INTERNATIONAL MARKETING

Jollibee Case Study

Kunal Shete - 92

Sameer Parab - 67

Karan Parmar - 69

Kartik Mehta – 50

Aditya Dhage - 11

Nilesh Singh - 97

JOLLIBEE FOODS CORPORATION

Started in 1975 as an ice cream parlor owned and run by the Chinese-Filipino Tan family

Diversified in sandwich business after realizing 1977 oil crisis could double the price of ice cream

JFC has a total of 2,510 stores worldwide

The Tans’ hamburger, developed by Tony’s chef father, quickly becomes a customer favorite

Company's name based on TTC's vision of employees working happily and efficiently

The “Five Fs” summed up Jollibee’s philosophy

Tan family members occupied several key positions particularly in the vital operations functions

CONTD…

In 1993, Jollibee went public and in an initial public offering raised 216 million pesos

The Tan family retained the majority ownership and controlled Jollibee

Acquisition of Greenwich Pizza Corporation in 1994 and the formation of a joint venture with Deli France in 1995

The company’s first serious challenge arose in 1981, when McDonald’s entered the Philippines

ABOUT THE CASE

Moving offshore 1986-87

Early lessons learnt in Singapore, Taiwan

In 1993, TTC decided that Jollibee’s international operations required greater structure and more resources

In January 1994, Tony Kitchner Vice President International Operations

New Division was created having different identity

Kitchener's strategy adopted

Strained International-Domestic relations

Kitchner’s departure in 1997

New International Era 1997, appointing “Manolo P. (“Noli”) Tingzon”

Fresh look at the strategy

JOLLIBEE DOMINANT POSITION IN PHILLIPINES

Old establishment

Reason for entry into fast food business

A home-style Philippine recipe

The company's name

Keeping the employees happy & treating them with respect

The “Five Fs”

CONTD….

A well developed operations management capability

A well oiled machinery that keeps close tabs on our day-to-day operations

Professional outside managers to supplement expertise in vital positions

Unique political situation

Subsequent growth in nationalism and local pride

REASONS FOR COMPETING SUCCESSFULLY WITH McDonalds

Consumers preference towards Philippine hamburger

Introduction a larger burger of its own, called the “Champ”

Was able to turn the economic and political crisis in 1983 to its advantage

National Pride

Introduced new items in the menu all developed to local customers taste

IS THIER ADVANTAGE SUSTAINABLE?

As long as below listed steps are followed advantage should

be sustainable:-

Sustaining the first mover advantage

Retaining tight control over operations management

Allowing it to price below its competitor

Having the flexibility to cater to the tastes of its local consumers

Constant market research in order to compete with the multinationals

Tony Kitchner’s International Strategy

Evaluation

Build the global Jollibee brand

Positioning Jollibee as an attractive partner, while generating resources for expansion

Top 10 fast food brands in the world

First mover into untapped markets

The company will be able to restrict the entry for competitors Incur losses in the initial years

Targeting expats

Allowed the company to ease its transition into an unfamiliar market

The popularity amongst expats could generate publicity and attract walk-in traffic from non-Filipinos

The risk of targeting a narrow segment

Operations in Dubai, Kuwait & Dammam faliedThe lifestyle, tastes and preferences of the expats was not

considered during international expansion

PLANT THE FLAG (Rapid expansion strategy)

Reflected a desire to build an empire under his leadershipFailed to make financially sound decision for the firm

TTC preferred to go slower, making sure eachstore was profitable / generate money for the franchisee

Neglected the large transaction costs associated with establishing markets in new countries

Lack of research prior to entering in new market (The unprofitable ventures in the Middle East)

Introduce dress code, converting the company image from neighbourhood chain to world-class/multinational company

 

Assigned the responsibility of opening of new stores to a Franchise Service Manager

FSM was also responsible to send the weekly data of store sale to the company, helped monitoring the performance of

each of their stores.

 Established a system to evaluated every aspect of operations

in detail, including product quality and preparation

 Redesigned the new Jollibee logo & adjusted the menu to local

preferences

Kitchner never really understood the organizational culture at Jollibee

Exhibited his personal culture throughout, the organizational culture was forgotten

He replaced the friendliness, one of the pillars of the Jollibee brand with competition, causing superiority complex

Failure to gain access to R&D and Finance resources controlled by the Philippine operations

DECISION TO BE IMPLEMENTED

Noli Tingzon took on the role of General Manager of the International Division in July 1997.

He was faced with three options for immediate growth that would shape the company’s future international

strategy.

The options were:

Papua New Guinea: Raising the Standard,

Hong Kong: Expanding the Base, and

California: Supporting the Settlers.

Papua New Guinea

There was virtually no fast food or decent places to eat.

A poorly managed 3 store fast food chain had recently severed ties with an Australian chicken franchise

The potential franchisee was willing to open five stores and would even put up the capital.

The benefits of opening the stores in New Guinea are first-mover advantage, franchisee would put up the capital, Jollibee would not

risk their equity, no competition, and putting fast food at service stations would create a constant flow of customers

Our recommendation would be to enter into a franchise agreement with Gil Salvosa, because the benefits outweigh the

risks.

Hong Kong

Many operating and cultural distance learning issues

Difficulty in retaining Chinese staff and appealing their product offerings to locals

Experienced uneven product quality and weak brand recognition in this market

Our recommendation would not be in favor of opening the fourth store in Hong Kong because the risks of not being successful are

too great.

The decision to open a fourth store in Hong Kong may be revisited at a later date.

California-Supporting the Settlers

Success in Guam led them to believe US had potential

Food Appealed to Filipinos and Americans

Plans to appeal to Asian Americans and then Hispanic Americans

Competitive atmosphere of US fast food market will provide Jollibee tremendous opportunity of global

learning

Helpful aspect is the diversification of America

IMPLEMENTING THE DECISION

New product-New market

Increase depots in the domestic and other countries

Maintaining market dominance

Focus on R&D from new markets, potential acquisitions and new products to be developed

Aligning strategies with macro environmental changes

A geocentric approach

Management Development

Facilitate inter unit cooperation

Smooth supply chain management

Varying the menu to local taste

Develop understanding of the local market

Establish close relations with local marketing teams

Manage campaigns like an army operation – plan ruthlessly

Track and adjust in real time

THANK YOU