A.

EXTERNAL FACTORS

A1. Economic Forces

Economics

The uncertainties of competition from foreign players as well as downturns in

specific marketniches are omnipresent in our current economic nature. Other
uncertainties also come in the formof financial crisis in the region as well as in the
country it is operating in.

Stakeholders

Three groups of stakeholders of Jollibee are identified whom are affected by the
strategicoutcomes and discussed below

Capital Market Stakeholders

Jollibees capital market stakeholders include its shareholders whom have a direct
interest in thecompany. Since going public on the Philippine Stock Exchange,
Jollibee had been able to tap onthis key resource to expand its horizon within and
beyond the local Philippines market. The importance of the capital market
stakeholders is also evident in the growing operations of Jollibeeover the years.

Product Market Stakeholders

Jollibees product market stakeholders include its customers locally and globally, as
well assuppliers of its food sources.Jollibee has been able to capture the market
share of the fast food going customers due to itsunderstanding of locals preferences
and it quality and competitive pricing of its food. Anapproximate 1 million customers
ate at Jollibees stores daily, making them an importantstakeholder in this category.
The large daily requirement of food resources had enabled Jollibee to enjoy better
prices through economies of scale from its suppliers.

Organizational Stakeholders

Jollibees organizational stakeholders include its large number of employees under

its corporation(26,500 employees as of 2004), its managers and its franchisees.In
maintaining its high standards, Jollibees compensation, benefits and comprehensive
training programs ensure they have the best employees that are available.

B. SOCIAL CULTURAL AND DEMOGRAPHIC FORCES

Demographic

In the local Philippines context, the million consumers walking into Jollibees
stores dailyrepresent strong demand for its products. The uniqueness of the
geographical landscape of Philippines has also made it a challenge for fast-food
companies. Globally, there are manyFilipinos workers situated in the overseas
market, especially in the United States where there areestimated to be around 2
million Filipino immigrants. Besides the US, many Filipinos are alsosituated in
parts of Asia such as Hong Kong, Brunei and Indonesia. Not limiting to Filipinos,
their stores have also attracted other Asians to eat at their restaurants.

Economic

The growing economic capabilities of developing countries have attracted major

players in thefast food industry to establish their stores there. Likewise for
Jollibee, the growing market possibilities in Indonesia for Chinese food enabled
Jollibee to venture into the market byintroduction of Chowking Brand. The
potential China market for fast food also led Jollibee to acquire 85 percent
ownership in Yong he King Chain.

Sociocultural

The social and cultural of each country differs from one another. For example, a
Chinese might prefer to have noodles instead of rice in Japan. In our case of
Jollibee, the langhap-sara concept adopted by them may be hugely popular to
Filipinos consumers, but this concept may not do sowell in
global markets. Foreign consumers might not like the traditional taste
of Jollibees food,as compared to bigger global players such as McDonald.

Global

The ever changing global landscape is one of the critical factors Jollibee has to
consider. Asillustrated in the case study, Philippines have seen major global
players entering the fast-foodmarket having a take on this pie. Although Jollibee
 have always been the dominant in thissegment, competing in foreign markets
seems to be in a different story. Not only they have to penetrate the foreign
market with their proven and successful local recipe, they would also have
tocompete against already established players such as McDonald, Wendys and
KFC.

C. Political, Govermental and Legal Forces

The operations of Jollibee are affected by the government policies on theregulations of fast
food operation. Currently government are controlling themarketing of fast food
restaurant because of health concern such ascardiovascular and cholesterol
issue and obesity among the young and children inthe country. Governments
also control the license given for open the fast foodrestaurant and other business
regulation need to follow such as for a franchisebusiness. Good relationship with government
in giving mutual benefits such asemployment and tax is a must for the company to
succeed in any foreign market.McDonalds should also protect its workers by ensuring all
the hiring,compensation, training or repatriation is according to Philippines
Labor Law asstipulated

D. Competetive Forces
Top 5 Jollibee Foods Corporation Competitors
1. Weber Grills

W
Estimated Revenue
$1.5b
Headcount
3,000
Location
Palatine, IL
hospitality,restaurants
Weber is the world's premier manufacturer of charcoal, gas, and electric grills, and grilling accessories.
Includes recipes, grilling tips, parts, and support.

2. Freddy's Frozen Custard

Estimated Revenue
$200.6m
Headcount
9,100
Location
Wichita, KS
restaurants,frozen custard concretes, sundaes, shakes, and malts,steakburgers,100% beef vienna hot dogs
Freddy's Frozen Custard & Steakburgers is more than your traditional American hamburger restaurant. We are
known for our tasty steakburgers and custards.

3. Chili's
Estimated Revenue
$3b
Headcount
10,000
Location
Dallas, TX
hospitality,restaurants,chili's,chilis restaurant
Chili's Grill & Bar is the flagship brand of Dallas-based Brinker International, Inc. (NYSE: EAT), a recognized
leader in casual dining. Chili's offers a variety Fresh Tex and... read more

4. Islands Restaurants

Estimated Revenue
$75m
Headcount
3,000
Location
Carlsbad, CA
restaurants,test,hospitality
Islands Fine Burgers & Drinks is a burger restaurant that specializes in gourmet burgers and beer and specialty
drinks. Come by Islands today!

5.Nando's

N
Estimated Revenue
$1.5b
Headcount
7,500
Location
Sheffield, United Kingdom
peri peri flame grilled chicken and sauces,restaurants,hospitality
Welcome to Nandos the worldwide home of Nandos legendary flame-grilled PERi-PERi chicken.

E. Technological ForcesFor a fast food restaurant, technology does not give a

very high impact on thecompany and it is not a significant macro environment
variables. However Jollibeeshould be looking to competitors innovation and
improve itself in term ofintegrating technology in managing its operation.
 For example in inventorysystem, supply chain management system to manage its
supply, easy paymentand ordering systems for its customers and wireless internet
technology.Implementation of technology can make the management more
effective andcost saving in the long term. This will also make customer happy
if cost savingsresults in price reduction or promotional campaign discount which will
benefitsthem from time to time

Industrial Environment Analysis ( Porter 5 forces)

Threat of New Entrant

Threat of New Entrants is High when: High Medium Low

Economic of Scale
Product differentiation
Capital Requirements
Switching costs
Ease of access to distribution channels
Cost disadvantages
Government policies creating barrier

The threat of new entrants to the industry is considered low to medium. New
entrants to the fast-food industry would need to face high entry barriers. Besides
having economies of scales, high capital requirements when opening a fast-food
chain as well as products that differ from the rest of the competition, the new
entrants would also have to compete against the high standards as well as the
already present loyal customer base Jollibee has set in the industry.
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-foodindustry is readily available not only locally, but available from
neighboring countries as well. Forexample, due to the high rice prices in the
Philippines, Jollibee can reduce its costs and source for rice in Thailand, Vietnam
or Cambodia.
Bargaining Power of Buyers

Bargaining Power of Buyers are High when: High Medium Low

Concentration of buyers relative to suppliers
Switching costs
Product differentiation of suppliers
Threat of backward integration of buyers
Extent of buyers profile
Importance of suppliers input to quality of buyers
final product

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.

Threat of Substitute Products

Threat of Substitute Products are high when: High Medium Low
Differentiation of Substitute Product
Rate of improvement in price performance
relationship of substitute products

The threat of substitute products is considered to be medium-high. Products from

local street foodcan be considered a major substitute, as well as food from its direct
competitors in the industry.

Intensity of Rivalry among Competitors

Intensity of Rivalry is high when: High Medium Low

Number of Competitors
Industry growth rate
Fixed cost
Storage cost
Product differentiation
Switching costs
Exit barriers
Strategic stakes

The intensity of rivalry among competitors is considered to be medium-high. The

fast-foodindustry can be described as a lucrative segment with high profitability.
Within the Philippines,there are already other fast-food players competing with
Jollibee.