CHAPTER 1 Introduction (Opening Statement) Company Profile “Chic-Boy™” – A play of words for “Chicken” and “Baboy” (pork), two of the products we proudly offer. Filipinos loves to eat and find reasons to celebrate at almost any occasion that is why in every gathering chicken and pork are always on the menu. Chic-Boy is the perfect place to have an affordable yet delicious and fulfilling meal with family, colleagues and barkadas.
Before the existence of Chicboy, Francis A. Juan, the founder that before earned in a simple buy & sell of rice put up a business in Block 8 Lot 8 Tomas Morato Avenue Corner Scout Borromeo Street south Triangle Quezon City, Metro Manila known as Pier One Bar and Restaurant. To take on his new challenge, Francis went to Cebu in 2008 and introduced lechon (roasted pig) and lechon manok (roasted chicken). Chicboy is a new trademark and business model of Pier One Bar Holdings Corporation, the company behind the successful Pier One Bar and Grill Restaurant chain in the Philippines. Having first tried the delicious and tasty lechon liempo in Cebu and the Chicken Inasal of Bacolod, Pier One Bar and Grill Holdings Corporation saw its business potential and the opportunity to tap into the lechon manok, lechon liempo and chicken inasal industry and therefore, brought the secret recipe to manila. In September 2008, the first outlet opened in Marikina City. Chicboy opened its first Dine-In store last May 2010 and began offering its Dine-In store concept for franchise. As of 17 March 2011, Chicboy has grown into a total of 12 dine-in stores, 11 units of which are franchises. 21 more franchises are under construction.
MISSION To offer superior tasting grilled chicken and pork Filipino dishes at value for money and provide excellent dining experience through fast and friendly customer service. VISION
To be the country’s preferred fast casual Filipino grilled restaurant by; - continuously innovating our product line and consistently providing quality products; - providing a welcoming ambiance through clean, bright and well- maintained stores and efficient and cheerful employees;
- reaching out to Filipinos in major malls, key cities, business districts across the nation; - providing jobs to Filipinos wherever we are.
VALUES
• We value that the core of all our dealings now and in the future must remain with integrity.
• We pledge to uphold the highest ethical and professional standards coupled with openness and transparency.
• We accept responsibility for our actions and any consequences thereof.
• We enable, encourage and exhibit an example of clear communication with and from all members of our organization, especially with our patrons.
• We will continue to model and demand excellence of ourselves in all areas.
• We will provide ways to communicate and continue to remain open and receptive of new ideas while striving to perfect our services and products.
• We will foster an environment of respect towards our customers, franchisees, employees, suppliers and each other.
Environmental Commitment Chic-Boy is committed to protecting the environment through responsible operating practices. Our commitment to environmentally-friendly operating practices is demonstrated through the following objectives:
Complying with or exceeding all applicable governmental regulations
Implementing waste management practices
Converting biodegradable waste to Bio-gas
Promoting waste reduction and recycling by converting grease trap fats, oils and grease (FOG's) to biodiesel to fuel our delivery trucks, steam boilers and generator sets Making environmentally conscious purchasing decisions
Goals and Objectives 1st Objective: conduct a soft-opening of the franchise by December 2011 and to be fully operational by the start of year 2012
Our specific objectives are the following:
● To conduct daily inspections on the floor and restaurant equipment ● Strictly implement the specifications set by Chic-boy and the Food and Drug Administration (FDA). ● To hire prospective employees with the ample amount of experience every 6 months. ● To review employee skills and knowledge of Chic-boy operating procedures every 2 months. ● To strictly comply with the requirements set by Chic-boy through punctual payment of royalty fees and other related payables. ● To achieve an ROI in a span of two years. ● To establish a minimum of 5 branches by 2020.
Definition of the Market Fast Food Restaurant (aka Quick Service Restaurant) - limited menu establishment which lends itself to production line techniques of producing food that is serve packaged for immediate consumption, on or off the restaurant premises. (Franchise Direct.com, n.d., para. 3).
Fast Food Industry - can be assessed as overly saturated because of the countless establishments competing for dominance.
● Established brands make it hard for prospective entrepreneurs to enter the industry with a new product or service ● Chic-boy provides a new concept which may tap the unexplored portion of the fast food industry as it still holds some potential growth and success for newcomers. Its concept integrates the best qualities of the leading fast food chains today The franchise will target the B, C, and D market of the Philippine population. ● Students and employees with a strict budget for food but still crave for rich-tasting Filipino food that will fill their bellies to the rim will find what they are looking for in Chicboy. A budget of around PhP 50 to PhP 100 will surely satisfy one's hunger
Currently, Chic-boy has no significant share in the fast food market but it is slowly gaining foothold with 4 take-out stores and 10 dine-in stores, 9 of which are franchises. ● 10 more are under construction all over Metro Manila, and 4 of these will be serving 24/7. GENERAL INFORMATION Address: 1402 Centerpoint Building, Julia Vargas Avenue corner Garnet Road, Ortigas Business Center, Pasig City 1600, Philippines Telephone no.: 63 2 6584564 63 2 6311215 Facsimile no.: 63 2 8093374 Email Add:
[email protected]
CHAPTER II INDUSTRY AND FIRMS ENVIRONMENT (OPENING STATEMENT) External Environment Economic
Interest Rate
Philippines central bank kept its overnight borrowing rate on hold at 4 percent for the seventh consecutive time on August 13th, as widely expected. Policymakers expect the inflation rate to remain within target over the rest of the policy horizon. Interest Rate in Philippines averaged 9.53 percent from 1985 until 2015, reaching an all time high of 56.60 percent in December of 1990 and a
record low of 3.50 percent in September of 2012. Interest Rate in Philippines is reported by the Bangko Sentral ng Pilipinas.
Money Supply
The Chic-boy Franchise has a lot of perks. These include a training program for you and your staff, an accredited architect that will design the restaurant for you, pre-opening assistance from the main branch and having a return of investment within three years. Franchising fee is 950,000 pesos with a possible total investment of 5 million – 6 million pesos depending on the store size, a projected return of investment within 2 – 2.5 years and a franchise term of 7 years, a royalty fee of 5% for gross sales and 2% for advertising gross sales.
Inflation Rate
The inflation rate in Philippines was recorded at 0.80 percent in July of 2015. Inflation Rate in Philippines averaged 8.76 percent from 1958 until 2015, reaching an all time high of 62.80 percent in September of 1984 and a record low of -2.10 percent in January of 1959. Inflation Rate in Philippines is reported by the National Statistics Office of Philippines.
Unemployment Level
Unemployment Rate in Philippines averaged 8.85 percent from 1994 until 2015, reaching an all time high of 13.90 percent in the first quarter of 2000 and a record low of 6 percent in the fourth quarter of 2014. Unemployment Rate in Philippines is reported by the National Statistics Office of Philippines.
Devaluation/ Revaluation
For every 1 dollar is equivalent to 45.79 peso which is very important in adjusting our price if ever we have restaurant in states.
Energy availability and Cost
Energy typically falls in the top site-selection factors for any project. The greater a project’s consumption of energy, the more important the availability and total cost of energy becomes in the final selection decision. The respondents to Area Development’s 26th Annual Corporate Survey ranked energy availability and costs seventh among the factors, with 84. 8 percent considering this factor as “very important” or “important.
Technological
Focus on Technological Effort
Due to innovation our company use machinery which may help us to fasten our production and to become more productive.
New Product
Chic-boy does not currently have a new product but it focuses on offering Lechon or grilled type food, pinoy favorite delicacies.
Infrastructure
Decentralizing its organization into 4 autonomous business units, that corresponded to thecountry’s major geographical markets. This enables the Head Office to focus its operations on the key marketing, finance, restaurant systems and engineering functions and act as a support andadvice to the RBUs.
Internet Availability
This helps us to promote our product and update them for the incoming events that we offer.
Telecommunication
Through telecommunication our consumer might contact us for the delivery of our product not only that but also to update us on what is happening or the activity in our business.
Political Legal The purchasing power of the Filipinos is at its low point.
Socio Cultural
Lifestyle Changes
Some of our present consumer always eat in modern restaurant being curios on Filipino ambiance that we offer they try to eat in our own restaurant.
Growth rate of population
Through the growth rate of population we gain more valuable consumer that might help our organization to earn profit more consumer more profit.
Age distribution of population
We try to do an undifferentiated marketing which we don’t segment our consumer to maximize earning.
Six Forces Factor
Threat of New Entrants
Threat of New Entrants is High when: Economic of Scale Product differentiation Capital Requirements Switching costs Ease of access to distribution channels Cost disadvantages Government policies creating barrier
High
Medium
Low
✔ ✔ ✔ ✔ ✔ ✔ ✔
The threat of new entrants to the industry is considered low to medium. New entrants to the fast-food industry would need to face high entry barriers. Besides having economies of scales, high capital requirements when opening a fast-food chain as well as products that differ from the rest of the competition, the new entrants would also have to compete against the high standards as well as the already present loyal customer base on our company Chic-boy has set in the industry.
Bargaining Power of Suppliers
Bargaining Power Of Suppliers are High when: Concentration of suppliers relative to buyer industry Availability of substitute products Importance of customers to suppliers Differentiation of the suppliers products and services Switching cost of buyer Threat of forward integration by the supplier
High
Medium
Low
✔
✔ ✔
✔
✔ ✔
The bargaining powers of suppliers are low. The availability of raw materials for the fastfood industry is readily available not only locally, but available from neighboring countries as well.
Bargaining Power of Buyers
Bargaining Power of Buyers are High when: Concentration of buyers relative to suppliers Switching costs Product differentiation of suppliers Threat of backward integration of buyers Extent of buyer’s profile
High
Medium
Low
✔
✔ ✔
✔ ✔
Importance of suppliers input to quality of buyer’s final product
✔
The bargaining power of buyers is medium-high. With the numerous available choices of fast-food in Philippines buyers are able to choose which restaurants they would want to patronize. Switching from eating at Chic-boy to Binalot Fiesta or any fast food chain has little impact on the buyers’ wallet and this poses one of the main blocks in determining if the firm is able to earn above-average returns.
Threat of Substitute Products
Threat of Substitute Products are high when: Differentiation of Substitute Product Rate of improvement in price performance relationship of substitute products
High
Medium
Low
✔ ✔
The threat of substitute products is considered to be medium-high. Products from local street food can be considered a major substitute, as well as food from its direct competitors in the industry.
Intensity of Rivalry among Competitors
Intensity of Rivalry is high when:
High
Number of Competitors Industry growth rate
✔
Medium
✔
Fixed cost
✔
Storage cost
✔
Product
✔
Low
differentiation ✔
Switching costs ✔
Exit barriers Strategic stakes
✔
The intensity of rivalry among competitors is considered to be medium-high. The fastfood industry can be described as a lucrative segment with high profitability. Within the Philippines, there are already other fast-food players competing with Chic-boy. Is Chic-boy New Entry or has been in the industry for a long time? Chic-boy is a new entrant on the industry. Chic-boy provides a new concept which may tap the unexplored portion of the fast food industry as it still holds some potential growth and success for newcomers. Its concept integrates the best qualities of the leading fast food chains today
Supplier of raw materials Suppliers Premier Farms Agro-Processing Corporation Renn Bee Farm (Bulacan) Supplier of Chickens Supplier of Vegetables (if the is a limited supply, they outsoure in local markets) Kai Anya Farm (Binan, Laguna) Supplier of Pork Monterey (Makati) BBQ and Liempo Magnolia Supplier of Chickens (if out of stock in Tanauan Batangas). They also buy frozen fish & eggs in SNR & Baclaran, sacks of rice in Bulacan, Batangas and Nueva Ecija locally/week and intentionally in Vietnam, Japan, and India every 3-5 months and buy additional recipes in Puregold & SM.
Is the firm Consolodated or Fragmanted? Our firm is consolodated because since from our entrance until now there are two major firm in food industry who typically dominate the fast food industry which is Jolibee and Mcdonald this two almost eat the food industry and try to take down new entrants one by one. As for our firm it is considered as a defender.
Internal Environment
