Jollibee: Fast-Food, the Filipino Way

Case Details: Price:

Case Code : BSTR052 For delivery in electronic format: Rs. 500;
Case Length : 20 Pages For delivery through courier (within India):
Period : 1985 - 2003 Rs. 500 + Rs. 25 for Shipping & Handling
Organization : Jollibee Charges
Pub Date : 2003
Teaching Note : Available (3 pages) Themes
Countries : Philippines Differentiation
Industry : Fast Food

Abstract:
The case examines the rapid growth of one of
the most successful companies in the
Philippines, the fast-food major, Jollibee
Foods Corp. Detailed information has been
given about the company's origins and the
measures it took to establish itself in the initial
years. Jollibee's strong focus on issues such as
product development, operational excellence,
customer service, marketing and promotion,
and social responsibility, and the leadership of
Chairman Tony Tan Caktiong helped it
become the market leader in the Filipino fast-
food industry, beating all the multinational
companies. The company's globalization
strategies and its future prospects in the light
of the new challenges it is facing in foreign
markets are also discussed.

Issues:

» Understand how an entrepreneur with a clear vision and mission can achieve a
leadership position in the face of competition from MNCs

» Understand how innovative operational and differentiation strategies can transform a

small local company into a market leader in spite of stiff competition

Contents:
Page No.
The Taste of Success 1
Background Note 2
The Recipe for Success 4
Operational Excellence 5
Serving The Customers 5
Serving The Employees 7
Serving The Franchises 8
Serving The Country 8
Leadership 9
Globalization 9
What's Cooking? 11
Global Expansion - In The Soup? 11
Exhibits 13

Keywords:

Rapid growth, Philippines, Jollibee Foods Corp., company's origins, initial years, product
development, operational excellence, customer service, marketing, promotion, social
responsibility, Chairman, Tony Tan Caktiong, Filipino, fast-food industry, multinational,
globalization strategies, foreign markets

"The Jollibee story is an inspiring saga of corporate vision, commitment to quality and
customer service, and state-of-the-art strategic marketing."

- An article on Philippine Marketing Association's website,

www.pma.philonline.com.

"If McDonald's is the Goliath of fast-food, Jollibee is its Filipino David. The Philippines
is a huge embarrassment to McDonald's."

- The Economist, February 28th, 2002.

"Jollibee has grown to be so well loved that every time a new store is opened, especially
overseas, Filipinos form long queues to the store without fail. It is not just a place where
they feel at home; it is a stronghold of heritage, a monument of Filipino victory."

- www.jollibee.com.ph.

Introduction

In early 2003, message boards on many websites on the World Wide Web were flooded
with rather disturbing news about Jollibee Foods Corp. (Jollibee), a fast-food major from
the Philippines. The message claimed that the company had misled millions of customers
into eating what they believed were burgers containing pure beef.

Jollibee was reported to have been using

earthworms in its beef patties for many years
to get customers 'addicted' to certain so-called
chemical elements in earthworms. The
company strongly denied the above
allegations through a statement released on its
website. It showed in detail its manufacturing
facilities on its website and stated that the
allegation was a hoax. The incident soon died
a natural death - however, it seemed to have
brought Jollibee in the 'big league' of global
fast-food majors who had been accused of
such practices in the past. Not that it needed
any such dubious claims to fame - the
company had been earning laurels from the
global corporate world for many years now; In
2001, The Far Eastern Economic Review1
(FEER) named it the top corporation in the
Philippines and the sixth leading corporation
in Asia.

Jollibee had also won recognition for its contribution to the economy of the Philippines
and the success of its strategies by the Asian Business Review, leading management
consultants Hewitt Associates, and many Filipino corporate bodies. Jollibee also had the
distinction of being one of the very few companies that had been able to give
multinational fast-food giants such as McDonald's and Burger King a run for their
money. While Jollibee had a market share of over 60%, its closest rival, McDonald's had
less than half of that.

Including its pizza and pasta outfit

(Greenwich Pizza), its Chinese quick-service
restaurant chain (Chowking) and its bakery
products chain (Delifrance), Jollibee had well
over 902 outlets across the world by the end
of 2001 (Refer Exhibit I). The company did
not seem to be content with ruling the fast-
food market in the Philippines (Refer Exhibit
II); it was aggressively expanding on a global
scale as well. By 2002, Jollibee had over 31
outlets abroad. Some of the countries it had
expanded into were the US, Hong Kong,
Vietnam, Indonesia and Brunei. The story of
the evolution of a small ice cream parlor into a
fast-food giant with a net income of P 1.05
billion2 for the year 2002 (Refer Exhibits III
and IV for financial statements) has been
closely-followed for years by many
companies, corporate leaders, business
analysts and strategists.