Jollibee Foods Corporation

JOLLIBEE FOODS CORPORATION: INTERNATIONAL EXPANSION

CASE ANAYSIS BY: DEEPTHI RAGHUNATH(24) GIA DCUNHA(30) GUNIN MATTACK(32) GURVIR SINGH SANGHA(33) HARI KUMAR M.P.(34)

Marketing: Jollibee depends on high customer traffic and tight operations mangement. It offers great service to the high volumes of people who patronize its outlets by functioning as a well-oiled machine with close tabs on daily operations. Jollibee focus: USP: The Unique Selling Porposition of the Jollibee brand is : 1) Fast, Good, Clean, Cheap food 2) Caters to local needs( Spicy patty) 3) Consistency, reliability over all its outlets. Positioning: Ensuring high traffic needs an emphasis on store location and positioning Jollibee in the minds of the consumer as a place that they would enjoy eating fast food. This entails proper branding and positioning of the service offered. Jollibee also projected itself as world class and not a local brand. The service that is offered should be consistent over all Jollibee stores, however this might be a problem as the division has been slimmed recently and resources might be stretched too far. Product: In the case of Jollibee, it went from being an ice cream parlour to serving hamburgers made with a homestyle recipe. This change in product was in response to events triggered by the 1977 oil crisis which would have doubled the prices of ice cream. The product offered by Jollibee appeals to the Filipinos taste for spicy burgers. By concentrating its resources on satisfying the Filipino palate, Jollibee has been able to serve localized dishes that are unlike any found in the other fast-food chains in the Philippines. In addition to offering the usual French fries that accompany the meals found in McDonald’s, KFC, Burger King, and so forth, Jollibee also serves rice or spaghetti, Filipino style. Even the burgers are cooked exactly as Filipinos want them done— sweeter and with more seasonings, often likened to what a Filipino mother would cook at home. Menus in outlets across the globe adjusted to local preferences to differentiate it from other standardized players like Mc Donalds and KFC who maintain the same menus worldwide with minimal changes. Jollibee even incorporated recipes from employees to truly capture local tastes.

“ McDonalds entered the Philippine market in 1981 and many assumed the Big Mac would soon dominate the market. Surprisingly, McD’s ended up getting stung by the bee. Jollibee has secured a 65% market share and is out pacing McDonalds at its own game. Jollibee accomplished this by local adaptation of the menu and by positioning the food chain as a family restaurant.” Source: Branding Insights from the Zyman Institute of Brand Science

Place: The location of outlets is of key importance to the marketing strategy of Jollibee. For Example, the outlet in Hong Kong is located at Central where a large number of Filipinos gather. Promotion: Local brands: Brands in local market are strong contenders and are not to be underestimated. Local managed brands like Jollibee in the Phillipines, often have the advantage of intimate knowledge of consumer tastes and consumer preference through local pride. Jollibee used the wave of nationalist pride to promote a Filipino brand of hamburger. This strategy met with great success. Investing in socio-civic programs designed to serve its host communities further secured Jollibee’s position as a Filipino company for the Filipino. Advocacy campaigns such as the early Christmas drive “ma-Aga ang pasko sa Jollibee,” again endorsed by Aga Mulach, the poverty housing project with Habitat for Humanity, and the Kaya Mo Yan Kid” or “You can do it, kid!” campaign to encourage kids to show their potential contributed to the company’s overall success, not only with its customers but with all its stakeholders. Source: http://elearning.utcc.ac.th “Jollibee attributes this success in part to its internal branding which focuses on "great taste and happiness" which includes "value for money, the happiest store experience, and the haven for kids.” Source: Branding Insights from the Zyman Institute of Brand Science

Beach head strategy: New Markets like papua New Guinea and San Francisco which had an immigrant population can support the Beach head strategy which entails expansion in a market with little or no competition. Jollibee is an emerging market brand and can easily establish a beach head in foreign countries by targeting areas with a high immigrant population. Competition Competitors like Mc Donalds have more money and highly developed operation systems. Mc Donalds doesn’t satisfy local taste in Phillipines. It has a plain patty which is part of its standard global menu. Jollibee doesn’t have the big name to generate the high level of trust, and to choose franchisers in the partner countries Go in for BLUE OCEAN strategy- expand in places where there is an unmet need, which isn’t being met by any of the existing vendors, hence there is little or no competition.

EXPANSION STRATEGY: Source: http://elearning.utcc.ac.th

Jollibee’s key success factors (KSF)

Transferability to overseas markets

Actions required to allow a successful transfer of KSF

Niche Market Highly localized menu.

Likely.

- Introduce the more popular Jollibee meals that are found in the Philippines. - Slowly bring in the other varieties. - Ingredients used must be identical to those used in the Philippines to ensure consistent quality and taste. - Use a marketing strategy that leverages on Jollibee’s brand equity.

Food variety that targets the Filipino palate.

Operations and IT State-of-the-art automation of commissary. Use of IT to speed up operations efficiency and study consumer trends.

Customer Service Fantastic customer service: - Service orientation pervasive in many of its activities. - Recruitment,

- Overseas markets that are chosen are locations with high concentrations of Filipinos.

Likely. - Replicate the same kind of technology and operating efficiency.

Likely. - The mission statement and strong management beliefs in recognizing the importance of its

- Use the blueprint of the commissary in the Philippines. - High initial investment to bring in state-of-theart automation that will help generate the volume and efficiency required by the overseas branch. - Jollibee should seek to understand the expectations of local customers and adapt its performance standards, and so on

selection, and training (cycle for success) of staff. - Empowerment and motivation of staff.

front line staff in profit generation.

accordingly. - Jollibee should bring in the best crew from its Philippines’s branches to train the local hires in Jollibee technology. - Important that Jollibee has a management team in the overseas market that shares the same zeal and ideals as those in the Philippines headquarters.

Location Good, high traffic and convenient locations.

Moderate

- Jollibee should continue to expand to areas with high Filipino concentration and gain a foothold in such areas first.

Communities are populated largely with Filipinos.

- Jollibee may be a late comer in the fast-food industry of the overseas market. - Launch pad strategy of setting up outlets in places with high Filipino concentration may help offset the late comer disadvantage.

By benchmarking McDonald’s operations and developing an understanding of its business model, Jollibee executives were able to bring their own chain up to world-class standards. In particular, they focused on learning about the sophisticated operating systems that enabled McDonald’s to control its quality, costs, and service at the store level—an area of weakness in the local firm that had constrained further expansion. Subsequently, through use of IT in its operations and state-of-the-art automation in its commissary, Jollibee has been able to drastically reduce production time and ensure quality consistency and the highest standard of cleanliness in its food products. Human Resource Management High standards of service. Jollibee ensures that it provides topnotch services in all its outlets. Jollibee’s

success can also be attributed to its organizational culture. Through stringent recruitment and selection procedures, Jollibee ensures a service-oriented staff to man its outlets. Willing to pay above-average compensation, Jollibee ensures loyalty among its staff members and this translates into better service performance and dedication toward serving the customers. Training programs equip its staff with the necessary skills needed to better perform their tasks. By hiring professionals to devise strategies for its store operations, Jollibee is able to create a professionalism and service excellence.