REAL-WORLD BUSINESS SCENARIO

Chowking is a prominent fast-food chain originating from the Philippines,

specializing in Chinese-inspired cuisine served in a casual dining atmosphere.
Established in 1985 by Robert F. Kuan, Chowking has expanded significantly, becoming
a household name not only in the Philippines but also internationally, particularly in
regions with sizable Filipino communities. Offering a diverse menu ranging from noodle
soups and dim sum to rice meals and desserts like the iconic halo-halo, Chowking has
carved a niche for itself by blending authentic Chinese flavors with Filipino preferences.
With strategic locations in malls and urban centers, coupled with a focus on affordability
and quality, Chowking continues to attract a broad customer base and expand its
presence through franchising opportunities, ensuring its enduring success in the
competitive fast-food industry.

ECONOMIC ANALYSIS

Chowking’s history

Chowking, a cherished culinary institution in the Philippines, was established

by the visionary Robert F. Kuan, who had a fervent passion for melding the diverse
flavors of Chinese and Filipino cuisine. The inaugural Chowking restaurant opened its
doors in Rotary Arcade, Makati City, in 1985. Four years later, in 1989, the first
franchise and provincial outlet emerged in Meycauayan, Bulacan, signifying a significant
milestone in the brand's expansion and its enduring popularity.

The year 1992 witnessed pivotal store openings beyond Luzon, with branches
inaugurated in Bacolod Era Mall in Visayas and Limketkai in Cagayan De Oro,
Mindanao. These expansions marked crucial moments in Chowking's journey toward
becoming a nationwide culinary icon. By 1996, Chowking achieved remarkable growth,
showcasing its incredible success and profound connection with the Filipino palate. Just
a few years after its inception, Chowking had become a household name, reflecting its
rapid ascent in the local dining scene.

In 1997, Chowking took a significant leap in its expansion journey with the
inauguration of its first global store outside the Philippines, located in San Diego,
California. This event marked a pivotal milestone in Chowking's international presence.
The year 1998 saw the inauguration of Chowking's first store in Dubai, a milestone that
not only introduced Chinese-Filipino flavors to the Middle East but also underscored
Chowking's commitment to sharing its culinary heritage with global audiences.

In 2000, Chowking was acquired, marking a transformative moment not only for
the brand but also for the Philippine fast-food industry. This acquisition united Chowking
with Jollibee Foods Corporation (JFC), solidifying JFC's position as a powerhouse in the
Philippine food industry and bringing together two iconic brands under one umbrella.

In 2004, Chowking made waves in the culinary scene by introducing two iconic and
timeless bestsellers: the Pork Chao Fan and the Beef Chao Fan, leaving a lasting mark
on its menu and the Filipino people's taste buds. Responding to evolving customer
needs, Chowking underwent a dynamic shift in 2013, introducing its first drive-thru
store, revolutionizing the way customers could experience and savor Chowking's
delectable Chinese-Filipino cuisine.

Today, Chowking remains dedicated to providing quality food and memorable

dining experiences to its customers, both locally and globally, while continuously striving
for excellence and innovation in the ever-evolving culinary landscape.

Products and Services

The main focus of Chowking's product line is its wide selection of Filipino-
friendly Chinese-inspired cuisine. Chowking offers a diverse range of menu items to suit
different tastes and preferences, including hearty noodle soups like Beef Wanton Mami
and Pancit Canton, as well as savory rice dinners like Sweet and Sour Pork and Yang
Chow Fried Rice. Apart from its primary menu items, Chowking is well-known for its
signature dessert, halo-halo, which is a wonderful combination of shaved ice, sweet
beans, fruits, and jellies, topped with ube ice cream and creamy leche flan. Additionally,
Chowking offers value sets and combo meals to improve the eating experience by
giving patrons an easy way to enjoy their favorite dishes with sides like spring rolls and
drinks. Furthermore, Chowking provides delivery and take-out choices for patrons who
would rather eat at home, expanding its menu beyond dine-in experiences. Chowking's
tasty dishes and outstanding service continue to please consumers, as it is dedicated to
using authentic flavors and high-quality ingredients.
Market position

Chowking, a renowned fast-food chain in the Philippines, is known for its unique
blend of Chinese and Filipino flavors. Its distinctive red and yellow branding and
widespread presence in malls and urban centers have earned it customer loyalty.
Chowking has successfully adapted its menu to cater to diverse cultural preferences
through strategic global expansion. This adaptability, consistent product quality, and
commitment to innovation have strengthened its market position and diversified revenue
sources. Chowking's responsiveness to evolving consumer tastes and accessibility in
high-traffic locations continue to drive its long-term success and competitiveness in the
fast-food sector.

Competitors

Chowking faces stiff competition from established fast-food brands like Jollibee,
McDonald's, KFC, and Mang Inasal, as well as local Chinese and Filipino restaurants
offering similar cuisine options in specific regions. Emerging fast-casual dining chains
and international players also pose a challenge to Chowking's market share. To
maintain its edge, Chowking must innovate its menu offerings, enhance customer
service, and leverage its unique selling points, such as Chinese-Filipino fusion cuisine
and iconic dishes like halo-halo, to attract and retain customers in a fiercely competitive
market.

Economic Factors

Chowking's international expansion exposes the company to currency

exchange rate fluctuations, impacting the cost of importing ingredients and paying
franchise fees, potentially reducing profitability across different markets. Similarly,
inflationary pressures may squeeze profit margins by diminishing purchasing power,
necessitating price adjustments to maintain competitiveness. Economic considerations
also encompass navigating regulatory frameworks, encompassing changes in food
safety standards, labor laws, taxation, and franchising regulations, all of which can
escalate compliance costs and operational complexities.

Moreover, Chowking operates in a competitive market environment influenced

by economic conditions. Monitoring competitors' strategies and pricing becomes crucial
for customer retention and acquisition, especially during economic uncertainties.
Economic downturns or geopolitical events may affect consumer confidence, demand
for fast food, and franchisee profitability, necessitating swift responses to market shifts.

Current interest rates also influence Chowking's access to finance and borrowing
costs, potentially limiting investment in expansion, technology upgrades, and franchisee
support programs. Economic factors further impact technological advancements and
automation trends in the fast-food industry, where investments in technology can
enhance efficiency and customer experience, but require significant capital outlay.

Chowking's supply chain relies on regular access to ingredients like potatoes and
other commodities, affected by weather conditions, agricultural practices, and supplier
reliability. Fluctuations in commodity prices and production capacity affect production
costs and supply stability. Additionally, consumer preferences and economic situations
influence demand for Chowking's offerings, necessitating agility in adjusting products
and marketing strategies in response to changing consumer needs.

Regarding cost theory, Chowking manages fixed costs such as store rent and
equipment expenses, variable costs including ingredients and labor, and total costs, the
sum of fixed and variable costs. Understanding these cost components is essential for
Chowking in setting appropriate pricing levels that cover expenses while maintaining
profitability.

Operating in a monopolistic competition market structure, Chowking competes

with numerous firms offering similar but slightly differentiated products. Pricing
strategies such as cost-plus pricing, competition-based pricing, psychological pricing,
and promotional pricing are employed to attract customers and optimize revenues while
remaining competitive in the fast-food industry. Overall, economic factors significantly
influence Chowking's performance and strategic decisions.

SWOT ANALYSIS

Strengths:

Chowking possesses several strengths that contribute to its market leadership

and customer loyalty. Firstly, its diverse menu of Chinese-Filipino fusion cuisine offers a
unique and beloved dining experience, appealing to a broad range of tastes. This
distinctive offering has propelled Chowking to significant heights, solidifying its position
as a preferred dining destination among consumers. Additionally, Chowking benefits
from strong brand recognition, particularly in bustling malls and high-traffic areas, which
further enhances its competitive advantage. Moreover, Chowking's efficient operations
model facilitates easy replication and scalability, enabling rapid expansion both
domestically and internationally. By maintaining a global presence across diverse
markets, Chowking continues to attract and delight customers with its innovative take on
traditional dishes, reinforcing its status as a leader in the fast-casual dining industry.
 Weaknesses:

Despite its strengths, Chowking faces several challenges that could impact its
market competitiveness. Primarily, the company's heavy reliance on foot traffic in malls
exposes it to the risk of economic downturns or shifts in consumer behavior, potentially
affecting sales performance. Additionally, Chowking's limited menu offerings may hinder
its ability to cater to diverse customer segments and capitalize on evolving dietary
preferences. Managing seasonal demand fluctuations, particularly during peak periods
such as holidays or summer months, poses operational challenges in inventory
management and staffing levels. Furthermore, competition from other fast-food chains
and local eateries may exert pricing pressure on Chowking, necessitating strategic
pricing strategies to maintain profitability without compromising quality. Lastly, ensuring
consistent quality and operations across franchise locations remains a challenge,
requiring robust support systems and training programs to uphold brand standards and
customer satisfaction.

Opportunities:

Chowking has several strategic opportunities to explore for future growth and
expansion. Firstly, diversifying its menu offerings or introducing new products can
attract a broader customer base and stimulate increased sales. By innovating and
expanding its menu options, Chowking can cater to different tastes and preferences,
thereby appealing to a wider audience. Additionally, investing in delivery services
presents an opportunity to capture additional revenue streams, particularly in markets
where delivery is popular or during periods of increased demand for convenience.
Furthermore, Chowking can leverage its brand recognition and success to pursue
further international expansion into untapped markets or regions with a growing demand
for Chinese-Filipino cuisine. Offering healthier options or emphasizing high-quality
ingredients can also resonate with health-conscious consumers, expanding Chowking's
customer base and positioning the brand as a more wholesome dining option. Lastly,
forming strategic partnerships or co-branding initiatives with other brands can enhance
Chowking's market reach and attract new customers through joint marketing efforts.

Threats

Chowking faces several external threats that could potentially impact its market
performance and profitability. Firstly, intense competition from established fast-food
chains, local eateries, and emerging food delivery platforms may erode Chowking's
market share and revenue. Economic uncertainties, such as economic downturns or
fluctuations in consumer spending, could also impact discretionary spending on dining
out, affecting Chowking's sales performance. Moreover, changing consumer
preferences towards healthier eating habits may pose a threat to Chowking's traditional
menu offerings. Regulatory changes, such as food safety regulations or labor laws,
could increase operating costs and impact profitability. Additionally, disruptions in the
supply chain, such as ingredient shortages or transportation issues, may affect product
availability and operational efficiency. Overall, Chowking must remain vigilant and agile
in addressing these threats to sustain its market position and drive long-term growth.

ADVANTAGES AND DISADVANTAGES

In the fast-food industry, Chowking has a distinct advantage because it combines

Chinese and Filipino food, providing patrons with a rich and varied dining experience. Its
unique combination distinguishes it from conventional fast-food franchises and draws
customers looking for creative and genuine cuisine. Furthermore, Chowking gains from
its well-chosen locations in shopping centers and busy regions, which guarantee a
consistent stream of clients and promote brand devotion. Nevertheless, the company
has to contend with issues like reliance on foot traffic in malls, a menu that only consists
of its hallmark meals, uniformity among franchise sites, and competition pressure on
prices. These difficulties highlight the necessity for Chowking to employ sound strategy
in order to preserve its competitive advantage and ensure continued success in the
market.
Financial Analysis

This analysis is to measure the business’ financial performance and health.

Assets Liabilities

Current Assets Current Liabilities

Cash ₱ 21,000,000.00 Accounts Payable ₱ 4,000,000.00

Inventory ₱ 8,200,000.00 Merchandise ₱ 8,000,000.00

Inventory

Supplies ₱ 6,000,000.00 Leases ₱ 10,000,000.00

Total Current ₱ 35,200,000.00 Taxes ₱ 3,200,000.00

Assest

Non-current Assets Wage payable ₱ 6,000,000.00

Equipment ₱ 2,000,000.00 Total Liabilities ₱ 31,200,000.00

Total Assets ₱ 37,200,000.00

Equity ₱ 6,000,000.00

Chowking capital

Total Assets ₱ 37,200,000.00 Total Liabilities & ₱ 37,000,000.00

Equity