joint venture

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Jollibee, a Philippine-based fast-food restaurant chain owned and run by the Chinese-Filipino Tan family that started out as an icecream parlor has now diversified into sandwiches, burgers, chicken etc. Due to its success in the Phillipines, it started to expand overseas to increase its market share globally. However, there were some issues that caused the failure of some of its international venture, such as incompatible partner and location selection. After the organization was restructured, there was internal conflict between its international and Phillipine-based division. Later, the strategies of Jollibee were reviewed, revealing opportunities for international expansion to shape the direction of Jollibee's future internalization strategy. The most adequate location to expand to is California, United States. From Jollibee's success in Guam, they gained experience and insights on the ways of doing business in the United States which can be applied in entering Daly City, California. Not only does this location have high Filipino concentrations, it also has relatively low number of fast food competitors. One of the investment options that can be used to enter California is through franchising as Jollibee has experience in from managing its Franchise Services Managers division. Plus, according to IFA, approximately one out of every twelve businesses in the U.S. is a franchise business, with fast food industry being the top in United States. Besides, joint venture can be one of the options since Jollibee has succeeded in entering Brunei using this mode, even when research shows a failure rate of 47%. The company should hold at least 50% of the share to maintain a certain level of control and decision making power. Plus, Jollibee... ... middle of paper ... ... be feasible as the returns on investment may not be favourable. When the partner company is reputable in the targeted market, it may help extend marketing efforts and distribution networks, where the alliance may have greater bargaining power in contract negotiations such as supply contracts and purchase agreements. For example, Jollibee can partner with a company that has connections to source for quality raw materials to ensure freshness and constant supply for customer satisfaction and competitive advantages. Plus, it allows Jollibee to create new products for entering new customer segments. This is because its partner company may have existing knowledge and expertise in certain products and services, like in the case of Starbucks, who partnered with PepsiCo to develop coffee beverages, and Dreyer's Ice Cream to sell coffee ice cream line. Conclusion (100 words)

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