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Jollibee – Fast Food in the Philippines

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1. Jollibee was able to build the dominant position in fast food in the Philippines because it was based on “Five Fs”: friendliness, flavorful food, fun atmosphere, flexibility in catering, and focus, which fitted the Filipino customer’s habit. Additionally, since it was a local brand, it understood the customers well. For example, it offered spicy burgers that McDonald couldn’t offer. Furthermore, the political and economic crisis that occurred in 1983 led most foreign investors and competitors, such as McDonald to slow down the expansion in Philippine.

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During this crisis, Jollibee broadened its menu by offering various kinds of food that matched local tastes and built more stores all around Philippine. This subsequent growth and strong dominance prevented McDonald to expand. One of the sources of competitive advantage of Jollibee against McDonald’s was that Jollibee was a first mover in Philippines. Therefore, when McDonald’s entered Philippines, Jollibee already had the brand awareness and had shaped the customer preferences. Other than that, due to the well understanding of the Filipino market, McD lost to Jollibee’s scale and flavor of burger.

Jollibee knew that the Champ’s one wide hamburger patty could attract more customers than McDonald’s Big Mac because of the Filipino’s large appetite. Speaking of the flavor, McDonald’s burger’s flavor might fit the Westerners, but it couldn’t satisfy the Filipinos who were used to eating spicy food. 2. Tony Kitcher was quite ambitious to increase the pace of international expansion. In two years, Jollibee had entered 8 new national markets and opened 18 new stores. Kitcher’s strategy was based on “targeting expats” and “planting the flag. Kitcher’s idea of “targeting expats” allowed the company to expand Jollibee to many countries. However, it didn’t go well because he later on found out that not all overseas Filipinos were potential customers. For instance, the wealthy expatriates prefer hotel dining, where they could consume alcohol. This showed that he didn’t understand the condition of the Filipino expatriates well enough beforehand. If he could have done enough research before the expansion, the result might have turned out to be different.

Speaking of his idea of “planting the flag”, it was actually a good idea because if Jollibee could be the first mover in other countries, it would have known the consumers better and have gained the advantage of brand awareness when other competitors entered the market in the future. Besides, by expanding the number of stores globally, it could be more globally recognized, which could positively impact sales in return. However, it was easier to plan than to act. Rapid expansion led to shortage of resources, since the company needed to support several start-ups at once.

Other than that, Kitcher he neglected the bond among the employees that eventually brought a huge impact to the company. The local Filipino employees didn’t want to help the International Division because they felt that Kitcher was so disrespectful that he didn’t consult with the superiors before recruiting people from the Filipino side. It occurred because of the lack of understanding of culture among employees. Kitcher should have actually tried to maintain good relationship with the local Filipino employees because cooperation among employees could help the company run more smoothly.

Kitcher’s plan didn’t turn out well. The international stores were losing money and the cost to support the unprofitable activities was increasing. Thus, Tony Tan Caktiong, the owner of Jollibee, eventually decided to stop Kitcher’s strategy of rapid expansion. 3. In my perspective, the best option for Tingzon was to expand Jollibee to Port Moresby, Papua New Guinea. Even though this place was not considered as a strategically important market, it could let Jollibee gain profit and dominate the market easily because Jollibee had the ability and opportunity to open a business there.

There were no strong competitors and any single decent place to eat. Besides, the Australian chicken restaurant had closed down due to the poor management. Therefore, as long as Jollibee could offer good quality of service and food, it could take the Australian chain’s market share and maybe even more than that. Additionally, Port Moresby was a good place to start in Papua New Guinea because it was the capital city and perhaps the most the populated city in Papua. Therefore, it was easier to get brand recognition.

Afterwards, Jollibee could expand to other cities in Papua. By having a great fast food market share, it could discourage further entrants. In entering Papua for the first time, Jollibee should find a good local partner to understand more about the culture, customer preference, and condition in Papua. Then, market the new opening of Jollibee and try to match the flavor to the people there. An international menu item (Jollimeal) might attract more customers, but it could complicate quality control.

Thus, Jollibee should wait until everything is stable, and then offer more creativity in the future. Besides, there was no competitor, so Jollibee could easily succeed by only adjusting the flavor of the burger, such as the level of spiciness. Nevertheless, Jollibee should give special training to the new local employees and motivate the local and Filipino employees to have a good cooperation. The more collective the employees are, the smoother the company runs. Other than that, encourage the employees to reach a certain amount of sales by rewarding bonus.

Even though Hong Kong and California were considered as strategic markets for global market because they were both in countries with huge populations, China and US, Jollibee seemed not to have enough ability to enter the market yet. In my perspective, after the expansion in Papua New Guinea, Tingzon could try to open another store in Hong Kong, but he should make sure that he could hire local Chinese employees because it was impossible to sell food without using the language the customers used. Language could create a miscommunication and misunderstanding. If there was no good communication with the customers, then there was no good service.

Besides, it showed the customers that Jollibee was not professional enough and this could ruin company’s image. Another way to develop the ability was to find another way to cook the chicken, instead of frying it. Perhaps, it could start from grilling the chicken to invite customers who have a kind of belief that deep-fried food was not good for body. Additionally, Tingzon should find a way to make the prospective local and Filipino employees to be more understanding and cooperate with one another because problem among staffs could cause great impact to the company indirectly.

From my viewpoint, it might be easy for Jollibee to open a store in California and attract the Filipino expatriates. However, it would be hard to expand to other states and appeal to other groups of Americans, including other Asian Americans because they were not familiar with “Jollibee” brand. Besides, fast food restaurants were everywhere in America, which meant that there were a lot of strong competitors. Furthermore, the spicy burger might not fit the American taste.

Cite this Jollibee – Fast Food in the Philippines

Jollibee – Fast Food in the Philippines. (2017, Feb 10). Retrieved from https://graduateway.com/jollibee-fast-food-in-the-philippines/

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