News: DLSU study finds trade secrets of Asian agro-food companies -
06 Apr 2008
Research done by Dr. Louie Divinagracia of the De La Salle Professorial School-Ramon V. del Rosario Graduate School of Business has unraveled the key strategies behind the success of smaller agrofood companies in the Asia-Pacific rim in competing with larger multinational corporations.
The research paper, entitled "Challenges of Growing Agro-food Enterprises in Asia-Pacific Markets," was presented during the recent Silver Anniversary celebration of the school’s Doctor of Business Administration Program.Divinagracia’s paper was also presented last month to both the Asian Institute of Management and the University of Hawaii.
Citing the phenomenal success of Jollibee Foods Corp. owned by Filipino-Chinese fast-food tycoon Tony Tan Caktiong, Divinagracia noted that smaller agro-food companies in the region implemented "adaptation strategies" to thrive and grow in the highly competitive global food industry.
The first strategy, Divinagracia said, is to "challenge the leader in its home country and focusing on culturally-familiar market segments."
He recalled that Jollibee, then a small domestic restaurant with only nine branches, "fortified its position" and challenged the much bigger US-based hamburger giant MacDonald’s, then the Philippines’ most popular fast-food chain.Jollibee’s strategy involved three key points: reinvent hamburgers to suit local tastes, internationalize the standards of homegrown fast-food outlets, and localize the menu by serving burgers with rice.
According to Divinagracia, Jollibee’s growth was so remarkable that it has now over 500 branches nationwide and overseas, about twice the number of MacDonald’s branches in its home territory. Jollibee has also penetrated the international fast-food markets, notably the US West Coast, Southern China, Indonesia and Vietnam.
The second strategy is to "continuously improve and create food products to meet the growing demand of the mass market and bottom-of-the-pyramid customers." To drive home his point, the professor used the experience of PT Mayora Indah Tbk, manufacturer of Indonesia’s leading snack foods and candies. The company’s competitive edge mainly came from product development, brand management and supply chain management.
Divinagracia entitled the third key strategy as "Pursuing Multiple Adaptation: Product Invention and Promotion Adaptation." For this purpose, the professor used as example Nissin Food of Japan which he said was associated with quality, affordability, and convenience, as well as availability in retail food outlets in Mexico, Brazil, Germany and the US. "The company continues to keep in pace with food technologies that targets the on-the-go working class with the addition of microwaveable meals," he said.