Fast Food Company Jollibee, Philippines

Table of Content

Jollibee is the largest fast food chain in the Philippines, operating a nationwide network of over 750 stores. A dominant market leader in the Philippines, Jollibee enjoys the liona€™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 in the USA, Vietnam, Hong Kong, Saudi Arabia, Qatar and Brunei, firmly establishing itself as a growing international QSR player. A company that values family

Jollibee was founded by Tony Tan and his family with its humble beginnings as an Ice Cream Parlor which later grew into an emerging global brand. At the heart of its success is a family-oriented approach to personnel management, making Jollibee one of the most admired employers in the region with an Employer of the Year Award from the Personnel Management Association of the Philippines, Best Employer in the Philippines Award from Hewitt Associated and a Top 20 Employer in Asia citation from the Asian Wall Street Journal.

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Aside from promoting a family oriented work environment, the branda€™s values also reflect on their advertising and marketing. Jollibee knows their target audience very well: the traditional family and all communication materials focus on the importance of family values, making Jollibee the number one family fast food chain in the Philippines and a growing international QSR player. A Well-Loved Brand Customer satisfaction has always been key to Jollibeea€™s success. Never losing sight of its goals, Jollibee has grown to be one of the most recognized and highly preferred brands in the Philippines.

Now the market leader among fast food chains in the Philippines, claiming a market share that totals to more than half of the entire industry. Great tasting products and quality systems Jollibeea€™s growth is due to its delicious menu line-up – like its superior-tasting Chickenjoy, mouth-watering Yumburger and Champ hamburger, and deliciously satisfying Jollibee Spaghetti -ably complemented with creative marketing programs, and efficient manufacturing and logistics facilities. It is made possible by well-trained teams that work in a culture of integrity and humility, fun and family-like.

Every Jollibee outlet welcomes customers with a clean and warm in-store environment and friendly and efficient service. And it is this tried and tested formula of delivering great-tasting food, adherence to world class operating standards and the universal appeal of the family values the brand represents that are driving the expansion of Jollibee both locally and in the overseas market. Widest store network in the Philippines and an emerging global player 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 liona€™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. Click on the link for the list of stores Philippines International A Triumph for and of the Filipino and a source of Filipino pride.

Jollibee dedicated its continuous success to the Filipinos who have been there from the very start. Jollibee is so well-loved everytime a new store opens, especially overseas, Filipinos always form long lines to the store. It is more than home for them. It is a stronghold of heritage and monument of Filipino pride.

FSC Standards

Jollibeea€™s phenomenal growth owes much to its strict and committed adherence to high standards as symbolized by “F. S. C. ”: Food (F) served to the public must meet the companya€™s excellence standards or it will not be served at all; the Service (S) must be fast and courteous; and Cleanliness (C), from kitchen to utensils, must always be maintained. Jollibee is proud of its employees who carry out their jobs. Jollibee recognizes them by providing the highest compensation and benefits packages in the fastfood industry, and modern and comprehensive training programs.

Managers are regularly updated on the latest store operations systems, people-oriented management skills, among others. Service crews are trained on various store stations and food-service innovations. Jollibee also offers career opportunities for qualified and exceptional crew members to further their food-service careers as managers. Store operations are ably supported by professionals who are experts in Marketing, Computer Management and Engineering. The Commisary Thanks to the Jollibee Commissary System, ensuring the manufacture and distribution of safe and high- quality food in the most cost-efficient manner is made possible.

There are three Commissary System sites: Santolan, Pasig City; Mandaue City, Cebu; and the central site in Canlubang, Laguna. The System, which operates 24/7, manages Jollibeea€™s total supply chain process. The Jollibee Pasig City commissary has production lines for breads and sauces, and is the distribution center for North Manila and North Luzon. In 1996, Jollibee opened the Vismin Foods Corporation (VFC) in Mandaue City, Cebu to service the Visayas and Mindanao areas. VFC has its own bread, pie, sauce, and frozen patty lines. The Laguna commissary is the biggest and most advanced in the country and among Asiaa€™s best.

Operated by Zenith Foods Corporation (ZFC), a full subsidiary of Jollibee, the newest commissary is on a 6-hectare property in the Calmelray Industrial Park. Aided by custom-made mechanized equipment, the production lines are for the marinated Chicken Joy, frozen patties and pies, breads, sauces, hotdogs and other meat products, and dry blended goods. ZFC can service over 800 Jollibee and Greenwich stores. The chicken marination line can produce as many as 150,000 pieces a day while about 480,000 hamburger patties a day is turned out by the frozen patty line. The breadline is designed to match the volume output of patties, i. e. also about 480,000 pieces a day. The pie line can produce as much as 157,000 pocket pies in a 20-hour operating day. Currently, pies are exported to Jollibee stores in Hong Kong, Guam, Saipan, Brunei, and the USA. Various sauce products are processed in the ZFC sauceline including those for the Jollibee bestsellers, spaghetti and palabok. A professionally staffed Technical Services Team supports the maintenance of an internationally accepted quality management system that further ensures the quality and safety of the commissary manufactured food products.

High caliber teams from Engineering, Human Resources, Information Management, Finance and Accounting likewise provide support to the Manufacturing and Logistics operations of the Commissary. Proof of Jollibeea€™s adherence to high quality standards is the various awards it garnered for the commissaries: in 1997, the commissary in Pasig earned the Outstanding Industrial Plant in the National Capital Region from the Laguna Lake Development Authority and the Most Improved Industry awarded by the Sagip Pasig Movement while Commissary Plant Engineer Romy P.

Fernandez was awarded as one of the Top Ten Most Outstanding Pollution Control Officers of the Philippines. In 1998 also, the frozen patty line in the Pasig commissary was awarded an ISO 9002 certification by the SGS (Societe’ Generale Surveillance) Yarsely, an international certification body. 2004 is a banner year for Vismin Foods Corporation (VFC) who has been assessed and certified by the National Meat Inspection Commission of the Department of Agriculture, to have fully met the requirements and standards of Good Manufacturing Practice, reinforcing the commissarya€™s “AAA” accreditation granted by the same agency.

Milestones / History 1975 Mr. Tony Tan and his family opens a Magnolia Ice cream parlor at Cubao. This is later to become the 1st Jollibee Outlet. 1978 Bakery is established in Cubao. Jollibee posts 1st year sales of P2 million Jollibee incorporates as a 100% Filipino-owned company, with seven Jollibee fast- food restaurants within Metro Manila as initial network and the Yumburger as flagship product. 1979 Spaghetti Special is introduced 1st Franchise owned store opens at Ronquillo Sta. Cruz. 1980 Jollibee launches its 1st TV commercial. Jollibee Chickenjoy and French Fries are launched.

The well-loved Jollibee mascot is conceived to support brand awareness and identity efforts. Other mascots are later introduced. Jollibee launches Chickenjoy, which becomes one of its best-selling menu items. 1981 Jollibee Foods Corporation enters list of Top 1000 Corporations. Jollibee ended the year with 10 stores 1982 Jollibee pioneers the use of in-store promotions, novelty premium items and Kiddie Birthday packages for kids. Palabok Fiesta is introduced. Jollibee Langhap Sarap TV ad 1983 The Langhap-Sarap TV ad Campaign is launched. Chickee and Lady Moo join the Jollibee mascots

The Champ hamburger 1984 Champ hamburger is launched. Jollibee enters list of Top 500 Corporations and assumes market leadership in local fast food industry. Mascots Champ and Hetty join the Jollibee family. WEA gives Jollibee Gold record award for the outstanding sales of Jollibee songs. 1985 Jollibee becomes the market leader of the fastfood industry. Breakfast Joys are introduced. Langhap-Sarap awarded most effective ad campaign in the food category during the 9th Philippine Advertising Congress. 1986 Jollibee wins the 9th International Foods Award from El Comestible in Barcelona, Spain.

Tony Tan wins the Agora Award for entrepreneurship given by the Philippine Marketing Association. Top 250 Corporation list include Jollibee Foods Corporation. Jollibee opens its 1st international store in Taiwan Jollibee adds Chunky Chicken Sandwich in its menu. Jollibee – No. 1 again in a€™87 1987 2nd Taiwan store opens. Sales of 570 million pushes Jollibee into the elite Top 100 Corporations. Jollibee opens 1st fast food outlet in Brunei, marking its entry into the global market. 1988 Jolly Twirls softserve is successfully launched.

Jollibee system wide sales hit P921 million, further leading market share of 31% in the fast food industry and a dominant 57% share in the hamburger segment. Jollibee celebrates 10th year anniversary. Tony Tan is named one of the Ten Outstanding Manilans. Jollibee wins the Anvil Award for outstanding PR campaign in relation to the achievement of marketing objective with its Filipino Talents campaign. 1989 2nd Brunei store opens. Balut and Ligaw TV commercials wins the Kidlat Award in the Service and Leisure Products category during the 11th Philippine Ad Congress.

Jollibee sales hit P1. 3 billion marks, first fast food chain to surpass billion-peso sales mark. 1990 Jollibee adds coleslaw, Jolly Hotdog, Chickenjoy Take-Me-Out and Peach mango Pie to its ever-growing menu. Jollibee post sales of P1. 8 billion. Tony Tan is awarded the Triple Award by AIM as Outstanding AIM Alumnus. Jollibee receives the Excellence in Marketing Management Award from the Asian Institute of Management. 1991 Jollibee’s 100th store opens in Davao City. Jollibee opens a record high of 35 new stores. Opens 1st store outside Luzon in Cagayan de Oro City.

Jollibee launches its Pancakes and Jolly Meals. Jollibee sales hit a whopping P2. 65 billion. The Lola TV commercial wins the Grand Araw Award and an award of excellence for the promotion of Filipino Values during the Philippine Ad Congress. Jollibee receives award for the outstanding Corporate Safety Consciousness Programs by the Safety Organization of the Philippines (SOP). 1992 Jollibee sales hit the P3. 365 billion. Started using frozen patties for its popular hamburgers. Improved softserve ice cream line by offering fruit flavored ice cream. Acquired 73% if the Hamburger segment.

Opened another store in Jakarta, totaling to 2 stores in Indonesia. Jollibee have 112 stores nationwide. Maintained its advantage over its competitors by acquiring more than 50% share of the fast food industry. 1993 July 13, JFC was listed in the Philippine Stocks Exchange with an initial offering of P9. 00 per share. October 1993, JFC share are being sold for P20. 00, a windfall or more than 135%. Improved softserve ice cream line by offering fruit flavored ice cream. Marketing launched its At Home Ako sa Jollibee ad campaign, focusing on Jollibeea€™s loyal customers. Introduced the Kiddie Pack Promo.

Moved to Jollibee Centre Building in Ortigas Center, Pasig, the new Main Office site. 1993 148 Jollibee stores nationwide by the year end. Jollibee expands into the pizza-pasta segment with the acquisition of Greenwich Pizza Corporation. Jollibee is cited as on of the leading companies in Asia by the Far Eastern Economic Review. 1995 Jollibee acquires franchise of Delifrance. 20 more stores opened in the Philippines,bringing the total to 168. Jollibee successfully opens stores abroad: Guam, Dubai, United Arab Emirates, Kuwait, and Jeddah, and Kingdom of Saudi Arabia. 1996

Jollibee opens its 200th store in Malolos, Bulacan. Jollibee is cited again as on of the leading companies in Asia by the Far Eastern Economic Review. The company reengineers its visual identity system. Jollibee system wide sales increased to P8. 29 billion which translates to a market share of more than 50% among all hamburger fast food chains. Jollibee had 208 stores nationwide. July 10: Mary’s Chicken was born; a semi-self service restaurant and another Jollibee subsidiary. The company reengineers its visual identity system. Amazing Aloha was launched. 1st Jollibee store in Hong Kong opens.

Jollibee launched various projects, such as Maaga ang Pasko sa Jollibee and Chikiting Patrol: at Home Ako Dito. These projects’ main objective was to protect and contribute to the development of the Filipino children. 1997 System wide sales increased to P11. 17 billion. Jollibee International opened Jollibee Xiamen located in the People’s Republic of China. Jollibee launched “Kaya mo Kid” project which aims to instill positive values, which helps children achieve their dreams and ambitions. 1998 Jollibee opens in Daly City. The company celebrates its 20th year anniversary.

Opened 62 stores nationwide, bringing the total to 300 stores. Jollibee opens its 300th store in Balagtas, Bulacan. Jollibee receives the ISO 9002 Certification for its frozen patty line. Jollibee wins the Employer of the Year Award. 1999 Opened 50 stores nation-wide; total of 350 stores. Introduced the Cheezy Bacon Mushroom Burger to its line of specialty burgers. Far Eastern Economic Review cites Jollibee as the Philippines’ leading business corporation. 2000 31 more Jollibee stores opened, bringing the total to 381 stores. Jollibee acquires Chowking Foods Corporation.

For the 3rd straight year, Far Eastern Economic Review ranked Jollibee as the Philippines’ leading company. Asian Business Magazine ranks Jollibee as the Most Admired Company in the Philippines and the 3rd over-all in Asia, surpassed only by global giants General Electric and Microsoft. Systemwide sales reach P20 billion. 2001 Jollibee opens its 400th store in Intramuros. System wide sales rose to 18. 8% to 24. 11 billion. Income, before non-recurring charges, to P959 million. Network expanded to 800 restaurants. 2002 Revenues neared the P27-billion mark. Number of stores exceeded 900. Tony Tan made MAP “Management Man of the Year”.

2003 Jollibee store count closed to 988 stores nationwide. For the sixth straight year, the Far Eastern Economic Review ranked JFC as the Philippines’ Leading Company. Jollibee celebrates its 25th year. 2004 The Chairman and Chief Executive Officer of the company, Mr. Tony Tan Caktiong was named the Ernst and Young’s 2004 World Entrepreneur of the Year. Jollibee opens its 500th store in Basilan. Jollibee inaugurates its biggest and most modern commissary in Camelray Industrial Park in Canlubang, Laguna with PGMA as guest of honor. 2005 TTC named World Entrepreneur of the Year by Ernst and Young.

2006 ETM receives Corporate Citizen Award of the year from CNBC Asian Business Leaders Awards. 2007 Jollibee opens 600th store in Aparri, Cagayan Jollibee opens Las Vegas outle. 2008 Jollibee launches Jollitown, the first children’s TV show in the country to be produced by a fastfood chain. TTC and ETM are featured by BBC and CNBC Managing Asia, respectively. JOLLIBEE marks 30th anniversary. JOLLIBEE bested some of Asia Pacific’s biggest multinationals as it bagged the FMCG and F & B Asia Pacific Supply Chain Excellence Award at the SCM Logistics Excellence Award held in Singapore.

Zenith Foods Corporation, the commissary plant of JFC, was adjudged the National winner of Meat Processing Plant AAA category in the search for Best Meat Establishment of the National Meat Inspection Service. Jollibee strengthens US network with the opening of three new stores. JOLLIBEE wins Award of Excellence in Philippine Quill Awards for Media Relations Program(30th anniversary campaign). JOLLIBEE bags CMMA and three Araw Values Award. Jollibee stages first ever holiday musical special for children dubbed “A Magical Christmas at Jollitown”.

Jollibee and the Jollibee Franchisees Association launched the 30th anniversary special novelty offering – Hug and Share Doll. Proceeds of the sales will all be donated to charity. Biggest and grandest MaAga ang Pasko caps off Jollibee’s 30th anniversary. Total of more than 117,000 toys and books collected were the highest ever in the campaign’s 14-year history. THE JOLLIBEE GROUP OF COMPANIES Jollibee 3rd Quarter Sales Up 13%, Profit Rises by 15. 9% Metro Manila, Philippines, November 14, 2013 – Jollibee Foods Corporation (PSE:JFC) – Results for the quarter ended September 30, 2013.

The following are the highlights of JFC’s results of operations for the quarter ended September 30, 2013: Financial Summary Quarter 3 Ended September 30 Year to Date Ended December 31 2013 2012 % Change 2013 2012 % Change System Wide Retail Sales 25,320 22,416 13. 0% 75,223 66,918 12. 4% Revenues 19,766 17,324 14. 1% 57,834 51,500 12. 3% Net Operating Income 1,209 1,067 13. 3% 3,935 3,018 30. 4% Net Income 1,038 886 17. 1% 3,139 2,506 25. 2% Net Income Attributable to Equity Holders of the Parent Company 1,019 879 15. 9% 3,124 2,466 26. 7% Earnings per Common Share – Basic 0. 970 0. 841 15. 3% 2. 979 2. 367 25. 8% Earnings per Common Share – Diluted 0. 965 0. 837 15. 3% 2. 940 2. 342 25. 5% *Amounts In PhP Millions, except % change and Per Share data. Jollibee Foods Corporation, the country’s largest food service company generated in the third quarter of 2013 System Wide Sales of Php 25. 3 billion, 13% higher than the sales in the same period in 2012. Sales for the first nine months of the year grew by 12. 4% compared to that same period in 2013. System Wide Sales is a measure of all sales to consumers both from company owned and franchise stores. 1978-1980 1980-2009

Launched in 1980, the logo was the longest-lived logo of Jollibee, consisting of Jollibee’s face, a burger shape, a box, and a straightened Jollibee text. The logo continued to be used even during the advent of Jollibee’s 1998 logo. The logo was used for store design until the early 2000s, and was used in packaging and commercials until 1998. The logo remained in use as the text was featured in the trays of the restaurant until 2009. Also, the logo remained in use as the full logo (with Jollibee’s face in a box and the text below) on the Jollibee USA website until the website officialy opened in 2009, marking the logo’s total discontinuation.

1998-2011 In 1998, to coincide with Jollibee’s 20th anniversary and the advancement of the new millennium, Jollibee revamped its store design and unveiled a new logo, consisting of a rounded Jollibee text in a VAG Rounded-style text, and a better version of Jollibee’s face, dropping the burger shape and the box that once enclosed the symbol. Also, Jollibee’s face was moved from the center to the right and was slightly rotated. The logo was used in packaging and commercials until 2011, and can still be found in restaurants that have not yet used the present logo and underwent renovation yet.

The logo affected the Jollibee mascot, because in coincidation with this, the Jollibee mascot was given a full makeover, sporting a better face and better clothing. 2011-present The logo is just the same, but the only things that were new was the modified head of Jollibee and a slight modification to the text (which included a modification of the b and the reserved logo turned from subscript to superscript). The logo was not universally adopted until late 2011, when a fraction of Jollibee’s branches underwent renovation and a number of new stores with new designs sporting the new logo opened.

The logo also affected the Jollibee mascot, resulting in the animated 2D Jollibee mascot sporting a new face that is exactly like the logo. The logo was launched in 2011, originally with two red rounded trapezoids, colored in red and yellow, which later became a new basis for Jollibee’s signage (Jollibee’s signage logo only contained the red trapezoid, the text, and the symbol, and is still used to this day). That variant was dropped in 2012, leaving the symbol and text to stand out on their own. Executive Summary

The case gives an idea about how the competition influenced Jollibee’s strategy, both domestic and international. Jollibee ,which was a Filipino chain of restaurants, was forced to change their strategy with the entry of McDonalds in Philippines, which later transformed the company into a global company . The company faced serious challenges with their international exposure. The challenges included the conflicts with franchisees/Joint venture and conflicts between divisions. Another issue that the company faced was the entry into Papa New Guinea, United States of America and expansion plans in Hong Kong.

The company has to consider the financial instability it faces while considering their plans. In the analysis we have tried to cover the effectiveness of strategies adopted by Mr Tony Kitchner (Former International Division head). This case analysis report deals with, firstly the key management challenges faced by the company, followed by some supporting arguments. In the management issues, the report focuses into the conflicting areas or the need to establish a greater cooperation and coordination between the Domestic and International divisions.

Then, the recommendations regarding what should the company do differently in each of its department like in Marketing, HR, Finance or Operations, to succeed in its plans of global expansion. Finally, the feasibility of the three decisions that the new management has taken is also discussed. We have also tried to analyse the dilemma faced by Mr. Tingzon regarding the opportunities of international expansions to Papa New Guinea, Hong Kong and USA. Jollibee Foods Corporation- International Expansion: Case Analysis a. Industry Analysis A fast food restaurant or Rapid Service Eatery (RSE) has the following 3 characteristics. 1.

It is characterized by its fast food cuisine and nominal table service. 2. It offers limited menu, cooked in bulk in advance, kept hot, finished, packaged to order, and available to take-out, drive-thru, and dine-in. 3. It is usually a part of a chain or franchise operation, which supplies standardized ingredients and/or partially prepared foods and provisions to each restaurant through controlled supply channels. McDonald’s is one of the most famous RSE in the world. McDonald’s became No. 1 in every country of more than 100 countries in the world except Philippines where JFC has been overwhelming strength against McDonald’s.

JFC was founded by Chinese-Filipino Mr. Tony Tan Caktiong (TTC) as the ice-cream parlor at Cubao City in 1975. Gradually, it grew up to a reasonably large fast food chain in Philippines. Further, JFC started scouting avenues for expansion internationally. Thus it opened its franchises in countries like U. S. A. , Brunei, Hong Kong, Guam, Middle East, etc. Assuming, Mc Donald’s was the chief competitor of JFC in Philippines we have made an analysis of the strategies adopted by both the organizations. In order to analyze the strategy, we have utilized the following two tools. a) Four-Tier Structure of Market b) Type of Glocalization A.

FOUR-TIER STRUCTURE OF MARKET Khanna & Palepu (2006) introduced the Four-Tiered Structure of Market. They insisted that most product markets comprise four distinct tires: global, glocal, local, and regional. In Global segment, products of global quality with global features at global prices are offered. In Glocal segment, products of global quality with local features (and local soul) at less than global prices are offered. In local segment, local products with local features at local prices are offered.

TYPE OF GLOCALIZATION As objectives of glocalization can be product/service and business model, there are two types of glocalization? Product/service glocalization ? Business model glocalization. The following charts give an overview of strategies adopted by JFC and Mc Donald’s.

  • Porter’s competitive strategies Model b. Type of Glocalization (Products/Services vs. Business Model) b. Firm Analysis SWOT ANALYSIS OF JFC: STRENGTHS WEAKNESSES a. Jollibee was a regional industry leader that had experienced professionals as chief executives of the organization.
  • Proven past performance made dealings with prospective partners easier.
  • Wide variety of products offered in diverse markets. a.

Lacked more effective marketing skills as growth revenues decreased. b. Lack on in-depth planning and research in the expansion to foreign markets. c. Poor co-ordination between the national and international units.


  •  The promising nature of international markets and also the available potential due to the migration of Filipinos in certain countries.
  •  Being an agricultural country, full integration in sourcing raw materials could be done.
  • For international markets, locating commissaries in the same country through joint ventures could be a potential source of success for the company.

Jollibee could facilitate the technology provision while the partner could formulate the appropriate modus operandi to sell in the foreign market. d. For the local market, an increase in the number of commissaries could easily reduce the transportation costs and the duration of shipments. This would allow the company to concentrate on the quality of products.

  1. Competition from both international companies and other local eateries.
  2. Political instability in the country threatened JFC as it could hamper the opportunities to convince international investors and country leaders to allow a JFC entry in their country.
  3. Driving Forces Analysis of Tony Kitchner’s Strategy a. Marketing Perspective Jollibee was able to attain a competitive advantage in Philippines over McDonald’s by doing following things:

First mover advantage – Jollibee was the first to enter the market. Analysis of Tony Kitchner’s Strategy In 1994 Tony Kitchner was hired to head the International Division. He was successful over his three years. He was successful in creating wealth and increasing the presence in countries that had less or no competition. During his time the total number of stores increased 65% to 205 from the end of 1993 to the end of 1996.

Moreover the total sales increased over 94. 5% over the same period These increases are dramatic. Very few companies can experience rapid growth like this. He always had the idea to be the first -mover into untapped markets as he believed that although you may incur losses in the initial years, which can be cross subsidized from Philippines operation, the company will be able to restrict the entry of its competitors. But these do not show the whole picture of his strategy implementation. There were instances of shutdown of stores due to mounting losses .

The chaotic strategy of investments unsupported by proper research failed costly for the company. His strategy of targeting expats had the risk of targeting a narrow segment. The lifestyle, tastes and preferences of the expats was also not considered during international expansion. Marketing Perspective Jollibee was able to attain a competitive advantage in Philippines over McDonald’s by doing following things:

  •  Jollibee was the first to enter the market.
  • Retaining tight control over operations management, which
  • Allowing it to price below its competitor.
  • Having the flexibility to cater to the tastes of its local consumers.

As Jollibee entered international markets, it faced new challenges. The fast food industry is highly competitive and price wars and marketing innovations are seen frequently. The rivalry is also centered on the key success factors of the industry, which are good food, good, service and reasonable pricing. Rivals are somewhat equal in capabilities and opportunities, thus making the competition stiffer. Internationally well-established players like KFC and McDonalds had high brand values that Jollibee found difficult to compete with.

The threat of substitute products is considerable. Local street food and high-end restaurants form two ends of a range of substitutes. Potential entrants face entry barriers that will hinder them from entering the industry. These are the inability to gain access to technology and specialized know-how, brand preference and customer loyalty, capital requirements, economies of scale, and strategically situated distribution channels. Tony Kitchner was hired to build the global Jollibee brand with the dual goals of positioning Jollibee as an attractive partner, while generating resources for expansion.

In order to become one of the; top 10 fast food brands in the world, Kitchner implemented a two-part international strategy which comprised of targeting ex-pats and planting the flag.;

TARGETING EX-PATS. Kitchner’s idea of targeting ex-pats; allows the company to ease its transition into an unfamiliar market. Although there is the risk of targeting too narrow of a segment, Jollibee’s success in the niche market would allow it generate momentum for the company’s expansion.

The concentrated marketing campaign allows the company to generate stable revenues that can be used to support Jollibee’s entry into other segments, while the popularity amongst expats could generate publicity and attract walk-in traffic from non-Filipinos. Recommendation; Targeting ex-patswill only lead Jollibee to become a global brand if: a. Jollibee correctly targets expats who have a need and want for the product and thus avoid repeating its mistake in the Middle East. b. The company continues to build its competitive advantage through learning and by appealing to a broader audience

PLANT THE FLAG. On the other hand, Kitchner’s decision to plant the flag; reflected a desire to build an empire under his leadership, rather than a strategically sound decision for the firm. Although Kitchner hoped to leverage Jollibee’s competitive advantage by entering new geographic market, his rapid expansion strategy was unfocused and poorly executed. Kitchner also neglected to consider the large transaction costs associated with establishing markets in new countries. Kitchner’s desire to be first-mover in a number of small, undeveloped markets would not have brought the prestige needed to win the firm better partners.

Planting the flag only showed that Jollibee knew how to repeat its success. Recommendation Market research prior to entering new markets will help in avoiding the unprofitable ventures as in the Middle East. In order to compete on the level with multinationals, rather than just being a first mover, Jollibee would have to take its performance to the next step and prove that it could continue to build its competitive advantage. b. Financial Management Perspective Jollibee’s sales, net income, operating income, and

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