STRAMA the Final Showdown!!

Executive Summary

Julie’s Bakeshop or Julie’s Franchise Corporation has grown to become the

largest bakery chain in the Philippines. By 1999, Julie’s counted 210 branches nationwide. Julie’s Bakeshop has served customers all over the nation its distinctive brand of high quality, freshly baked breads. With more than 500 branches and outlets nationwide, Julie’s is a shining example of success through hard work and commitment. Its main office in Manila is situated in Lot 1 Block 1 Amang Rodriguez Avenue, corner JRA Subdivision, Rosario, Pasig City and the office in Cebu is situated in C. Padilla Street, Duljo Fatima, Cebu City. After a thorough research primed, the external analysis of Julie’s Bakeshop show shows s a figu figure re of 3.15 3.15,which ,which c onfir ms that the firm’s strate gies effect ively take advantage of existing opportunities and minimize the potential adverse effects of  exte externa rnall thre threat ats. s. The The inte intern rnal al ana lys is on the oth er han d, sho ws a f igu re of  3.3, which shows that Julie’s Bakeshop has been busy striving to be the best as it service not only to its customers, franchisees, and to retailers but also to its internal system that made them recognize as one of the outstanding franchising company in the Philippines. With the competitive advantage and market sustainability that the researchers found, the researcher strongly recommends after comprehensive consideration with the Grand Strategy Matrix (GSM) to pursue among three strategies: Market Development, Market Penetration and Product Development as these strategies would lay of a claim to a solid foundation and dynamic synergy upon which to build even more vigorous vigorou s growth in the future.

Bolivar,Castillo Julie’s Franchise Corporation

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I. Company Profile The Rising of a Breadwinner 

Sinc Si nce e 19 1981 81,, Jul Julie ie’s ’s Ba Bakes kesho hop p has ser serve ved d cu cust stom omers ers al alll ov over er th the e nat natio ion n it its s distinctive disti nctive brand of high quality, freshly freshly baked breads. With more than 500 branches and outlets nationwide, Julie’s is a shining example of success through hard work and commitment. Julie’s success is attributed to the culture set down by its founder and namesake, the original Tita Julie, Mrs. Julia Gandionco. A canteen concessionaire concessionaire since 1970, Mrs. Gandionco, or Ma’am Julie as she prefers to be called, started the first Julie’s Bakeshop Bakesho p in Wirel Wireless, ess, Mandaue on January 6, 1981. The bakeshop was intended intended to answer Ma’am Julie’s canteen needs of bread products. Running a bakery has been a very challenging endeavor for Ma’am Julie. Not having any experience in the bakery business nor even knowing how to bake, she ventured into this business with pure guts and faith in God. With the support of her husband, Mr. Deigs Gandionco, Ma’am Julie put up her  first bakeshop and named it after herself at the insistence of Bobby Gandionco, her  eldest son. While seeming“baduy”  at first, Bobby Gandionco’s suggestion that using his mother’s name would give personality to the bakeshop was sheer serendipity. Within six months, a second Julie’s opened in Urgello, Cebu City. Three years later, lat er, Julie’s Julie’s had ten bra branche nches s all over the cit city y of Cebu. The increasi increasing ng num number ber of  branches led to the formation of RJ and Sons Commodities, led by Bobby Gandionco, to supply the various Julie’s branches with its baking ingredients and supplies. It was in 1988 when the first Julie’s outside Cebu opened in Iloilo. This opened the door that ultimately ultimately led to the secret to Julie’s rapid growth: Franchising. Franchising. The first Julie’s franchise started in 1998 in Mambajao, Camiguin. On July 2, 1998, Julie’s Bolivar,Castillo Julie’s Franchise Corporation

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Franchise Corporation was registered in the Securities and Exchange Commission. The path to nationwide success was open and clear. Since then, Julie’s Bakeshop has grown to become the largest bakery chain in the Philippin Philippines. es. By 1999 1999,, Jul Julie’ ie’s s coun counted ted 210 bran branches ches nationwi nationwide. de. So, it was no surprise that on June 1999 Julie’s was dubbed as the “Success Story of the Year” and On October 1999 as “Outstanding “Outstanding Country – Side Investor” Investor” by the Philippine Philippine Chamber  of Commerce and Industry Inc. These awards were followed on June 2000 with the Outsta Out standi nding ng Sma Smallll and Med Medium ium Sca Scale le Ent Entrepr repreneu eneurr Awa Award rd and the Cer Certif tifica icate te of  Recogni Rec ogniti tion on as Out Outsta standi nding ng Sma Smallll and Med Medium ium Scal Scale e Ent Entrepr reprene eneur ur Awa Award rd by the Federation of Filipino – Chinese Chamber of Commerce and Industry Inc., and the Philippine Chamber of Commerce. The year 2000 saw the third Julie’s company formed with the spinning off of  Julie’s Julie’ s Franch Franchise ise Corpora Corporation’ tion’s s maint maintenance enance department to form Julie’s Manufac Manufacturing turing Corporation. This is the youngest of all three Julie’s companies. Over the years 2001 and 2002, Julie’s made inroads in the Luzon and Mindanao areas with the first RJ and Sons Commodities in Manila opening on June 22, 2001 and in Davao on October 4, 2002. September 28, 2002 saw Julie’s garner the “Who’s Who in the Philippines: The Best Bakeshop of the Year” by the National Consumers Excellence Excellence Award. With its over 300 branches and outlets across the country, Julie’s was a success phenomenon on its own. The three Julie’s companies, RJ and Sons Enterprises, Julie’s Franchise Corporation and Ju Julilie’ e’s s Ma Manuf nufact acturi uring ng Co Corpo rpora rati tion on me merg rged ed in Ju July ly 1, 200 2003 3 to bec becom ome e Ju Julilie’ e’s s Franchise Corporation with three divisions: the Franchise Division, the Supply and Logistics Division and the Corporate Shared Services Division.

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From Fro m the then n on, Jul Julie’ ie’s s con contin tinuou uously sly garn garnered ered val valuabl uable e rec recogni ognitio tions ns from est esteem eemed ed institutions like the Philippine Franchise Association and Philippine Marketing Association. 2004 200 4

CEO Rob Robert erto o R. Gan Gandion dionco co was awa awarded rded as the Ago Agora ra - Out Outsta standi nding ng Achievem Achi evement ent Awa Award rd for Ent Entrepr reprene eneursh urship ip (Lar (Large ge Sca Scale) le) by the Phi Philip lippin pine e Marketing Association.

2005

Julie’s Franchise Corporation was awarded with the Franchise Excellence Award for consistently exhibiting high standards of growth and development in all aspects of franchise operations. The award was given by the Philippine Franchise Associations, Department of Trade and Industry, Philippine Chamber  of Commerce and Industry, and the Philippine Retailers Association. Franchise Marketing Campaign of the Year Award (Food Category – Medium Scale) Franchisee of the Year Award – Ms. Ritchie Hawak

2006 200 6

CEO Rob Robert erto o R. Gand Gandion ionco co was one of the fin finali alists sts of Erns Ernstt & You Young ng Entrepreneur of the Year. - Hall of Fame/ Outstanding Filipino Franchise of the Year  Julie’s Bakeshop (Medium Scale Category/ Specialty Bakeshop) - Franchisee of the Year - Carolyn Francisco - Garbo sa Sugbu Award Recognition from the Office of Governor Gwen Garcia for the success and fame Julie’s has given to the Province of Cebu - Julie’s Bakeshop’s birthplace.

2007

Most Socially Responsible Entrepreneur Award

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Cebu Chamber of Commerce and Industry Franchise Marketing Campaign of the Year  Franchisee of the Year Award – Dr. Ed Escalona At Present…

Julie’s Franchise Corporation is manned by professionals who assist each franchisee every step of the way from Franchise Application, Expansion, Operation, Training, Marketing, Construction, Accounting, and Human Resources Development. It has a fully operational laboratory under a Research and Development Department that cont co ntin inuo uous usly ly im impro proves ves an and d in innov novat ates es on ov over er 300 va vari riet etie ies s of br bread ead an and d ba bake kery ry products to respond to the need of the regional markets. Julilie’s Ju e’s to today day is a ho house useho hold ld na name me an anch chori oring ng it its s suc succe cess ss on sup super erior ior ta tast ste e an and d freshness freshne ss of its product products s as well as its clean and conven convenient ient outlets. outlets. With more than 500 branches and outlets, 99% of which are franchised, Julie’s continues to strengthen its market reach from North Luzon to Mindanao. With Wit h ove overr 180 fra franch nchise isees es and sti stillll grow growing ing,, purs pursuin uing g Jul Julie’ ie’s s pri princi nciple ples s of Ser Service vice Excellence and Total Customer Satisfaction, Julie’s Franchise Corporation aims to have Julie’ Jul ie’s s Bake Bakeshop shop present present in eve every ry tow town n in the cou countr ntry. y. Jul Julie’ ie’s s fra franchi nchisees sees are all independent indepe ndent entrepreneurs committed committed to practic practicing ing the Julie Julie’s ’s Franchis Franchise e Corpor Corporation’ ation’s s business in all aspects of its operations, thus maintaining Julie’s Bakeshop’s position of  market leadership in the industry. On Standards…

All Julie’s Bakeshop franchisees and bakery staff are equipped with the knowledge about the company’s strict quality standards through intensive and thorough training, semina sem inar-wo r-works rkshops hops and han hands-o ds-on n pro product duct hand handlin ling. g. The Jul Julie’ ie’s s bak baking ing tec techno hnolog logy y

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program highlights highlights the Julie’ Julie’s s way of achievi achieving ng product qualit quality, y, service excell excellence ence and customer satisfaction. Julilie’s Ju e’s Fr Fran anch chis ise e Co Corp rpora orati tion on has est estab ablilish shed ed a rew rewar ard d sys syste tem m fo forr ba bake kery ry te team am performance, a motivational tool to drive all JBS teams nationwide to excel both in sales and in operational efficiency. Julie’s Franchise Corporation recognizes franchisees whose bakeries adhere to the Julie’s Bakeshop system, upholding the HIGHEST STANDARDS OF QUALITY, CUSTOMER

SERVICE,

CLEANLINESS,

SANITATION,

MAINTENANCE

and

RELIABLE MANAGEMENT. Every Julie’s Bakeshop is assured of continuous marketing campaign support from bakery opening onwards to building superior brand image. A Value Driven Business…

Julie’s Bakeshop’s success is not only measured in the fulfillment of its endeavors as a value driven franch franchise ise business, but also in establ establishing ishing harmonious harmonious relati relationships onships with the Filipino community. The company continues to initiate and support cause-oriented programs in partnership with the community and the local government through its Corporate Social Responsibility (CSR) Programs. Julie’s Bakeshop’s achievement in its business and good relationship with the Filipino people is a measure of true growth. Julie’s Bakeshop does not only bring its bread closer to the Filipino people but it also enhances the capability of the franchisees towards growth, making them proud Julie’s Breadwinners.

II. Research Design and Methodology

The researcher was able to acquire data from the following sources: Bolivar,Castillo Julie’s Franchise Corporation

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Primary Data

The Primary Internal Data was gathered through Julie’s Company’s website it includes the company background and product and services information. Primary external data was congregated from the website of the Securities and Exchange Commission. This information includes external factors that affect the industry, market size, market growth ranking positions of all baking companies in the Philippine market. Secondary Data

Secondary external and internal data was gathered through the readings from the internet. The information includes economic trends in baking business and its major competitor’s information; it also includes the latest technologies in baking industry in the Philippines. The data requirement of this paper includes recent surveys, projections and operationa l highlights. It also requires information regarding recent trends re ga rd ing the th e indu in du stry st ry un de r study. study. For compara comparativ tive e purpo purposes, ses, backgro background und of some some major competitors in the industry is also needed, especially in the financial and operations aspect. Limitations

The Strategic Management Paper is only limited to study and analysis of Julie’s Bakeshop, among the different sectors in the industry this study focuses on baking institutions in the Philippines. The focus of this paper is on the company’s performance and position in the market. The annual report of the most recent year (2010) was not yet available during the study. It assumed therefore that the financial statements for the year 2009 were the same as of the year 2010, which is the most recently available financial statement.

III. Environmental Analysis Bolivar,Castillo Julie’s Franchise Corporation

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i.Economic Specific Factor

Relevance to Enterprise

Exchange rate

The Philippine Peso will likely continue to appre appreci ciat ate e agai agains nstt the the US doll dollar ar to Ps 43.89: U$1 (source: BSP, Dec. 30, 2010). Such appreciation to persist due to continuing continuing rise in OFW remittances, remittances, rising foreign investments, weak US economy & currency.

A strong currency may make exporting more difficult because it may raise the price in terms of  foreign currency. Julie’s Bakeshop may have a hard time importing baking ingredients from other  countries.

Interest Rate

Since the interest rare in the country is very low there is a higher tendency for Julie’s Franchising Corporation to have foreign partners or investors, because it cost less to borrow.

The Philippine central bank held its policy rate at a record low of 4% Labor cost

Non-Agricultural –php 404.00 Agriculture

Since the labor cost in the Philippines is lesser  than the other countries, they can produce more baking products with a lower labor cost.

Plantation- php 367.00 Non-Plantation php367.00

ii.Political / Legal SPECIFIC FACTOR

Bolivar,Castillo Julie’s Franchise Corporation

RELEVANCE TO ENTERPRISE

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Taxation Policy The tax rate for Domestic Corporations is 30% on worldwide income. Foreign Branch Offices have a tax rate of 30% on Philippines based income.

The policy will give awareness to the enterprise enterp rise on whatever changes has been made regarding taxes, so as to avoid evasion or other related matters.it is beneficial both on the company and for the Government. In terms of  financial matters.

Business Regulation Some laws regarding business will guide the franchisee of  Julies Bakeshop to a better business operation. Philippines’ Local Governments Improving Business Regulation and Empowering  Entrepreneurs, Finds World 

iii.Technological SPECIFIC FACTOR

Website Improve the website to communicate with the customers easily and conveniently. New Baking Technologies What are the latest trends in production of baking products.

Bolivar,Castillo Julie’s Franchise Corporation

RELEVANCE TO ENTERPRISE

Since almost everyone has the easy access on the internet it is very helpful for Julie’s Bakeshop to advertise their products and how to franchise online. It will help boost their sales.

There are a lot of baking technologies now a days, it will be very helpful for the production of Julie’s Bakeshop, it may double or triple their production daily.

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Social Networks Social networking sites are a big help in promoting and to identify the brand.

Facebook, tweeter etc. there are a lot of potential buyers on those social networking sites, Julies Bakeshop should have their pages on these networking site and post what’s new on their  products or franchise programs.

iv.Socio/ Cultural

Specific Factors

Relevance to Enterprise

Filipinos Taste Buds

Filipino culture indeed loves to eat and in every family table there is always a place for breads , it’s a big factor to consider that Filipinos loves eating bread especially in occasions or during free time.

Filipino haw a unique sense of  taste. Filipino Hospitality Trademark of being a Filipino is being Hospitable on their guest.

Being Filipino we are very accommodating to guest, and commonly Filipino serves bread or any other  pastry products to their guest, Filipinos calls it as a merienda.

Change in Lifestyle Through times Filipino always want to be on trend, everyone now today are really health conscious.

Bolivar,Castillo Julie’s Franchise Corporation

Many Filipinos now are very health conscious and one thong that Julies Bakeshop should concentrate in is to develop new kind of bread which is sugar  free or have more nutritional benefits.

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v.Environment / Climate

Specific Factors

Climate Change in the Philippines CO2 emission 75,299.2

Climate in the Philippines The Philippines is a tropic nation with a hot and humid climate. Pollution in the Philippines (Air and Water)

Relevance to Enterprise Climate change has had an impact on International farmers, ranchers, rural land owners, and foresters, and will continue to do so, through its influence on production, distribution, and yields. Continuous climate change in the Philippines may affect the Baking Industry especially the Flour Industry and soon will affect the prices of the products that uses Flour, sugar etc.

As to baking industry it is an ideal climate for  agriculture with ample rainfall all year long. Julie’s Franchising Corporation has the advantage of buying less expensive agricultural products, instead of  importing into other countries.raw materials such as eggs,milks,oil and other baking ingredients. In Philippines pure water is very difficult to obtain. This is due to excretion of biological and other waste into the water of rivers, lakes, and ponds. As a baking corporation water is very important to production, the corporation may have the tendency of consuming too much water. It may affect the products prices because water is one of the main ingredients of bread and other pastries.

IV.Industry and Competitor Analysis i.)Porter’s 5 Forces 1.)Rivalry of competition Conclusion

Bolivar,Castillo Julie’s Franchise Corporation

Basis for conclusion

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Medi Medium um

Incr Increa easi sing ng numb number er of comp compet etit itor ors s – beca becaus use, e, Fren French ch Bake Baker, r, Goldilocks, Red ribbon and Pan de Manila, this bakeshops really marked their name in industry and Julies Bakeshop really having the hard time competing with this company. The said competitors already built such public image regards to baking and other pastry products. Consumers can switch brands easily- because of a lot of baking company in the market today there are high tendency for the consumers in switching brand easily. Industry demand declining – the purchase power is depreciating and the people decided to search for new alternatives Barriers to leaving the market/industry are high - a firm may be forced to continue competing in a market, as the costs of leaving may be higher than those incurred if they continue competing in the market and obstacles in the path of a firm which wants to leave a given market or industrial or industrial sector . These obstacles often cost the firm financially to leave the market and may prohibit it doing so. Products are perishable- Julie’s bakeshop offers a wide variety of  pastry products and it is a big factor for the company to keep their  good fresh and, it’s competitors are using ingredients or adding some preservatives to keep the bread and other pastry products fresh.

2.)Potential for New Entrants Conclusion

Bolivar,Castillo Julie’s Franchise Corporation

Basis for Conclusion

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Medi Medium um

Ther There e are are a lot lot of Baki Baking ng compa compani nies es in the the Phil Philip ippi pine nes, s, Julie Julie’s ’s bakeshop’s key competitors are the pioneering baking companies on the Philippines, it may be too tough for them to gain loyal customers. Strong customer loyalty- The product is loved by the customers because it is affordable and has a good taste. Strong brand preferences – for example if they don't find the ideal taste that they're looking for, they'll look for other bake shops that will satisfy what their taste buds. Lack of access to raw materials- the basic ingredients of bread are sugar, milk, flour and egg, and the prices of those ingredients rapidly had hit the global high and will continue to high in the next few weeks or months. It may be a big factor for Julie’s bakeshop to get cheaper  suppliers of those ingredients, and it would be a reason for them to double their products’ prices. Current competitors have strong marketing resources – because of  having a strong customer loyalty the competitors compe titors of Julie’s Bakeshop has the advantage of having strong marketing resources. And the competitors are already in the industry quite some time compare to Julie’s Bakeshop.

3.)Bargaining Power of Suppliers Conclusion

weak weak

Basis for conclusion

Consid Consideri ering ng if the brand brand of the suppli supplier er is strong strong and the role of quality quality and service of baking products. There are a lot of baking suppliers in the market, and it may be a very hard one for Julie’s Bakeshop to find suppliers that offers cheap cost and gives a good deal. Plus the industry is not the key customers to the suppliers. Because of the high price in sugar and flour the baking industry is trying to buy in large volume to lessen the cost. There is a high tendency that Julie’s Bakeshop will charge or pass the cost to the consumer resulting into having a costly pastry product, if the company can’t find a supplier which offers a good deal and price.

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4.) Bargaining power of Buyers Conclusion Medium

Basis for Conclusion

Julie’s Bakeshop has a large volume of competitors in the market, there are many sellers and at the same time there are dominant buyers. Filipinos love to eat bread everyday and some of the customers buy in volume. The products are undifferentiated compare to the prices of  its key competitors like goldilocks, red ribbon, pan de manila. The quality of breads and services of Julie’s bakeshop is just the same to its competitors, it’s just that Goldilocks and Red Ribbon are larger companies compared to Julie’s Bakeshop.

5.) Potential for Substitutes Conclusion

Bolivar,Castillo Julie’s Franchise Corporation

Basis for conclusion

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Medium In light of today’s economic status, people are searching for  less expensive products. Julie’s Bakeshop offers cheap breads and other pastry product with a high quality same to their competitors. There are a lot of baking companies in the market and for  Julie’s Bakeshop to keep its customers they must increase their market shares and keep the aggressiveness in the market. Julie’s Bakeshop has served customers all over the nation its distinctive brand of high quality, freshly baked breads. With more than 500 branches and outlets nationwide.

Summary of Porter’s Five Forces of Competition

The researcher performed the industry analysis using Porter’s five forces model. The researcher specifically analyzed the rivalry among competing firms, potential development of substitute products, and potential entry of new firm, bargaining power of  suppliers and bargaining power of consumers. Based on the analysis above the researcher concludes - The researcher concludes that the intensity of rivalry is MEDIUM - The researcher concludes that the threat of substitutes is MEDIUM - The researcher concludes that the threat of new entrants is MEDIUM - The researcher concludes that the bargaining power of consumer is MEDIUM - The researcher concludes that the bargaining power of suppliers is WEAK

ii.Competitor Analysis

#1 Competitor Goldilocks Goldilocks traces its roots to the collaboration and complementary talents of the women, whose collective love for good food fueled what has been transformed into the global enterprise today. In 1966, two sisters Milagros and Clarita, and their sister-in-law, Doris, decided to open a small bakeshop along to the Pasong Tamo Street, Makati. The Bolivar,Castillo Julie’s Franchise Corporation

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sisters have already been dabbling in the business for some time ---Milagros, by supplying chiffon slices to a number of Manila’s canteens, and Clarita, by baking and decorating cakes during special occasions in Bicol --- when they decided to take their  hobby one step further. A third sister, Maria Flor, suggested that they name the enterprise “Goldilocks“, after the character in a fairy tale, aiming to make it easier for  children and their mothers to remember its name; and because it suggested luck and prosperity. Over the years, Goldilocks did prosper, but not due to mere luck. The sisters’ dedication, hard work and business sensibilities led to a second branch just two years after the pioneering outlet began operating. From ten employees and two display stands, Goldilocks has become a global brand, expanding to over a total of 250 stores in the Philippines and overseas; and hiring thousands of local employees. The opening day total sales of P574 back in 1966 has multiplied thousand of times over, reaching a system-wide sales of P5.9 billion by the end of 2007. THE MARKET

For the most Filipinos, the Goldilocks fairytale has two versions: a golden-haired lass who encounters the three bears, and the bakeshop that has become an integral part of  the Filipino way of life. Now on its 42nd year, Goldilocks remains that company and more. At the forefront of its industry, the company enjoys a substantial lead over competitors in all aspects of  performance. National consumer surveys have consistently identified Goldilocks as the landslide winner in customer satisfaction indices such as Awareness Conversion (the ability to translate brand awareness to actual trial) and Share of Heart (the emotional approach to measuring preference). Indeed according to a 2005 study by AC Nielsen, the world’s leading market research and information firm, Goldilocks enjoys a total product awareness of 100 percent, with seven out of 10 respondents mentioning it first. More impressively, Goldilocks has managed a full conversion of awareness-to-trial, and has done exceedingly well in retaining trial to regular purchase. It enjoys a committed customer base, and continues Bolivar,Castillo Julie’s Franchise Corporation

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to attract even more. #2Competitor Red Ribbon From its store in Timog, Quezon City what started out as hobby-induced business in 1979, turned out to be a proudly Filipino-owned and professionally-run business network. Red Ribbon has grown to over 200 outlets all over the country and over 38 stores in the US with locations in California,Las Vegas, Arizona, New Jersey and New York. With its acquisition in October 2005 by Jollibee Foods Corporation, Red Ribbon entered a new phase in its company history. The company will soon become the biggest and fastest-growing bakeshop in the Philippines. Its mission is to bring the joy of eating to everyone through its great-tasting food and superior quality. Red Ribbon uses premium ingredients, such as real butter, high quality cake flour, and its unique Red Ribbon cream. Red Ribbon cakes have become a tradition, an integral part of every celebration - birthdays, christenings, anniversaries, and weddings. Owing to its heritage of bringing families and friends together through its delicious, elegantly-designed cakes and other specially prepared products, Red Ribbon captures this core benefit in a campaign that best summarizes what the company has stood for  over the years, "Whatever the celebration, it's more beautiful with a Red Ribbon." #3Competitor Gal’s Bakery 

In the 1960's, an enterprising man of modest means, means , Mr. Galileo Ancajas , dreamt of  owning his business. While working for a paper product company, he bought and sold bread to his co-workers to augment his income. Gifted with a keen business instinct, he saw the opportunity to set up his own bakery. With almost no technical know-how in running the business, he slowly learned the ropes, with a few hits and misses through hard work, determination and the support of his better half, Remedios. Thus, in 1965, the first GAL's BAKERY was established in Tipolo, Mandaue City, Cebu. Starting on a 30 sq.m. space with a handful of employees, the home spun venture soon became a flourishing business with the opening of more bakery outlets to cater to a wider, diverse market. With more stores to handle, family members soon gave their  share in helping the business thrive. A son-in law, Bill Gayatin, undertook the research Bolivar,Castillo Julie’s Franchise Corporation

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and development by coming up with tasty and reasonably priced baked products on a regular basis, further beefing up the product line-up of GAL'S BAKERY to as much as 108 baked products. The family would have been just content in keeping the GAL'S BAKERY network in Cebu and selected cities in Visayas and Mindanao. However,

events would soon unfold GAL'S was meant for more growth. A long-time friend of the family introduced GAL'S BAKERY to Lorna Tolentino and her  friends, who at that time, were looking for a new business venture to set up in Manila. The group went to Cebu to meet "Tito Gal", as Mr. Ancajas is fondly called, and immediately hit it off. It was then agreed that Ms. Tolentino and her friends would incorporate and the entity would become the Master Franchise Holder of  GAL'S BAKERY in the Luzon area. The group was formalized as Baley Ventures Corporation and actively composed of:

1) Bill & Arcy Gayatin

6) Miriam Pantig

2) Boogey Ancajas

7) Alex Cruz

3) Lorna Tolentino

8) Teresa Leung

4) Elena Orosa

9) Kristine Tiu

5) Lenore Yap

10) Chelo Rivera

A hands-on training was then completed by the group under Bill Gayatin's tutelage and with his help, they were able to set-up the first Metro Manila branch of GAL'S BAKERY in Santa Monica, Novaliches, Quezon City. The rest is as they say is history. From that first branch, which opened in November 15, 2001, it has grown to 32 Luzon branches at the end of the 2004, bringing br inging the network of  GAL'S BAKERY to 80 branches nationwide. With the tremendous growth of GAL'S BAKERY in Luzon, it did not escape the watchful eyes of entrepreneurs who wish to venture into the bakery business. Though the group received a good number of franchise inquiries starting on the first quarter of 2002, it was not until the later part of that year that the group grou p decided to expand and grow via v ia franchising. Today GAL'S BAKERY is open to franchising and targets 10 - 20 franchise stores opening per year.

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KEY COMPETITORS COMPETITOR Competitor#1 Goldilocks

Market Share(Number of  Branches)

REASONS FOR CHOOSING AS A BENCHMARK

Goldilocks is one of the most Filipino owned bakeshop in the Philippines. They established already established a good image in the Philippine Baking Industry. Goldilocks is the best performing bakeshop in the Filipino hearts and mind. With 100% total brand awareness and top-of-mind score of 71% per 2005 UAI study.

37% Competitor #2 Red Ribbon

Market Share(Number of  Branches) 30%

Red Ribbon is one of the successful Baking Company in the Philippines. Red Ribbon have the financial capability of competing in the Baking Industry. For Red Ribbon Bakeshop, the ingredients to success are no secret. Quality. Service. Value. Customer. Red Ribbon has even taken itself to a higher level of customer  service. Improvements are geared towards a more delightful dine-in experience with strict FSC (Food, Service, Cleanliness & Condition) compliance, better  take-out experience to ensure faster servicing time, and enhanced delivery service with a broader coverage. Your favorite cakes are just a phone call away with our  easy-to-recall Metro Manila Cakes by Delivery hotline number 8-77-77.

Competitor #3 Gal’s Bakeshop

Market Share(Number of  Branches) 6%

Because of its surviving skills in the Baking Industry Gal’s Bakeshop is still competing with its key competitor. With the tremendous growth of  GAL'S BAKERY in Luzon, it did not escape the watchful eyes of entrepreneurs who wish to venture into the bakery business.

iii.CRITICAL SUCCESS FACTORS CSF

#1 Financial Position What is the current financial capability of the company.

Bolivar,Castillo Julie’s Franchise Corporation

Importance weight (%)

Reasons for choosing CSF and the importance of weight

0.40

Because of having around 250 stores inside and outside the country Goldilocks made its way Page 19

#2 Technology

0.30

What are the latest on technology and how  it affects the company’s sales and  production.

#3 Customer Service How the company serve their  customers and how they build loyalty.

Bolivar,Castillo Julie’s Franchise Corporation

0.40

on top of the market in the Baking and fastfood industry. the company enjoys a substantial lead over competitors in all aspects of performance. National consumer  surveys have consistently identified Goldilocks as the landslide winner in customer satisfaction indices such as Awareness Conversion (the ability to translate brand awareness to actual trial) and Share of  Heart (the emotional approach to measuring preference). Using the latest technology in baking, goldilocks created a good products and services. They also have a very accessible internet and phone services. Their loyal customers can access it fast and very reliable. Goldilocks as one of the pioneering baking company in the country already established a good relationship in every Filipino, they always adopts the Filipino hospitality on their services. 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 Page 20

magmahal ng Pinoy!”, embracing a culture and tradition that goes beyond the name.

Innovation

0.30

New and improve product services and features

As a fast growing Baking Company Innovation is a big factor in maintaining market penetration. New product features may increase the number of  customers.

iv.)Your Firm’s rating per CSF (Julie’s Bakeshop) CSF #1 Financial Position

FIRM RATING (14) 3

What is the current  financial capability of the company.

#2 Technology

How the company  serve their customers and how they build  loyalty.

Bolivar,Castillo Julie’s Franchise Corporation

Since then, Julie’s Bakeshop has grown to become the largest bakery chain in the Philippines. By 1999, Julie’s counte counted d 210 branch branches es nation nationwi wide. de. Julie’ Julie’s s today today is a household name anchoring its success on superior taste and freshness of its products as well as its clean and convenient outlets. With more than 500 branches and outlets, 99% of which are franchised, Julie’s continues to strengthen its market reach from North Luzon to Mindanao.

3

The Julie’ Julie’s s baking baking techno technolog logy y progra program m highli highlight ghts s the Julie’s way of achieving product quality, service excellence and customer satisfaction.

4

Since 1981, Julie’s Bakeshop has served customers all over the nation its distinctive brand of high quality, freshly baked breads.

What are the latest on technology and how it  affects the company’s sales and production.

#3 Customer Service

REASONS FOR RATING

Page 21

#4 Innovation

3

New and improve product services and features

Innovation is one of the key factors that Juiles Bakeshop should concentrate into. There are a lot of potential entrants and they should know how to innovate their products and services to keep their  loyal customers.

v.)CPM Key Competitor #1 (Goldilocks) CSF

FIRM RATING (1-4)

REASONS FOR RATING

#1 Financial Position

4

Because of having around 250 stores inside and outside the country Goldilocks made its way on top of the market in the Baking and fastfood industry. the company enjoys a substantial lead over competitors in all aspects of performance. National consumer  surveys have consistently identified Goldilocks as the landslide winner in customer satisfaction indices such as Awareness Conversion (the ability to translate brand awareness to actual trial) and Share of Heart (the emotional approach to measuring preference). Using the latest technology in baking, goldilocks created a good products and services. They also have a very accessible internet and phone services. Their loyal customers can access it fast and very reliable.

What is the current  financial capability of  the company.

#2 Technology

3

What are the latest on technology and how it  affects the company’s sales and production.

#3 Customer  Service How the company  serve their  customers and how  they build loyalty.

Bolivar,Castillo Julie’s Franchise Corporation

4

Goldilocks as one of the pioneering baking company in the country already established a good relationship in every Filipino, they always adopts the Filipino hospitality on their services. 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

Page 22

beyond the name.

#4 Innovation

4

New and improve product services and features

One of the first 100 companies in the country to get GMP and SSOP (Good Manufacturing Practices and Standard Sanitation Operating Procedures) certifications. They innovate their products by acquiring the latest in baking industry, it resulted into a good sales over  the years.

Key Competitor #2

(Red Ribbon) CSF #1 Financial Position

FIRM RATING (14) 4

What is the current  financial capability  of the company.

#2 Technology What are the latest  on technology and  how it affects the company’s sales and production. #3 Customer  Service How the company  serve their  customers and  how they build  loyalty.

Bolivar,Castillo Julie’s Franchise Corporation

3

4

REASONS FOR RATING

With its acquisition in October 2005 by Jollibee Foods Corporation, Red Ribbon entered a new phase in its company history. The company will soon become the biggest and fastest-growing bakeshop in the Philippines. Its mission is to bring the joy of  eating to everyone through its great-tasting food and superior quality. Red Ribbon uses premium ingredients, such as real butter, high quality cake flour, and its unique Red Ribbon cream

For Red Ribbon Bakeshop, the ingredients to success are no secret. Quality. Service. Value. Customer. Red Ribbon has even taken itself to a higher level of customer service. Improvements are geared towards a more delightful dine-in experience with strict FSC (Food, Service, Cleanliness & Condition) compliance, better take-out experience to ensure faster servicing time, and enhanced delivery service with a broader coverage.

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#4 Innovation

4

New and improve product services and features

Red Ribbon dominates the baking industry through wide variety of choices in cakes and other pastry products, through innovating their  products they created a good results in fair  competition with its key competitors.

Key Competitor #3 (Gal’s Bakeshop) CSF #1 Financial Position

FIRM RATING (1-4)

REASONS FOR RATING

2

Because of having only 32 outlets in Luzon Gal’s bakeshop is having a tough time competing on its key competitors. Because of its financial capability Gal’s Bakeshop is having a hard time on getting the latest technologies on baking compare to it’s competitors. Because of its long stay in the baking industry, it’s loyal customers already built trust on their product and services. Gal’s bakeshop continues to reach out on every Filipino home. Through the years Gal’s bakeshop exerted too much efforts in innovating their  pastry products. Resulting into good sales every year.

What is the current financial capability of  the company.

#2 Technology

2

What are the latest on technology and how  it affects the company’s sales and  production.

#3 Customer Service

3

How the company serve their  customers and how they build loyalty.

#4 Innovation

3

New and improve product services and features

Conclusion

Based on CSF and CPM ratings Goldilokcs has a strong andvantage compared to Julie’s Bakeshop. Goldilock’s Competitive advantage had allow him to be the number one baking company in the Philippines. Julie’s Bakeshop’s current competitive position is middle ground, there are a lot of  baking companies in the industry and one of its key competitors have a very strong financial position, Julie’s bakeshop will have a tough one on sustaining its market stability. The Company needs strategies to address the stiff competition in the industry. Bolivar,Castillo Julie’s Franchise Corporation

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vi.) EFE Matrix

The researcher performed the industry analysis using the external factor evaluation matrix. The external factor evaluation matrix summarizes and evaluates the economic, social, cultural, demographic, environmental, technological and competitive information. The external factor evaluation matrix for the Julie’s Frachising Corp. is given below: Opportunities

Weight

Rating

Weighted Score

1.)Acquiring latest technology in baking

0.10

3

0.3

2.)Increasing number of  potential customers

0.15

3

0.45

3.)Advertising and Social Networking

0.10

2

0.2

4.)Market Penetration

0.15

3

0.45

1.)Brand Recognition

0.10

4

0.4

2.)Increasing Number of  Baking Company

0.10

3

0.3

3.)Strong Competitors in the 0.15 Industry

3

0.45

4.)High cost of baking ingredients(sugar,egg,flour)

0.15

4

0.6

Total:

1.00

Threats

3.15

As the results shows that Julie’s Bakeshop is responding above average (3.15) to the environment for exploiting opportunities and to overcome ove rcome threats. There a lot of strong competitors in the Baking industry and there a lot of increasing number of baking company, Julie’s Bakeshop should deal on how to prevent loss of  customer loyalty and should improve their brand awareness among the Filipino market.

Bolivar,Castillo Julie’s Franchise Corporation

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V.Company Analysis i. Vision/Mission Statements Old Mission Vision of Julie's Franchise Corpration Philosophy

Each individual in our organization is committed to the pursuit of Service Excellence and the highest level of Customer Satisfaction to any one that we do business with in the service of our God and our Country. Our Vision A Julies Bakeshop in every town .

We will be the most sought – after food freanchising company maintaining leadership in the neighborhood bakeshop market. Our Mission

Julie's Bakeshop is a major brand established as a family – oriented business and making its presence felt all over.We maintain very high quality standards at each Julie's Bakeshop offereng freshly baked products using only the finest ingredients and produced in a clean environment in full view of our customers. Criteria

Customers

No

N/A

Product or Services

Yes

We maintain very high quality standards at each Julie's Bakeshop Offering freshly baked products using only the finest ingredients and produced clean environment in fyull view of our customers.

Markets

Yes

We will be the most sought – after food freanchising company maintaining leadership in the neighborhood bakeshop market.

Bolivar,Castillo Julie’s Franchise Corporation

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Concern fir SGP

No

N/A

Technology

No

N/A

Philosophy

Yes

Each individual in our   organization is committed to the pursuit of Service Excellence and the highest level of Customer Satisfaction to any one that we do business with in the service of  our God and our Country.

Self - Concept

Yes

Julie's Bakeshop is a major   brand established as a family – oriented business and making its presence felt all over.

Public Image

No

N/A

Employees

No

N/A

ii.Revised Vision- Mission of Julie's Franchising Corporation Philosophy

Each individual in our organization is committed to the pursuit of Service Excellence and the highest level of Customer Satisfaction to any one that we do business with in the service of our God and our Country. Our Vision

We will be the most sought – after food freanchising company maintaining leadership in the neighborhood bakeshop market. Every Julie's bakeshop is assured of continous

Bolivar,Castillo Julie’s Franchise Corporation

Page 27

marketing campaign support from the bakery opening onwards to building superior  brand image. Our Mission

Julie's Bakeshop is a major brand established as a family – oriented business and making its presence felt all over. We maintain very high quality standards at each Julie's Bakeshop offereng freshly baked products using only the finest ingredients and produced in a clean environment in full view of our customers. All Julie's Bakeshop Franchisees and bakery staff should be equip with the knowledge about company's strict quality standards through intensive and thorough traning, seminar – workshops and hand – on product handling. The Julie's Baking technology program highlights the Julie's way of achieving product quality, service excellence and customer satisfaction. Julie's Bakeshop's succes is not only measured in the fulfillment of its endeavors as a value driven franchise business, but also in establishing harmonious relationships with the Filipino community. Julies bakeshop's achievement in its business and relationship with the Filipino people will be the measure of true growth. Julie's Bakeshop will not only bring its bread closer to the Filipino people but it will also enhance the capability of the franchisees towards growth, making them proud Julie's Breadwinners. Criteria

Customers

Yes

The Julie's Baking technology program highlights the Julie's way of achieving product quality, service excellence and customer satisfaction.

Product or Services

Yes

We maintain very high quality standards at each Julie's Bakeshop offereng freshly baked products using only the

Bolivar,Castillo Julie’s Franchise Corporation

Page 28

finest ingredients and produced in a clean environment in full view of our  customers. Markets

Yes

We will be the most sought – after food freanchising company maintaining leadership in the neighborhood bakeshop market

Concerns for SGP

Yes

Every Julie's bakeshop is assured of continous marketing campaign support form the bakery opening onwards to building superior  brand image. Julie's Bakeshop will not only brigns its bread closer to the Filipino people but it will also enhance the capability of the franchisees towards growth, making them proud Julie's Breadwinners.

Technology

Yes

The Julie's Baking technology program highlights the Julie's way of achieving product quality, service excellence and customer satisfaction

Philosophy

Yes

Each individual in our   organization is committed to the pursuit of Service

Bolivar,Castillo Julie’s Franchise Corporation

Page 29

Excellence and the highest level of Customer Satisfaction to any one that we do business with in the service of  our God and our Country. Self - Concept

Yes

Julie's Bakeshop is a major   brand established as a family – oriented business and making its presence felt all over.

Public Image

Yes

Julie's Bakeshop's succes is not only measured in the fulfillment of its endeavors as a value driven franchise business, but also in establishing harmonious relationships with the Filipino community.

Employees

Yes

All Julie's Bakeshop Franchisees and bakery staff  should be equip with the knowledge about company's strict quality standards through intensive and thorough traning, seminar – workshops and hand – on product handling.

Bolivar,Castillo Julie’s Franchise Corporation

Page 30

Recommendation on how will communicate the vision-mission to employees and other  stakehoklders: The additional proposed mission statements above clearly states the majority on how to improve their product line, services and values to the customers, practicing good citizenship and the need for competent employees in order to achieve quality service for  insuring public. The researcher decided to include respond to social sentiment because it will help to build company’s public image as being socially responsible through responsible management. The core values will be the guiding principle for the employees support the organization. iii.IFE MATRIX Strengths Key Internal Factors 1.)Strong Management team 2.)Good franchising assistance 3.)Good relationship with the Franchisee 4.)Good Relationship with the suppliers 5.)Corporate Culture

Weight 0.05

Rating 3

Wtd Score 0.15

0.10

4

0.4

0.05

3

0.15

0.10

3

0.3

0.10

3

0.3

Weight 0.20 0.15

Rating 4 4

Wtd Score 0.8 0.6

0.05 0.10

2 2

0.1 0.2

0.10

3

0.3

Weaknesses Key Internal factors 1.)No overseas market 2.)Limited access to international market 3.)Operating Losses 4.)Small number of  management team 5.)Small number of  suppliers Total:

1

3.3

VI. Strategy Formulation Bolivar,Castillo Julie’s Franchise Corporation

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The information gathered through the CPM, EFE and IFE matrices will be used to develop strategies for Julie’s Bakeshop. SWOT Matrix, SPACE, InternalExternal (IE) matrix, Grand Strategy, Summary of  Strategies and Quantitative Strategic Planning Matrix (QSPM) will be utilized in strategy formulation. formulation. 1.)SWOT MATRIX Strengths-S

Weaknesses-W

Advertising

Employee Training

Job Specialization

Production Speed

Pricing

Limited Branches in

Brand Name

Operation Store Size

Opportunities-O

SO Strategies

WO Strategies

Advertising

-Being specific and having a

-Making the store look more

Health Consciousness

concentration with what the

customer friendly to attract

“Rice Subsidy”

products they wanted to

more customers, and giving

offer to the public to satisfy

enough benefits to the

their long for a good and

employees to satisfy their 

healthy sandwich as a

needs for a better 

substitute for rice.

production in providing

Threats-T

ST Strategies

quality and healthy products WT Strategies

Newbie in the Market

- Empowering the Brand

-Attract more investors to

Small Market Share

name through massive

invest to the company to

Limited Branches in

advertisements in making a

make the financial power 

Operation

good and health conscious

more stable and to be able

Competition

products in just a cheap

to expand the business and

Food Preferences (Trend)

price, affordable by the

be able to offer much more

Bolivar,Castillo Julie’s Franchise Corporation

Page 32

mass

of the products available for   sale.

Competition Food Preferences (Trend)

Key Key Inte Intern rnal al Fact Facto or Unique Product Offering

Key Key Exte Extern rnal al Facto actorr Government proposal for 

Resu Result ltan antt Stra Strate teg gy Acquire Customer Loyalty and

(Strengths)

a food

potential customers

Store Popularity

subsidy(Opportunity) Entry of other companies

Massive production of product

(Weaknesses)

(Opportunity)

to top them all, and take the

Strong R&D

Acquiring more customer 

lead Offering of more products for 

(Opportunities)

friendly products and

sale to customers and

having better 

producing it with cheaper cost

supplies(Threat) Low Employee

Employee

Develop a new employee work-

Involvement

Aggressiveness for 

life package for their benefit

(Weaknesses)

secured work(Threat)

-

In order order for the business business to succeed succeed more, more, the the company company should should be be able to know know exactly the strengths of the business and know the opportunities available for  them, and by the time they are to execute everything for the good of the

Bolivar,Castillo Julie’s Franchise Corporation

Page 33

business, the weaknesses and the threats visible for the business should be avoided. 2.) Space Matrix Internal Strategic Position Financial Strength (FS)

External Strategic Position Environmental Stability (ES)

Return on investment=3

Technological changes=-3

Leverage=2

Rate of inflation=-4

Liquidity=3

Demand variability=-3

Working capital=4

Price range of competing products=-4

Cash flow=3

Competitive pressure=-4 Price elasticity of demand=-3 Ease of exit from market =-4 Risk involved in business=-2 Barriers to entry=-3

Internal Strategic Position

External Strategic Position

Competitive Advantage (CA)

Industry Strength (IS)

Market share=-4

Growth potential=2

Product quality=-3

Profit potential=-2

Product life cycle=-4

Financial stability=1

Customer loyalty=-4

Technological know-how=3

Competition’s capacity utilization=-5

Resource utilization=2

Technological know-how=-4

Ease of entry into market=2

Control over suppliers & distributors=-5

Productivity, capacity utilization=3

Bolivar,Castillo Julie’s Franchise Corporation

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Julies bakeshop is a financially strong firm that has achieved major competitive advantages in growing and stable industry.

3.) IE Matrix

Bolivar,Castillo Julie’s Franchise Corporation

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Based on the on the IE Matrix Julie’s Bakeshop falls on cell 1 grow and build which means that the following strategies are recommended: Market Penetration Market Development Product Development Backward Integration Forward Integration Horizontal Integration

Bolivar,Castillo Julie’s Franchise Corporation

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4.) Grand Strategy Matrix

Another alternative tool in formulating strategies is the GSM. It has al so fo ur quadrants just just like the SPACE SPACE Matrix but GSM is base of two ev al ua tive ti ve di mens me ns io ns : compet competiti itive ve positi position on and market market growth growth.Using .Using the gran d strategy matrix, firms are grouped into four quadrants depending on the firms competitive competitive position and the industry’s growth.

Looking at the GSM, Julies Bakeshop is located in the quadrant I. They are in an excellent strategicp o s i t i o n . T h e p e r f e c t s t r a t e g i e s a r e m a r k e t p e n e t r a t i o n , m a r k e t development, andproduct development. Being in the quadrant I, they can afford to take advantage of external Bolivar,Castillo Julie’s Franchise Corporation

Page 37

opportunities in several areas. They can take risks aggressively w h e n nece necess ssar ary. y.

5.) BCG MATRIX

Having an Industry Growth Rate of 8.5% and a Market Share Share of 27%, Julies Bakeshop falls on Question Marks, which means Low relative market share – compete in high-growth industry 

Cash needs are high



Case generation is low



Decision to strengthen (intensive strategies) or divest

6.) QSPM

Bolivar,Castillo Julie’s Franchise Corporation

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Strategic Alternatives 1.)Improve Franchising Program Key Factors Opportunities 1.)Acquiring latest technology in baking 2.)Increasing number of potential customers 3.)Advertising and Social Networking 4.)Market Penetration Threats 1.)Brand Recognition 2.)Increasing Number of Baking Company 3.)Strong Competitors in the Industry 4.)High cost of baking ingredients(sugar,egg,flour) Tota Total: l: Strengths 1.)Strong Management team 2.)Good franchising assistance 3.)Good relationship with the Franchisee 4.)Good Relationship with the suppliers 5.)Corporate Culture Weaknesses 1.)No overseas market 2.)Limited access to international market 3.)Operating Losses 4.)Small number of management team 5.)Small number of suppliers Total:

Weight

AS

TAS

2.)Build more stores in Visayas and Mindanao AS TAS

0.10

4

0.4

4

.4

0.15

3

0.45

3

0.45

0.10 0.15

3 3

.3 .45

4 3

.4 .45

0.10 0.10

1

0.1

4

.4

0.15 0.15

3 4

.45 0.6

3

.45

4

0.2

2 4

0.10 .4

4

0.2

3

.3

4 4 3

0.2

1.00 1.00

0.05 0.10 0.05 0.10 0.10 0.20 0.15 0.05 0.10 0.10 1.00

4

0.2

3

0.3 3.65

0.3 3.85

VII. Strategy Implementation Bolivar,Castillo Julie’s Franchise Corporation

Page 39

i.Recommended revised Mission and Vision Statements

Philosophy

Each individual in our organization is committed to the pursuit of Service Excellence and the highest level of Customer Satisfaction to any one that we do business with in the service of our God and our Country. Our Vision

We will be the most sought – after food freanchising company maintaining leadership in the neighborhood bakeshop market. Every Julie's bakeshop is assured of continous marketing campaign support from the bakery opening onwards to building superior  brand image. Our Mission

Julie's Bakeshop is a major brand established as a family – oriented business and making its presence felt all over. We maintain very high quality standards at each Julie's Bakeshop offereng freshly baked products using only the finest ingredients and produced in a clean environment in full view of our customers. All Julie's Bakeshop Franchisees and bakery staff should be equip with the knowledge about company's strict quality standards through intensive and thorough traning, seminar – workshops and hand – on product handling. The Julie's Baking technology program highlights the Julie's way of achieving product quality, service excellence and customer satisfaction. Julie's Bakeshop's succes is not only measured in the fulfillment of its endeavors as a value driven franchise business, but also in establishing harmonious relationships with the Filipino community. Julies bakeshop's achievement in its business and relationship with the Filipino people will be the measure of true growth. Julie's Bakeshop will not only bring its bread closer to the Filipino people but it will also enhance the capability of the franchisees towards growth, making them proud Julie's Breadwinners. ii.Recommended Revised Strategic and Financial Objectives Bolivar,Castillo Julie’s Franchise Corporation

Page 40

From the Market analysis Goldilocks and Red Ribbon are ahead of Julie’s Bakeshop while Gal’s Bakery is in the lower rate. Goldilokcs and Red Ribbon are very dominant in the baking industry. However, given that the market followers have equal position Julie’s bakeshop can best succeed if it can become the strong number 2 in position next to Goldilocks in the next 3-5 years. The researcher established specific business strategy for Julie’s franchising Corp. The following strategies are both strategic and financial in nature: 1.)Increase Brand Awareness 2.)Improve Franchising Assistance 3.)Expand Stores and build stores inside malls 4.)Build more stores in Visayas and Mindanao

5.) Increase its distribution and promotion of products and services iii. Recommended Strategies

In this section, the researcher established specific business strategies for each business objective based on the results of the strategy formulation in the previous chapter. In summary, the recommended business strategies from the strategy formulation chapter are market penetration, product development and market development. The strategic objectives along with the corresponding business strategies are given as follows: 1.)Market Development

Julie’s Bakeshop as a baking company should expand its business; its key competitors are located almost everywhere except in the rural parts of the country. Julie’s Bakeshop should also build stores inside the mall to gain its competitive advantage among its competitors like Red Ribbon and goldilocks. Managers take actions like targeting promotions, opening sales offices and creating alliances to operationalize a market development strategy. They should also need to improve its franchising programs and assistance so they can expand stores in Visayas and Mindanao. 2.)Product Development Bolivar,Castillo Julie’s Franchise Corporation

Page 41

Julie’s Bakeshop as one of the oldest in Philippine Baking market should innovate its pastry products to cope up with the consumer rapid change on taste and to the competition among its key competitors, through new-product new-prod uct development m the company sown research -and-development department By new products we mean original products product improvements product modifications and new brands that the firm develops through its own research-and-development efforts. 3.)Market Penetration

In light of Julie’s Bakeshop’s market position it should increase its market share through Increasing its distribution and promotion of products and services, more expenditure in marketing and advertising activities. This strategy adopted by the firms to raise their sales revenue without making changes in the products or services. The other  dimension of market penetration is the existing market which means firm already offering products or services to the customer but can forecast that the existing e xisting sales figures can be improved by working on marketing penetration strategy. iv. Recommended organizational Strategies

After analyzing the key internal factors of Julie’s Bakeshop the following strategies are highly recommended: 1.)Should build strong management team.

A key element to entrepreneurial success is choosing the right people to be part of your management team. 2.) Should have Good Franchising Assistance

Franchisors provide financing assistance either directly or indirectly. 3.)Build Good relationship with the Franchisee

On – going support from the franchisor and fellow franchisees. Julie’s Franchising program should keep its continuous support to its franchisee.

v.Financial Projections and Overall Evaluation of the strategies Bolivar,Castillo Julie’s Franchise Corporation

Page 42

The researcher established a forecast of the Net Income of Julie’s Bakeshop . The period covered is 2008-2012. The financial projections below was based on the strategic objectives and proposed strategies on the different aspects of the business in the previous chapters. Year Net Income

2008(actual) 2009(actual) 303,566 208,463.8

Increase or 

2010 335,413.0

2011 542,691.8

2012 2,209,947

-99,103

126,950

207,278.8

1,667,255.2

-145%

62.15%

61%

24%

decrease %of  increase or  decrease Conclusion: The strategies recommended by the researcher are projected to gradually

enable Julie’s Bakeshop to achieves it strategic objectives of growing the net income to P2,209,947 exceeding the net income of the previous years. vi.Departamental Programs

In this section the researcher established different programs and step by step action that will be undertaken to progress the implementation of the strategic plan. The action is discussed based on its objective and strategy it supports. The action plan for  Julie’s Bakeshop is given as follows: 1.)Increase Brand Awareness Strat Strateg egic ic Prog Program ram

Use the Internet to

Expec Expecte ted d Outpu Outputt

Gain Gain popu popula lari rity ty

Time Time Tabl Table e

Perso Persons ns/u /uni nitt

Cont Contin inuo uous us

Responsible Mark Market etin ing g

develop product

Department

popularity Develop Business

It will gain exposure

Status with public

in local press or 

Department

relations and press

publication.

Public Relation

Bolivar,Castillo Julie’s Franchise Corporation

Continuous

Marketing

Page 43

relations Rent Billboard along This will associate Highways

Continuous

the brand with a

Officer/s Marketing Department

specific product 2.)Improve Franchising Assistance Strat Strateg egic ic Prog Program ram

Expec Expecte ted d Outpu Outputt

Time Time Tabl Table e

Perso Persons ns/u /uni nitt

Continuous

Responsible Management/

Franchising Officers Management

Positive

Increase potential

Reinforcement Monthly Evaluation

franchisee Will oversee the

Monthly for the next

of the new

growth of the

2 years

Franchise for the

business

next 2 years The role of 

effective franchisee-

Mentoring

support

Continuous

Management

3.)Expand Stores and Build Stores inside malls Strat Strateg egic ic Prog Program ram

Expec Expecte ted d Outpu Outputt

Time Time Tabl Table e

Perso Persons ns/u /uni nitt

Quarterly

Responsible Management,

Increase the

Will assess how

Business Capacity

much money will be

Marketing,

to produce the

needed to expand

Financing

product or service Assess whether the

the business Will assess how

First months of the

Management,

current number of 

employees to

strategy

Human resource

employees can

employ, will lessen

implementation

handle the new

the cost of the

business load

company.

Target other 

Will serve different

markets. Look for larger 

markets Will serve larger

Bolivar,Castillo Julie’s Franchise Corporation

Annually

Marketing ,

Annually

Management All department Page 44

premises if needed.

market, and costumers

4.) Build more stores in Visayas and Mindanao Strat Strateg egic ic Prog Program ram

Expec Expecte ted d Outpu Outputt

Build Stores in

Will serve a larger 

Visayas and

market

Time Time Tabl Table e

Perso Persons ns/u /uni nitt

Quarterly

Responsible All departments

Mindanao 5.) Increase its distribution and promotion of products and services Strategic Program

Advertise

Expected Output

Increase in profit

(tv,radio,newspapers,etc) and sales Sales promotion (Could increase in sales involve using money off 

Time table

Persons/Unit

Monthly

resposible Marketing

Monthly

Department Management,

short term

Marketing

coupons or special offers.) Set pricing objectives

Departmetn It will maximize

Monthly

Accounting

company’s profit

Department,

and revenue and

Management

will stabilize the price of the products

VII. Strategy Evaluation, Monitoring and Control

In this section the researcher prepare a Balance Scorecard as strategy evaluation tool, It will allow the organization to evaluate from our perspectives: Financial Performance, Customer Knowledge, Internal Business processes and Learning and Growth.

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Proposed

Key Result

Performance

Strategy Market

Areas Target different

Indicators Establishments

development

market (malls,

of the said

Time Time Fram Frame e

2 to 3 years

Depa Depart rtme ment nt in Change Mark arketing, ng,

Finance,

establishments) areas.

Production and

Market

Increase the

Result of the

Operations Marketing,

Penetration

market share in

Market share

2 to 3 yrs

Management,

the Baking

Production and

Product

Industry Innovation in

Operations Mark Market eting ing,,

development

Baking

Production and

products and

Operation

Prof Profit it and and sales sales

2 t0 3 year years s

Baking Equipments

Balanced Scorecard for Julie’s Bakeshop

Area of Objectives

Scorecard

Bolivar,Castillo Julie’s Franchise Corporation

Measurement

Timetable

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Financial

Improve Productivity Increase Increase by by 25 – 30 % 2 to to 3 years

Perspective

Long Term Share Holder Value Return of  Investment Customers

Increase customers

satisfaction

20-30 %

Internal Process

Development of 

Increase of sales 30 –

(Marketing,

new baking

40 %

Management,

technologies and

Operations)

Pastry Product,

Customers

2 to 3 years

2 to 3 years

Integrated Marketing Communications, Management Learning and

recognition Grow Human capital Increase in production

Growth

Build Organizational

2 to 3 years

and sales 20 30 %

Capital

Reference:

Fred R. David. Strategic Management: Concepts and Cases, 11 th Edition. Fred, David. Strategic Management. 7th edition. 2009. Kotler, Philip & Keller, Kevin. Marketing Management. 4th Edition. www.scribd.com http://www.planware.org/businessstrategies.htm Bolivar,Castillo Julie’s Franchise Corporation

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http://www.entrepreneur.com/management/growingyourbusiness/article70660.html www.juliesbakeshop.com.ph www.goldilocks.com.ph www.gal’sbakery.com.ph www.sec.gov.ph www.redribbon.com.ph

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