company analysis

Saint Louis CollegeSan Fernando City, 2500 La Union

College of Commerce, Secretarial and Accountancy

Company Analysis(Universal Robina Corporation)(Jollibee Food Corporation)(San Miguel Corporation)

In Partial Fulfilment of the Requirementsin

Financial Management 7

Submitted to:

Mrs. Feliza Villanueva

Submitted by:

Camille Gwen ObaldoJoy RimandoNikka Libao

Lucks Mae MadayagCharmaine Jane RañaJenny Rose CariagaMaria Cecilia Arranz

Jenimie Reyes

(Time Schedule: 3:00-4:00 MWF)

August 17, 1015

TABLE OF CONTENTS

I. COMPANY PROFILE

A. When and how the company was established and who were

responsible for setting it up.

B. Evolution of the company

C. Directors and Managers

II. UNDERSTANDING THE CULTURE

A. Management principles, styles and practices

B. Standing of the firm relative to:

a. Industry

b. Brand name acceptance

c. Production facilities and their locations

d. Marketing and distribution outlets

e. Pricing

C. Product Diversification

D. Investment Diversification

III. ANALYSIS

IV. REFERENCES

I. COMPANY PROFILE



Universal Robina Corporation (URC) is one of the largest

branded consumer food and beverage product companies in the

Philippines and has a significant and growing presence in the

ASEAN markets. URC is among the Philippines' pioneers in the

industry. It has been in operations for over 50 years since John

Gokongwei, Jr. established Universal Corn Products, Inc, a

cornstarch manufacturing plant in Pasig, in 1954.

URC is engaged in a wide range of food-related businesses,

including the manufacture and distribution of branded consumer

foods and is also in commodities namely sugar million band

refining and flour milling and in Agro industrial businesses of

farms mainly hogs and animal feed milling and related products.

URC is the leading branded snack foods and beverage company in

the Philippines. It is the first "Philippine Pan ASEAN

Multinational" and has proven itself to be a trailblazer in

manufacturing with a strong and loyal consumer base. The company

has unswervingly showcased its innovation and excellence through

its groundbreaking products, wide distribution network, and

UNIVERSAL ROBINA CORPORATION

effective marketing. This is also evident in URC's formidable

market leadership in snack foods and beverages. John Gokongwei

Jr. established a vision for URC to become one of the leading pan

Asian players in snack foods and beverages. This vision is

gradually being realized as URC has managed to transform itself

from a Philippine operation to a recognized Asian multinational

with full scale operations in eight countries outside the

Philippines, and soon in emerging markets like Myanmar, Laos and

Cambodia.

In addition, URC's products are already being exported to

mainstream markets in the US, Europe, Japan, Korea the Middle

East and frontier markets in West Africa, like Ghana and Nigeria.

URC has built three strong regional brands over the years; "Jack

'n Jill" for snack foods, "C2" for ready to drink tea, and "Great

Taste" for coffee, with these brands becoming popular across the

ASEAN region. URC's key to success is to build very strong

branding through a robust product innovation pipeline, consumer-

centric marketing and world-class manufacturing and supply chain

management. URC will continue to transform itself in line with

the changing external dynamics in line with increasing

opportunities in Asia and beyond.

a. Company History

Universal Robina Corporation (URC) traces its beginnings all

the way back to 1954. John Gokongwei was doing very well then as

a trader/importer. He had learned the trade when his father died

before the war, and had worked hard through the war and post-war

years to prosper. However, while he thrived, he took a long hard

look at his company, and correctly predicted that trading would

remain a low-margin business. On the other hand, a successful

manufacturer controlling its own production and distribution

would command more profitable margins. Mr. John decided to

construct a corn milling plant to produce glucose and cornstarch,

Universal Corn Products (UCP), the first linchpin of the company

that would become the URC we know today.

For a time, business was good. However, Mr. John was still

looking ahead, working with an eye towards the future. While the

business was doing very well, it was producing essentially a

commodity, which a customer could easily access elsewhere. To

stay ahead in the game, Mr. John had to diversify by producing

and marketing his own branded consumer foods, similar to the

multinational companies in the country like Nestle and Procter &

Gamble. In a sense, he wanted to put up the first 'local' MNC,

borne out of their best practices.

Thus, in 1961, Consolidated Food Corporation was born. Their

first 'home run' product was Blend 45, the first locally-

manufactured coffee blend, dubbed as the "Pinoy coffee". This

became the largest-selling coffee brand in the market, even

beating market leaders Cafe© Puro and Nescafe.

After coffee came chocolates. Nips, a panned chocolate were

a staple of Filipino childhood.

In 1963, Robina Farms started operations, beginning with

poultry products. This was also the beginning of the vertical

integration of the Gokongwei businesses, as the farms would be

able to purchase feeds from UCP in the future. Later that decade,

Robichem Laboratories would be put up, to cater to the veterinary

needs of the farms businesses. Robina Farms expanded as it

entered the hogs business in the latter part of the 70s.

1966 saw the establishment of Universal Robina Corporation,

which pioneered the salty snacks industry through Chiz Curls,

Chippy, and Potato Chips, under the "Jack 'n Jill" brand. Other

snack products would follow over the years, as the company

successfully introduced market leaders like Pretzels, Piattos,

and Maxx.

The coming decades saw more acquisitions and expansion. In

the early 1970s, the family entered the commodities business

through the formation of Continental Milling Corporation, for

flour milling and production. The late 1980s brought the

acquisition of three sugar mills and refineries, under URC Sugar.

These two businesses provided stable cash flows, and allowed for

further vertical integration in the supply chain, to help URC

weather any volatility in the cyclical commodities markets. In

line with this strategy, the late 1990s saw the entry of URC into

the plastics business, through URC Packaging.

While the businesses became more diversified, the companies

were slowly integrated in order to streamline and minimize costs.

In 2005, the present structure of the group was completed. All

the different companies are now organized under the Universal

Robina Corporation umbrella, divided into 3 focused groups:

the Branded Consumer Food Group, comprised of BCFG Domestic

(including packaging) and International

the Agro-Industrial group, comprised of Universal Corn

Products, Robina Farms, and Robichem

and the Commodities group, with the Sugar and Flour

divisions

b. Business Operations

Universal Robina Corporation (URC), the "first Philippine

multinational", is one of the largest branded foods companies

in the Philippines, and has managed to expand to other Asian

markets. Most recently, URC has expanded its reach to New

Zealand and Australia through the acquisition of Griffin's

Foods, a leading snacks player in New Zealand.

URC is engaged in a wide range of food-related businesses,

including the manufacture and distribution of branded consumer

foods, flour milling and pasta manufacturing, sugar milling

and refining, renewable energy via the bio-ethanol and biomass

cogeneration businesses (under Sugar Group), hog farming,

manufacture of animal feeds, glucose, soya products and

veterinary compounds.

c. Mission, Vision and Core Values

Mission


branded food product companies in the Philippines and has a

growing presence in other ASEAN markets.

Vision

URC's vision is to be the best Philippine food and beverage

company, with a powerful presence throughout the ASEAN

region, carrying a wide portfolio of delightful brands of

exceptional quality and value, equipped with efficient

systems and motivated people. We are committed in making

lives a truly fun experience.

Values

Passion to Win: We build organizational capability by being

entrepreneurial and proactive, driven by a sense of urgency

and purpose. We continuously challenge ourselves to deliver

world-class brands and consistently rally our people to

strive for excellence.

Dynamism: We cultivate a culture of innovation and

productive working relationships. We continuously find ways

to improve organizational and people capabilities to meet

constantly challenging consumer needs.

Integrity: We are guided by transparency, ethics, and

fairness. We build the business with honour and are

committed to good governance. Our processes and products

meet the highest standards. We are credible in our dealings

with both internal and external stakeholders.

Courage: We seize opportunities in building long-term,

sustainable businesses. We make tough people and business

decisions to ensure competitive advantage.


Looking ahead to “a world without borders,” URC, currently

the Philippine food and Beverage Company with the widest

geographical footprint, has expanded steadily outside the

country. At present, URC maintains manufacturing facilities in

Vietnam, Thailand, Indonesia, Malaysia and China and sales

offices in Singapore and Hong Kong. Some of the all-time Filipino

favourite “Jack ‘n Jill” products such as Piattos, Roller

Coaster, Cloud 9, and Cream-O, and C2 Cool and Clean Green Tea,

as well as other new and exciting brands, can be found on

supermarket shelves and in neighbourhood stores throughout the

region. URC International grew tremendously in the past years and

has become a major player in the Southeast Asian region. Fuelled

by its leadership in Thailand and Vietnam, and the steady growth

of its presence in Malaysia, Singapore, Indonesia, Hong Kong and

China, URC continues to impart joy in the region using the same

winning formula that has delighted Filipinos through the years.

URC has been a part of the Filipino consumers’ lives for

decades. However, the Company also takes much pride in its

successful expansion beyond Philippine shores. Over the past few

years, it has steadily built a presence in Southeast Asia and

China with URC Vietnam at the forefront. URC Vietnam only started

operations in 2004 but has taken giant steps since then. It is

currently the largest (in terms of revenues) among the different

country operations, second only to the Philippines. In October

2013, C2 became the #1 Ready-to-drink Tea product in the whole of

Vietnam*, besting even the strongest local and foreign

competitors. At present, URC Vietnam continues to expand its

innovative portfolio of snack foods and beverages. It also

continues to strengthen its operations with plans to build a new

factory in Quang Ngai (in central Vietnam) to complement the

existing Ho Chi Minh and Hanoi facilities. It is perhaps hard to

believe that a Filipino company can achieve so much success in a

country that is more than 900 miles away, speaks an entirely

different language, and has very unique influences and tastes.

But URC has a couple of things going for it: the ability to

‘localize’, and a universal vision and core values.

‘Localization’ can mean many things but for URC, it means the

ability to adapt the products and the business operations to an

entirely different country or situation but still offering

something distinctive. One example in Vietnam is that the Company

has successfully ‘localized’ both the product and the marketing

for C2. Vietnam has a deep-rooted tea culture and because of

this, the Company decided to offer and push C2 more than any

other product. C2, being freshly brewed from green tea leaves,

caters very well to this traditional tea-drinking culture and yet

offers something new with its refreshing fruity flavours. Even

the way C2 is marketed speaks of this immersion into the Vietnam

culture. URC Vietnam has been running their “Only One Love, Only

C2” brand message across its advertising and promotional efforts

and it has created a strong affinity with the local consumer.

This adaptation also carries over to the way the Company runs its

operations – from purchasing (e.g. using locally grown green tea

leaves) all the way to distribution.


BOARD

The Board has adopted the Revised Corporate Governance

Manual in 2010 for the Company. The Manual elaborates on the

governance roles and responsibilities of the Board and its

Directors. The Board ensures that all material information about

the Company is disclosed to the public on a timely manner. The

Board likewise is strongly committed to respect and promote the

rights of stockholders in accordance with the Revised Corporate

Governance Manual, the Company’s Articles of Incorporation, and

By-Laws.

Composition

• The Board is composed of nine directors (four executive

directors, three

non-executive directors, and two independent directors)

with diverse

backgrounds and work experience

• None of the independent directors own more than 2% of the

Company’s

capital stock

• Different persons assume the role of Chairman of the Board

and CEO

Attendance of Directors

January 1 to December 2013

Date of Election: April 18, 2013

Number of meetings during the year: 9

Role

A Director’s Office is one of trust and confidence. A

Director should act in the best interest of the Company in a

manner characterized by transparency, accountability, and

fairness. He should also exercise leadership, prudence, and

integrity in directing the Company towards sustained progress.

BOARD OF DIRECTORS

John L. Gokongwei, Jr.DIRECTOR, CHAIRMAN EMERITUS

James L. GoDIRECTOR, CHAIRMAN

Lance Y. GokongweiDIRECTOR, PRESIDENT

AND CHIEF EXECUTIVE OFFICER

Patrick Henry C. GoDIRECTOR, VICE PRESIDENT

Frederick D. GoDIRECTOR

Johnson Robert G. Go, Jr.DIRECTOR

Wilfrido E. SanchezDIRECTOR

Robert G. Coyiuto, Jr.DIRECTOR

Pascual S. GuerzonDIRECTOR

EXECUTIVE OFFICERS

James L. GoCHAIRMAN

Lance Y. GokongweiPRESIDENT AND CHIEF EXECUTIVE OFFICER

Patrick Henry C. GoDIRECTOR, VICE PRESIDENT

Cornelio S. Mapa, Jr.EXECUTIVE VICE PRESIDENT AND MANAGING DIRECTOR,

URC BRANDED CONSUMER FOODS GROUP

Constante T. SantosSENIOR VICE PRESIDENT

Bach Johann M. SebastianSENIOR VICE PRESIDENT

Geraldo N. FlorencioFIRST VICE PRESIDENT

Chona R. FerrerFIRST VICE PRESIDENT

Ester T. AngVICE PRESIDENT – TREASURER

Anne Patricia C. GoVICE PRESIDENT

Alan D. SurposaVICE PRESIDENT

Ma. Victoria M. Reyes- BeltranVICE PRESIDENT

Michael P. LiwanagVICE PRESIDENT

Socorro ML. BantingASSISTANT VICE PRESIDENT

Rosalinda F. RiveraCORPORATE SECRETARY

II. Understanding the Culture


Insider Trading Policy

The Company observes strict compliance with the Exchange's

Trading Rules and Restrictions, emphasizing the need for

transparency and fairness in its transactions in order to fully

apprise its investors of its current activities The Company is

guided by, observes and complies with provisions of the

Securities Regulation Code (RA Act No. 8799) with regard to the

Prohibition on Fraud, Manipulation and Insider Trading.

The Company complies with the provisions of law set forth in

the Securities Regulations Code and shall implement policies and

procedures to prevent the unauthorized disclosure or misuse of

material, non-public information in securities trading to

preserve the reputation and integrity of the Company.

Conflict of Interest Policy

The Company's Code of Business Conduct and Conflicts of

Interest Policy require employees to make a conscious effort to

avoid conflict of interest situations; that his judgment and

discretion is not influenced by considerations of personal gain

or benefit. A conflict of interest may also occur because of the

actions, employment, or investments of an immediate family member

of an employee.

Related Party Transaction

Describe the company's policies and procedures for the

review, approval or ratification, monitoring and recording of

related party transactions between and among the company and its

parent, joint ventures, subsidiaries, associates, affiliates,

substantial stockholders, officers and directors, including their

spouses, children and dependent siblings and parents and of

interlocking director relationships of members of the board.

Stakeholders Health, Safety and Welfare

Stakeholders

The Company is committed to undertake all reasonable steps to

ensure the health, safety and welfare for the best interest of

our stakeholders and the communities where we live and work by

complying with the provisions of law, industry rules and

regulations, standards of independent accreditation bodies where

the Company obtained accreditation, and contractual obligations.

This policy aims to:

1. Provide a guiding principle to ensure health, safety and

welfare of the Company's stakeholder.

2. Identify responsibility and accountability of every

personnel and department in the organization to ensure the

health, safety and welfare of stakeholders.

3. Integrate health and safety practices in all activities to

ensure efficiency and quality of products and services.

This policy shall define the guiding principles and

responsibilities for managing health, safety and welfare of the

stakeholders of JG Summit Holdings, Inc. (JGSHI), its

subsidiaries and affiliates.

Employees

The Company abides by safety, health, and welfare standards

and policies set by the Department of Labor and Employment.

Likewise, the Company has Security and Safety Manuals that are

implemented and regularly reviewed to ensure the security,

safety, health, and welfare of the employees in the work place.

To ensure that the employees of the Company maintain a

healthy balance between work and life, health and wellness

programs are organized for these employees. Professionals are

invited to conduct classes of Zumba, Tai Chi, and other

activities in our work site. The Company has also partnered with

fitness gyms to offer special membership rates to employees. This

is in addition to the free use of gym facilities in the different

installations.

Year on year, the Company has facilitated vaccinations such

as against flu and cervical cancer that are offered not only to

employees but to their dependents as well. The Company has worked

with healthcare providers in identifying top diseases based on

utilization report and has invited resource speakers to talk

about preventive measures.

To ensure the safety of the Company's employees, a Corporate

Emergency Response Team (CERT) has been created that will be

activated and will become the "command center", orchestrating

initiatives across the conglomerate during a crisis. Also, the

CERT shall be responsible for the periodic review of contingency

plans and the institution's emergency preparedness and response

procedures to ensure that effective responses and responsible

policies are in place to deal with crisis or emergency

situations.

Company Trainings and Development Programs for Employees

The Company continuously provides learning and development

opportunities for its employees through the John Gokongwei

Institute for Leadership and Enterprise Development or what is

commonly known as JG-ILED.

JG-ILED is the leadership platform for systematic and

sustained development programs across the conglomerate. Its

mission is to enable a high performing organization that will

facilitate the learning process and develop the intellectual and

personal growth of all employees through targeted and customized

trainings and development programs.

JG-ILED curriculum comprises of the following:

Core Program - programs designed to ensure employees have the

foundation needed to perform job effectively. It also covers key

people skills training that will help supervisors and managers in

leading their teams to perform to the optimum level.

Basic Management Program (BMP)

Coaching for Effectiveness (CFE)

Problem Solving and Decision Making (PSDM)

Employee Discipline Program (EDP)

Achieving Customer Service Excellence (ACE)

Management Development Program a programs that aims to enhance

the leadership capability and business acumen of all leaders

Finance for Senior Executives

Strategic Communication Program

Executive Coaching Program

Advanced Negotiation Skills

Leading and Managing Change

Resources Development Human Program - courses designed to ensure

employees have a common understanding of the HR processes and

systems by which the Company operates.

Job Evaluation

Competency-Based System

Organization Design and Manpower Planning

Labor Relations Management

Performance Management System

Targeted Selection-Competency Based Interviewing

Creditors

The Company upholds creditors' right by honoring contracted

obligations and providing information required under the Revised

Disclosure Rules and the Securities Regulation Code, if

applicable, audited financial statements prepared compliant with

applicable financial reporting standards, and other periodic

reports compliant with the provisions of law, loan covenants and

other regulatory requirements.

This policy aims to:

1. Provide the guiding principles to ensure protection of

creditors' rights.

2. To identify the duties of responsible departments in

protecting the rights of creditors.

This policy shall cover the documentation, reporting and

disclosure requirements to promote transparency for the

protection of the rights of creditors of JG Summit Holdings, Inc.

(JGSHI), its subsidiaries and affiliates.

B. Standing of the firm relative to:

a) Industry

Universal Robina Corporation has great reputation

in the industry for being one of the largest branded

consumer food and beverage product companies in the

Philippines and has a significant and growing presence

in the ASEAN markets. URC is among the Philippines'

pioneers in the industry. It has been in operations for

over 50 years since John Gokongwei, Jr. established

Universal Corn Products, Inc, a cornstarch

manufacturing plant in Pasig, in 1954. URC is the

leading branded snack foods and Beverage Company in the

Philippines. URC is the first "Philippine Pan ASEAN

Multinational" and has managed to expand to other Asian

markets. URC also has a growing regional presence in

the branded consumer foods segment and has established

operations in Thailand, Malaysia, Indonesia, China,

Hong Kong, Singapore and Vietnam. URC continues to

launch products in each of its international markets,

both from its existing portfolio of products and brands

and new products specifically formulated and branded

for the local markets. In its most established

international operations in Thailand, URC has attained

leading market share positions in several product

categories

URC has expanded its reach to New Zealand and

Australia through the acquisition of Griffin's Foods, a

leading snacks player in New Zealand. In November 2014,

the Company acquired 100% shares of NZ Snack Foods

Holdings Limited, the holding company of Griffin's Food

Limited, a snack food company in New Zealand, from

Pacific Equity Partners. URC also entered into joint

ventures with Calbee, Inc. to form Calbee-URC, Inc.

b) Brand name acceptance

URC has proven that they are trailblazer in

manufacturing with a strong and loyal consumer base.

URC is the customers’ first choice in fun snack. URC is

the leading branded snack food and beverage company in

the Philippines, which enjoys a loyal and consistent

following from its many delighted customers. Over 40

years of operation URC has built three strong regional

brands over the years; "Jack 'n Jill" for snack foods,

"C2" for ready to drink tea, and "Great Taste" for

coffee, with these brands becoming popular across the

ASEAN region. URC's key to success is to build very

strong branding through a robust product innovation

pipeline, consumer-centric marketing and world-class

manufacturing and supply chain management. URC will

continue to transform itself in line with the changing

external dynamics in line with increasing opportunities

in Asia and beyond.

c) Production facilities and their location

The location and production facilities of URC are the

following:

Pasig City – Production of flour

Calabarzon – Consumer Goods, Packaging and container,

Food production

Central Visayas – Consumer Goods

Central Luzon – Food and beverages

Cebu and Manila – Milling production

Novaliches, Rizal, Bulacan and Batangas – Hog

production

Toronto, Canada – Pharmaceutical

Ballarat, Austria – Food production

Noida, India – Food and Beverages

Bangkok, Thailand – Consumer goods, Food production

Jakarta, Indonesia – Consumer goods

URC uses the modern and larger facilities compare to

other company.

d) Marketing and distribution outlets

URC has consistently grown due to its constant

innovations, strong distribution capabilities, and

effective marketing campaigns. The company's constant

efforts caused URC to have market leadership in salty

snacks, candies, chocolates, canned beans, and ready-to-

drink tea while maintaining strong positions in coffee,

biscuits and noodles. Megabrand Jack 'n Jill offer one of

the most diverse portfolios of snack food products in the

Philippines. URC devotes significant expenditures to

support advertising and branding to differentiate its

products and further expand market share both in the

Philippines and in its overseas markets, including funding

for advertising campaigns such as television commercials

and radio and print advertisements, as well as promotions

for new product launches by spending on average 8%of its

branded consumer food division’s net sales per year

The Company’s branded consumer food products are

distributed to approximately 114,000 outlets in the

Philippines and sold through its direct sales force,

regional distributors and independent business managers. URC

intends to enlarge its distribution network coverage in the

Philippines by increasing the number of retail outlets that

its regional sales force and distributors directly service.

By deploying larger and financially stronger regional

distributors over the next two years, URC plans to increase

the number of outlets serviced directly from 114,000

accounts being serviced as of fiscal year 2006 to 120,000

accounts. URC also plans to increase the product focus of

its distribution network by ensuring that relevant products

are targeted towards appropriate retail outlets. Company has

developed an effective nationwide distribution chain and

sales network that it believes provide its competitive

advantage. The Company sells its branded food products

primarily to supermarkets, as well as directly to top

wholesalers, large convenience stores and two types of sub-

distributors, large scale trading companies and independent

business managers which in turn sell its products to other

small retailers and down line markets through the Company’s

Grand slam Program, an innovative distribution scheme for

downscale accounts, which enabled URC Philippines to

solidify its presence in sari-sari stores and groceries,

effectively locking out competitors in the consumer foods

segment in the Philippines. The branded consumer food

products are generally sold by the Company either directs

from delivery vans to small retail outlets or by travelling

salesman to wholesalers or supermarkets, and regional

distributors with delivery subsequently being undertaken by

third party road carriers. Direct delivery sales are

normally made on cash basis, while 15- to 30- day credit

terms are extended to wholesalers, supermarkets and regional

distributors. The Company believes that its emphasis on

marketing, product innovation and quality, and strong brand

equity has played a key role in its success in achieving

leading market shares in the different categories where it

competes.

e. Pricing

URC is competitive enough in terms of pricing. They

make sure that the prices of their products are affordable.

URC also gain the loyalty of the consumer by serving the

industry over 50 years.


Universal Robina Corporation (URC) traces its root

to 1954 when founder John Gokongwei diversified his trading

company into corn starch production (United Corn Products) and

counts its production of Blend 45, the first domestically

manufactured instant coffee, as its first successful venture. URC

has since then expanded exponentially and is currently involved

in a plethora of food related businesses, including the

manufacture of branded consumer foods, hog and day-old chick

production, manufacture of animal and fish feeds, glucose and

veterinary compounds, flour milling, and sugar milling and

refining.

URC has several branches that provide a variety of

products. The Branded Food Group (BCF) is responsible for the

distribution of a diverse mix of snacks, chocolate, candy,

biscuits, baked goods, beverages, noodles and tomato-based

products. The Agro-Industrial Group handles hog and poultry

farming, the manufacture and distribution of animal feeds,

glucose and soya products, and the production of animal health

product. The Commodities Group meanwhile operates URC’s sugar and

flour divisions.

URC is part of the JG Summit (JGS) conglomerate which

includes air transport, hotels, banking, telecommunications,

petrochemicals, real estate and property development, and food

manufacturing businesses.


The Gokongwei group has struck a deal to buy the remaining

27.1 percent stake in Manila Electric Corp. held by the San

Miguel group.

Universal Robina Corp., the manufacturing unit of taipan

John Gokongwei’s JG Summit Holdings, is seeking shareholders

approval to diversify into the power generation business.

The company is putting up a 40-megawatt biomass plant

at one of its sugar mills’ site. This is seen to complement

URC’s sugar milling business as it will be using molasses

which are by-products of its sugar milling operations.

Biomass plants generate power using plant or animal matter

as fuel. In the case of sugar mills, these produce large

amounts of bagasse as waste which can still be used to fuel

the biomass plant.

URC is investing about $27 million for the construction of

an ethanol plant in Mahhuyod, Negros Occidental as part of

the firm’s sugar mill.

URC investing in a state-of-the-art biomass-fired power

cogeneration facility in SONEDCO. Costing around US62

million, the power plant is expected to produce 46 megawatts

of electricity from bagasse.

III. Analysis


branded food product companies in the Philippines and has a

growing presence in other ASEAN markets. And it is listed in the

Philippine Stock Exchange. Everyone can invest their money on the

URC but they must first study if it’s worth investing.

URC was established and continuously serving consumers since

1954. Based on its existence for a long period of time, we can

say that URC is profitable (because of its wide range of

consumers, and its different products being produce), and stable

(for it has been established long time ago and still growing to

the present). URC is engaged in a wide range of food-related

businesses, including the manufacture and distribution of branded

consumer foods and is also in commodities namely sugar million

band refining and flour milling and in Agro industrial businesses

of farms mainly hogs and animal feed milling and related

products. URC is the leading branded snack foods and beverage

company in the Philippines. It is the first "Philippine Pan ASEAN

Multinational" and has proven itself to be a trailblazer in

manufacturing with a strong and loyal consumer base. So we can

now formulate ideas little by little regarding of the given

information's above. It has a great standing in the industry

since it has been in operations for over 50 years. And URC gain

peoples loyalty because of their wide range of products, and

their wide and excellent strategy of distribution and marketing.

But these are only the first step in analyzing companies. It

is only the qualitative side and we cannot conclude yet if it is

a good investment or not. We can only decide a little or we are

only guided by some of the information's given. And above all

this, we can say that it is good in investing at URC (based on

the information's gathered).

IV. REFERENCES

http://www2.urc.com.ph/

http://books.google.co.jp

http://journals.upd.edu.ph

http://journals.upd.edu.ph/

http://books.google.co.jp/

http://www2.urc.com.ph/

http://business.inquirer.net

http://archive.sunstar.com.ph

http://philstar.com

http://philstar.com/

http://archive.sunstar.com.ph/

http://business.inquirer.net/

I. COMPANY PROFILE



Jollibee is founded by Filipino-Chinese Tony Tan

Caktiong and his family began as a two-branch ice cream

parlor in 1975 at Cubao offering hot meals and sandwiches.

The original company name was Jolibe then Mr. Lumba next

reformed the name Jolibe to Jolly Bee and made the two words

form a single name Jollibee. Their success is phenomenon.

Fast food popularity begins 1960’sand the pioneers of this

are Ray Kroc – McDonalds and Colonel Sanders – Kentucky

Fried Chicken. They have the concept of Serve time

constrained customers, good quality food, clean dining

environment, having a low price and give convenience to the

customer. Almost 15 years when Jollibee entered the industry

but they rapidly became successful to other fast food that

came first. It was incorporated a 100% Filipino company 1978

with seven outlets to explore the possibilities of

a hamburger concept. 1979 is the introduction of Spaghetti

Special. 1980, First TV commercial was launched by Jollibee,

Chicken joy and French Fries are launched and it is the

JOLLIBEE FOOD CORPORATION

introduction of Jollibee mascot debuts. Then Jollibee

Palabok Fiesta’s introduction was 1982.

In 1984, Jollibee hit the P500 million ales mark,

landing in the Top 500 Philippine Corporations. Their first

international venture was at Singapore by 1985 and they

already have 31 stores by 1986. In 1987, barely 10 years

in the business, Jollibee landed into the country’s Top 100

Corporations. It became the first Philippine fast food chain

to break the P1 billion sales mark in 1989. In 1993,

Jollibee became the first food service company to be listed

in the Philippine Stock Exchange and the new Main Office

site has been moved to Jollibee Centre Building in Ortigas

Center, Pasig. By 1994 he got Greenwich for Jollibee

expansion into the pizza-pasta segment and by the end of the

year there has been already 148 Jollibee stores nationwide.

By 1995 Jollibee acquires franchise of Delifrance and

Jollibee success fully opens stores abroad: Guam, Dubai,

United Arab Emirates, Kuwait, and Jeddah, and Kingdom of

Saudi Arabia. By 1996 By the Far Eastern Economic Review

Jollibee has been cited again as one of the leading

companies in Asia having cited it last 1994 and on the same

year Mary’s Chicken was born last July 10. It is a semi-self

service restaurant and another Jollibee subsidiary it is

also in the same year of launching of Jollibee’s Amazing

Aloha, opening of first Jollibee in Hongkong and the

launching of the project Maagaang Pasko sa Jollibee and

Chikiting Patrol: at Home AkoDito. These projects’ main

objective was to protect and contribute to the development

of the Filipino children. By 1999 Jollibee opened 50 stores

nationwide which makes a total of 350 stores and Cheezy

Bacon Mushroom Burger has been introduced to its line of

specialty burgers. By 2000,31 more Jollibee stores opened,

bringing the total to 381 stores and Jollibee obtains

Chowking Foods Corporation, Asian Business Magazine ranks

Jollibee as the Most Admired Company in the Philippines and

the 3rd over-all in Asia, surpassed only by global giants

General Electric and Microsoft and reaching a system wide

sales of P20 billion. Jollibee also acquired Red Ribbon

Bakeshop on2005, another popular fast-food restaurant in the

Philippines. In2006, they acquired the Délifrance which

further expanded its penetration in the food service

industry particularly in the French café-bakery, a growing

segment of the Philippine food market.

And until now Jollibee Corporation is continuously

expanding and they already acquired MangInasal last Oct. 19,

2010. It was their competitor in their chicken product, but

now it is one of their sister company. It is now part of

Jollibee Food Corporation. Among all the fast food chains

here in the Philippines, the Jollibee Food Corporation is

considered to be the most popular choice among all the

Filipinos. The Jollibee Food Corporation has been serving us

with their delectable collection of fast food service and

cleanliness offered by Jollibee is an advantage. Restaurants

are not as quick as a Jollibee QSR which is an advantage for

Jollibee having a superior service, and finally, Jollibee

prices are reasonably priced that is has been a pinoy

favorite.

All Filipino will love Jollibee, if a new Jollibee

branch will be build Filipino wait until it will open and

patronize it. The threat of substitute products is

considerable. Local street food and high-end restaurants

form two ends of a range of substitutes. Potential entrants

face entry barriers that will hinder them from entering

the industry. These are the inability to gain access to

technology and specialized know-how, brand preference and

customer loyalty, capital requirements, economies of scale,

and strategically situated distribution channels. But

Jollibee can overcome with this. Anew substitute for

Jollibee product will be hard to enter to the industry and

compete with Jollibee.


From Ice Cream Parlor to Fast Food Empire: Tony Tan

Caktiong’s Story

“Jollibee” is a registered trademark in the Philippines and

other countries.

Background

“From modest beginnings to the top of the world” are

the words that succinctly sum up Tony Tan Caktiong’s story,

today president and CEO of Jollibee® Foods Corporation, the

biggest fast food restaurant chain in the Philippines.

Born in a poor family who migrated from south-eastern

China to the Philippines in search of a better life, he

became involved in the restaurant business from an early age

when his father opened a restaurant. The restaurant became

profitable with the help of all family members and this

success enabled Mr. Caktiong to pursue a degree in chemical

engineering in Manila.

At the age of 22, inspired by a visit to an ice cream

plant, he set out to gain his own foothold in the restaurant

business: relying on family savings, he seized

a franchising opportunity with Magnolia Dairy Ice Cream and

opened two ice cream parlors. In response to customer

requests, he added hot meals and sandwiches to the menu,

which soon proved a lot more popular than ice cream. Three

years later, in 1978, he decided to capitalize on this

development, discontinued the Magnolia franchise and

converted his parlors into fast food outlets.

Trademarks and Branding

Tony Tan Caktiong, founder, president and CEO of

Jollibee Foods Corporation (Photo: WIPO/Arrou-Vignod)

Realizing that he needed a brand name and logo for his

new business, Mr. Caktiong and his family decided on using a

smiling red bee. They chose a bee because of its association

with hard work, and because honey represents the sweet

things in life. The “jolly” prefix was intended to connote

happiness and enjoyment. Jollibee invested millions of pesos

to register the “bee” trademark in the Philippines and other

key countries.

Helped by smart marketing and advertising strategies,

the mark struck a chord with the public: “From a rather

crude, strange-looking bee that no bank dared to touch back

in 1978, Jollibee and his cheeky smile today have become

synonymous with a truly Filipino success story that is now a

source of patriotic pride. It is estimated that the Jollibee

brand is now worth several billion pesos”, Mr. Caktiong

points out.

“Trademarks increased a lot of value to our business”,

he explains. “To the consumer, they represent either trust

in the company or trust in the brand…they will remember that

the brand connotes very tasty food and also the experience,

the ambiance, the service, and they are also proud to be a

part of that brand”.

Today, Jollibee Foods Corporation uses 8 proprietary

brands (including “Jollibee” for their core fast food

business, “Greenwich” for their pizza and pasta chain, and

“Chowking” for their oriental food outlets), owns many

trademarks (including “Bee Happy”, “Yumburger”, “Chickenjoy”

and “Amazing Aloha”) and has registered all of its logos,

some of them in several countries.

IP Infringements and Enforcement

The strong Jollibee brand name and its positive

connotations have made it a target for free-riders and

counterfeiters: “We have some cases where people will do

other things like garments or shoes and they call it

“Jollibee”. Overseas, they will open a restaurant or a fast

food also called Jollibee, even with the same drawing”, Mr.

Caktiong reports.

Conscious of the importance of protecting their brand,

Jollibee Foods Corporation reacts to trademark

infringements: “We have to enforce [our trademarks]

properly. If you do not enforce it properly, your brand

image will get diluted over time”, he continues.

Mr. Caktiong is also aware of the long-term

consequences of counterfeiting for the economy and society

as a whole: “Counterfeiting will destroy society in the long

run…this will hurt everybody because counterfeit does not

have the right quality: customers get confused by this and

they are not happy…then they lose confidence in the real

brand and everything will be destroyed. Therefore, overall

the whole society will also be hurt”, he concludes.

Franchising

There are nearly 2,000 restaurants worldwide

representing the Jollibee Foods Corporation (Photo:

WIPO/Arrou-Vignod)

Jollibee Foods Corporation relies on a franchising

model for the exploitation of about half of its outlets in

the Philippines. In order to protect the company’s high

quality and service standards, potential franchisees have to

conform to a specific profile (self-driven entrepreneurs

with good management skills, good community standing and

excellent interpersonal skills).

Successful franchising applicants undergo a 3-month

full time Operations Training Program (BOTP) at a designated

training restaurant, supplemented with other programs that

will enrich the franchisee's management and analytical

skills needed in the operation of the restaurant.

However, support for franchisees does not end there:

Jollibee provides advice for and assistance with restaurant

layout and design, equipment specifications, furniture and

fixtures, and construction management. Field personnel

renders consulting services once the outlets are

operational. Creative advertising and marketing programs,

product development, manufacturing and logistics facilities

provide further support to franchisee restaurants.

Business Results

Jollibee is the most popular fast food restaurant in

the Philippines. Since its establishment at the end of the

1970s, Jollibee Foods Corporation has grown spectacularly:

today, Jollibee is the leading fast food chain in the

Philippines with over 50% market share and hundreds of

restaurants all over the country. The company’s public

listing at the Philippine Stock Exchange in 1993 broadened

its capital and allowed for the acquisition of the

“Greenwich” pizza and pasta chain in 1994. Other major

acquisitions include the Chinese fast food chain

YongheDawang (in 2004) and the Chowking oriental food

outlets (in 2000).

The company is also present in Brunei Darussalam,

China, Hong Kong (SAR of China), Indonesia, Saudi Arabia,

the United Arab Emirates, the United States and Viet Nam. By

2020, the group plans to roughly double the number of

restaurants to 4,000 outlets worldwide. Jollibee’s business

success relies on its smart branding strategy, complemented

by strong customer orientation, superior menu line-up,

innovative new products, creative marketing programs and

efficient manufacturing and logistics facilities.

In a recent survey, the Jollibee group was the only

Philippine company that made it to the top 20 of Asia’s best

employers list, ranking 16th. Jollibee Foods Corporation

ranked third among Asia’s most admired companies in 2000 and

was cited as number one in overall leadership among the top

ten Philippine companies. In 2004, Mr. Caktiong received the

Ernst & Young World Entrepreneur Award.

Through the Jollibee Foundation, the company has

established an institutionalized mechanism of giving back to

the community through projects in the areas of education,

leadership development, livelihood, environment, and housing

and disaster relief.

Marking their Territory in the Philippines and abroad

Protecting their brands through national and

international trademark registration has been instrumental

in Jollibee’s remarkable success – without an easily

recognizable brand associated with highest quality and

customer service standards, it would have been difficult to

prevail in the extremely competitive fast food market.

“Intellectual property is becoming very important because

you need to distinguish yourself from the others – it’s a

very competitive world [in which] you need to create

something unique”, concludes Mr. Caktiong.


During the Annual Stockholders' Meeting of the Jollibee

Foods Corporation, the stockholders elected the following as

the company's Directors for the year 2012:

1. Tony Tank Caktiong

2. Ernesto Tanmantiong

3. William Tan Untiong

4. Ang Cho Sit

5. Antonio Chua Poe Eng

6. Ret. Chief Justice ArtemioPanganiban

7. Felipe B. Alfonso (Independent Director)

8. Monico Jacob (Independent Director)

9. Cezar P. Consing (Independent Director)

At the organizational meeting that immediately followed

the stockholders meeting, the following are elected as

officers of the Company:

Tony Tan Caktiong - as President and Chief Executive Officer

(CEO)

Ernesto Tanmantiong - as Treasurer and Chief Operating Officer

William Tan Untiong - Corporate Secretary

The following were also appointed as members of the Board

Committees:

Executive Committee

Tony Tan Caktiong

Ernesto Tanmantiong

William Tan Untiong

Felipe B. Alfonso

Ret. Chief Justice ArtemioPanganiban

Nomination Committee

Ret. Chief Justice ArtemioPanganiban - Head

Ernesto Tanmantiong - Member

Ang Cho Sit - Member

Compensation Committee

Felipe B. Alfonso - Head

Ret. Chief Justice ArtemioPanganiban - Member

Ernesto Tanmantiong - Member

Audit Committee

Monico Jacob - Head

Felipe B. Alfonso - Member

Antonio Chua Poe Eng - Member

William Tan Untiong– Member

Finance Committee

Cizar P. Consing - Head

Monico Jacob - Member

William Tan Untiong - Member

UNDERSTANDING THE CULTURE

A. Management Principle, Style and Practices

Jollibee Foods Corporation (JFC) espouses the principle

of shared value in its corporate social responsibility (CSR)

activities. As a company in the food industry, JFC through

its CSR arm, the Jollibee Foundation, implements programs

that address access to education, livelihood development,

leadership development and disaster response, issues that

are also of relevance to the company’s core business.

Jollibee Foundation’s Busog, Lusog, Talino (BLT) brings

together local education stakeholders and JFC employee

volunteers to mitigate hunger and undernourishment, widely

attributed causes of school attendance decline and drop-out

among lower grade pupils. Daily lunch is provided to below

normal weight-for-age Grades 1 & 2 pupils with food prepared

by parent groups following menus developed by Jollibee

Foundation. The parents also attend seminars on food safety,

cooking, health and nutrition. For SY 2008-2009, BLT is

being implemented in 54 public elementary schools benefiting

1,822 pupil beneficiaries. Pupils' exhibit marked

improvements in weight and attendance while their parents

show improved budgeting and menu preparation skills as well

as knowledge on nutrition.

Aside from education, Jollibee Foundation also has

initiatives in livelihood, leadership development and

provides assistance in times of calamities.

Jollibee Foods Corporation’s (“JFC” or the “Company”)

core business is the development, operation and franchising

of its quick-service restaurant brands. It offers a wide

variety of affordable and delicious dishes and great tasting

food prepared to satisfy customers of all ages and from all

walks of life.

Food quality, service, price-value relationship, store

location and ambience, and efficient operations continue to

be critical elements of the Company’s success in the quick-

service restaurant industry.

Sa Jollibee, bida ang saya.” (At Jollibee, We Promote

Happiness).This is the popular slogan of the undisputed top

fast food chain in the Philippines, which is the flagship

among the other Jollibee Food Corporation subsidiaries (the

rest being Chowking, Greenwich Pizza, MangInasal and Red

Ribbon.)

The typical Filipino childhood would not be complete

without experiencing Jollibee and its flavors. While Aga

Mulach had popularized the “Chicken Joy” to a-whole-nother

level (it was already pretty good before he campaigned for

it), the Jollibee menu is also filled with interesting

pickings. The Spaghetti is a unique Filipino concoction – we

prefer our Spaghetti sweet, for some reason. And Jollibee

comes with hotdog bites, too!

http://en.wikipedia.org/wiki/Red_Ribbon_(bakeshop)

http://en.wikipedia.org/wiki/Red_Ribbon_(bakeshop)

http://en.wikipedia.org/wiki/Mang_Inasal

http://en.wikipedia.org/wiki/Greenwich_Pizza

http://en.wikipedia.org/wiki/Chowking

http://en.wikipedia.org/wiki/Jollibee

And the dessert section is home to some really good

pies. Their Peach-Mango combo is easily the most popular.

Family Day is also usually a Jollibee day. Many

Filipino families, especially those who belong in the middle

class, troop to the nearest Jollibee branch after attending

the Holy Mass on Sundays, a practice that has been passed on

to new generations.

Indeed, this Pinoy food titan has gone a long way since

it first started its journey. Jollibee’s single greatest

accomplishment is that it has thoroughly dominated the

competition among multinational fast-food chains like

McDonalds, Wendy’s and Burger King (in the Philippines).

The first Jollibee restaurant was located beside the

Quezon Bridge, near Quiapo Market. It was in a tiny 30

square-meter space, which had been previously abandoned, and

was therefore low-cost. The signboard was made out of

plywood, humbly painted and had one purpose – to say that

this was Jollibee.

Along the sidewalk fronting the restaurant was a

barker, who enticed passers-by to try their hamburgers for

merely 2.75 Pesos (a local competitor, Tropical Hut, sold

hamburgers for 4.50 Pesos).

The following years, Jollibee branched out in a gradual

manner. But in 1978, McDonald’s opened at the corner of CM

Recto and Morayta in Manila’s University Belt. In 1979,

Jollibee opened its first franchised restaurant at

Ronquillo, Quiapo, Manila, which was an almost exact replica

of the McDonald’s restaurant.

In the coming years, the two fought tit for tat in

opening more franchises, with Jollibee winning out

eventually, maybe, because of lower franchise fee, and have

no royalties to be paid to a mother company.

In 1984, Jollibee entered the top 500 Philippine

Corporations, and topped the local food industry. It opened

its first overseas store in Taiwan in 1986. In 1992, its

sales reached 3.4 billion Pesos, and it expanded overseas

aggressively.

In 2002, its revenues neared 27 billion Peso mark. This

year, its founder, Tony Tan Caktiong was named “Management

Man of the Year” of the Philippines, with stores already

numbering about 900. MangInasal’s 70% equity was bought by

Jollibee Corporation in 2010 for 3 billion Pesos.

To strengthen its hold in the fast-food field in the

Philippines, it gobbled and bought diversified competitors,

– Chowking with 377 franchises, Greenwich Pizza with 236,

Red Ribbon Bakeshop with 194, Delifrance’s 28 branches,

ManongPepe’s 4 and MangInasal’s 500.

Now, it has more than 2,000 stores, and still expanding

at a brisk phase. But still, it’s the Bee that remains the

face of this Filipino Food Empire.

B. STANDING OF THE FIRM RELATIVE TO:

a.Industry

Since its inception as a corporation in the late 70s,

Jollibee has seen strong financial growth. As seen in the

financial data provided, Jollibee’s sales and revenue has

been on the rise in the recent years. As shown in their

revenues, an amount of $12.9 billion pesos in 1998 was

gradually increased to $26.2 billion pesos in 2004, and

indicating strong growth and ability to compete in the

already dense fast food market locally and internationally.

The organization going public on the Philippine Stock

Exchange in 1993 acts as a foundation for the rapid

expansion of its stores locally and internationally

Organizational Design

The decentralization of its operations in 2000 enables the

organization to manage their business on a manageable scale.

Four autonomous regional business units dealing with human

resources, administration, finance and network development

enabled the company to focus their operations on a corporate

level and allowing the RBUs to achieve greater efficiency.

Physical

As of June 2005, Jollibee has a total of 1200 stores locally

and internationally. A diversification of food products

enabled the organization to reach out to a variety of

customers and making them as a market leader in the

Philippines. Due to the geographical structure of the

country, they are the only fast food chain that operated

nationwide, and in some locations face no other

competitions.

Risk Management

The acquisition of several new brands such as Greenwich,

Chowking and Delifrance allow the diversification of its

products into different market niches. It proved to be a

hedge against downturns and competition and as seen in the

case study, most of the acquisitions are the leader in their

respective market segment.

Product Development

The main draw for customers into Jollibee’s restaurants is

the appeal for local styled food catered to Filipinos’

preferences. This is evident as they are constantly adding

its product range on top of their already popular favourites

menu, in order to allow its local customers to experience

the traditional Filipino way of having local flavoured taste

in a comfortable setting.

Marketing

Jollibee projects itself as being closer to Filipino

families as compared to its competitors. There is already

widespread awareness locally that Jollibee is a local

Filipino establishment, which in turn appealed to the mass

population whom felt more comfortable in a familiar setting.

Tailoring its menu towards the Filipino taste, it positioned

itself as the favourite destination for family outings as

compared to its similar competitors.

Outbound Logistics

Individual RBUs are able to achieve greater efficiency in

the delivery of products and services, quicker coordination,

and more timely decision making due to this decentralizing.

Marketing and Sales

Portraying itself as a fast-food outlet of high-quality at

an affordable price specifically tailored for the Filipinos,

the chain has appealed to patriotic locals. With its

introduction of in-store play activities for children and a

cast of brand mascots, it reaches and appeals to the

children and is evidently more popular than its nearest

competitors. Recognizing that a normal Filipino family’s

weekends are normally reserved for children, the previously

mentioned activities add value to Jollibee's position as the

prime destinations for family outings.

Service

The Filipino speaking crew appeals to the locals more than

its competitors where their crew spoke in English. It is

also in Jollibee’s commitment that this service component of

their business to their customers must be fast and at the

same time being courteous.

Procurement

Being a major player in the Fast-food industry in

Philippines, they constantly enjoyed economies of scale in

terms of retail site selection, procurement, manufacturing,

distribution, and marketing levels unavailable to most

industry players.

Human Resource Management

To attract the right talent and retaining of valuable

staffs, the compensation and benefits package at Jollibee is

the highest in the Philippine fast-food industry. Employees

are to undergo comprehensive training programs based on

underlying standards. Managers also received ongoing

training in the latest operations systems and people-

management skills. Opportunities are available for crew

members to advance into a management role in the

organization.

Firm Infrastructure

Decentralizing its organization into 4 autonomous business

units, which corresponded to the country's major

geographical markets. This enables the Head Office to focus

its operations on the key marketing, finance, restaurant

systems and engineering functions and act as a support and

advice to the RBUs.

Business Fundamentals Analysis

Economics

The uncertainties of competition from foreign players as

well as downturns in specific market inches are omnipresent

in our current economic nature. Other uncertainties also

come in the form of financial crisis in the region as well

as in the country it is operating in.

Stakeholders

Three groups of stakeholders of Jollibee are identified who

are affected by the strategic outcomes and discussed below.

Capital Market Stakeholders

Jollibee’s capital market stakeholders include its

shareholders whom have a direct interest in the company.

Since going public on the Philippine Stock Exchange,

Jollibee had been able to tap on this key resource to expand

its horizon within and beyond the local Philippine’s market.

The importance of the capital market stakeholders is also

evident in the growing operations of Jollibee over the

years.

Product Market Stakeholders

Jollibee’s product market stakeholders include its customers

locally and globally, as well as suppliers of its food

sources. Jollibee has been able to capture the market share

of the fast food going customers due to its understanding of

locals’ preferences and it quality and competitive pricing

of its food. An approximate 1 million customers ate at

Jollibee’s stores daily, making them an important

stakeholder 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

Jollibee’s 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, Jollibee’s compensation,

benefits and comprehensive training programs ensure they

have the best employees that are available.

b. Brand Name Acceptance

The number one fast food chain in the Philippines is

not a global giant. It’s Jollibee, the country’s very own

home-grown fast-food brand that first opened its doors in

1978. With 847 stores in the Philippines today and 111

outlets abroad (30 in the United States, 50 in Vietnam, 12

in Brunei, 10 in Saudi Arabia, three each in Qatar and

Kuwait, two in Singapore and one in Hong Kong), Jollibee has

steadily risen to become a multinational itself.

The jolly giant bee wearing his orange coat with a

black bow tie and chef’s hat is one of the most enduring

icons of Pinoys’ memories of childhood. It has almost become

a rite of passage to chase after the Jollibee mascot or have

some pictures taken with Jollibee at one point in our lives.

Offering a cultural blend of Western and Filipino

comfort food in a convenient fast food setting, the

following Jollibee has gained over the years arose from the

brand’s understanding of Filipinos and the local palate. If

Jollibee’s Jolly Spaghetti were one day declared the

national spaghetti of the Philippines, there would likely be

weak opposition. Jolly Spaghetti’s full-bodied sauce

captures the sweetness Filipinos like in their spaghetti

sauce. It is this sweet taste that distinguishes the

Filipino style spaghetti from all others around the world.

But what has really established Jollibee as a household

name is its Chickenjoy, the “langhapsarap” fried chicken for

which Jollibee’s slogan seems to be made, because there is

no other way to describe it. Chickenjoy is Jollibee’s

timeless classic. It is a guaranteed favourite that appeals

across Philippine demographics—including pregnant women,

interestingly—and its absence from the menu has been known

to incite minor riots.

With the Jolly Hotdog, Palabok Fiesta, Yumburger and

other bestsellers, Jollibee bested its larger counterparts

in the Philippines from the very beginning. The fast-food

chain’s success is at one hand generated by

its langhapsarap menu, but its staying power in the industry

and in the hearts of Filipinos is a reflection of the

company behind Jollibee.

Through the years, Jollibee has promoted a family-

oriented approach in the work environment and in its brand

values. The original Jollibee restaurant was founded by

entrepreneur Tony Tan, who established and ran the business

with his family. What then grew into the Jollibee Foods

Corporation (JFC) is today the parent company that also

consists of other fast food brands Chowking, Greenwich, Red

Ribbon, MangInasal, Burger King and food business

partnerships with restaurants in China.

Jollibee, the brand and the corporation, is now a

global enterprise that beats with a local heart. While the

menu remains authentic to the way Filipinos like their fried

chicken, spaghetti, fries or burger, it is also the Filipino

core values which move Jollibee that ensures its longevity

and leadership in the fast food industry. The value of

family, first and foremost, because family takes care of

each other, supports one another. In life as in business,

people who treat each other like family exercise respect,

share trust and value teamwork.

Recently, Jollibee activated a systems upgrade that

supposedly cost the corporation P500 million in orders to

improve the fast food chain’s business processes. The irony

was that the initial migration to the new system disrupted

the supply chain, and the unavailability of favourite

bestsellers led to an uproar in Metro Manila. Despite the

risks, these are ventures a rising global brand needs to

undertake to make it outside of its home country.

Jollibee has long since restored its normal operations.

Combined with all the brands under JFC, Jollibee is the

largest and number one fast food chain in the Philippines.

It is the industry leader because it stays true to its

roots, and to its Pinoy family.

c. Production facilities and their Location

Jollibee Foods Corporation (JFC) was incorporated on

January 28, 1978. JFC's principal business is the

development, operation, and franchising of quick-service

restaurant under the trade name "Jollibee". In the

Philippines, JFC also has as subsidiaries, Fresh & Famous

Foods, Inc., which develops and operates, and franchises

quick-service restaurants under the trade names "Chowking",

"Greenwich", "Delifrance", "ManongPepe'sKarinderia", and

"Red Ribbon Bakeshop, Inc.". JFC also has subsidiaries and

affiliates overseas which develop and operate its

international brands, "Yonghe King", "Chun Shui Tang",

"Hongzhuangyuan", and "Lao Dong".

JFC operates its central commissary in Calamba, Laguna

through a wholly-owned subsidiary, Zenith Foods Corporation

(ZFC). On February 7, 2008, ZFC was merged with another

wholly-owned subsidiary, Vismin Foods Corporation, which

owned commissary facilities in Mandaue, Cebu, with ZFC as

the surviving entity. The merger allowed JFC to be more

efficient in sourcing, receiving, manufacturing,

warehousing, and distributing raw materials in its stores.

The commissaries have a collective capacity to service 800

stores nationwide.

By the end of 2009, JFC had a total of 686 stores

nationwide, of which 355 are franchised and 331 are company-

owned. There were also 57 Jollibee stores overseas,

including the United States, Vietnam, Hong Kong, Brunei,

Dubai, Guam, Saipan, and Jeddah.

d. Marketing and Distribution

Jollibee Foods Corporation, the Philippines’ largest

fast food chain, wanted to integrate the distribution

systems for four of its brands under one roof. They opened

their new distribution center in Parañaque City in May 2012

and commissioned SSI SCHAEFER Philippines to design a

picking and sorting system for its dry warehouse.

The installation includes a three-tier picking tower

equipped with pallet and carton live storage, where non-

perishable supplies, such as utensils and condiments, are

stored for dispatch. These items are tagged with bar codes

and transported on a conveyor system, where it is scanned

and sorted by store, before being delivered to JFC’s many

stores across the country.

http://www.ssi-schaefer-asia.com/logistics-systems/conveyor-systems.html

http://www.ssi-schaefer-asia.com/storage-distribution/hand-loaded-systems/live-carton-storage-kdr.html

With the new system enabling faster picking and

deployment for the company, it has become more responsive to

the needs of its stores. The system also aided JFC’s plans

to consolidate multiple supply chains into one facility in a

cost-effective way, laying the groundwork for the company’s

expansion plans.

For more project information, project specifications

and more project pictures, please download Case Study in PDF

on the right hand side. The Case Study is in PDF format and

needs Adobe Reader to view.

e. Pricing

Since, Jollibee Foods Corporation is one of the highly

recognized fast food chains Jollibee sets its price at a

acceptable price that a buyer is willing to buy and is very

competitive compared with other fast food chains.

The combo meals of Jollibee are cheaper by 10% compared

to McDonald’s.

As for the Chicken, though the price of Jollibee is

cheaper the McDo but their Chicken size is bigger.


http://get.adobe.com/reader/

Jollibee Philippines is one of the most popular

Philippine franchises. Originally opened as a Magnolia Ice

Cream parlor at Cubao in 1975, the name was originally

called Jollibee. In 1978, the business focus shifted from

ice cream to hamburgers. Jollibee studies showed a much

larger market was waiting to get tapped. Lumba became Tony

Tan’s first business and management mentor. After changing

the name to Jollibee, the Jollibee mascot was inspired by

local and foreign children’s books. Developed by a

management consultant named, Manuel C. Lumba working for

Tony Tan Caktiong next created the product names “Yumburger”

as well as the name “Chickenjoy”. Later Tony Tony made Manny

Lumbar in charge of developing the franchise. The stores

were re-designed, the service transformed into a full self-

service, fast food operation with drive thus. The first

headquarters was located on Main St. in Cubao, Quezon City.

Lumba developed a long-term marketing strategy, listing up a

number of consumer promotions and traffic building schemes

while maintaining internal strengths required by Tony Tan.

We won’t be going in detail on how Jollibee

Philippines exactly work. We are here to analyze the reason

and principle of Jollibee Philippines’ success.

Acquisitions in the Philippines

http://franchisephilippines.org/jollibee-philippines/

The corporation is actually known as Jollibee Foods

Corporation. Oh and if you thought that Jollibee was the

only fast food chain operated by this corporation, boy are

you in for a surprise. To me, it seems like JFC owns a

majority stake in all of the Filipino fast food niches. Do

you ever eat at Chow King? I know I love the halo-halo

there, but did you know that in the year 2000, JFC acquired

Chowking! That’s right; all the delicious oriental style

fast food from Chow King is operated at a high level by the

same corporation as Jollibee. Oh and that’s not all. Seems

like Jollibee Foods Corporation has the idea that

diversification is key to its future, and I think they’re on

the right track. JFC also bought out the popular fast food

pizza restaurant known as Greenwich Pizza. Additionally, in

2005, Red Ribbon Bakery became part of JFC. Keeping with the

baking theme, JFC acquired the French cafe and bakery known

as Deliverance. The division of JFC that handles business

inside of the Philippines is known as Jollibee Philippines.

Acquisitions outside of the Philippines

JFC has holdings in several other Asian countries

including China and Taiwan. There’s a Chinese fast food

chain named Yonghe King in mainland China (based in

Shanghai) that is owned and operated by JFC. Another Chinese

restaurant chain named Hongzhuangyuan was acquired on

September 21, 2007. This chain has 33 locations in Beijing

and was purchased for the amount of US $50.5 million.

Wow! I sure was surprised when I learned about all

those acquisitions. It’s interesting to note that when I

walk into any of the chains above that they’re owned and

operated by the same corporation. I’m glad that Jollibee has

a great track record with the Filipino community and that in

addition to the amazing Jollibee Philippines; they can offer

us a variety of different foods ranging from pizza, oriental

food, and coffee and baked goods.


As an investor, you should know the pitfalls of loving

what you own too much. As much as I would

rate Jollibee’s Chickenjoy to be my #1 chicken-of-all-time

(yes, it beats Colonel Sander’s secret recipe in my personal

taste buds), Jollibee Food Corp (PSE: JFC) is too richly

valued by investors and traders alike in today’s market.

Make no mistake that I absolutely love the company, its

management, and especially its menu. In fact, I daresay my

grandkids would probably be eating the same chicken as I do

now. However, for the shareholder, Jollibee might just upset

your portfolio if you bought it last week or even

today even as it has gone down from its 52-week highs. It

is that expensive.

The Lesson of Value

As a buyer, price is what you fork over. While traders

worry about the price, investors should worry about the

value. It is value that dictates how much you are willing to

fork over for a share of Jollibee. Any sane person would not

even fork out more than Php5, 000 for headphones and yet I

pony top-dollar for flagships costing more than a MacBook

Pro. It has little value for you but it has

considerable value for me.

Even when it has significantly declined from its 52-

week high of Php241 per share, Jollibee Foods is still

expensive at its last trade price of Php 216.8 per share.

However, you will not know of that until you have read this

article. Fundamentalists who believe that earning is the #1

reason for share price movement know. But if you try to

check your technical, it won’t get you anywhere.

III.ANALYSIS

Jollibee may be the nation’s favourite fast food chain

but the humble bee we’ve always known is more than meets the

eye of every individual. Jollibee has its own fair share of

life’s surprises to everyone. Customers are loyal to

Jollibee because they created the most people’s choice

taste; they we’re highly recognized because Jollibee is one

of the best competitive company which the people will

patronize their products because it sets the prices at a

cheap price but can satisfy the customers. Instead also of

targeting new customers in order to grow their business,

there is a specific target market already which is the kids

or the whole family in the market industry.

JFC has its wide range distribution, and for this

surely they gain customers loyalty that triggers the

profitability of the business. But despite of the

information's given, it is not yet enough to conclude

whether it is a good investment or not. Based on its

background it has a good record, thus we can say that it is

stable, and profitable. On the persons behind its success,

we can say that they are reputable based on their

background. JFC is a good investment based only to the

information's gathered, but we still need to know their

Quantitative analysis to be accurately concluded.

IV.REFERENCES

http://www.wipo.int/ipadvantage/en/details.jsp?id=2531

http://www.wipo.int/ipadvantage/en/details.jsp?id=2531

http://www.affordablecebu.com/load/business/

jollibee_foods_corporation_board_of_directors_and_officers_2

012_2013/6-1-0-3709#ixzz3iglLjpfY

http://www.affordablecebu.com/load/business/

jollibee_foods_corporation_board_of_directors_and_officers_2

012_2013/6-1-0-3709

http://jollibeefoundation.org/jollibee-foods-corporations-

csr-programs/

http://nhobeelab.weebly.com/industry-analysis.html

http://adedge.com.ph/jollibee-foods-corporation-the-global-

enterprise-with-a-pinoy-heart-a-bee-ting/

https://www.google.com.ph/search?

q=jollibee+food+corporation+swot+analysis&biw=1024&bih=513&s

ource=lnms&tbm=isch&sa=X&ved=0CAYQ_AUoAWoVChMIwuCklbStxwIVFF

aOCh3Z6AE2#imgdii=Q82Vf89jGc8BHM%3A%3BQ82Vf89jGc8BHM%3A

%3BQ07gOXQe-lssMM%3A&imgrc=Q82Vf89jGc8BHM%3A


http://wikamag.com/the-filipino-food-empire-jollibee-foods-

corporation/

http://edge.pse.com.ph/companyInformation/form.docmpy_id=86

http://edge.pse.com.ph/companyInformation/form.docmpy_id=86

http://wikamag.com/the-filipino-food-empire-jollibee-foods-corporation/

http://wikamag.com/the-filipino-food-empire-jollibee-foods-corporation/


https://www.google.com.ph/search?q=jollibee+food+corporation+swot+analysis&biw=1024&bih=513&source=lnms&tbm=isch&sa=X&ved=0CAYQ_AUoAWoVChMIwuCklbStxwIVFFaOCh3Z6AE2#imgdii=Q82Vf89jGc8BHM%3A%3BQ82Vf89jGc8BHM%3A%3BQ07gOXQe-lssMM%3A&imgrc=Q82Vf89jGc8BHM%3A



http://adedge.com.ph/jollibee-foods-corporation-the-global-enterprise-with-a-pinoy-heart-a-bee-ting/

http://adedge.com.ph/jollibee-foods-corporation-the-global-enterprise-with-a-pinoy-heart-a-bee-ting/

http://nhobeelab.weebly.com/industry-analysis.html

http://jollibeefoundation.org/jollibee-foods-corporations-csr-programs/

http://jollibeefoundation.org/jollibee-foods-corporations-csr-programs/

http://www.affordablecebu.com/load/business/jollibee_foods_corporation_board_of_directors_and_officers_2012_2013/6-1-0-3709



http://www.affordablecebu.com/load/business/jollibee_foods_corporation_board_of_directors_and_officers_2012_2013/6-1-0-3709#ixzz3iglLjpfY



http://www.alphainvestments.ph/is-jollibee-expensive/

http://www.alphainvestments.ph/is-jollibee-expensive/

I. COMPANY PROFILE

A. When and how the company was

established who were

responsible for setting up?

The original San Miguel

Brewery, Incorporation was founded

as La Fabrica de Cerveza de San

Miguel in 1890 by Don Enrique Maria Barretto de Ycaza y

Esteban under a Spanish Royal Charter that officially

permitted the brewing of beer in the Philippines and

incorporated as the first San Miguel Brewery, Inc. in 1913.

It was renamed San Miguel Corporation (SMC) in 1963, having

grown into one of the Philippines largest business

conglomerates with core interests in alcoholic and non-

alcoholic beverages, food and packaging. The breweries

operated as the beer division of SMC until 2007.

Early success led to the expansion of the business and

the Barretto decided to incorporate his brewery. On June 6,

1893, the company was incorporated and registered with a

capital of Php 180,000.Those forming the corporation were Don

Pedro Pablo Roxas y Castro, Don Gonzalo Tuason y Patiño, Don

Vicente D. Fernandez y Castro, Don Albino Goyenechea, Benito

SAN MIGUEL CORPORATION

Legarda y Tuason, the heirs of Don Mariano Buenaventura y

Chuidan and Barretto.

Roxas was appointed manager, playing a prominent role in

the development of the firm. He was the active member of the

firm until 1896.

San Miguel Brewery, Inc. (SMC) was incorporated on July

26, 2007 as a subsidiary of SMC and the domestic beer

business was spun off from SMC to SMB on October 1, 2007. In

2009, Kirin Holdings Co. Ltd. Of Japan acquired 48.3% of the

company from SMC for Php 8.841 per share.

In 2010, SMB acquired 100% ownership of San Miguel

Brewing International Ltd. (SMBIL) from SMC. The acquisition

of SMBIL enabled SMB to achieve full integration of San

Miguel’s domestic and international beer businesses.

SMB became listed in the Philippine Stock Exchange on

November 5, 1948.


Established in 1890 as a single brewery in the

Philippines under La Fabrica de Cerveza de San Miguel was

Southeast Asia’s first brewery, which produced and bottled

what would eventually become one of the best-selling beers in

the region and among the top beer brands in the world.

San Miguel since expanded to produce a wide range of

popular beverage, food and packaging products, which have –

for over a century – catered to generations of consumers’

ever changing tastes. They give every customer and consumer

they touch access to the best they can offer – whether in

terms of quality, or affordability or choice.

SMB enhance the value of their established businesses by

striving to achieve even greater efficiencies and operational

excellence. They also strengthen their brands by improving

product visibility and targeting areas where there is room

for growth in market share.

The company seek strategic acquisition and Greenfield

opportunities, positioning their businesses in a way to best

contribute to the country’s growth and industrial

development.

Broader distribution network for their products and

expand their customer base by identifying synergies across

their various businesses. In addition, they are pursuing

plans to integrate their production and distribution

facilities for it's both their established and newly acquired

businesses to generate additional cost savings and

efficiency.

San Miguel intends to further enhance their market

position in the Philippines by leveraging the company’s

financial resources and experience to allow it to continue to

introduce new products and services. Potential investments to

develop existing businesses include building additional

service and micro-filling stations, constructing new power

plants, expanding their power generation portfolio and

expanding food distribution networks. They will also continue

to invest in and develop business that has the potential to

gain leading positions in their respective markets and

industries.


Insiders at San Miguel Corporation (SMC)

Name Title Type of Board

or Member

Eduardo Cojuangco Jr. *Chairman

*Chief Executive

Officer

*Chairman of

Executive

Committee

Chief

Executive

Officer

Ramon Ang B.S.M.E *Vice Chairman President

*President

*Chief Operating

Officer

*Director

*Member of

Executive

Committee

*Member of

Nomination &

Hearing Committee

Ferdinand Constantino

B.A. (Econ.)

*Chief Finance

Officer

*Senior Vice

President

*Corporate

Information

Officer

*Treasurer

*Director

*Member of

Executive

Committee

*Member of Audit

Chief

Financial

Officer

Committee

*Member of

Executive

Compensation

Committee

*Member of

Nomination &

Hearing Committee

Aurora Calderon *Senior Executive

Assistant To The

Office of the

President & Chief

Operating Officer

*Senior Vice

President

*Director and

Member of

Executive

Compensation

Committee

Senior Key

Executive

Ferdinand Tumpalan *Chairman of San

Miguel Packaging

Specialists inc.

Unit

President

*President of

Mindanao

Corrugated

Fibreboard Inc.

*President of San

Miguel Packaging

Specialists Inc.

*President of San

Miguel Yamamura

Packaging

Corporation

Carlos Berba B.Sc.,

M.B.A, M.Sc.

*Managing Director

of San Miguel

Brewing

International

Limited

*Chairman of San

Miguel Brewing

International

Limited

Other Key

Executive

Francisco Alejo III *President of San

Miguel Pure Foods

Company Inc.

Unit

President

*Director of San

Miguel Pure Foods

Company Inc.

Thomas Tan *Director

*President of San

Miguel Shipping &

Lighterage

Corporation

Unit

President

Other Board Members on Board

Name Type of Board Member

Estelito Mendoza AA,

LLB

(UP), LLM (Harvard)

Member of the Board of Directors

Menardo Jimenez Member of the Board of Directors

Margarito Teves Member of the Board of Directors

Iñigo Zobel Member of the Board of Directors

Leo Alvez Member of the Board of Directors

Winston Garcia Member of the Board of Directors

Alexander Poblador Member of the Board of Directors

Joselito Campos Jr. Member of the Board of Directors

Reynato Puno M.C.L,

L.L.M, L.L.B

Member of the Board of Directors

Horacio Ramos Member of the Board of Directors

II. UNDERSTANDING THE CULTURE


San Miguel Corporation in adherence to management

principles and best practices, the Chairman of the Board

designated a Compliance Officer reporting directly to him. As

the position denotes, he is responsible for seeing to it that

the organization complies with the provision in the manual.

The Board of Directors is responsible for the long-term

success of the Corporation and its sustained competitiveness,

consistent with its trusted role exercised in the best

interest of the Corporation, its shareholders and other

stakeholders.

Forming working committees within the Board fosters open

discussion, keeping Board members informed, and allowing them

to become more sensitive to shareholders’ interest.

The Audit Committee ensures that the accounting and

auditing processes, practices and methodologies meet

international standards. Financial records conform to

accounting principles generally accepted in the Philippines.

Upon its approval, the Corporation will adopt the IAS as its

accounting and financial reporting platform for international

acceptability.

The Corporation has in place an independent internal

audit function performed by an Internal Auditor, who ensures

that its key organizational and procedural controls are

effective, appropriate and complied with.

All material information is publicly disclosed. These

include earnings result, board changes, and shareholdings of

directors.

The Corporation established an Investor Relations Unit

to disseminate timely information to shareholders. SMC

practices consistency, accuracy, and timeliness in the

delivery and communication of information and data. The Unit

coordinates with the Compliance Officer and other SMC

divisions in effectively communicating with stakeholders.

B.Standing of the firm relative to:

a. Industry

San Miguel Corporation (SMC or the Parent Company),

together with its subsidiaries (collectively referred to as

the SMC Group), is one of the largest and most diversified

conglomerates in the Philippines by market capitalization and

total assets, with sales accounting for approximately 6.5% of

the Philippine GDP in 2013. Originally founded in 1890 as a

single brewery in the Philippines, SMC has transformed itself

from a market-leading beverages, food and packaging business

with a globally recognized beer brand, into a diversified

conglomerate with market-leading businesses and investments

in the fuel and oil, energy, infrastructure,

telecommunications, mining, banking and airline industries.

SMC owns a portfolio of companies that is tightly interwoven

into the economic fabric of its home market, benefiting from

and contributing to, the development and economic progress of

the Philippines. The common shares of SMC were listed on the

Philippine Stock Exchange on November 5, 1948.

b. Brand name acceptance

San Miguel Brewery Inc. (SMB) is the largest producer of

beer in the Philippines, with nine out of ten beer drinkers

preferring its brands. As the beer business grew at a steady

pace, it provided the foundation from which SMC expanded its

interests from food, beverage and packaging, to power, oil,

airline and infrastructure. Today, SMC is the country's

biggest diversified conglomerate.

From a single product produced in a single brewery in

1890, SMB has developed an array of popular beer products

over the past century, catering to the distinct tastes and

preferences of beer drinkers across all segments and markets

in the Philippines. Today, it carries a portfolio of ten

strong and popular beer brands: San Mig Light, Red Horse

Beer, Cerveza Negra, Gold Eagle Beer, San Miguel Strong Ice,

San Miguel Super Dry, San Miguel Premium All-Malt Beer, San

Miguel Flavoured Beer, San Mig Zero, and its flagship brand,

San Miguel Pale Pilsen. These products carry distinct

attributes that cater to all segments of the Philippine beer

market and have earned international recognition for quality,

winning in the prestigious Monde International Selection

almost on an annual basis, among other awards and citations.

c. Production Facilities and Locations

Breweries today are made predominantly of stainless

steel, although vessels often have a

decorative copper cladding for a nostalgic look. Stainless

steel has many favorable characteristics that make it a well-

suited material for brewing equipment.

San Miguel Corporation plants perform myriad analyses on

their beers for quality control purposes. Shipments of

https://en.wikipedia.org/wiki/Copper

https://en.wikipedia.org/wiki/Stainless_steel

https://en.wikipedia.org/wiki/Stainless_steel

ingredients are analyzed to correct for variations. Samples

are pulled at almost every step and tested for [oxygen]

content, unwanted microbial infections, and other beer-aging

compounds. A representative sample of the finished product

often is stored for months for comparison, when complaints

are received.

San Miguel's manufacturing operations extend beyond its

home market to Hong Kong, China, Indonesia, Vietnam,

Thailand, Malaysia and Australia; and its products are

exported to 60 markets around the world.

The Company has six production facilities strategically

located across the Philippines to ensure product availability

and freshness. The six production facilities in the

Philippines are located at Pampanga, Metro Manila, Laguna,

Negros Occidental, Cebu and Davao.

d. Marketing and Distribution Outlets

From a portfolio perspective, San Miguel’s new business

ventures increase the company’s exposure to profitable

recurring revenue and are highly synergistic with the

company’s core businesses, enjoying complementarities in

scale, markets, geography, technology and raw materials. At

the corporate level, the size and scale of San Miguel’s

distribution network operations will provide significant

economies of scale and synergies in production, research and

development, distribution, management and marketing. Scale

also lends to substantial leverage and bargaining power with

suppliers and retailers, an advantage that SMC currently

enjoys. In terms of immediate distribution channels, Petron’s

network of over 1,700 service stations and convenience stores

has already broadened the footprint of SMC’s food and

beverage products. And the combined distribution network will

also be critical in the roll-out of new products and

services. SMC’s ownership of toll roads and regional airports

would further expand this network, providing various retail

and advertising options in kiosks and rest stops. The

infrastructure sector would also result in ancillary business

opportunities for SMC businesses as its toll way projects

provide the right of first refusal to use the land that falls

within the scope of the project. Synergies are also abundant

for the power business and San Miguel’s three coal mines,

with the mines providing raw material input to the power

plants and fuel for the company’s other non-coal power

plants.

C.Product Diversification

For the longest time, the San Miguel Corporation (San

Miguel was the model of the focused “related” diversifier in

the Philippines. To broaden its beer and soft drink

businesses, it acquired La Tonden Distillers (later renamed

Ginebra, the largest selling hard liquor brand in the

Philippines. Beyond the beer and the beverages business, the

company integrated backwards by entering into the bottle-

making as well another packaging materials businesses. Then,

it went beyond its beverage businesses by diversifying

further in the food line, adding ice cream, milk and dairy

and processed meat products. The acquisition of Purefood from

Ayala in 2001 further broadened its food line to include

flour. Its largest and most publicized strategic move was,

however, the acquisition in 2000 of National Foods, the

largest dairy company in Australia. The acquisition through,

considered a very costly one, was well within its historical

trust as a diversified food and beverage company.

For its beer business, it aggressively pursued

territorial diversification in the 1990s. It established in

China, Vietnam, Thailand, and Indonesia and expanded its

operations in Hong Kong. It also acquired the Australian beer

brewer J Boag and Son. The beer line was said to be San

Miguel’s spearhead for the entry of its other food lines into

foreign markets in the region.

Until the new millennium, San Miguel hewed closely to its

decades‐old posture of diversifying within the food and

beverage fields. Beginning in 2007, however, San Miguel’s

diversification efforts took a different direction. In the

second half of 2007, it was one of the principal contenders

for the acquisition of Energy Development Corporation (EDC),

the government’s largest geothermal steam producer.

In addition, it acquired the controlling interest in

Petron Corporation, the largest oil refiner and distributor i

n the Philippines.Its interest in the power distribution ande

nergy field wassaid to diversify into biofuel production (e.g

., ethanol) in the future.

Since the new millennium, the new management of

San Miguel Corporation has entered the following

unrelated businesses 5 outside its traditional food

and beverage businesses: (1) Telecommunications(e.g., Liberty

Telecoms); (2) Banking (e.g., Bank of Commerce);

(3) Electricity generation and distribution (e.g., SMC

Global Power Holdings, San Miguel Energy, Meralco); (4)Oil

refining and distribution (e.g., Petron Corporation);

(5)Mining(e.g., Daguma Agro Minerals, Bonanza Energy Resource

s, SultanEnergy);(6)Air Transport(e.g.Philippine Airlines);

and (7) Public infrastructure construction and management

(e.g., Universal LRT, TransAire, TPLEX).

III. ANALYSIS

San Miguel Corporation was started during the year 1890

by Don Enrique Maria Barretto de Ycaza y Esteban and until

now the company exist. The company has already 125 years in

business. It is stable enough because the company was already

last long in the business world and they’ve done many things

in the world for a good business operation, for the

betterment of the company and there will be the probability

that it will continue in the future. Don Enrique Maria

Barretto de Ycaza y Esteban was a well-known businessman in

Manila and is responsible enough in establishing San Miguel

Corporation. SMC was listed in the Philippine Stock Exchange

on November 5, 1948.

SMC is a stable business, has a well known founder and

responsible, and was listed in the PSE attracts its investor

to invest in SMC. This will increase the demand of stocks for

SMC, increase in stock price, increase in profit and will

also increase the sales of the company. Being listed in the

PSE the company makes it legal because they’ve pass the

necessary documents needed for their good business operation.

The company evolved through expansion and making quality

products throughout the years. Expansion of business caters

more customers, that will increase their production, increase

also to their profit and it will also lead an increase of

their sales. One of their strategies is enhancing their

market position in the Philippines by leveraging company’s

financial resources and experience to allow it to continue to

new products and services. This strategy of SMC attracts more

investors and customers to patronize their product.

The Chief Executive Officer of SMC is Eduardo Cojuangco

Jr. has been called “one of the country’s leading

businessmen.” He serves as the Chief Executive Officer of SMC

since July 7, 1998. He studied at San Beda College, De La

Salle University. He is a responsible man and credible in

handling businesses. The other board members of SMC are also

responsible enough and credible in their positions. Having a

credible, responsible and good board of directors of SMC

attract more investors. They are also efficient and

effectiveness in such a way in making a good decision for the

betterment of the company and also it can be seen that there

are a lot of programs and projects that they are makes and

there are a lot of improvements that they make since its

establishment.

The company ensures that all public information is being

disseminated. They also informed changes about the earning

result, board changes and shareholdings of directors which is

good for the investors so that they will be fully informed

about the company and it can also help them in deciding

whether to invest in the company or not.

SMC offered their products nationwide. They have also

production facilities nationwide which is good for the

business in order to produce more products. They ensure that

their products and services will meet the demand of their

customers. This is good for the business in order to satisfy

more customers, increase production, increase their profit,

increase sales and will increase also the value of the firm

which is good for the investors.

Brand name of SMC was widely accepted by the customers

or highly recognized it. Customers patronize the SMC

products. Having an accepted brand name for SMC creates the

loyalty of their customers, more potential buyers, increase

in demand for their products, increase in their sales,

increase in profit, and increase the stability of the

business.

They don’t focus solely in beverages but also in food,

packaging, properties, oil and refining and marketing, power,

infrastructure and other businesses. This is good for the

company in to become stable and in case of having a loss in

the beverages industry there would be other businesses that

will be gaining.

IV. REFERENCES

A. Company Profile

https://en.wikipedia.org/wiki/San_Miguel_Brewery

shttps://en.wikipedia.org/wiki/San_Miguel_Corporation

http://www.sanmiguel.com.ph/company/page/802/

Strategy.html

http://www.bloomberg.com/research/stocks/people/

board.asp?ticker=SMC:PM

B. Understanding the Culture

http://www.sanmiguel.com.ph/corporate/page/19/

Corporate_governance.html

http://www.sanmiguel.com.ph/corporate/page/19/Corporate_governance.html

http://www.sanmiguel.com.ph/corporate/page/19/Corporate_governance.html

http://www.bloomberg.com/research/stocks/people/board.asp?ticker=SMC:PM

http://www.bloomberg.com/research/stocks/people/board.asp?ticker=SMC:PM

http://www.sanmiguel.com.ph/company/page/802/Strategy.html

http://www.sanmiguel.com.ph/company/page/802/Strategy.html

https://en.wikipedia.org/wiki/San_Miguel_Corporation

https://en.wikipedia.org/wiki/San_Miguel_Brewery

http://www.sanmiguel.com.ph/PDF/fs/SMC-17-A-

Final04.15.14.pdf

http://www.sanmiguel.com.ph/business/page/773/beer.html

http://sanmiguelbrewery.com.ph/plantsandfacilities.php

http://sanmiguelbrewery.com.ph/about-us.php

http://www.sanmiguel.com.ph/synergy.html

http://journals.upd.edu.ph/index.php/pmr/article/

viewFile/3597/3312

http://journals.upd.edu.ph/index.php/pmr/article/viewFile/3597/3312

http://journals.upd.edu.ph/index.php/pmr/article/viewFile/3597/3312

http://www.sanmiguel.com.ph/synergy.html

http://sanmiguelbrewery.com.ph/about-us.php

http://sanmiguelbrewery.com.ph/plantsandfacilities.php

http://www.sanmiguel.com.ph/business/page/773/beer.html

http://www.sanmiguel.com.ph/PDF/fs/SMC-17-A-Final04.15.14.pdf

http://www.sanmiguel.com.ph/PDF/fs/SMC-17-A-Final04.15.14.pdf

company analysis

Documents

beverage company

company profile

leading branded snack

asean markets

urcs products

related products

universal corn products

largest branded consumer