Strategic Management Paper Chapter Essays

Strategic Management Paper Chapter Essays Strategic Management Paper Chapter Paper Strategic Management Paper Chapter Paper This can affect company performance in the long run especially if people will patronize the new entrants. Rt 3 Despite the entry of new competitors, Jollibee has been insignificantly affected because of its scheme of buying competitors and assimilating itself into the Company group. 06. There is an opportunity for competitors to agree upon a price ceiling to be able to maintain their customers. Wt = . 09 To maintain customers is to ensure that product prices are kept to an affordable value considering the competition. New products are normally created that are priced to a minimum to attract customers. Rt = 2 Jollibee has maintained that prices of new products are kept abreast with competitors. By doing this, the threat of new substitute products are minimized because pricing is adapted to address the potential threat. other fast-food products to satisfy their wants in terms of food service. Wt = success largely depends on its customers and their buying power. Rt = 3 By lowering food prices, Jollibee continues to address this disposable income rise so as to maintain constant or growing sales. By lowering prices, Jollibee attracts customer who can buy more in their stores compared to ther competitors. T2. Varying consumption patterns may lead consumers to find alternative food products other than that which Jollibee may offer. Wt= . 06 The growing taste of consumers affects the sales of companies for they continue to seek out new products offering a new taste. Nonetheless, almost all food chains do not significantly differ in product offering. Rt = 3 By continuous innovations of product development, Jollibee does not significantly lose in this threat. They are able to address the growing demands for new food products. T3. With more international franchise store entering the Philippines, consumers have a lot option to decide where to go sizeable exposure to multinational fast food chains, high-end dining. Wt= . 07 Globalization is imminent and the Philippines is a good place to start developing a new food business. Filipinos are basically food enthusiast with colonial mentality preferring foreign based chains over local ones. Rt 2 Jollibee has quite failed to address the influx of new and foreign competitors. It has stuck with its brand of promoting Filipino-oriented fast food until now. T4. Jollibee faces a huge market competition due to the fact that these two (McDonalds and KFC) chains are internationally-based and is rapidly expanding and are already established within the country. Wt = . 09 McDonalds and KFC are Jollibees biggest competitors in the country. Both have the resources to play step-by-step with Jollibee in terms of resources and product development. 4 Jollibee has stepped up efforts to compete head-to-head with these two giant ast-food chains by rigorous product development and innovation. The key is continuous progress and quick response to the needs of its market. T5. Lack of new entrants to the industry results to higher competition among existing and established businesses. Wt= . 08 There are little entrants in the caliber Of Jollibee, McDonalds, or KFC in terms of fast-food chain. Therefore, the competition is narrowed among the three big competitors. Rt = 2 Repsonse is basically the same as previous threat. Jollibee has stepped up efforts to compete head-to-head with these two giant fast-food chains by igorous product development and innovation. T6. Higher competition is expected due to the threats brought by substitute products. Wt = . 09 The fast-food industry plays on product innovation and development. Lagging into these will result in reduced sales output of fast-food companies. Rt 4 Jollibee has addressed this continuous progress and quick response to the needs of its market. B) Competitive Profile Matrix (CPM) A competitive profile matrix compares a company and its rivals. The matrix reveals strengths and weaknesses for each company, and critical success factors show areas of success or areas for improvement. Understanding a few key elements of a competitive profile matrix will help with interpretation. Jollibee McDonalds KFC Critical Success Factors Score 1 . Advertising . 4 0. 4 2. product Quality . 05 . 15 0. 15 0. 2 3. Price Competitiveness . 3 . 9 0. 9 0. 6 4. Management . 2 5. Financial Position 6. Customer Loyalty 0. 3 7. Global Expansion 8. Market Share 1. 2 Total: 100% 3. 57 3. 35 2. 65 4 = Major strength where the response is superior, 3 = Minor strength where the response is above average, 2 = Minor weakness where response is average, 1 = Major weakness where the response is poor. In the Philippines, it is evident that Jollibee is the leading fast-food brand overall. Although McDonalds is very close and KFC maintaining a good distance not to be left out, Jollibees SUCceSS is evident as against the other competitors largely because it is a locally-based firm unlike the other two which are internationally based. CSFI . Advertising Weight = Jollibee uses different strategies often seeking to generate increased consumption of their products or services through branding, which involves associating a products name or image with certain qualities in the minds of consumers. Jollibee Rate = 4 Jollibees revenue shoots up because of its strong marketing programs emanating from the Langhap Sarap motto. McDonalds Rate = 4 McDonalds invests on their marketing programs as well, ranging from its first, drive † thru facilities, the McSavers value meals and Happy Meals, and the introduction and re-launching of various McDonalds products. KFC Rate The chain is well known for the finger lickin good slogan which makes it such a household name in the fast food chain industry as well. CSF2. Product Quality CSF Weight = . 5 Most business, such as Jollibee, that produce goods for sale have a product uality or assurance department that monitors outgoing products for consumer acceptability Jollibee Rate = 3 Jollibee has a strong understanding of Filipinos taste and preference as well as it is high quality with a tailored menu specifically for Filipinos. McDonalds Rate = 3 McDonalds is committed to provide customers with high quality products as well KFC Rate = 4 W hile KFC is known for its Quality Management Program as its standards for product quality exceeds the customers expectations. CSF3. Price Competitiveness weight = . 3 Competitive pricing is used by Jollibee often because they sell similar roducts to that of McDonalds and KFC, since services can vary from business to business while the attributes of Jollibees products remain similar. Jollibee Rate = 3 Its price competitiveness is lower than that offered by the competitors, or the price is made more attractive because of added incentives, such as longer payment terms. McDonalds Rate 3 McDonalds also offers food at prices that cannot be easily matched by other competitors thus making this an advantage. KFC Rate = 2 KFC uses this pricing strategy as well but compared to Jollibee and McDonalds, its approach to this strategy is less aggressive compared to the ther competitors. CSF4. Management weight = . 05 It is evident that the company uses effective and efficient planning strategies from goal and objective setting hierarchical structure to duty delegations and job specifications. Jollibee Rate = 4 Jollibee always makes sure that all aspects of the day-to-day running restaurant, from sales and operational management to budgetary control and team development. We are looking for leaders who will maximize the potential of the Restaurant and deliver exceptional resu Its through their people. McDonalds Rate = 4 McDonalds has provided the same techniques with regards its management. KFC Rate = 4 ike Jollibee and McDonalds, KFC hires the right candidates to manage its operations and strategy planning. CSF5. Financial Position The company is consistent with an increasing trend in terms of revenues, operating costs and expenses. Jollibee Rate = 4 Jollibee is in a secure financial position. However, improvements are needed in some areas for the company if it intends to grow. McDonalds Rate 4 It is discovered that efficient operations, strong short and long term solvency position, high profitability, highly loyal customer, broader ne?ork expansion nd the value adding menu are major factors Of its successful financial position. KFC Rate = 4 KFCs escalating ratio is a result of the higher increase in sales over its cost of sales and operating expenses, leading to a higher income before interest and taxes. CSF6. Customer Loyalty Weight Jollibee nowadays have capitalized making their loyalty programs, which often gives benefits that also cost a little, but it carries with them an assumed prestige. Jollibee Rate = 4 Instead of targeting all customers, Jollibee only needs to target new customers in order to grow their business. Their customer loyalty is an easily efendable qualitative factor, so competing institutions will have a difficult time overcoming it. McDonalds Rate † 4 McDonalds may not have Jollibees high Customer Loyalty but it does instil brand loyalty in customers as regards to introducing Ronald McDonald as its clown mascot. KFC Rate = 3 KFCs strategy in gaining Customer Loyalty actually targets the youth and the company focuses more on innovation. CSF7. Global Expansion Jollibee is aggressively entrusting its expansion both locally and globally which in the long term, more and more of the profit growth will come from franchising. Jollibee Rate = 2 Unlike its other competitors, this company has little exposure to competition with foreigners and has limited markets with overseas Filipino communities. McDonalds Rate 4 McDonalds adaptation to the local culture in every country is the way they have managed to successfully provide Global Expansion. KFC Rate = 4 Same as McDonalds, KFC has proven its ability to expand globally along with its diverse strategies. CSF8. Market Share Weight = . 3 This fast food chain not only to win the market share of fast food customers, but also to dominate the Quick Service Restaurants (QSR) industry in the Philippines. Jollibee Rate = 4 Jollibee now controls 18% of the market in Metro Manila, handily beating McDonalds which is said to only have 10% share of the market. McDonalds McDonalds is the worlds largest food service organization. McDonalds holds more than 40% share of the US fast-food burger market, many times the share of its nearest competitor. However, in the Philippines, Jollibee is considered as having more market shares. KFC Rate = 2 KFC is currently sharing its market to brands like McDonalds and Jollibee for under Chicken Dishes category, garnering at least 30% of its share. KFC is more focused on investing in advertising. C) Internal Factors Evaluation (IFE) Matrix This strategy-formulation tool summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas. Intuitive judgments are required in developing an IFE Matrix, so the appearance of a scientific approach should not be interpreted to mean this is an all-powerful technique. A thorough understanding of the factors included is more important than the actual numbers.