Jollibee revolutionized fast food in the Philippines under the visionary leadership of Tony Tan Caktiong (Tony). For detailed information on history and growth of Jollibee read at http://en.wikipedia.org/wiki/Jollibee . Jollibee the restaurant, popular for its fried chicken, spaghetti and hamburgers has become one of the biggest fast-food chains in the world with 1,804 stores worldwide and total sales of more than US$1 billion as of December 2008.

A case study discussion on Jollibee happened on 10 Nov 2010 at Tasmac. The presenting group smartly attired set the pace with an impressive Philipino greeting – Magandang umaga po! (Good morning to all of you). The highlights of the analysis are covered in this post.

Ravi, Nisha, Karan, Jasmin & Vishal

The Jollibee is a classic example of how a small local company dug-in and thwarted the giant MNC McDonalds from gaining supremacy in the Philippines. Jollibee exploited local advantage of its home country and did not hesitate to copy its competitor McDonald’s few winning attributes. In fact Tony Tan himself drew inspiration from the popularity of McDonald.

Strategic Intent

An ideal objective for Jollibee in Philippines would be ‘Lead McDonald’ – akin to a strategic intent to channelize organize wide effort and hold the main competitor at bay.

Jollibee Mascot

It is evident that the Jollibee mascot concept was inspired from McDonalds clown character ‘Ronald McDonald’ and local and foreign children books. A mascot or a Logo is a powerful intangible strategic device that represents the company’s core identity. In case of Jollibee the human-like bee – symbolises the sweetness of honey and lighthearted happy spirit of the Philipino.

Success factors

(a)    Customer focus: Was a KRA on which employees were evaluated. Jollibee’s mission statement “To serve great tasting food, bringing the joy of eating to everyone” projects this image powerfully.

(b)   Advertisement: Extensive reach through print and electronic media. A unique combination of national-level campaigns handled centrally and local promotions managed by individual stores. The theme included a niche associated with children.

(c)    Values: Jollibee’s sustainability emanates from its powerfully enshrined values – “Always customer first, excellence through teamwork, spirit of family and fun, frugality, honesty and integrity, humility”.

(d)   Value chain: In the Philippines at the downstream end franchise partners (50% outlets) were supported and strengthened – being the customer face. The franchise partners true to Jollibee’s values were treated like family members. On the upstream end were the three Jollibee Commissary Systems, ensuring the manufacture and distribution of safe and high- quality food to all its outlets in the most cost-efficient manner is made possible. It operates 24/7.

(e)   Beyond profit motive: Many social causes were taken up faithfully such as medical assistance to the underprivileged and for hearing impaired children. Collection of toys and story books for children and housing projects for the poor. All such initiatives and more turned Jollibee into a national level icon. Environmental concerns reflect in their operations and disposal of waste.

(f)     Leadership and employee engagement: Tony Tan Caktiong’s maintained his entrepreneurial fervour and zeal even after the company grew large in size. To speed-up market response MBWA (management by walking around) was done through regular visits to stores. He himself tested the implementation of decisions taken at the board-level to take

Tony Tan Caktiong- Man Behind The Bee

account of possible hitches.

This encouraged employees to give suggestions and ideas to the boss directly – thus generating innovations. All managers followed suit and upward-downward flow of communication improved.

Tony took pride in serving the employees through a culture of family bonds and belonging.

(g)    Core competencies: Apart from marketing its organizational culture can be identified as Jollibee’s key core competencies. Its organizational culture is the alchemy of many attributes of Jollibee the main being its values. And therefore not easily copied by its competitors.

Strategies for overseas expansion

Underlying Tony’s strong moves and success in the home country Philippines were his global aspirations. He hoped to generate half the revenues from overseas.  It first entered California where the Philipino population was more than 25%.

Jollibee followed an approach of brand acquisitions to stimulate customer interest – among JFC’s popular brands are Jollibee, Chowking, Greenwich, Red Ribbon, Manong Pepe’s and Delifrance. Jollibee has a strong cash flow and can acquire more brands.

In 2001 the company‘s initial foray into China failed. It shut its first outlet there after four years. And China is seen as an important strategic market. India with its large fast food consumer base could well be another target.

Summing up

As Jollibee’s strategy of adopting the Philipino recipes were not meeting with success they may retain its strategy of using its Philippine brands in areas where there are large concentrations of overseas Filipinos and buying local brands (and strengthen them) in markets such as China and other countries, where it does not have that advantage.

Jollibee India entry

We find the fast food joints like McDonalds, Dominos Pizza and others thronging with customers. But these operate on a focused menu. Is the Indian consumer adventurous enough to prefer an authentic Jollibee Philipino cuisine?  Or prefer to stick to the common menu that they have become used to.

Thank you!

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About dilipnaidu

An open mind! Love to share my thoughts and a keenness to learn. An engineer and a MBA I had a wonderful innings in the Army and later moved to consultancy and teaching. My current interests are reading, music, growing culinary herbs and playing golf. I am serious on "Living life less seriously". A warm welcome to you be well and be cheerful always.

7 responses »

  1. Gaurav R Arora says:

    Namaste friends,

    I think the leadership played a very curtail role for Jollibee’s success; Tony involved himself in the business at the grassroots level, to the fullest extent possible. For instance, he regularly participated in the weekly meetings held to test new products and product-variants. He also frequently visited various Jollibee stores, ensuring that decisions taken at the board-level were actually implemented at the store-level. This hands-on style laid the foundations of a confident, happy and fun-filled corporate culture at the company.

    While McDonald’s decided to ‘slow down’ within the Philippines, Jollibee seemed to have adopted a dual approach – continue expanding internally in a limited way while exploring the option of tapping new countries. Tony said, “In the light of the shifting competitive environment, we have taken a broader, more global view of our business. We are leveraging the preeminent position of the Jollibee concept and our mastery of food- service technologies to cater to more market segments…”

    As Jasmin mentioned,Jollibee supported many social causes in the Philippines. It worked with various government agencies to provide services such as immunization and medicine distribution. It also took part in polio-eradication programs. In association with the country’s Social Welfare Department, Jollibee employed many hearing-impaired youth at its stores. Jollibee conducted a toy and book collection drive named ‘Ma-Aga ang Pasko sa Jollibee’ to give gifts to underprivileged children across the Philippines.

    Great work guys,

    Regards
    Gaurav R Arora

    • Dilip says:

      Dear Gaurav … I am thrilled to read your comments … you have grasped some of the principal strategic issues beautifully … and you could do this without being part of the presentation … ‘clap clap’

      Regards & keep up the tempo!

  2. Dilip says:

    Welcome Jasmin,

    Your response is indeed insightful. Jollibee did fail in its initial entry in China but subsequently met with success. Perhaps they may like to transfer the same learning for their India entry. Your inputs on their China activities and the CSR initiatives are discussed very well.

    Excellent – keep it up.

  3. Jasmin Patel says:

    Thank you sir for give us the opportunity. we were able to come out of all information just from what we learned in class from you.

    But what i fell is that they have not failed in china. they have just been evaluating how to increase market share. Jollibee Foods Corp., which has taken a 85 stake in China’s leading fast food chain Yonghe King for USD 22.5 million in 2004, announced in 2007 that it plans to make the Shanghai-based fast food company a fully-owned subsidiary by purchasing the remaining 15 stake for USD 6 million, or CNY 45.8 million.

    Based in Shanghai, Yonghe King currently operates about 100 stores across the country and plans to lift total number of the company’s stores to 500 over the next three to five years.

    so looking at this way we can say that jollibee is finding out way by globalization and expanding business in china to survive.

    Social Responsibility also plays an important role for the company to survive in todays world. at last people are the ones from were you survive and in return they do demand something. And i think Tony
    Tan was able to understand this and implement this.

    Advertising a product will not work at all times in catching customers because though they get interested, they get tired of seeing the commercial as well. Dominating as they are, Jollibee launched several publicity tactics that is geared to strengthen awareness from the public, but also get into the hearts of customers, and staying there, because the customer brought Jollibee to where it is today.
    Tony Tan believes that with sharing one’s blessings, something good in turn will happen to the business. The social responsibility campaign launched a bundle of projects as seen on the exhibit that follows:

    Exhibit: Social Responsibility Projects

    1. Habitat for Humanity- a poverty housing project initiated by the JFC group for habitat

    2. Sabi ng Jollibee ‘kaya mo kid’ program- an inspiration program targeted at inspiring young ones to exhibit the talent they possess within.

    3. MaAga ang Pasko sa Jollibee- tapping a celebrity in aharing blessings for the welfare and development of underprivileged children.

    4. Nurture the Future- a nationwide supplemental feeding program.

    5. (Jollibee supports Give-A-Live Foundation to benefit sick children)- This foundation aims to provide assistance to indigent pediatric patients confined at various hospitals. The project aims to raise funds for the purchase of desperately needed life-saving medicines and hospital equipment.

    Thank You.

  4. Vishal Mahajan says:

    Hello Sir,

    We did enjoy the presentation and I personally feel that everything has been covered in the blog.

    Here is a part of presentation topic I covered.

    “Beyond the Case”.

    The Current Scenario
    JFC currently operates the Philippines largest food service network with a total of 1578 outlets
    From its initial milestone of 100 outlets in 1991, JFC today operates a total of 1953 outlets worldwide – well on its way to achieving its Vision of 4000 outlets by the year 2020

    Financials and the Way Forward for the Busy Bee!
    17.2% increase in net income in financial year 2009 compared to 2008
    13% growth in sales in financial year 2009 compared to 2008
    Plans for future expansion of Chinese and US markets as well as launching Jollibee in India

  5. Manasa says:

    Dear Team,

    Reading just the summing point of this case study seems to be very interesting and I hope you all have enjoying this presentation. According to me there are many aspects which were been in this case study like 1) Corporate Culture (McKinseys model) 2) Concentric Diversification 3) The strategic intent 4) Corporate culture 4) Ofcourse the mission and the goal…..

    Coming to the question at the end,India is one of the largest fast food consumer growing country. Even though the Jollibee Philipino cuisine has failed in Chain, there is always a possibility to make its entry in India as we are the one who look for change and appreciate the best always. Might be they have to surely work on the strategies which they have to work and even revise the strategies if required and implement in china too.

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