Look for an example of a conglomerate in the internet.

The conglomerate can be the Philippine based or foreign

based.
Jollibee Foods Corporation

 Tony Tan and his family created Jollibee with humble beginnings as an ice cream parlor, which
subsequently blossomed into an expanding global brand. At the core of its success is a family-
oriented approach to people management, which has earned Jollibee the title of Employer of
the Year from the Personnel Management Association of the Philippines.

 Jollibee is the largest fast-food chain brand in the Philippines, with over 1,400 locations. Jollibee
is the undisputed market leader in the Philippines, with a larger proportion of the local market
than all other foreign fastfood companies combined.

1. Discuss the type of diversification strategy the conglomerate is using. List down all the subsidiary
companies to support your answer. (10 points)

For its diversification, Jollibee Food Corporation mostly employs Michael Porter's Generic Strategies.

Michael Porter established the Porter, generic strategies framework, in 1980. The model shows how
businesses may get a competitive edge by implementing the appropriate tactics. The framework is
organized around three major strategies: cost leadership, distinctiveness, and focus. Companies can gain
a competitive edge by cutting costs or distinguishing their services from rivals along the most valuable
dimensions in order to justify the higher pricing. Companies can obtain a competitive advantage by
pursuing a tight focus strategy through specialized marketing, a broad focus strategy (by selling items to
certain market segments), or an industry-wide approach (by offering products to maximum market
segments). The typical strategic options available vary depending on the nature and breadth of
competitive advantage.

Porter's generic strategies include three primary streams that multinational firms like JOLLIBEE
FOODS CORPORATION employ to attain their growth objectives.

Cost Dominance/Leadership
- Gaining a competitive edge through cutting costs is a cost leadership approach. JOLLIBEE
FOODS CORPORATION's principal generic strategy in multiple consumer segments is cost
leadership.

.Differentiation
- Differentiation is another popular general method for gaining a competitive edge. JOLLIBEE
FOODS CORPORATION achieves growth goals by combining distinctiveness with a cost
leadership approach.

Focus Strategy
- The third general competitive strategy is focus, which encourages businesses to concentrate their
efforts on increasing narrowly defined areas. Companies that use the focus approach serve
certain market segments and gain a competitive edge through niche marketing.
Jollibee Foods Corporation (JFC) is a Philippines-based business that develops, operates, and franchises quick-
service restaurants (QSR) under the brand name Jollibee. The Company has a number of subsidiaries, which
include FRESH N' FAMOUS FOODS, INC., which develops, operates and franchises quick-service restaurants
under the trade names Chowking and Greenwich; RED RIBBON BAKESHOP, INC. (through RRB
HOLDINGS, INC.), which develops, operates and franchises restaurants under the Red Ribbon trade name;
MANG INASAL PHILS., INC., which develops, operates and franchises restaurants under the Mang Inasal
trade name, and PERF RESTAURANTS INC. It also has subsidiaries and affiliates that establish and run its
overseas brands, including Yonghe King, Hong Zhuang Yuan, San Pin Wang, SuperFoods Group brands
(including Highlands Coffee and Pho 24), Sma, and Dunkin' Donuts.

2. Explain how do different subsidiary companies create value to the mother company. Give
facts/evidences to support ypur answer. (10 points)

Due to its status as a legitimate corporation, a subsidiary business might benefit from lower corporate
tax rates than the parent company. Businesses frequently use subsidiary companies as a means of
expanding into foreign markets. The danger to the bigger corporation is decreased because of the
different groups. Frequently, subsidiary companies are separate brands that operate under the control of
a bigger parent company. These brands can benefit from the interactions between various divisions of
the larger corporate company while yet retaining their independence. Subsidiaries can be test markets
for new brands or products as long as their financial commitments are restricted. Since they are separate
legal companies, subsidiary businesses are simpler to manage and sell. Instead of investing heavily in
internal R&D, parent corporations usually acquire businesses with specific industry knowledge. For
instance, a larger firm may purchase a small business that produces specialized technology or a digital
tool. Like Meta, Inc., subsidiaries help parent companies diversify their business while limiting potential
risks. As a result of being purchased by Facebook, companies including Instagram LLC, Oculus VR
LLC, and WhatsApp Inc. became divisions of Facebook.

References
(2012). Retrieved from Pse Edge: https://edge.pse.com.ph/companyInformation/form.do?cmpy_id=86