Jollibee

A quick analysis of the industry that Jollibee operates in will bring to light several important
issues that it faces in different areas. The company started in 1975 and expanded quickly
throughout the Phillipines . Upto 1983, Jollibee faced no serious challengers. The entry of
McDonalds into Phillipines changed things, and it was during this year that Jollibee first invested
heavily in advertising.

Increasing globalization
Sourcing beef materials from different countries and locating in foreign markets both introduce
the company to global developments such as exchange rates and tariff and non-tariff barriers
that could potentially change how operations continue in the future.
The migration of large numbers of Fillipino workers to different countries is another factor to
consider and exploit.
Industry profitability
Minimizing the company's operating cost by creating an efficient production is one way to
increase its profitability. This can be done by adopting new technologies that can speed up
the company's operation. These can greatly help the company to capitalize on economies of
scale. The same concept forces other players to innovate and cause changes in the industry.

Interest of the buyers for differentiated products

Differentiated products are necessary to cater to different segments and to retain the interest
of the existing customer share. Retaining the existing market share and expanding market
share , both require differentiation in terms of variety of food provided in the menu.

Jollibee-Marketing Analysis
Jollibee was started as an ice cream parlor and later discovered its destiny as a hamburger
chain in 1978. Jollibee has attained worldwide admiration in so short a time. Today, it owns
Chowking, Greenwich, Red Ribbon, and Philippine franchise of Deli France. It has
become one of the biggest fast-food chains in the world with more than1,600 stores
worldwide.

Jollibee was able to attain a competitive advantage in Philipines over McDonald’s by doing
following things:

  Jollibee was the first to enter the market.

 Retaining tight control over operations management, which allowed it to

price below its competitor.
 Having the flexibility to cater to the tastes of its local consumers.
As Jollibee entered international markets, it faced new challenges. The fast
food industry is highly competitive and price wars and marketing innovations are
seen frequently. The rivalry is also centered on the key success factors of the
industry, which are good food, good, service and reasonable pricing. Rivals are
somewhat equal in capabilities and opportunities, thus making the competition
stiffer. Internationally well-established players like KFC and McDonalds had high
brand values that Jollibee found difficult to compete with. The threat of substitute
products is considerable. Local street food and high-end restaurants form two ends
of a range of substitutes. Potential entrants face entry barriers that will hinder them
from entering the industry. These are the inability to gain access to technology
and specialized know-how, brand preference and customer loyalty, capital
requirements, economies of scale, and strategically situated distribution channels.

Jol ibee PhilippinesJollibee Philippines is one of the most popular philippine franchise. Originally
opened as a Magnolia Ice Cream parlor at Cubao in 1975, the name was originally called
Jolibe. In 1978, the business focus shifted from ice cream to hamburgers. Jollibee studies
showed a much larger market was waiting to get tapped. Lumba became Tony Tan’s first
business and management mentor. After changing the name to Jollibee, the Jollibee mascot
was nspired by local and foreign children’s books. Developed by a management consultant
named, Manuel C. Lumba working for Tony Tan Caktiong next created the product name
“Yumburger” as well as the name “Chickenjoy”. Later Tony Tony made Manny Lumpa in
charge of developing the franchise. The stores were re-designed, the service transformed into
a full self-service, fast food operation with drive thrus. The first headquarters was located on
Main St. in Cubao, Quezon City. Lumba developed a long-term marketing strategy, listing up a
number of consumer promotions and traffic building schemes while maintaining internal
strengths required by Tony Tan.

We won’t be going in detail on how Jollibee Philippines exactly work. We are here to analyze
the reason and principle of Jollibee Philippines’ success.

Acquistions in the Philippines

The corporation is actually known as Jollibee Foods Corporation. Oh and if you thought
that Jollibee was the only fast food chain operated by this coporation, boy are you in for
a
surprise. To me, it seems like JFC owns a majority stake in all of the Filipino fast food niches. Do
you ever eat at Chow King? I know I love the halo-halo there, but did you know that in the
year 2000, JFC acquired Chowking! That’s right, all the delicious oriental style fast food from
Chow King is operated at a high level by the same corporation as Jollibee. Oh and that’s not
all. Seems like Jollibee Foods Corporation has the idea that diversification is key to its future,
and I think they’re on the right track. JFC also bought out the popular fast food pizza
restaurant known as Greenwich Pizza. Additionally, in 2005, Red Ribbon Bakery became part
of JFC. Keeping with
the baking theme, JFC acquired the French cafe and bakery known as Delifrance. The division
of JFC that handles business inside of the Philippines is known as Jollibee Philippines.

Acquisitions outside of the Philippines

JFC has holdings in several other Asian countries including China and Taiwan. There’s a
Chinese fast food chain named Yonghe King in mainland China (based in Shanghai) that is
owned and operated by JFC. Another Chinese restaurant chain named Hongzhuangyuan was
acquired on September 21, 2007. This chain has 33 locations in Beijing and was purchased for
the amount of US $50.5 million.

Wow! I sure was surpised when I learned about all those acquisitions. It’s interesting to note
that when I walk into any of the chains above that they’re owned and operated by the same
corporation. I’m glad that Jollibee has a great track record with the Filipino community and that
in addition to the amazing Jollibee Philippines, they can offer us a variety of different foods
ranging from pizza, oriental food, coffee and baked goods. Yum!

Jollibee Philippines Organizational Structure

Success in any industry is acheived by a variety of factors, amount of capital, market segment
targeting, values held by company founders and the type of people who are hired has a big
impact as well. Still, something that many companies lack to take them to the next level is the
organizational structure that allows the right people to be in the right place. There’s a saying
that goes: First you gotta have the right people on the bus. Then you gotta make sure each
person on the bus is sitting the right seat that’s designed specifically for their unique strengths.
Only then do you worry about where the bus is going.

I believe that Jollibee had the same idea when they introduced a host of changes to
their business beginning in 1994. These changes were mostly focused on creating more
structure and taking advantage of more resources. First of all, they hired Tony Kitchner, the
first outsider vice- president to handle their international operations. This was a key move to
separate Jollibee International from Jollibee Philippines. They introduced FSM’s, known as
Franchise Services Managers to help keep their franchise owners abreast of the new changes.
These changes were aimed at creating a “world class” view, and you could see some of the
changes visibly through the newly differentiated logo to the new packaging. They also instituted a
dress code change as well as began to recruit from outside.

Overall, these changes certainly kept Jollibee ahead of the game, as 10 years in the future,
their success would be so great as to garner the Entrepreneur of the Year Award by Ernst & Young
for founder Tony Tan Caktiong.

The Jollibee Philippines Mascot

I honestly wonder what goes through the heads of fast-food chain management and founders
when deciding what their mascot should be. It must have been an interesting time when the
creators of McDonalds came up with the idea of a friendly clown dressed in red, yellow and
white. I guess things were a bit simpler for Dave Thomas when he named the franchise after
his daughter Wendy, though I would hesitate to call her a mascot. We all know how bad (or
maybe good?) things can get when a fast food chain brainstorms the brilliant idea of a talking
chihuahua that speaks in Spanish about how much he wants (or loves?) Taco Bell.
Interestingly enough, not all successful chains need a mascot (or maybe they weren’t
memorable) in the case of chains like Arby’s, but many do, like Jack of Jack in the Box and
The King of Buger King – all normal people with ridiculous masks or, um, heads.

Now what does this have to do with Jollibee in the Philippines? Well, many would
attributeJollibee’s success in the Philippines to its mascot, sharing the same name as the
franchise: the Jollibee. Is it a coincidence that Jollibee chose its mascot to be bright yellow
and red as well? Perhaps not – as gaudy as those colors may seem, they are more than
vibrant enough to catch the eye’s attention. These colors exposed to children who grow up
on Jollibee begin a lifelong association of bright yellow and red with delicious, affordable and
fast food. Reminiscent of the memorable flavors of popular condiments for hamburgers
(or Yumburgers) and hot dogs, the yellow and red bee namedJollibee is dressed in a
chef’s hat along with a shirt and blazer.

Jollibee’s smiling face is friendly enough to be a favorite among kids, and his face is prevalent in
many locations that include playrooms for children. Clearly, this cartoon figure is aimed at the
younger generation, but it does not alienate the older generation, especially these days, when
many of us have grown up eating Jollibee. It’s easy to say that this figure has been pivotal in the
branding and marketing efforts that have led to such success in the Philippines.

Personal View About Jollibee’s Taste

This next few post is in my personal point of view. I have friends and relatives that live on the
other parts of the world. They have shared all their experiences in dining at Jollibee fast food
chains. But one similar opinion they had is that not all Jollibee franchises are the same. They
have different tastes and hospitality when it comes to service. The food is somewhat different
to what we are served in the Philippines.

My friend in Hong Kong once told me, (the first Jollibee in Hong Kong) that the food is not as
good as it was on the Philippines. Is it because the Philippine native chicken better?
However, Jollibee is Jollibee no doubt, whereever you see that Jollibee mascot, that orange
stiped honey bee smiling at you, you can never resist!

Jollibee and Mc Donalds

Like any other franchise, fast food chains like McDonalds and Jollibee is one of the leaders in
providing employment for the Filipinos. It is said that 60% of all college students have had
experience in working in this fast food chains during their college days. No doubt, fast food
franchises helps the Philippine economy.

Jollibee is an American-style fast food restaurant with Filipino-influenced dishes specializing in

burgers, spaghetti, chicken and some local Filipino dishes with affordable prices. It is also

known as the leading fast food chian in the country with its main focus is to make every filipino

people happy in every meals.

our OFWs can still contribute and be part of these family moments, even when they are miles

away from home." Filipinos working abroad can choose from five Langhap Sarap Family blowout

packages good for at least five persons, with prices ranging from P800 to P1,000. These five

treats are the Spaghetti + yum with Cheese Treat, the Chickenjoy + Yum with Cheese Treat, the

Chickenjoy Treat, the Burgersteak Treat, and the Chickenjoy + Spaghetti treat. The partnership

between the largest Filipino-owned non-bank remittance company and the Philippines’ biggest

fastfood operator is “very strategic," Harris E. D. Jacildo, iRemit president and chief operating

officer, said. However, the two companies declined to the partnership’s contribution will

their respective sales. I-Remit has also signed agreements with the Home Shopping Network to

market household products.

Therefore, majority of its customers were satisfied and delighted of the food they

served and the quality o services they performed. In fact, one commented in some of the

websites that he always eats to the Jollibee because of its friendly atmosphere and the foods

being served are of great quality. The company also gives a discount of 20% for the senior

citizens.

Creditors:

Jollibee foods corporations borrowed money from different financial institutions. Last

September 2008 the Company has just entered into an agreement to borrow money from

several financial institutions to fund its investments in the People’s Republic of China. The

agreement covers a loan denominated in Renminbi amounting to China Yuan seven hundred

million (CNY 700 million, equivalent to about USD 100 million) to be paid in three years at a

fixed interest rate for Jollibee Foods Corporation and at a floating rate for the lenders at Libor

plus 2.25%

Financial institutions include the Metropolitan Bank and Trust Company, Banco De Oro

Unibank, Inc., Rizal Commercial Banking Corporation and the Bank of Tokyo-Mitsubishi UFJ,

Ltd., Manila Branch as lenders; Metropolitan Bank and Trust Company as facility agent; and

UNS AG, Singapore Branch as the swap bank. The facility has been arranged by UBS AG,

Hongkong Branch.
 Other sources of funds are the Investors and shareholders of the company like the

Hyper DynamicCorporation, PCD Nominee Corporation, Honeysea Corporation.

Jollibee Foods Corp. Fundamental Company Report Including Financial, SWOT,

Competitors and Industry Analysis
Ask a question
Date: January 15, 2012
Pages: 50
Price: US$ 499.00
Publisher: Business Analytic Center (BAC)
Report type: Strategic Report
Delivery: E-mail Delivery - PDF (on default), Hard Copy Mail Delivery (+US$ 140.00)
ID: J630A7D8387EN

Jollibee Foods Corp. Fundamental Company Report provides a complete overview of the
company’s affairs. All available data is presented in a comprehensive and easily accessed
format. The report includes financial and SWOT information, industry analysis, opinions,
estimates, plus annual and quarterly forecasts made by stock market experts. The report
also enables direct comparison to be made between Jollibee Foods Corp. and its
competitors. This provides our Clients with a clear understanding of Jollibee Foods Corp.
position in theRestaurants and Leisure Industry.

Jollibee – Analysis

The case gives an idea about how the competition influenced Jollibee's strategy, both domestic
and international. Jollibee ,which was a Filipino chain of restaurants, was forced to change
their strategy with the entry of McDonalds in Philippines, which later transformed the company into
a global company .The company faced serious challenges with their international exposure.
The challenges included the conflicts with franchisees/Joint venture and conflicts between
divisions. Another issue that the company faced was the entry into Papa New Guinea, United
States of America and expansion plans in Hong Kong. The company has to consider the
financial instability it faces while considering their plans. In the analysis we have tried to
cover the effectiveness of strategies adopted by Mr Tony Kitchner (Former International Division
head).