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Lower expenses help Jollibee survive economic crisis
Photo from Entrepreneur Philippine Magazine
Jun 25, 2010
Being conservative helped Jollibee Foods Corp. to post profits last year despite the global economic crisis, said Tony Tan Caktiong, JFC chairman and chief executive officer. [Read Jollibee group reports robust earnings growth in the first quarter here]
During the annual stockholders meeting of the company, Tan Caktiong told shareholders that the company will remain “vigilant and proactive” given the uncertain global economic condition. [Read about the faster-than-expected growth of the economy in the first quarter here]
“First, we instructed our organization to be conservative in our capital investments. We advised our people to be more selective in new store opening and to maximize our commissary utilization before we added capacity,” Tan Caktiong said.
The same guidelines, dubbed as ‘cautious optimism,’ according to Tan Caktiong, will still be observed until the economic situation improves. [Read about the drivers of economic growth in the first quarter here]
Another guideline imposed was limiting the growth of the company’s marketing spending, maintaining the marketing expenditures at the same level as in 2008. [Learn how to promote your business for less than P200 only here]
JFC also emphasized on cash flow generation, focusing on the management of their working capital to create a stronger balance sheet. [See easy ways to keep your business liquid at all times here]
“And last, we asked our people to control overheads, and limited growth in spending to where it is only necessary,” Tan Caktiong said.
In 2009, JFC posted a P2.7 billion net income, a 14.9-percent improvement over the previous year’s.
“These business results were strong, considering the stressed and changing economic conditions in markets where we do business. Our products have become better, our brands stronger, and our organization more capable,” Tan Caktiong said. “Our financial balance sheet is a potent power for future major investments.”
In the first quarter of 2010, JFC reported that its net income rose 23 percent to P691 million on higher sales.
As of March 31, 2010, JFC was operating a total of 1,570 stores in the Philippines: Jollibee, 692; Chowking, 402; Greenwich, 227; Red Ribbon, 211; Delifrance, 24; and Manong Pepe, 14.
In foreign operations, the group had 334 stores: In China - Yonghe King, 165; Hong Zhuang Yuan 46; in the US - Jollibee, 24; Red Ribbon, 35: Chowking, 17; in the Middle East - Jollibee, five; Chowking, 15; in Vietnam, Jollibee, 14; in Brunei, Jollibee, 11 and in other parts of Asia, two for a total of 1,904 stores worldwide. [See things to do and not do in expanding your business overseas here] - Carlo P. Mallo
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