KEY DRIVERS OF ENVIRONMENTAL CHANGE 1. Market globalization A market is any place where makers, distributors or retailers sell, and consumers buy. Examples include shops, high streets, or websites. It may also refer to the whole group of buyers for a good or service. On the other hand, Globalization is the growing interdependence of the world's economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information. If put together, market globalization refers to the process of integrating and merging of the distinct world markets into a single market. This process involves the identification of some common norm, value, taste, preference and convenience and slowly enables the cultural shift towards the use of common product or service. In market globalization, consumer tastes are becoming more homogenous in such matters as clothes and entertainment. The trend to consume fast food has been increasing more and more. So, Jollibee saw the opportunity to penetrate the global market. Today, Jollibee is the largest fastfood chain brand in the Philippines, operating a network of more than 1,400 stores. A dominant market leader in the Philippines, Jollibee enjoys the lion’s share of the local market that is more than all the other multinational fast-food brands in PH combined. . Moreover, consumer behavior is always shifting and evolving, but the changes seen recently have really changed the business world. Jollibee recognized that there was a shift in consumer behavior wherein more home-cooking, greater use of digital and more reliance on delivery and takeout due to pandemic. As markets globalize, firms supplying them become global customers for their own inputs and seek global suppliers.Jollibee's raw materials processed and manufactured products are imported and are grown by their suppliers. Jollibee has developed long-term deals with these partners. Jollibee is reliant on a steady supply of raw materials, such as vegetables, cereals and animal produce, at significant quantities and stable prices. However, the agricultural sector in the Philippines is particularly vulnerable to such extreme weather events such as typhoons, floods, and extreme weather such as El Niño that greatly affects the livelihood of our farmers. JFC began sourcing produce directly from smallholder farmers in addition to its traditional intermediary traders. JFC invested a significant amount into partnership building and training to organize the farmers into functioning cooperatives. Buying directly from the farmers has meant that when one area of the country is producing lower yields, JFC can buy from a less affected region. for example, Glory to God Forever Food Corporation, one of the suppliers of Jollibee, a cooperative that manages farmers’ groups from various parts of the country. Since 2005, the cooperative has been supplying Jollibee with green bell pepper, red bell pepper, lettuce, tomato, potato, siling labuyo, and ube. By 2015, Jollibee had helped over 900 farming families in 27 cooperatives with an increase in income of 200-500%. One-fourth of all vegetable produce sourced by JFC is now purchased directly from the farmer cooperatives. The founder of Jollibee, Mr. Tony Tan Caktiong, was branded as “Pillar of Brand Globalization.” Rosemarie Bosch Ong, the president of Philippine Retailers Association (PRA), stated that Jollibee and Mr. Tony Tan Caktiong gave other Filipino retailers and brands the inspiration and encouragement to conquer the international market. Jollibee is one of the contributors in globalizing Philippine market by establishing Jollibee branches in other countries, thus, bringing Filipinos abroad closer to home. He also gave other nationalities a taste of the Philippines by experiencing the Filipino’s fast-food chain. 2. Cost globalization Globalization enables goods to be produced in different parts of the world. This greater specialisation enables lower average costs and lower prices for consumers. In return, increases economies of scale. Jollibee uses Competitor-based pricing. Jollibee is a price taker that must accept the going market price determined by the forces of demand and supply. Their product are priced with the 'going rate' or in line with the prices charged by direct competitors. Jollibee, being a major player in the Fast-food industry in Philippines, it constantly enjoyed economies of scale in terms of retail site selection, procurement, manufacturing, distribution, and marketing levels unavailable to most industry players. Jollibee’s quest for global dominance has been wiped out by a virus. The coronavirus pandemic has blown a wide hole in Jollibee's 2020 revenue forecasts. Shares in Jollibee Foods have plunged 25% last year, forcing the company to drastically rethink its global expansion plans. According to FactSet data, since January 2019, investors have wiped nearly $4 billion from Jollibee's market capitalization -- around 55% of the company's value -- as the two money-losing U.S. acquisitions squeezed profit margins to an 18-year low. 3. Government activity and policy Several governments take a careful initiative to improve the health of the people for example the restaurants as Jollibee are required to indicate the nutritional factors for each meal they offer. Recently, governments are concerning the fast-food companies marketing, because of health- related issues. Like little nutrition value, diabetes, and high gain obesity to young children and teenagers also with adults. So governments are trying to keep an eye on fast food companies, like all the fast food franchise company should have to follow the rules from the regulations if not the government will not permit the license whether the country is the Philippine or other foreign countries. Moreover, the government policies regarding the taxes can clearly affect the fast-food business-like Jollibee. One of the most controversial issue Jollibee faces is contractualization. Jollibee topped the list of 20 companies engaged in labor-only contracting released by the Department of Labor and Employment (DOLE). In April 2018, the Labor department ordered JFC to regularize more than 7,000 contractual workers deployed under its contractors or service providers. Tan Caktiong assumed that Jollibee is now working closely with the Labor department on the issue and to clarify which roles are allowed to be contracted or outsourced. “In compliance with regulations, we only deal with reputable service contractors that have been duly accredited and registered with DOLE,” as he stated. Due to the COVID-19 Pandemic, a strict lockdown announced by President Rodrigo Duterte. It is expected that more than $600 million losses in sales of the entire system for Jollibee during the lockdown. To prevent the spread of the virus, governments have created policies aimed at controlling people’s social behavior. Maintaining social distance is a challenge for restaurants expecting to increase the number of customers entering a store. Aside from governmental issues, Jollibee join hands with the government in providing employment opportunity for the Filipinos. In year 2019, The city government of Manila and fastfood giant Jollibee Foods Corp. (JFC) have entered into a memorandum of agreement on Friday to provide employment for the elderly and persons with disabilities (PWDs). Under the MOA, JFC will open its facilities to accommodate qualified elderly and differently-abled people for temporary employment.
