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Jollibee case study

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Introduction

1. Introduction "Ordinary people with extraordinary achievement" said by Tony Tan Caktiong, the president of Jollibee Foods Corporation. The company started in 1975 as an ice cream parlor, and now it becomes one of the fast-food major from the Philippines. Jollibee had over 223 outlets across the world with annual sales of $7,778 millions (Pesos) dollar by the end of 1997(Bartlett & Connell, 1998). However, the company seems not to be content with current situation, and it is still seeking an opportunity to expand to the global market. This report evaluates the fast food industry as well as Jollibee's overall status. The report also addresses and defines some relevant issues and problems the company is facing, such as what are the competitive advantage does Jollibee have, what the strategy they have been using for the international market, what are the friction between International division and Philippine company and what the recommended strategies should be implemented to solve the problems. It also suggests Jollibee should not ignore the new opportunity to the American and Hong Kong market, because of a huge potential in future. Some of the techniques are using to help anglicizing the company and industry, such as SWOT, Porter's Five Forces. This may also be a limitation as the evaluation only covers certain aspects. 2. Discussion 2.1 Industry background It is very important to understand what the Fast food industry it is, before analyzing the company's business strategy. In the 1960s, the fast food market starts growing, leading by some main players such as McDonald's and KFC. They have successfully provided a model that the business was aiming to serve quality food at a clean dinning environment. And it targets the customers who with limited of time and budget. To perform a fast food Industry analysis, it is better to follow Michael Porter's five forces model. This model was created to help the management team to analyze competitive forces to the company. ...read more.

Middle

This is a local factor that influnces Jollibee's business philosophy, and therefore encourages the company to deliver quality food and freiendly services consistently and efficiently. Local demand is another critical condition that Jollibee considered well. The local Filipino prefer large appetites with strong taste, such as spicy sauce. In order to compete with the Big Mac, Jollibee quickly introduced a Champ Burger with larger size and taste with local flavor. In terms of brand image, Jollibee emphysiz on promoting its Joy Bee with fun atmosphere, and focus on famlies. This helps to attarct children from Philippine famliy, and of course to provide best value of food is another selling point. An instable business environment in Philippines helped to slower the investment from overseas. The Philippine government somewhat offered a protection to the local company. An expample is the economic and political crisis stoped foreign investors, inculding McDonald's, expanding its business activties in Philippines. Nevertheless, the main resaon that Jollibee has estbalished a dominate position is it focus more on the local market, and provides suitble meal to the domestic market. Jollibee reacts more flexible than McDonald's, it changes its menu quickly to satisfy the local customer's needs. On the other hands, McDonald's applied more to the Global Strategy at that time. It is a strategy that the firm views the world as a single marketplace and its primary goal is to create standardised goods and services that will address the needs of customers worldwide. About the local knowledge, Jollibee knows better than McDonald's, such as the Filipino prefer rice than chips. Further more, during that time, Jollibee was able to go ahead by using riding a wave of national pride and again tailored their menu, adding "taste-tested offerings of chicken, spaghetti, and a unique peach mango dessert pie, all developed to local consumer tastes" (Bartlett & Connell, 1998). These were the sources of competitive advantage for Jollibee winning the battle against McDonald's by 1984. ...read more.

Conclusion

In order to implement all the plans and decisions, the international division needs to be reformed. The international operation should become a department not only operating the overseas franchisee, but also coordinating with the Philippine company. It is critical for the Philippine company to understand the international strategies and its decision, so that they could provide efficient support to the division. It is also important for both domestic and international departments share the resources and cooperate with each other, and therefore serve the world market together as a common goal. 3. Conclusion There are lots of augment on Jollibee's future strategy, whether should keep following the niche market "targeting expats" and "planting the flag. In fact, with these strategies, the ex vice president, Kitchner, did make some success. During that time, 205 stores were set up across 10 counties in the world. However, there is no absolute strategy should be applied, and it is recommended the company should keep "planting the flag" but with a conservative pace, otherwise It will become too ambition to grow. Especially, facing with some new investment opportunities, Jollibee is suggested to start a business in California as its first priority, with lower risk and changes in operation. The target market at beginning is still the expatiate Filipino. However, the strategy "targeting expats" for niche market is limited in long term. A Multidomestic strategy is recommended for Jollibee dealing with international market. The strategy suggests that a company should attempts to combine the benefits of global scale efficiencies, with the benefits and advantages of local responsiveness. (Ghoshal & Nohria, 1993, p.27) An opportunity to expand its Hongkong business encourages Jollibee to customize its products and services to the local market, and eventually helps Jollibee become a Multinational Corporation world wide. The pain teaches, as the company should learn from the previous mistake. It is always a challenge for company keeping a balance between external expanding and its internal organizational ability. A strategy plan will fail if this exceeded company's capability. 4. ...read more.

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