Name: DON MCARTHNEY C.

TUGAOEN Date Submitted: 02/11/2018

Course Code: HRM 280 Module No.: 1
Title of Specific requirement/exercise: Assignment1.1
Course Professor: EVELYN A. ESQUEJO

ASSIGNMENT1.1
1. Show by concrete examples how integration of economies takes place?

As discuss in our class, gone are the days where countries and regions were economically self-
sufficient. Today, economies of most countries are interconnected that they form a part of a single,
interdependent global economy. This integration of economies is one of the results of globalization.

Globalization is being defined as the movement towards expansion of economic and social ties
between countries through the spread of corporate institutions and the capitalist philosophy that
leads to the shrinking of the world in economic terms.

In the Philippines and its neighboring country, we also address the pressures of globalization
through an integration of economies. We have our very own ASEAN Economic integration. In our
region we are part of the ASEAN Economic Community. Recently, we just hosted the 31st ASEAN
summit and the chairman of the ASEAN is no other than our tough and bold President, Rodrigo
Duterte.

The ASEAN Integration constitute four key characteristics which includes single market and
production base, competitive economic region, equitable economic development and integration to
the global economy. In terms of single market and production based, members of the ASEAN can
now experience free flow of goods, services, investment, capital and skilled labor. ASEAN will also
help each members in the creation of competition policy, consumer protection, intellectual property
rights, infrastructure development, lower tax rates and explosion of e-Commerce. ASEAN will also
aid in small and medium enterprise development. This will encourage coherent approach towards
external economic relations and enhanced participation in global supply networks.

ASEAN integration cannot just help in the economic development of our country but specifically it
can benefit everyone. We will be having the opportunity to buy cheaper and wider range of goods
and services within the region. We will be having the opportunity to travel within the region. It will
be easier for us to travel within ASEAN since it will be cheaper, VISA-free and most importantly
more ways to travel by air, sea and land. As for employment, there will be more job opportunities
across ASEAN since there will be more foreign investments, more potential customers and also be
able to have an opportunity more employment abroad. The opening of borders means we can have
the opportunity to work in any country in the region. This is how integration of economies among
countries can foster in terms of economic development.

Page 1 of 4
Name: DON MCARTHNEY C. TUGAOEN Date Submitted: 02/11/2018
Course Code: HRM 280 Module No.: 1
Title of Specific requirement/exercise: Assignment1.1
Course Professor: EVELYN A. ESQUEJO

2. Cite at least three multinational companies and discuss their businesses and how they
have internationalized.

1. JOLLIBEE – Probably the most famous local brand here in the Philippines but now a global
brand can be one of the prime examples of internalization. Jollibee is the largest fast food chain
in the Philippines, operating a nationwide network of more than 750 stores. A dominant market
leader in the Philippines, Jollibee enjoys the lion’s share of the local market that is more than
all the other multinational brands combined. The company has also embarked on an aggressive
international expansion plan, and currently has 80 stores outside the Philippines-USA (26),
Vietnam (32), Brunei (11), Jeddah (7), Qatar, Hong Kong, and Kuwait (1 each), firmly
establishing itself as a growing international QSR player.

Jollibee came from humble beginnings: from becoming a national favorite of the
Philippines, to becoming the multinational fast food chain megacorporation that they are
now. Despite the entry of the two most powerful fast food corporations in the world
with McDonald's and KFC, Jollibee responded to their call by catering to the specific taste
of their local market. This resulted not only on them being able to defend themselves in
their home court, but allowed them to experience rapid growth that rivaled even that of
their competitors. The young but budding chain opened plenty of stores in the years to
come, eventually dominating the entire Philippine fast food industr y, and even buying out
most of their competitors. This eventually made them one of the world's top powerhouses
in the fast food industry.

Jollibee officially went international and opened its very first branch outside of the
Philippines in Taiwan during 1986. Then a year later, the company opened up its first store
in Brunei which, to this day, now totals fourteen stores in the country. They later went on
to open up branches in Indonesia during 1991, but were later closed down due to the 1997
Asian financial crisis. Jollibee has since expanded to other neighboring countries, even to
parts of the Middle East like Saudi Arabia and Qatar.

In June 1998, Jollibee opened its first store in the continent of North America, with the
inaugural American branch located in Daly City, California. They had opened a few more
stores in the following months and years, but some had to close down after briefly
operating. Despite such setbacks, the chain still grew and had received more success,
especially when they were operating in close proximity to other businesses that catered to
Filipinos. Jollibee even went for a vacation and opened a store in Hawaii and later opened
a third branch in 2014. On December 2016, Jollibee opened its first store in Canada,
marking the 35th store at the time to have opened within North America and with hundreds
waiting in line on opening day.

Page 2 of 4
Name: DON MCARTHNEY C. TUGAOEN Date Submitted: 02/11/2018
Course Code: HRM 280 Module No.: 1
Title of Specific requirement/exercise: Assignment1.1
Course Professor: EVELYN A. ESQUEJO

Jollibee also has plans to open up more branches in other countries. In 2016, Jollibee had
announced their plans to return to the Malaysian and Indonesian market. Jollibee has also
been allowed to open up stores in Japan by 2018.

The initial expansion strategy of Jollibee is to target expats and build their store. Now they
are targeting large Filipino population countries and with economies who have large
demand and growth for fast food market. In order for them to attract and retain non-Filipino
customer base through improving quality, consistency and standardization. They also
have generic menu with emphasis on research to provide food menu and they avoid
excessive localization. And last with the aid of brand awareness, TV endorsements and
creative marketing, they was able to make Jollibee a global brand.

STARBUCKS – The first Starbucks opened in 1971. Back then, the company was a single
store in Seattle’s historic Pike Place Market. From just a narrow storefront, Starbucks offered
some of the world’s finest fresh-roasted whole bean coffees. The name, inspired by Moby Dick,
evoked the romance of the high seas and the seafaring tradition of the early coffee traders.

In 1981, Howard Schultz (Starbucks chairman and chief executive officer) had first walked into
a Starbucks store. From his first cup of Sumatra, Howard was drawn into Starbucks and joined
a year later. In 1983, Howard traveled to Italy and became captivated with Italian coffee bars
and the romance of the coffee experience. He had a vision to bring the Italian coffeehouse
tradition back to the United States. A place for conversation and a sense of community. A third
place between work and home. He left Starbucks for a short period of time to start his own Il
Giornale coffeehouses and returned in August 1987 to purchase Starbucks with the help of local
investors. Today, Starbucks is privileged to connect with millions of customers every day with
exceptional products and more than 24,000 retail stores in 70 countries.

In 1995, the firm established a subsidiary called Starbucks Coffee International Inc. At that time,
the subsidiary consisted of 12 managers located in Seattle. Today, this subsidiary is led by
Australian expatriate Peter Maslen and is staffed with about 180 experienced multi-national and
multi-lingual managers located in Seattle and three regional offices around the world. This group
is responsible for all Starbucks business development outside North America, including
developing new businesses, financing and planning stores, managing operations and logistics,
merchandising, and training and developing Starbucks’ international managers. Starbucks’ first
non-North American store was opened in 1996 in Tokyo. In reflecting on this early step in
internationalizing the chain, Schultz.

According to US News and World Report: When venturing overseas, there is a Starbucks way.
The company finds local business partners in most foreign markets…It tests each country with
a handful of stores in trendy districts, using experienced Starbucks managers. It sends local

Page 3 of 4
Name: DON MCARTHNEY C. TUGAOEN Date Submitted: 02/11/2018
Course Code: HRM 280 Module No.: 1
Title of Specific requirement/exercise: Assignment1.1
Course Professor: EVELYN A. ESQUEJO

baristas to Seattle for 13 weeks of training. Then it starts opening stores by the dozen. Its coffee
lineup doesn't vary, but Starbucks does adapt its food to local tastes. In Britain, it won an award
for its mince pie. In Asia, Starbucks offers curry puffs and meat buns. The company also fits its
interior décor to the local architecture, especially in historic buildings. “We don't stamp these
things out cookie-cutter style,” says Peter Maslen, president of Starbucks Coffee International.

Their approach in international expansion is to focus on the partnership first, country second.
They rely on the local connection to get everything up and working. The key is finding the right
local partners to negotiate local regulations and other issues. They look for partners who share
their values, culture, and goals about community development. They are primarily interested in
partners who can guide them through the process of starting up in a foreign location. They look
for firms with: (1) similar philosophy to ours in terms of shared values, corporate citizenship, and
commitment to be in the business for the long haul, (2) multi-unit restaurant experience, (3)
financial resources to expand the Starbucks concept rapidly to prevent imitators, (4) strong real-
estate experience with knowledge about how to pick prime real estate locations, (5) knowledge
of the retail market, and (6) the availability of the people to commit to their project.

Throughout the expansion of Starbucks they have use partnership, brand awareness event,
acquisition and partnership, technological innovation and global expansion.

References:

Alkema, R., Koster, M., & Williams, C. (2010). Resuming Internalization at Starbucks.

Growth, S. (2014). Starbucks Details Five-Year Plan to Accelerate Profitable Growth. Starbucks
Newsroom

Kotha, S. & Glassman, D. (2003). Starbuck Corporation. Competing in the Global Market.

Starbucks.Com

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