Jollibee established itself as the leading fast food chain in the Philippines by embodying the five elements known as the “Five Fs”: friendliness, flavorful food, a fun atmosphere, flexibility in catering, and a focus on customer needs. This approach resonated well with Filipino consumers and aligned with their preferences. Additionally, being a local brand gave Jollibee an understanding of its customers that foreign brands like McDonald’s lacked. An example of this was Jollibee’s introduction of spicy burgers, a unique offering that McDonald’s could not provide. Furthermore, the political and economic crisis in 1983 prompted foreign investors and competitors, including McDonald’s, to slow down their expansion efforts in the Philippine market.
During the crisis, Jollibee took measures to widen its menu and offer a variety of local taste-oriented food options. Additionally, Jollibee expanded its presence in the Philippines by opening more stores. By achieving significant growth and establishing dominant market share, Jollibee effectively prevented McDonald’s from expanding further. One of Jollibee’s competitive advantages over McDonald’s was being the first mover in the Philippines. As a result, by the time McDonald’s entered the market, Jollibee had already established strong brand awareness and shaped customer preferences. Furthermore, Jollibee’s success can be attributed to their deep understanding of the Filipino market, allowing them to surpass McDonald’s in terms of scale and burger flavor.
Jollibee recognized that the Champ’s large hamburger patty had the potential to attract more customers than McDonald’s Big Mac due to the Filipino people’s hearty appetite. In terms of flavor, McDonald’s burger may appeal to Westerners, but it fails to satisfy Filipinos who have a preference for spicy food.
Tony Kitcher was ambitious in accelerating international expansion. Over the course of two years, Jollibee successfully entered 8 new national markets and launched 18 new stores. Kitcher’s strategy focused on “targeting expats” and “planting the flag.” By targeting expatriates, the company managed to expand Jollibee to various countries. However, this approach faced challenges as not all overseas Filipinos turned out to be potential customers. Wealthy expatriates, for example, preferred dining in hotels where they could consume alcoholic beverages. This highlighted Kitcher’s lack of understanding regarding the preferences of Filipino expatriates. With thorough research prior to expansion, the outcome might have been different.
Speaking of his idea of “planting the flag,” it was a good idea because if Jollibee could be the first to enter other countries, it would gain a better understanding of consumers and the advantage of brand awareness when competitors entered the market in the future. Additionally, expanding the number of global stores could enhance global recognition and positively impact sales. However, executing this plan was easier said than done as rapid expansion led to a shortage of resources due to the need to support multiple start-ups simultaneously.
In addition to this, Kitcher failed to acknowledge the importance of fostering unity among the employees, which ultimately had a significant impact on the company. The employees from the local Filipino division refused to assist the International Division due to Kitcher’s disrespectful behavior, as he did not consult with higher-ups before recruiting individuals from the Filipino side. This problem arose due to a lack of cultural understanding among the employees. It would have been beneficial for Kitcher to make an effort to maintain positive relationships with the local Filipino employees, as their cooperation could have greatly facilitated the smooth functioning of the company.
Kitcher’s plan turned out to be unsuccessful as the international stores were losing money and the cost of supporting unprofitable activities continued to rise. Consequently, Tony Tan Caktiong, the owner of Jollibee, made the decision to halt Kitcher’s rapid expansion strategy. From my point of view, the most favorable choice for Tingzon was to expand Jollibee to Port Moresby, Papua New Guinea. Despite not being considered a strategically important market, this move would allow Jollibee to generate profit and easily dominate the market due to its ability and opportunity to establish a business there.
There were no strong competitors and no decent place to eat. Furthermore, the Australian chicken restaurant had shut down due to poor management. Consequently, if Jollibee could provide high-quality service and food, it could capture the Australian chain’s market share and potentially even more. In addition, Port Moresby was an ideal location to begin in Papua New Guinea as it was the capital city and likely the most populated city in Papua. This made it easier to establish brand recognition.
After establishing a strong presence in one city of Papua, Jollibee has the potential to expand to other cities in the region. This expansion could deter competitors from entering the fast food market. When entering Papua for the first time, Jollibee should seek a reliable local partner to gain insights into the culture, customer preferences, and local conditions. Moreover, Jollibee should promote the new opening and customize its menu to cater to the local taste. However, introducing an international menu item like Jollimeal may attract more customers but could pose challenges in maintaining quality control.
Therefore, Jollibee should exercise patience until the situation stabilizes and then introduce more innovative ideas in the future. Additionally, since there is no existing competition, Jollibee can easily achieve success by simply modifying the burger’s flavor, such as adjusting its spiciness level. However, it is crucial for Jollibee to provide specialized training for new local employees and to motivate both the local and Filipino staff members to foster excellent teamwork. The more cohesive the employees are, the more efficiently the company will operate. Furthermore, it is recommended to incentivize employees by offering bonuses based on achieving a certain sales target.
Despite being strategic markets in countries with large populations (China and the US), Hong Kong and California posed challenges for Jollibee’s entry due to its limited capabilities. In my view, after successfully expanding in Papua New Guinea, Tingzon could consider opening a new store in Hong Kong. However, ensuring the hiring of local Chinese employees would be crucial as selling food without using the customers’ language could lead to miscommunication and misunderstanding. Without effective communication, providing good service would be impossible.
Furthermore, the incident revealed a lack of professionalism within Jollibee which could potentially harm the company’s reputation. Another suggestion for improvement is to explore alternative cooking methods for the chicken, such as grilling, in order to attract customers who avoid deep-fried food for health reasons. Additionally, Tingzon should focus on fostering better understanding and cooperation among local and Filipino employees, as internal issues can indirectly impact the company.
Opening a store in California and attracting Filipino expatriates might be straightforward for Jollibee. However, expanding to other states and appealing to different groups of Americans, including other Asian Americans, would be challenging due to their lack of familiarity with the “Jollibee” brand. Moreover, the presence of numerous fast food restaurants nationwide signifies intense competition. Additionally, the American taste might not favor the spicy burger.
