CEBU PACIFIC- JOHN GOKONGWEI

Biography:

THE EARLY YEARS: 1927-1940

◦ John Robinson L. Gokongwei, Jr. was born on August 11, 1926 in Gulangyu, Xiamen, Fujian
Province, China. His parents are Juanita Marquez Lim and John Gokongwei Sr. He’s the eldest
among six children.
◦ For his thirteen years, he lived a life of privilege. He lived in a big house and studied in the best
school in Cebu.
◦ His father, John Gokongwei Sr., did not work in their family business. Instead, he built movie
houses and became the owner of one of the largest movie houses in Cebu.
◦ In 1939, his father died after receiving the wrong blood type during a blood transfusion. Their
creditors started to take their house and, movie houses which left them with no property.
THE BICYCLE AGE: 1941-1942
◦ It was a bicycle that launched the entrepreneurial career of John Gokongwei Jr. at the age of
fifteen. He pedaled his bike to neighboring towns to sell soap, thread and candles.
◦ According to John, during those years “I rode my bicycle to SURVIVE”
◦ He saw business opportunities during war instead of problems and difficulties
THE BATEL AGE: 1943-1945
◦ “After two years of biking and and peddling, at seventeen, I entered my batel age. The batel was
a small, a very utilitarian boat that defied the open sea and would take me further from Cebu,
and all the way to Lucena, from where I would take a truck to Manila with companions twice or
thrice my age.” – John Gokongwei Jr.
THE TRADING AGE: 1945-1955
◦ John Gokongwei Jr. saw an opportunity in import trading. He set up his first company, American
Asia (Amasia) Trading. The major business was to import fruits, milk, flour, onions, old
newspapers, magazines, used clothing, and other remnants from US.
THE MANUFACTURING AGE: 1956
◦ Seeing that trading would always have low margins and would always be dependent on
government policies, the family concern entered the era of manufacturing. With a loan of
500,000 pesos from Dr. Albino Sycip, then chairman of China Bank, and DK Chiong, he started a
corn milling plant producing glucose and corn starch. The company was named Universal corn
products and later expanded into Universal Robina Corporation. San Miguel Corporation was a
big customer of theirs.
THE AGE OF BRANDS: 1960’s
◦ 1961 His company started to launch brands such as Blend 45 (an instant coffee brand, to
compete with Nestle's Nescafe), John returned to school to study and obtain an MBA at the De
La Salle University. A decade later, he underwent a 14 week advanced management program at
Harvard University.
◦ 1968- put up his first retail store, Cebu Foodarama.
THE AGE OF DOMESTIC EXPANSION: 1970-1999
THE AGE OF GLOBALIZATION: 2000s
◦ John Gokongwei Jr. wanted the Universal Robina Corporation to be a truly Philippine-based
multinational company.
◦ From 2000-2004, the Universal Robina Corporation International Group expanded its markets in
Thailand, Indonesia, Malaysia, China, Singapore, Hongkong and Vietnam.
◦ 2004 Announced retirement and handed the reins to his youngest brother James and only son
Lance Gokongwei.

John is married to Elizabeth and they have six children. All of his children play an important role for his
empire and other enterprises owned by JG Summit Holdings. His son Lance Gokongwei is now the
president of JG Summit Holdings while his brother James is the Chairman Emeritus. Gokongwei’s rag-to-
riches is one of the most inspiring stories everyone can possibly read. According to him, his motivation
comes from his competitiveness. He said competition is good for the soul. He also gave advice to young
entrepreneurs who also want to make it big someday. They have to love their work. Instead of spending,
they have to save money. It is also essential to look for places where there is a competition. Work hard
and the most important ingredient for success is to love work.

At present, JG Summit six (6) core businesses: branded consumer, agro-industrial and commodity food
products in Universal Robina Corporation, real estate and hotels in Robinsons Land Corporation and
United Industrial Corporation (Singapore), telecommunications in Digital Telecommunications Phils.,
Inc., petrochemicals in JG Summit Petrochemicals Corporation, air transportation in Cebu Pacific Air, and
financial services in Robinsons Bank.

About Cebu Pacific:

In 1996, John Gokongwei and his only son, Lance decided to start an airline. At the time, the dominant
airline in the country was PAL, and if you wanted to travel cheaply, you did not fly. You went by sea or
by land. However, he and his only son Lance had a vision for Cebu Pacific: We wanted every Filipino to
fly. Inspired by the low-cost carrier models in the United States, we believed that an airline based on the
no-frills concept would work here. No hot meals. No newspaper. Mono-class seating. Operating with a
single aircraft type. Faster turn around time. It all worked, thus enabling Cebu Pacific to pass on savings
to the consumer. How did we do this? By sticking to our philosophy of “low cost, great value.” And we
stick to that philosophy to this day. Cebu Pacific offers incentives. Customers can avail themselves of a
tiered pricing scheme, with promotional seats for as low a P1. The earlier you book, the cheaper your
ticket. Cebu Pacific also made it convenient for passengers by making online booking available. When
we started at 1997, Cebu Pacific flew only 360,000 passengers, with 24 daily flights to 3 destinations.
Today, we are the largest in terms of domestic flights, routes and destinations. We also have the
youngest fleet in the region after acquiring new Airbus 319s and 320s.
Contributions to Management:

The Entrepreneurial PERSONALITY of John L. Gokongwei Jr.

VALUES

 Leadership
 Confucian values
 Optimism
 Role models
 Hard work
 Frugality
 Education

PERSONALITY

 Willingness to take risks

 Creativity and innovativeness
 challenging the status quo
 Creative imitation and borrowing ideas
 Recognizing what is essential

The Entrepreneurial Leadership of John L. Gokongwei Jr.

 Developing a shared vision

 Holding people responsible and rewarding
 Performance
 Creating new business
 Making deals

The Nine Rules for Business Success of John L. Gokongwei Jr.

1. Change is inevitable and flexibility is the key.

- the old school of doing things, with the changes brought about by social web, is worth
reviewing and changing to stay relevant.
- telecommunications sector: Unlimited Texting and Unlimited intra-network calls that
changed the Philippine cellular phone industry.

2. Personal stakes in the company encourage everyone to work hard.

- By involving subordinates and members of the organization, they will feel that they truly
belong to the organization. As such, they will become stakeholders in the company and they
will work for the improvement of the organization.
- no free riders.
 3. Mistakes and disappointments are inevitable.
- Gokongwei faced a lot of odds in his business career.
- We cannot focus on what is ahead if we keep on looking back.
- “The important thing to know is that life will always deal us a few bad cards. But we have to
play those cards the best we can. And we can play to win” (Gokongwei, 2008)

4. Good brand building equals reputation.

- offline and online value adding behaviour + pr and customer relations + integrity = brand
reputation
- budget airline: Cebu Pacific Air; telecommunications: Sun Cellular, and Digitel Philippines;
snacks: Universal Robina Corporation; shopping mall: Robinson’s Place

5. Family support is crucial.

- John Gokongwei’s family has been crucial in building his empire.
- During those times when you are at the bottom and failure is staring at you eyeball to
eyeball, the family is where you can find comfort and renewed strength. Bring them on
board in your career or business from the beginning, so they will not be the first to blame
you.

6. Never lose sleep thinking of business risks.

- Gokongwei knew how to enjoy life! Yet, he enjoyed the game of business, more than just
the rewards with it.

7. Pausing to recharge brings new vigor.

- Gokongwei tried to find time to rest and renew his spirits.
- there is more to life than business, work life balance.

8. Reading and traveling enrich one’s mind.

- Cebu Pacific Air - Inspired by the low-cost carrier models in the United States.
- C2 Iced Tea - popularity of bottled iced tea in China.
- exposure to unfamiliar terrain is a form of benchmarking. Gives you fresh idea.

9. Philanthropy is a personal satisfaction.

- His businesses already generated thousands of jobs in the Philippines.
- spreading goodness around brings goodness back to your doorstep.

THE GOKONGWEI WAY

This is the first of 10 unwritten commandments which John Gokongwei, founder of the Gokongwei
group of companies, followed in running the family business “the Gokongwei way.”

1. No In-laws
- Over the years, they learned that it is best not to let in-laws participate in the business
because it brought unnecessary tension in the family.
 - “There were situations where some of the marriages did not work. Loyalties change.
Sometimes relationships between the different in-laws from the second generation become
strained. Feelings get hurt. It is tricky deciding which in-law is more deserving, which is
smarter, which would do a better job,”

2. No moonlighting
- If you work for the company, you must be either fully in the business or completely out. In
running the business, you must be actively involved, with full-time commitment and focus.

3. No conflict of Interest
- As a rule, the company will not transact with businesses of other family members.

4. No work no pay from the Company

- A family member must work to receive a salary. There should be no fake pay. You must
have a real, full-time position in the company.

5. Personal assets should be kept separate from Company assets

- Use your own money for personal expenses. No freebies from the company for your personal
use.

6. Pay the right salary for the right job

- Pay must be commensurate to the family member's contribution in the business.

7. Being family is no guarantee of employment

- Sometimes professionals are more qualified than family members.

8. Avoid working directly under one's parents at the start of your career
- Parents can sometimes be biased in giving feedback. You'll learn more from someone else.

9. Give the Next Generation Wings

- Successfully passing on the business to the next generation. Implement a fix retirement age.

10. There can only be one boss

- Establish a process to appoint the leaders. This is critical so that a business can smoothly
pass on from generation to generation, and achieve longevity.

Generous Tycoon

Compared to other business tycoons, Gokongwei is one who can be considered as the most generous in
the sense that he is very open to share his regimen and stratagems both in life and business for public
consumption, a condition which is favorable to every Filipino who wants to alleviate his economic
condition by means of entrepreneurship and likewise, in the process of doing so, help in building the
country’s economy. If one wants to become successful in life, especially in business, he has to live the
values and wisdom that entrepreneurs like Mr. John lived. Guided by the Confucian values, John L.
Gokongwei, in his more than half a century of engaging into entrepreneurial activities, has grown to be
wise. Hence, he has become a philosopher himself who does not fail to share his broad experiences and
wisdom to the younger generation in the immense hope that they would follow his path.

“Life has been good to me, and I want to give back the blessings I have received” – John Gokongwei
Jr.”

 The Gokongwei Brothers Foundation

 The GBF Technical Training Center
 The Children’s Library
 Other GBF Donations:
• donated land to church institutions
• support six to eight university scholars
• donate part of his shareholdings in JG Summit to the GBF

List of companies he owns:

 Cebu Pacific.
 JG Summit Petrochemical Corporation.
 Meralco (27.1% stake)
 PLDT (minority stake)
 Robinsons Bank.
 Robinsons Land Corporation (Robinsons Malls)
 Robinsons Retail Holdings.
 United Industrial Corporation Limited (a Singapore listed company)

John's children have held senior responsibilities for some time:

 Summit's airline, Cebu Air, and Universal Robina – Lance runs the company and the youngest
sister, Marcia, is a manager.
 Robinsons Retail Holdings (the second-largest retailer in the Philippines) - Robina Gokongwei-Pe,
the eldest daughter, runs it. Her twin sisters, Faith and Hope, each have management roles
there.
 Summit Media - Lisa Gokongwei-Cheng, the second daughter, is in charge of publisher.
 Other key JG Summit businesses (including land development, banking and petrochemicals) -
run by extended family members and professionals.

Significant Awards:
2017- ASEAN Legacy Award (recognizes iconic entrepreneurs who have served as inspiration in
advancing entrepreneurship)
2014- Lifetime Achievement Luminary Award from Channel News Asia.
2013- JG Summit Holdings, Inc, was awarded one of the 50 best publicly-traded companies in Asia for
2012.
2012- JG Summit Holdings, Inc, was awarded one of the 50 best publicly-traded companies in Asia for
2011.
2008- recipient of Forbes Asia magazine's Philanthropy award

Book:
2007- his biography, John L. Gokongwei Jr.: The Path of Entrepreneurship written by Dr. Marites A. Khanser,
was launched at Ateneo de Manila University.

References:
https://www.slideshare.net/madz_h05/sr-john-l-gokongwei-jr-the-path-of-entrepreneurship
https://archian.wordpress.com/2011/02/04/path-of-enterpreneurship-lance-gokongwei/
http://asksonnie.info/john-gokongweis-nine-rules-of-success/
https://toughnickel.com/business/john-l-gokongwei-jr-his-thoughts-on-business-life-work-economy-
and-values
https://www.slideshare.net/chinin79/john-gokongwei
http://asianjournal.com/consumer/10-commandments-of-the-gokongweis-in-family-business/