297) that most people tend to
stick with what they know and are familiar with. Jollibee’s choice of store locations is
also consistent with dense market theory which suggests that stores in areas where the
population resides and works in high-rise buildings tend to opt for fast food restaurants
due to population density.
Their second strategy is identifying and exploring markets of significant potential
Santos, 2019, p.1). Even without a strong Filipino presence, Jollibee was able to open
up 120 stores in Vietnam where the majority of the fast food market comprises local
Vietnamese presence. One of the most important parts of a business’s future growth is
potential markets (Levitt, 1983, p. 1). Before choosing which country or area to open a
new store, organisations wanting to expand its global presence should dissect their
which age groups, cultural backgrounds and socioeconomic status will the company
most appeal to. The brand was a success in the U.S. as the American stores had a
menu with American Filipino fusion which included dishes such as Spaghetti with a
sweeter flavour. Once the potential market is identified it is important to get the right
message across.
Jollibee has entered the market not as just a fast food chain but identified themselves
as “a company that values family” (Jollibee Foods Corporation, 2019). All of its
advertising material focus on the importance of family values, this is evident in their
advertisement campaigns. Their valentine’s and Christmas advertisements have gone
viral with over 100 million views (Dickinson, 2018, p.1). Jollibee’s intention with these
stories is so that the customers can relate to them. The emotional tales clearly attracted
a mass audience which is evident by the number of views of the advertisements.
Jollibee shows its appeal to young families by offering kid’s party packages as part of
their services. From its mascot (a bee) to toys and its own TV show called Jollitown, its
appeal to kids and staying commercially active is tremendous.
Jollibee also targets adventurous and younger demographic enabling curious
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consumers in trying new cuisines at a cheaper price. Most people would not want to
spend a lot of money to try new food, as they might not want to waste money on
something that they would not like or would end up throwing away. The cheaper price is
an incentive for new customers to try out Jollibee and repeat customers to keep coming
back. This price advantage is consistent with Levitt’s (1983) globalization hypothesis
which suggests that customers in foreign markets are attracted to lower prices and can
abandon their initial favourite services/goods. Jollibee’s low cost operation system
allows them to sell their products at lower price compared to its competitors such as
Mcdonalds (Dickinson, 2018, p.1). According to Marin-Guzman (2019, p.1) the median
household income has gone down by $542 from 2009 to 2017 while household
expenses has risen significantly more. With Jollibee offering cheaper prices more
people are inclined to visit a Jollibee store for a meal.
Competitive Dynamics
The competitive strategies primarily include the internal outlook that is meet the
demands of the customer's in the changing environment. For Jollibee Incorporation the
basic motive should be to know the taste and preferences of the customers. As the
product will only be competitive when it is according to the choices of the people and
their taste. Quality matters above everything. As the business is new the company has
to take care of the customer's choices in only this way, they can attain success. To
enter into the new market the company should put a tight control on the operations of
the management and the market. Basic research is must, and should be done regularly
to keep a check on the market activities and after knowing the demands and tastes the
consumers prefer should be brought to them and should be innovative that is different
from what the other means those who are already there is offering to them. Because
that will be only reason the consumers will invest in the food that the company is
offering. The crucial part is the price of the food product offered that should be below
the competitors. Jollibee Incorporation can adopt Penetration Pricing Strategy that is
keeping their product price lower than that of competitors. This strategy will be
beneficial for the company as with great quality and low price they can capture a big
part of the market easily and can establish a brand name at the new place. The
company should give attractive packaging to influence customer's and the most
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impacting thing will be differentiation. The company should manage the operations of
the company effectively and with it should simultaneously evaluate the external factors
that can affect their business (Distler, 2018). Changing dynamics like political
environment, economic environment, social and legal factors. These all need to
analysed properly as they can adversely affect the business. The changing rules and
regulations of the government effect the operations of new business in the host country.
As Jollibee has a well-known brand name it has sufficient funds to invest in the new
technologies and promote their new business in the market. The new technologies have
come that help in lowering the cost of production that will ultimately increase the
earnings of the company. The company should start online services that are trending
these days. Providing the food items online through various applications and receiving
feedbacks from the consumers will help the company to grow and in improving the food
quality of the product. Through proper feedbacks the company can evaluate where they
are lacking and can improve the services or the food etc. The company should regularly
check the environment and keep themselves updated about the factors prevailing in the
environment and affecting the business. Jollibee Incorporation should analyse their
competitive strategy and their actions, and if found effective and efficient can be applied
in their own organisation. Jollibee used all the techniques described to expand the
business such as maintaining quality of the products and offering the product at lower
rate than the competitors and thus helped in capturing the market. The company offered
the products comparatively at the lower prices than its competitors (Dy, 2018).
Organisational Structure of Jollibee Food Corporation
The organisational structure followed in Jollibee corporation is functional. In this
type of structure all the working of the company is divided into different functions such
as marketing, HR, financial and operations. Organisation is divided into different
departments and each department is responsible for carrying out work. Employees are
divided into different teams which carry out different work for the company. There are
various benefits of using this structure in international expansion. It is used to organise
workers on the basis of specific skills and knowledge. Departments are made on the
basis of employees specialisation and there is a head of each department and there is a
committee above the head which is called as Top management. Jollibee is a multi-
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national company based in Philippines(Dy, 2018). It is in food business and sells a
variety of food items. It is expanding very fast and has a good market share. The
department of Jollibee can be divided into:
Information Technology: IT performs various functions related to company.
There are various benefits of using IT in Jollibee like it will reduce the cost of production,
improves efficiency, maximise profits, minimise waste and more. The expenditure done
on development of IT is not very big. As the expenditure is not high so the profits shared
to them are also not very high. IT help the company to reach potential customers and
good relations can be maintained with the customers. Jollibee uses the help of this
department to reach far customers and to provide them with good service . This sector
is beneficial for the company in the long run. Most of the companies are dealing with
products online and selling products on internet increases the sales and market share of
the company. Most of the companies are spending on IT because this field will benefit
the company in long run and nowadays most of the company are running online and
products selling online will increase the sales of the company. The company should
spent proper funds on the It department as excessive investment will lead to wastage of
resources. Jollibee can gain various customers if the products are sold on internet as
people will directly search and they will order(Distler, 2018).
Marketing: Marketing of a product means selling of goods and services to
customers. Advertisement increase sales of the company and good relations with the
customers will always benefit the company in some way. Marketing department of
Jollibee satisfy the customers by providing excellent after sales services to customers.
Marketing department is related to promotion of a company's product and services and
the ads of Jollibee are very famous and entertaining (Ancarani and et.al., 2015).
Finance: This department is responsible for keeping the proper records of the
financial accounts of the company. This department finds the correct sources from
which the funds can be acquired. The main objective of finance department is to get the
right amount of fund at right time with least interest rate. The main aim of people
working in this department is to find investors for Jollibee corporation who are ready to
invest in the company. Every company who is thinking to expand cannot expand without
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getting proper financial support. The total tax paid by the company and all the monetary
transactions are checked by this department(Parboteeah and Cullen, 2017).
Functional department is good for a company because it allows greater
operational efficiency of employees as employees with same abilities are grouped
together. The work of Jollibee can be best done if the employees are divided into
different teams or department. Problems are less and benefits are more of using this
method. One problem which can arise is of communication between different
department.
Knowledge management in organisation
Knowledge management is related to applying your knowledge for the benefit of any
company. Effective use of knowledge is very important for the survival and success of
the company in the high competitive environment. Using the knowledge properly and in
the most effective way is known as Knowledge Management. It is very important in the
organisation in context to various business. Various ways to manage knowledge
effectively is:
Cross-Training programs- Shadowing, training and other programs allows
employees to gather business knowledge by analysing the work which is done by
others. New employees can be appointed in the Jollibee and they can see other
employees or experienced employees and watch how they work. This method is useful
when there are less number of employees working in the company and they get proper
experience of working in the company. (Groysberg and Connolly, 2016).
Document- Management systems: There are many system like Google-Drive
and cloud which are used by the company to store their data. This data can be stored
and shared but it can be accessed by only few people. These tools are very beneficial
for Jollibee and a very good advantage of using this source is that the information can
be founded easily. Jollibee uses it to store its data on cloud.
Social-networking tools: Various private networking tools like Slack can be
used to communicate from one place. They are used to see the historical conversation
which allows employees to see their previous chats and discussions between
colleagues. There are different social-networking tools which are used by different
companies to check the conversation between different employees in Jollibee.
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Knowledge management is very crucial for a company if it wants to expand its market
share (Parboteeah and Cullen, 2017).
Chatbots: These are those application which responds to the employee
questions and difficulties. The main benefit of using chatbots is that the employee does
not have to think who to ask and where to go in need of any information. This
application is used by Jollibee so that new employees can directly see the information.
The employee does not have to go to any place to find the information or see any chat
history, he just has to use chatbots. The chatbot will give the best information he has
from its knowledge base irrespective of where the information lives in that organisation.
Content management Systems: These are those system which help the
employee and company to update, access and publish information on the company’s
server or intranet. Other companies or investors can use this information prior to their
investment in Jollibee. This allows friendly environment in the team and the team
becomes more hard working and competitive. There are different software and
applications which can be used for this (Li, Hernandez and Gwon, 2019).
Innovation
It is very important for a company to do innovation so that company can compete
in the changing environment. Innovation gives a competitive edge to a company over
others. Innovation can be done in many things like in products, technology, methods
and more. Good and innovative products will increase the company's market share and
this will increase the company's profits in future. Innovation in a product increases the
demand of that product. Jollibee can do innovation in its various food items. Company
can do innovation by:
Using online method: Jollibee can go into online sector to sell its food products. It
has stores in different parts of country and after expansion it can also deal in selling
goods online. Goods can be marketed online as well as company can deliver goods at
home. This way its market will increase and more people will purchase it products.
Jollibee can benefit as trend of home delivery of food item are growing very fast as
people don't have time to go and purchase goods from the market. Jollibee can charge
more for home delivery and this way it can increase its revenue. Jollibee should be
offering variety of food products to compete in the international market, as there are
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already companies who are dealing in same if Jollibee must create monopoly to attain a
good position in the market this will help them in capturing bigger market share and
eventually their revenues will be increased.. Jollibee is a new company and if it wants to
stay then it must have good variety of food from which customers can choose
(Parboteeah and Cullen, 2017). This way customer's won't switch to other company
and will be loyal to Jollibee. Jollibee can start producing different food items like packed
food. It was always dealing in normal food, now it can start dealing in packed food which
also have good scope in international market and according the company can capture
international market also and can make their brand name. The companies today are
very fast and does not miss any opportunity to expand and grow. Jollibee should always
be ready to grab all the opportunities to gain competitive advantage so that they can
always be one step ahead of other firms. New products with new technology will
increase the profits of the Jollibee. Company will sell new packed food on new channel
this will increase the revenue of the company. Jollibee will start this new business so
they need to employ more members this will make the company's name more reputed in
both the markets. Jollibee must have competent employees which can help the
company in dealing with new market and products. The employees are more satisfied
and motivated this will enhance their productivity and performance. The company
should be ready to face challenges before entering into the new market. For this the
employees must be provided efficient training and such skills should be developed so
that they don't resist change, this way company can never face losses. Innovation also
requires a lot of fund which needs to be spend by the company. Jollibee employed such
competent person that will help the company in expanding the business and those who
have competitive spirit that helped Jollibee to earn profits over other rivalry firms. The
employees were capable of expanding the online business and increase the sales and
profits (Li, Hernandez and Gwon, 2019).
CONCLUSIONS
From the above study it can be concluded that Jollibee Incorporation has the
biggest food chain across Philippines. Now the company wants to expand their
business. So, to expand the food chain business they have to analyse many factors like
how they will enter into the foreign market. Then in the report various methods are
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mentioned that is direct export, franchising, licensing and so much more are there but
the company chooses targeting the expatiates of the host country. That will be
beneficial in so many ways like they already know about the choices of the people of
that country. They can easily promote the food and brand in their country as they know
the ways their people live. The other strategy was planting the flag that is company will
open their chains in different countries. The company should use penetration pricing
strategy to capture the new market and should provide after sale services plus online
food delivery. Jollibee Incorporation will adopt the functional structure in their new
business that is beneficial as every department takes responsibility of their operations.
The company will bring innovation such as online delivery of food that will help in
increasing the customer's of the company and thus increase the profits and will create
the brand name. According to this the company will increase it's brand recognition.
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