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 profitabili
p rofitability
ty
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
attained worldwide admiration
admiration in so short
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.

Jollibee 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 o wned 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 a cquisitions. 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 a t 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 Jo llibee 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 de lighted 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 

Dynamic Corporation, 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).