STRATEGIC BUSINESS ANALYSIS

Porter’s 3 Generic Strategies

ANILAO, ELIJAH JOYCE M.

AQUINO, ERIKA JOY L.
MARAÑO, DONITA MAE P.
MERCADO, ANGELO T.
RESTITUTO, EVE JEREMY Q.
BSA III
C061 TTH 1:00 - 2:30

PROF. ROMERICO A. ALVAREZ

Adviser
 COST LEADERSHIP STRATEGY

A. Name of the company: Jollibee Foods Corporation

Jollibee is the leading fast-food chain in

the Philippines, operating a network of
over 1,150 stores nationwide. As a
dominant market leader in the Philippines,
Jollibee enjoys the lion’s share of the local
market that is more than all the other
multinational brands combined. The
company has also embarked on an
aggressive international expansion plan in
Vietnam, Brunei, Hongkong, Singapore, Macau, Malaysia, US, Canada, Saudi
Arabia, UAE, Qatar, Kuwait, Bahrain, Oman, Italy and the United Kingdom. It
operates over 250 overseas outlets in 15 territories around the world.

B. What strategy is it using?

Cost leadership is the main generic strategy that Jollibee Foods

Corporation uses in various consumer markets. According to Porter’s 3 Generic
Strategies, cost leadership occurs when a company is the category leader for low
pricing. In order to successfully achieve this without drastically cutting revenue, a
business must reduce costs in all other areas of the business, such as marketing,
distribution and packaging. Being a global brand with a strong presence all over
the world, Jollibee has set its competitive positioning based on some critical
factors including its price that provide a strong edge over rivals including the
competitor in the majority consumer markets.
C. Describe how the company implements the strategy.

Jollibee’s affordable menu prices garner a broad base of loyal customers.

Students and young working adults often look for budget-friendly or quick meals.
Rapid urbanization, long work hours and increased living expenses continue
fueling the demand for budget fast food. Jollibee helps many Filipino working
classes surviving Petsa de Peligro, which refers to the dreaded period between
paydays, a term commonly used among Millennial.

This strategy allows the business to expand the market share by targeting
the middle class, which makes the largest proportion of overall consumer market
mix in most of the countries. Middle class consumers generally place high
importance to the pricing factor and cost leadership is the best strategy to cater
the needs of this consumer segment.

It focuses on affordability and easy accessibility of its produce across the

globe, which leads towards high brand awareness and high sales growth and
provides a strong competitive advantage basis. Other than charging low prices
by lowering production cost and maximizing supply chain efficiency, Jollibee
frequently offers discounts and coupons to achieve sales targets and handle the
competitive pressure by its closest rival. The intended outcome of these discount
and promotional campaigns is to increase brand popularity and encourage
consumption.

This strategy has outlined many benefits, such as- gaining quick brand
recognition, expanding the customer base, encouraging consumption and
achieving sales targets by emphasizing over product’s affordability and
accessibility.
D. Company competitors.

McDonald's Corporation franchises and operates

fast-food restaurants in the global restaurant
industry. The Company's restaurants serve a
variety of value-priced menu products in countries
around the world. As the biggest fast food
restaurant chain in the world, McDonald’s uses its
intensive growth strategies to support continued
business development and expansion.

Max's Group, Inc. is the largest casual dining

restaurant company in the Philippines. Its vision is
to be the leading Filipino company with the most
loved brands by 2025. Max’s started with its
flagship brand Max's Restaurant, a humble
roadside cafe in the home of its founders.

KFC Corporation is an American fast food

restaurant chain headquartered in Louisville,
Kentucky, that specializes in fried chicken. It is the
world's second-largest restaurant chain (as
measured by sales) after McDonald's, with more
than 20,000 locations globally in 150 countries as
of December 2019.
E. Past and present performances.

Established by Tony Tan Caktiong and his family in 1975, ever since,
Jollibee has become the dominant leader in the Philippines despite the entries of
McDonald’s and KFC. Jollibee’s line-up products that were introduced during the
early 80’s are still best known for today – the Chickenjoy fried chicken,
Yumburger and the uniquely sweet Jolly Spaghetti.

From its humble beginning turning to a national favorite, Jollibee has

captured the taste buds and hearts of generations of Filipinos through its classic
deliciously satisfying burgers, chicken and spaghetti. Started as a two brand ice
cream parlor in 1975, Jollibee expanded its product portfolio to venture into the
burger business. Over the years, with its in-depth consumer knowledge,
Jollibee’s advantage on the Filipino taste and culture was evident and
demonstrable. Today, the brand has become a true Filipino icon everywhere in
the country. Jollibee captures the mass population where families and kids are
the dominant demographic in the Philippines. Jollibee created a strong emotional
bond with its core target customer segment – the traditional families – through its
compelling media commercials and quality customer services. Jollibee’s thematic
advertisements are filled with storylines that echo the importance of Filipino
family values. Ever since, Jollibee serves up nostalgia for millions of Filipinos
today around the world.

During recent years, the company has been aggressively expanding its
global footprint overseas by opening Jollibee stores abroad and acquiring foreign
brands, including the recent acquisition of lost-making US-based Coffee Bean &
Tea Leaf in Indonesia. Jollibee has been in the coffee business through a
previous purchase of Highlands Coffee Shops that have a significant presence in
Vietnam.
 DIFFERENTIATION

A. Name of the company: Ferrari Company

Ferrari Company is an Italian luxury

company engaged in the design,
engineering, production, and sale of
luxury performance sports cars. It
operates in four segments: Sports Range,
GT Range, Special Series, and Icona.
Ferrari sports cars are among the most
prestigious automobiles in the world,
along with Porsche, Maserati, Alfa Romeo,
Jaguar, and Lamborghini. The company was founded by Enzo Ferrari in 1939
and built its first car in 1940. They got their recognition in 1947 as an auto
manufacturer and now earned its name as a racing car.

B. What strategy is it using?

Ferrari obtains competitive advantage by adopting Porter's generic

strategies. Ferrari uses differentiation as a strategy that allows the company to
compete in areas where unique features of the product are distinguished. In its
high competitive market, sustaining its market leadership position appears to be
challenging for them while increasing its market share. Ferrari creates a
competitive advantage in the prevailing business environment in terms of its
luxury performance and design, not just to stand out from their rivals but the
desire to stand above it.
C. Describe how the company implements the strategy.

Using the differentiation as a strategy, Ferrari emphasized its products more

in a way to standout and makes it superior to alternatives from the market.
Increasing market demands for its product and make it different and be more
attractive to consumers. In this strategy, as the company focus to be distinctive
from the products of competitors, it requires more effort, involves bigger
investment in marketing and advertisement. However, it is not just differentiating
its products from the other businesses, strong presence from the public and
having an extensive experience are some differentiation factors need to be
considered for effective marketing. To be popularly known, a unique and
attractive logo is one of the important factors to set the differentiation basis. A
strong impression is important. Having a unique business logo has a significant
effect to every consumer’s mind for the company to be remembered. One of the
special features of Ferrari is a special project where Ferrari does in -house
personalization service. Ferrari does self-engineering and design.
Sometimes it works in cooperation with external design companies like
Fioravanti and Pininfarina.

Up until today, Ferrari is one of the brands that will always be looked up into
because of its distinctive products and the fact that it is a luxury brand. It also
offers a wide variety of products so that it can match the costumer’s unique taste
needs. Using differentiation as a strategy allows the company to speak directly to
the relevant consumers and creates impression as the best among all of the
products in the same category that it could lie into.
D. Company competitors.

McLaren is one of Ferrari's top competitors. Like

Ferrari, McLaren also operates in the Automobile
Manufacturers industry. McLaren generates $2.7B
less revenue than Ferrari. McLaren Automotive is a
creator of luxury and high-performance sports cars.

Lamborghini is a top competitor of Ferrari. Like

Ferrari, Lamborghini also competes in the
Automobile Manufacturers field. It generates $1.8B
less revenue vs. Ferrari. It is an Italian brand and
manufacturer of luxury sports cars and SUVs.

Bugatti is a French car manufacturer of high-

performance automobiles, founded in 1909 by the
Italian-born industrial designer Ettore Bugatti. The
cars were known for their design beauty and for
their many race victories.

Tesla, Inc. sells fully electric vehicles, and energy

storage systems, as well as installs, operates and
maintains solar and energy storage products.
The Company operates through two segments:
Automotive, and Energy generation and storage.
E. Past and present performances.

Ferrari built his first car, the 815, and competed in the 1940 Mille Miglia.
World War II temporarily halted Italian industry and motor racing, leading Ferrari
to move his operations to Maranello in 1943. After the war’s conclusion, Ferrari
set about building his first production car, the 125 S. The 12-cylinder car
achieved its first victory at the Rome Grand Prix in 1947.

In 1961, noting production difficulties, Ferrari began negotiating a sale to

Ford Motor Company. Enzo backed out of the deal at the last minute, however,
infuriating Ford and igniting a fierce racing rivalry (guess Enzo had a knack for
making enemies). In 1969, Enzo sold half his company shares to Fiat and
resigned as president in 1977.

In the 1970s, Ferrari’s first mid-engine V8 road cars hit production, including
the 308 GTB, 308 GT4, and 308 GTS. The ‘80s brought significant changes to
Ferrari. Fiat increased its stake to 90 percent, Enzo passed away in 1988, and
road car performance leveled up. Vehicles like the 288 GTO, Testarossa, and
F40 brought the automaker into the modern era of style and power.

Ferrari continues to compete in Formula One though with much less

success than the early 2000s. The road car business, however, continues to
succeed with new models, variants, and millions of adoring fans. Ferrari is
embracing electrification for its next round of sports cars. Up to 60 percent of its
vehicle range will be hybridized by 2020 and all models will gain electric help
before 2025. Ferrari plans to expand its model range significantly, especially the
grand touring (GT) category, but with increases in its model prices, it expects it
will remain ultra-exclusive. The Italian automaker will also adopt semi-
autonomous driving technologies but claims it will retain the pleasure of driving.
 DIFFERENTIATION

A. Name of the company: Coca-Cola Company

The Coca-Cola Company, American

corporation founded in 1892 and today
engaged primarily in the manufacture and
sale of syrup and concentrate for Coca-Cola,
a sweetened carbonated beverage that is a
cultural institution in the United States and a
global symbol of American tastes. The
company also produces and sells other soft
drinks and citrus beverages. With more than
2,800 products available in more than 200 countries, Coca-Cola is the largest
beverage manufacturer and distributor in the world and one of the largest
corporations in the United States. Headquarters are in Atlanta, Georgia.

B. What strategy is it using?

Coca-Cola targeted this niche market of healthy drinkers through brand

extension. This brand-extension strategy is a brilliant example of utilization of the
Focus or Niche Market Strategy because focusing on the needs of a niche
market that was rapidly increasing will be a merit on Coca-Cola’s company if they
satisfy this market’s demands. This strategy is primarily used by small
businesses because they can only supply for the demands of a small group of
customers, but Coca-Cola smartly applied this strategy although they are a giant
company already, because they wanted to be in every type of market.
C. Describe how the company implements the strategy.

As everyone knows, the Coca-Cola Company is a well-known big drinks

manufacturer that uses Porter’s focus strategy. Because of its strong brand, it not
only makes and delivers their products around the world, but also markets the
non-alcoholic beverage concentrates and syrups. The company has a vast
portfolio of drinks, beverages, waters, juice, teas, coffees, energy and sports
drinks which they products, distribute, market and license all over the world.
Meanwhile, Coca-Cola also manages its business in more than 200 countries.

On the other hand, Coca-Cola becomes a successful company and earns

great revenue, using its internal and external marketing strategies to overcome
most of the other competitors. The company also claims that innovation is at the
heart of everything they do and it is one of the reasons why they success. The
report aims to analyze the market segmentation for one of the world’s strongest
brands Coca-Cola and talks about the different market segmentation variables by
theories and practices in the company. Furthermore, the report discusses the
targeting and positioning of Coca-Cola Company, it also provides the market for
the organization is segmented for the company.

The Coca-Cola Company aims to focus on niche market and work smart.
Generally, comparing with old generation, Coca-Cola seems more popular in the
younger groups. Especially they put vending machines in schools to gain more
profit. A Coca-Cola official said that his company would “continue to be very
aggressive and proactive” in going after school business (Marion, 2000). In 2008,
the company launched more than 700 new products globally, which was
including more than 160 low or no-calorie beverage options. This gives people
more options to choose what they want, especially for those people who do not
like to drink with too much sugar but water, so diet coke is not the only option for
those people anymore.
D. Company competitors.

PepsiCo, Inc. engages in the manufacture,

marketing, distribution and sale of beverages, food,
and snacks. It is a food and beverage company
with a complementary portfolio of brands, including
Gatorade, Pepsi-Cola, Quaker, and Tropicana.

Red Bull is one of the strongest growing energy

drink/sports drink and is amongst the strongest
direct coca cola competitors in terms of brand
valuation. The popularity of Red Bull is due to its
wide adoption in the pub culture where Red Bull
can be mixed in various drinks.

Fanta has close to 100 flavors being used across

various countries. It is also known for a
differentiated marketing message in each of the
countries which it operates in.

Mountain dew is a clear carbonated drink from the

house of Pepsico. It is known for its clear beverage
worldwide but it also has a lineup known as
Kickstart.
E. Past and present performances.

The drink Coca-Cola was originated in 1886 by an Atlanta pharmacist, John

S. Pemberton (1831–88), at his Pemberton Chemical Company. His bookkeeper,
Frank Robinson, chose the name for the drink and penned it in the flowing script
that became the Coca-Cola trademark.

Under Candler’s leadership, sales rose from about 9,000 gallons of syrup in
1890 to 370,877 gallons in 1900. Also during that decade, syrup-making plants
were established in Dallas, Los Angeles, and Philadelphia, and the product came
to be sold in every U.S. state as well as in Canada. In 1899 the Coca-Cola
Company signed its first agreement with an independent bottling company, which
was allowed to buy the syrup and produce, bottle, and distribute the Coca-Cola
drink. Such licensing agreements formed the basis of a unique distribution
system that now characterizes most of the American soft-drink industry.

The post-World War II years saw diversification in the packaging of Coca-

Cola and the development or acquisition of new products. The trademark “Coke,”
first used in advertising in 1941, was registered in 1945.

In the early 2000s Coca-Cola faced allegations of illegal soil and water
pollution, as well as allegations of severe human rights violations. In 2001 the
United Steelworkers of America and the International Labor Rights Fund (ILRF)
filed a lawsuit against Coca-Cola. The controversy gained worldwide attention
and led several American universities to ban the sale of Coca-Cola products on
their campuses. The lawsuit was eventually dismissed. In 2005 the company
introduced Coca-Cola Zero, a zero-calorie soft drink with the taste of regular
Coca-Cola. In 2007 the company acquired Energy Brands, Inc., along with its
variously enhanced waters.
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