Most Filipinos consider Goldilocks not only a brand, but also a Filipino Institution. In fact its...
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Most Filipinos consider Goldilocks not only a brand, but also a Filipino Institution. In fact its popular tagline, "How thoughtful, how Goldilocks" has evolved over the years into "How thoughtful, how Pinoy (colloquial for 'Filipino')", and later to "Ang sarap magmahal ng Pinoy!", embracing a culture and tradition that goes beyond the name. Metro Manila accounted for only 30% of consumer spending. Therefore, they had to go outside Metro Manila in order to get a share of the other 70% that is still largely untapped by Goldilocks. Furthermore, some regions were growing faster than Metro Manila. For instance Central Visayas grew at an annual rate of 6.2% while National Capital Region was expected to grow at an average of 5.35%. It was then found out that there is huge consumer spending in regional markets and higher growth rates outside Metro Manila. Hence, it was topmost of their plans to have a regional expansion. Goldilocks has also decided to reposition itself as a global brand - as a well-loved, home-grown enterprise primed to serve the rest of the world. Following the principle of "thinking global, strategizing regional, and acting local", it maintains the exact home-grown goodness of its products in overseas markets, but endeavours to acquaint multicultural tastes with its menu items as well. As a result, its hold in the international market continues to strengthen. From one branch in Los Angeles, California in 1976, Goldilocks has expanded to other key cities in the United States such as San Francisco, Las Vegas, Sacramento, and San Diego, for a total of 19 U.S stores. Its first outlet in East Coast will soon open, with others sure to follow. Likewise, the two Goldilocks outlets in Canada will undoubtedly encourage more branches to open due to its remarkable success. Moreover, it has received a considerable number of requests to open in the Middle East, mostly from Overseas Filipino Workers and expatriates.³ Goldilocks achieved 12% -14% sales growth over 2007-2009. According to Arle Azela G. Delos Santos, Goldilocks Corporate Communications Manager, Goldilocks' growth prospects for both company-owned stores and franchisees remain vigorous. Goldilocks will proceed with their expansion plans despite the slowing economy. This is also banked on the Filipinos' continued celebration of special occasions and the practice of bringing home small gifts. What Goldilocks 2 is facing now is how globalization and expansion will help maintain the sales growth for the next five years. Path towards Success According to the two founders, the best way to learn about your business is to get your hands dirty. Bake, cook, go to the production line, and face the customer at the sales counter. Once a year, during the peak Christmas season, Goldilock's office employees get their hands dirty. They help out in the production, delivery and selling. Their friends couldn't believe it when they would leave Christmas parties early with the excuse that they "still have to wake up early to pack ensaymada and mammon." The founders of Goldilocks had a simple vision: to produce high-quality, high-value but affordable products. This vision has guided every aspect of business operations for four decades now. The two sister's taste buds and capacity for hard work and continuous learning have produced food items that have become the standard for many Filipinos. Having the mission to constantly innovate new products that suit the discriminating Filipino tastes, the company's team of R&D and marketing specialists continuously develop new products for the mainstream consumer. Goldilocks doesn't want to deliver products that would just satisfy their buyers taste, rather, produce more products that would make their buyers crave for more. Goldilocks has set the standard for quality cakes, breads, pastries and popular Filipino food. Each of the more than 400 products in Goldilocks stores is a result of hundred of ideas developed and tested. With the two founders having an innate sense of what the Filipino consumers wants, the R&D people have to keep going back to the laboratory until their samples pass the in-house and external panel of food tasters. 3 Everyday products must be delivered to the stores "fresh from the oven" of the various plants. The company was practicing "just-in-time" delivery even before it became an industry buzzword.³ Franchising It's transformation from a small, boutique type bakery into a full service fast food restaurant has ensured that the company continues to expand and flourish. Aside from the quality cakes, breads, and pastries that have been its mainstays over the years, they have expanded their offerings to include dishes such as beef, chicken, and seafood, noodles and pasta, and a wide range of popular Filipino food fare under its Pinoydeli line. Another reason for their continued success is the company's stringent and careful selection of potential franchisees. Goldilocks franchising program started in 1991 wanting other entrepreneurs to benefit from the outstanding brand value that it had carefully developed over the years. This was under the leadership of their president, Mr. Freddie Go. The Franchise Agreement grants to the franchisee the right to operate a specific Goldilocks Store, at a single address, for a period of 8 years. In return, the franchisee agrees to operate the business in accordance with the Goldilocks established standards of quality, service, cleanliness and customer service. Goldilocks will provide training for one Managing Director, the management team and the crew who must all successfully complete the Store Operations Training Program. There is a standard Goldilocks store design, layout, equipment and facilities requirements for each type of store. On-going support includes regular store visits to help franchisee identify areas of improvement, assistance in the development of marketing and customer relations programs and activities, new operating procedures etc.? 4 Bakery Sector and Industry Players During the last decade, the Philippine bakery has been expanding. The sector, however, slowed down during 2008 due to the global economic downturn and rising cost of flour and oil. In 2008, sales of all items in the bakery products sector amounted to Php49.97 billion. Forecasted growth in the sector is about 15 percent over the next two years, though this number may not accurately reflect the effects of the global recession (Euromonitor International, 2008). Bread is the leading bakery item sold in the Philippines, with sales of Php27.7 billion in 2008. Besides bread, statistics are reported for pastries and cakes produced by industrial bakers and artisanal bakers. Since 2003, the value of all pastries sold in the Philippines has increased by nearly 30 percent, while the value of all cakes sold has increased by about 20 percent (see Table 1). These increases can be explained by an increase in sales volume as well as increasing prices for products. Table 1. Sales of baked goods in the Philippines, 2003-2008 (US$ million) 2007 2003 172.1 2004 2005 2006 181.8 204.8 232 258.2 71.3 77.1 88 101.2 114.3 100.7 104.8 116.8 130.8 143.9 80.1 88.5 96 105 114.4 50.1 55.6 60.4 30 32.9 35.5 128 135.5 142.6 Industrial 50.7 54.8 57.8 Artisanal 77.2 80.7 84.7 Source: Euromonitor International, 2008 Bread Industrial Artisanal Pastries Industrial Artisanal Cakes 66.4 72.8 38.5 41.6 151.7 161.5 61.8 89.8 5 65.9 95.7 2008 290.1 130.3 159.7 125.2 80 45.1 171.9 70.5 101.4 Artisanal bakeshops are characterized as single or a few shops run independently with limited distribution and market power. Marketing is through local bakeries and sari-sari stores, which are small convenience type stores important in rural regions of the country. Industrial bakeshops are those other than artisanal bakeshop. They are characterized by wider range of distribution. The leading industrial bakery in the Philippines is Gardenia bakeries (owned by QAF, Ltd., an investment holdings firm) whose focus is primarily on white breads. Other leading baked goods companies in the Philippines are MLM foods, inc., Regent Foods Corp., Big E Food Products, Suncrest Foods Inc., Red Ribbon Bake Shop Inc., and Universal Robina Corp. (Table 2).8 1. Considering the pandemic in 2020, what is the current situation of Goldilocks Bakeshop Inc.? 2. Using PESTLE, analyze the external environment of the fast food industry in the Philippines. 3. Using Porter's 5 forces of Competitive Advantage, analyze the competitive position of Goldilocks. Conclude by determining whether each force is high or low. 4. From the above tools (PESTLE & Porters 5 Forces), list down the factors considered Opportunites; Threats. Most Filipinos consider Goldilocks not only a brand, but also a Filipino Institution. In fact its popular tagline, "How thoughtful, how Goldilocks" has evolved over the years into "How thoughtful, how Pinoy (colloquial for 'Filipino')", and later to "Ang sarap magmahal ng Pinoy!", embracing a culture and tradition that goes beyond the name. Metro Manila accounted for only 30% of consumer spending. Therefore, they had to go outside Metro Manila in order to get a share of the other 70% that is still largely untapped by Goldilocks. Furthermore, some regions were growing faster than Metro Manila. For instance Central Visayas grew at an annual rate of 6.2% while National Capital Region was expected to grow at an average of 5.35%. It was then found out that there is huge consumer spending in regional markets and higher growth rates outside Metro Manila. Hence, it was topmost of their plans to have a regional expansion. Goldilocks has also decided to reposition itself as a global brand - as a well-loved, home-grown enterprise primed to serve the rest of the world. Following the principle of "thinking global, strategizing regional, and acting local", it maintains the exact home-grown goodness of its products in overseas markets, but endeavours to acquaint multicultural tastes with its menu items as well. As a result, its hold in the international market continues to strengthen. From one branch in Los Angeles, California in 1976, Goldilocks has expanded to other key cities in the United States such as San Francisco, Las Vegas, Sacramento, and San Diego, for a total of 19 U.S stores. Its first outlet in East Coast will soon open, with others sure to follow. Likewise, the two Goldilocks outlets in Canada will undoubtedly encourage more branches to open due to its remarkable success. Moreover, it has received a considerable number of requests to open in the Middle East, mostly from Overseas Filipino Workers and expatriates.³ Goldilocks achieved 12% -14% sales growth over 2007-2009. According to Arle Azela G. Delos Santos, Goldilocks Corporate Communications Manager, Goldilocks' growth prospects for both company-owned stores and franchisees remain vigorous. Goldilocks will proceed with their expansion plans despite the slowing economy. This is also banked on the Filipinos' continued celebration of special occasions and the practice of bringing home small gifts. What Goldilocks 2 is facing now is how globalization and expansion will help maintain the sales growth for the next five years. Path towards Success According to the two founders, the best way to learn about your business is to get your hands dirty. Bake, cook, go to the production line, and face the customer at the sales counter. Once a year, during the peak Christmas season, Goldilock's office employees get their hands dirty. They help out in the production, delivery and selling. Their friends couldn't believe it when they would leave Christmas parties early with the excuse that they "still have to wake up early to pack ensaymada and mammon." The founders of Goldilocks had a simple vision: to produce high-quality, high-value but affordable products. This vision has guided every aspect of business operations for four decades now. The two sister's taste buds and capacity for hard work and continuous learning have produced food items that have become the standard for many Filipinos. Having the mission to constantly innovate new products that suit the discriminating Filipino tastes, the company's team of R&D and marketing specialists continuously develop new products for the mainstream consumer. Goldilocks doesn't want to deliver products that would just satisfy their buyers taste, rather, produce more products that would make their buyers crave for more. Goldilocks has set the standard for quality cakes, breads, pastries and popular Filipino food. Each of the more than 400 products in Goldilocks stores is a result of hundred of ideas developed and tested. With the two founders having an innate sense of what the Filipino consumers wants, the R&D people have to keep going back to the laboratory until their samples pass the in-house and external panel of food tasters. 3 Everyday products must be delivered to the stores "fresh from the oven" of the various plants. The company was practicing "just-in-time" delivery even before it became an industry buzzword.³ Franchising It's transformation from a small, boutique type bakery into a full service fast food restaurant has ensured that the company continues to expand and flourish. Aside from the quality cakes, breads, and pastries that have been its mainstays over the years, they have expanded their offerings to include dishes such as beef, chicken, and seafood, noodles and pasta, and a wide range of popular Filipino food fare under its Pinoydeli line. Another reason for their continued success is the company's stringent and careful selection of potential franchisees. Goldilocks franchising program started in 1991 wanting other entrepreneurs to benefit from the outstanding brand value that it had carefully developed over the years. This was under the leadership of their president, Mr. Freddie Go. The Franchise Agreement grants to the franchisee the right to operate a specific Goldilocks Store, at a single address, for a period of 8 years. In return, the franchisee agrees to operate the business in accordance with the Goldilocks established standards of quality, service, cleanliness and customer service. Goldilocks will provide training for one Managing Director, the management team and the crew who must all successfully complete the Store Operations Training Program. There is a standard Goldilocks store design, layout, equipment and facilities requirements for each type of store. On-going support includes regular store visits to help franchisee identify areas of improvement, assistance in the development of marketing and customer relations programs and activities, new operating procedures etc.? 4 Bakery Sector and Industry Players During the last decade, the Philippine bakery has been expanding. The sector, however, slowed down during 2008 due to the global economic downturn and rising cost of flour and oil. In 2008, sales of all items in the bakery products sector amounted to Php49.97 billion. Forecasted growth in the sector is about 15 percent over the next two years, though this number may not accurately reflect the effects of the global recession (Euromonitor International, 2008). Bread is the leading bakery item sold in the Philippines, with sales of Php27.7 billion in 2008. Besides bread, statistics are reported for pastries and cakes produced by industrial bakers and artisanal bakers. Since 2003, the value of all pastries sold in the Philippines has increased by nearly 30 percent, while the value of all cakes sold has increased by about 20 percent (see Table 1). These increases can be explained by an increase in sales volume as well as increasing prices for products. Table 1. Sales of baked goods in the Philippines, 2003-2008 (US$ million) 2007 2003 172.1 2004 2005 2006 181.8 204.8 232 258.2 71.3 77.1 88 101.2 114.3 100.7 104.8 116.8 130.8 143.9 80.1 88.5 96 105 114.4 50.1 55.6 60.4 30 32.9 35.5 128 135.5 142.6 Industrial 50.7 54.8 57.8 Artisanal 77.2 80.7 84.7 Source: Euromonitor International, 2008 Bread Industrial Artisanal Pastries Industrial Artisanal Cakes 66.4 72.8 38.5 41.6 151.7 161.5 61.8 89.8 5 65.9 95.7 2008 290.1 130.3 159.7 125.2 80 45.1 171.9 70.5 101.4 Artisanal bakeshops are characterized as single or a few shops run independently with limited distribution and market power. Marketing is through local bakeries and sari-sari stores, which are small convenience type stores important in rural regions of the country. Industrial bakeshops are those other than artisanal bakeshop. They are characterized by wider range of distribution. The leading industrial bakery in the Philippines is Gardenia bakeries (owned by QAF, Ltd., an investment holdings firm) whose focus is primarily on white breads. Other leading baked goods companies in the Philippines are MLM foods, inc., Regent Foods Corp., Big E Food Products, Suncrest Foods Inc., Red Ribbon Bake Shop Inc., and Universal Robina Corp. (Table 2).8 1. Considering the pandemic in 2020, what is the current situation of Goldilocks Bakeshop Inc.? 2. Using PESTLE, analyze the external environment of the fast food industry in the Philippines. 3. Using Porter's 5 forces of Competitive Advantage, analyze the competitive position of Goldilocks. Conclude by determining whether each force is high or low. 4. From the above tools (PESTLE & Porters 5 Forces), list down the factors considered Opportunites; Threats.
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1 The COVID19 epidemic has had a significant impact on the Philippines expanding economy It caused bankruptcy in small medium and big businesses forcing them to close their doors if they did not want ... View the full answer
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