MANAGEMENT

ACCOUNTING
P2

ABOUT JOLLIBEE
FOODS CORPORATION
Jollibee is the largest
fast food chain in the
Philippines, operating a
nationwide network of
over 750 stores.

The company has also embarked on an

aggressive international expansion plan in
the USA, Vietnam, Hong Kong, Saudi
Arabia, Qatar and Brunei,
Jollibee was founded by Tony Tan and his
family with its humble beginnings as an Ice
Cream Parlor which later grew into an
emerging global brand.

Great Tasting Products and Quality Systems

Jollibees growth is due to its delicious menu line-up like

its superior-tasting Chickenjoy, mouth-watering Yumburger
and Champ hamburger, and deliciously satisfying Jollibee
Spaghetti -ably complemented with creative marketing
programs, and efficient manufacturing and logistics
facilities.

PROBLEM STATEMENT
The

newly appointed head of

International division Mr Manolo
P. Tingzon is pondering into
continuing with its strategy of
expanding its business base into
potential markets.The markets
in consideration are Papua New
Guinea, Hong Kong and
California.

NEW MARKET ANALYSIS

PAPUA

NEW GUINEA:

Marketing to
the populace here will be of major
challenge as it is one of the most diverse
countries of the world with over 850
languages being spoken by a population of
just seven million. 85% of the people here
depend on agriculture for livelihood.

 PAPUA

NEW GUINEA: Since this

would be its first store in Papua
New Guinea, Jollibee will have
to incur huge expenses in terms
of conducting market research
about consumer preferences,
hiring competent staff and its
training

HONG

KONG

Jollibees existing stores in Hong Kong are

already struggling with management issues.
Instead of aggravating the differences
between the Chinese and Filipinos, the Store
Managers are required to motivate the staff
to achieve a common goal.
Expanding to fourth store in Hong Kong is not
an issue of financial terms but more of
manpower requirement (Chinese) and also of
local perceptions related to food

CALIFORNIA
-Being able to successfully run a store
in California would be a significant
milestone in the growth of Jollibee.
-But in order to succeed in this
market, it needs to upgrade its
technology as the labour cost is
enormously high in this part of the
world

CALIFORNIA
. In order to make a mark,
Jollibee needs to invest heavily
on promotional campaigns and
meanwhile, needs to keep doing
what it is best at modifying the
recipe to prepare exactly what
the consumers wanted

DECISION

Entering into California market will bring a high branding

opportunity although it may face tough competition and high
cost being part of States. But looking at the high immigrant
Pilipino population the sales may be largely supported by
their tastes.

With a franchising partner ready to serve as an investment of

about 40% the starting operation may be easy

Well connected with international air and sea routes the

state can provide fast and effective logistics (examples:Los Angeles International Airport and
San Francisco International Airport are major hubs for transPacific and transcontinental logistics)

ABOUT COCA COLA COMPANY

The Coca-Cola Companyis an

Americanhistoricalmultinational beverage
corporationand manufacturer, retailer, and marketer
of nonalcoholic beverage concentrates andsyrups,
which is headquartered inAtlanta,Georgia.

The company is best known for its flagship

productCoca Cola, invented in 1886 by
pharmacistJohn Stith PembertoninColumbus,
Georgia.

Coca Colas
corporate
headquartersin
Atlanta,Georgia.
, United States

PROBLEM STATEMENT
Economic
There is low growth in the market for carbonated drinks, especially in Coca-Colas
main market, North America. The market growth recorded at only 1% for North
America in 2004.

Social
There are changes in consumers lifestyles. Consumers are more health conscious.
This affects the Coca-Colas sales of the carbonated drinks as consumers prefer
non-carbonated drinks such as tea, juices and bottled drinks. Demand for
carbonated drinks decreases and this leads to a decrease in Coca-Colas revenues.

ALTERNATIVES
Acquiring

KKD and GLDC (a potato chip and

snack food company)

Producing

a new diet soda line made form

more healthy sugar alternatives

Both

alternatives

DECISION
The QSPM strategies assessed whether acquiring
KKD and GLDC (a potato chip and snack food
company) was a better option than producing a
new diet soda line made form more healthy
sugar alternatives. Both scores on the QSPM are
relatively close and given the financial
condition of KKD and GLDC, it is recommended
Coca Cola undertake both strategic alternatives.

The Net Worth of both companies is provided below. It is

estimated it would cost $200 million to research, produce and
market the new diet drinks.

Krispy Kreme (KKD) Net Worth January 2008 (in millions).

1. Stockholders Equity + Goodwill = 79 + 28
2. Net income x 5 = $-42 x 5=
3. Share price = $2.73/EPS -0.94 = NAx Net Income $-42=
4. Number of Shares Outstanding x Share Price = 65 x $2.73 =
Method Average

$ 107
$ NA
$ NA
$ 177
$142

Golden Enterprises (GLDC) Net Worth January 2008

(in millions).
1. Stockholders Equity + Goodwill = 19.4 + 0
2. Net income x 5 = $1.2 x 5=
3. Share price = $2.95/EPS 0.19 =$15.52 x Net Income $1.2=
4. Number of Shares Outstanding x Share Price = 11.2 x $2.95 =
Method Average

$ 19.4
$ 6.0
$ 18.6
$ 33.0
$19.3

ABOUT KENTUCKY FRIED CHICKEN

(KFC) CORPORATION

Kentucky Fried Chicken(KFC) is a fastfood restaurant

chain that specializes in fried chickenand is
headquartered in Louisville, Kentucky, in the United States

The company is a subsidiary ofYUM! Brands.

It is the world's second largest restaurant chain (as

measured by sales) after McDonalds, with 18,875 outlets
in 118 countries and territories

 KFC

was founded byHarland Sanders, an

entrepreneur who began selling fried chicken
from his roadside restaurant inCorbin, Kentucky,
during the Great Depression. Sanders identified
the potential of the restaurantfranchising
concept, and the first "Kentucky Fried Chicken"
franchise opened inUtahin 1952.

PROBLEM STATEMENT
What market entry strategy to be
employ in the expansion in China?

ALTERNATIVES
Franchising/Licensing
Wholly

owned subsidiary
Joint venture

Franchising/Licensing
First, KFC's traditional franchising strategy, which is
emphasizing standardization and reducing financial risk, on
the expense of cultural sensitivity and control. Due to
China's strict foreign investment laws such a strategy is not
feasible. In addition, KFC will be pioneering in the fast-food
field and thus needs to be highly sensitive to cultural
demands. In the past, KFC encountered problems with
aligning corporate planning with franchisee's short-term
focus on profitability.

Wholly owned subsidiary

Such

a strategy relies upon total control over

competitive advantages and ensures complete
operational and strategic control. It also involves
high investment expenses with no financial risk
sharing. With high levels of resource commitment
and little country-level flexibility and
responsiveness, this option is not recommended.

DECISION
Expansion

in China through Joint venture strategy.

The potential size and growth of the market in
association with improving political stability
makes the Chinese market very attractive. As KFC
has been able to successfully expand into the
Pacific Basin, and its popularity in the region
(large portion of the population is Chinese), the
people in China will most certainly find KFC's
products attractive.

DECISION
In

addition, the ready access of quality poultry in the

major metropolitan areas and host government
emphasis on modernization of this industry can
ensure a reliable supply of supplies. Opposite to this,
potential competitors such as MacDonald's face major
barriers to enter the market due to poor beef supply.
Moreover, the Chinese government has opened-up
access to its markets.

PRESENTED BY:
Abegail L. Dazo
Patrik Jay Joven
Perly Syjuco