2.3 Problems and issues
In 1994, Tony Kitchner was employed as a professional manager to operate the International department, since the company had decided to put more recourse on its international business. During his time, there was great expansion and increase in the company's international side. He used a "plant the flag strategy" to expand Jollibee's chain stores in overseas, and he saw all the expatriate Filipinos as a potential Niche market. This is another strategy from Kitchner, named "Targeting Expats". In addition, he also made some internal changes to help implement all the business plans. Kitchner start recruiting people for the International operations, such as marketing, Finance, Quality control and product development (Bartlett & Connell, 1998). One of his reformations on employees is to ask them wearing ties, as to provide a more professional image on Jollibee's international side. During his time at Jollibee, Kitchner manage to increase the franchise stores up to 205 by 1997(Bartlett & Connell, 1998), however, with more than 30 employees in his group (Bartlett & Connell, 1998).
Kitchner believes that company should take a first mover advantage in the fast food industry and therefore began to "plant the Jollibee flag" in countries where with few competitors. With this strategy, Kitchner was hoping to build brand recognition. Unfortunately, the risk exists at the same time when the company decided to become a first investor in the market. There is always uncertainty in the new market, and the company needs to spend lots of resources to find out what the local tastes are, and how to localize the menu to suit its habit. Jollibee, as a pioneer company, has to spend huge money in lots of areas, such as R&D, buyer education, infrastructure development, marketing, and even staff training. An even worse case is that in some of the new countries, the franchise could not afford an expensive advertising before they achieved certain level of sales. All these negative are defined as First Mover Disadvantage (Robert M. 2003). On the other hand, the experience in Middle East shows that there is few potential on the overseas Filipinos, because of different eating preference. Therefore, he fails to implement the "Targeting Expats" strategy. Kitchner did not ignore the importance of localization, in terms of tastes, customer preference and cultural difference. He hired 32 employees in his division to help each franchise store in different countries, in order to find out what the local customer needs and what is their preference. Kitchner felt that Jollibee needed to present itself as "world Class, not "local" (Bartlett & Connell, 1998). As a result, he decided to change company's logo, store design, advertising, and even the food package. Gradually, Kitchner has built his own empery, and viewed itself as a collection of relatively independent operating division. Naturally, he has applied a Multidomestic Strategy for Jollibee entering international market. This is a strategy that the firm focus more on each specific domestic market, and trying to meet the needs of local customers. It is normally adopted by the companies who are selling brand-name, thereby ensure that local customers are still paying premium price so that to cover the all heavy cost. However, Jollibee sells only fast food, and this somewhat confused its brand image.
In 1994, Tony Kitchner was employed as a professional manager to operate the International department, since the company had decided to put more recourse on its international business. During his time, there was great expansion and increase in the company's international side. He used a "plant the flag strategy" to expand Jollibee's chain stores in overseas, and he saw all the expatriate Filipinos as a potential Niche market. This is another strategy from Kitchner, named "Targeting Expats". In addition, he also made some internal changes to help implement all the business plans. Kitchner start recruiting people for the International operations, such as marketing, Finance, Quality control and product development (Bartlett & Connell, 1998). One of his reformations on employees is to ask them wearing ties, as to provide a more professional image on Jollibee's international side. During his time at Jollibee, Kitchner manage to increase the franchise stores up to 205 by 1997(Bartlett & Connell, 1998), however, with more than 30 employees in his group (Bartlett & Connell, 1998).
Kitchner believes that company should take a first mover advantage in the fast food industry and therefore began to "plant the Jollibee flag" in countries where with few competitors. With this strategy, Kitchner was hoping to build brand recognition. Unfortunately, the risk exists at the same time when the company decided to become a first investor in the market. There is always uncertainty in the new market, and the company needs to spend lots of resources to find out what the local tastes are, and how to localize the menu to suit its habit. Jollibee, as a pioneer company, has to spend huge money in lots of areas, such as R&D, buyer education, infrastructure development, marketing, and even staff training. An even worse case is that in some of the new countries, the franchise could not afford an expensive advertising before they achieved certain level of sales. All these negative are defined as First Mover Disadvantage (Robert M. 2003). On the other hand, the experience in Middle East shows that there is few potential on the overseas Filipinos, because of different eating preference. Therefore, he fails to implement the "Targeting Expats" strategy. Kitchner did not ignore the importance of localization, in terms of tastes, customer preference and cultural difference. He hired 32 employees in his division to help each franchise store in different countries, in order to find out what the local customer needs and what is their preference. Kitchner felt that Jollibee needed to present itself as "world Class, not "local" (Bartlett & Connell, 1998). As a result, he decided to change company's logo, store design, advertising, and even the food package. Gradually, Kitchner has built his own empery, and viewed itself as a collection of relatively independent operating division. Naturally, he has applied a Multidomestic Strategy for Jollibee entering international market. This is a strategy that the firm focus more on each specific domestic market, and trying to meet the needs of local customers. It is normally adopted by the companies who are selling brand-name, thereby ensure that local customers are still paying premium price so that to cover the all heavy cost. However, Jollibee sells only fast food, and this somewhat confused its brand image.
