CASE STUDY

OF
JOLLIBEE
FOODS
CORPORATION
 Point of View

Tony Tan Caktiong is the creator and chairman of one of the world's most rapidly expanding
Asian food businesses, Jollibee Food. Jollibee runs about 3,300 restaurants in the Philippines and
over 2,500 restaurants abroad. Tan was born to Fujian-born Chinese immigrants. He completed
secondary school at Chiang Kai Shek College and earned a degree in chemical engineering from
the University of Santo Tomas. Tan's first concept for Jollibee was to open an ice cream shop; he
then added hamburgers, French fries, and fried chicken to the menu.

Jollibee offers Filipino, Chinese, American, and European cuisines in a quick-service and
budget-friendly manner. Caktiong shares the rapidly expanding Double Dragon Properties with
his business partner Edgar Sia II.

Tony believes that his employees will be more productive if he motivates them, so he
encourages them always to give their absolute best effort. Tony's management style also
emphasizes the importance of listening. He has learned to appreciate the opinions of others,
particularly those of his staff. Tony constantly recognized the immense potential of his firm and
dreamed big. He relied on diligence, zeal, and concentration to transform his then-small firm into
one of the largest corporations in the Philippines, Asia, and now the world. Today, this desire has
transformed him from the founder of a single company to the CEO of a restaurant group with 17
well-known names and over 6,300 locations in 34 nations. Through Jollibee's mission of
bringing the joy of eating to all, it strives to become one of the top five restaurant chains.

Since its founding in 1975, Jollibee Food Corporation, a Filipino fast-food chain, has been
expanding. IT capitalized on the developments to compete with brands such as McDonald's and
KFC. The instance shows the company's global expansion plan. As a result, they were forced to
reconsider their plans. The corporation has an opportunity in Papua New Guinea, California, and
Hong Kong, but it must address its existing problems to ensure success in these locations before
selecting.
 Time Context

This year, Jollibee will spend 17.8 billion pesos on capital expenditures to establish 500
new shops, develop logistical facilities, and repair existing restaurants throughout the globe. This
expense is more than twice the 7.4 billion pesos invested in 2021 when it launched 398 outlets.
The global growth will be supported by cash from operations, bank loans, revenues from bond
issuances, and a possible IPO of its warehousing joint venture later this year.

"After 2022, our view for company development is much more optimistic," added
Tanmantiong. "North America, China, Southeast Asia, and Europe are regions in which we
anticipate the most robust expansion, while the Philippines is anticipated to continue its healthy,
lucrative growth."

Jollibee has expanded its global presence both organically and via acquisitions. Last year,
it acquired a majority position in the Asia-wide Tim Ho Wan dim sum chain, acquired a stake in
the Taiwanese bubble tea company Milksha, and invested in the Philippine Yoshinoya Japanese
restaurant franchise. Jollibee, founded in 1975 by Tan Caktiong as a modest family business
selling ice cream, has over 3,200 locations in the Philippines and over 2,700 abroad, including
U.S. brands Smashburger and Coffee Bean. With a net worth of $2.7 billion, 68-year-old Tan
Caktiong ranked seventh on Forbes Asia's September list of the Philippines' 50 wealthiest
individuals. Additionally, he owns a portion of DoubleDragon Properties.

In August, Jollibee purchased a share in DoubleDragon's CentralHub Industrial Centers

by investing in 16.4 hectares of industrial buildings it uses for its commissaries. CentralHub
reported last month that the partners are accelerating the development of warehouses around the
Philippines in preparation for an IPO in the second half of 2022. This data is in response to the
rising demand from e-commerce enterprises. It will be the country's first real estate investment
trust to concentrate on warehouse logistics assets.
 Short Historical Background

It is impossible to fathom a period when parents and children celebrated birthdays without the
giant bootylicious bee breakdancing and clapping his gloved hands. Jollibee, the barong-wearing
Filipino icon, is hardly the country's oldest restaurant or franchise, which makes it blazing,
apparently unstoppable popularity all the more remarkable. Jollibee's rise from an ice cream store
that sold another person's ice cream to a worldwide force that rescues failing restaurant
franchises is an inspiration for all Filipinos.

It is impossible to fathom a period when parents and children celebrated birthdays

without the giant bootylicious bee breakdancing and clapping his gloved hands. Jollibee, the
barong-wearing Filipino icon, is just 41 years old, making its roaring, apparently unstoppable
success all the more astonishing. Jollibee is not even the oldest restaurant or franchise in the
country. Jollibee's rise from an ice cream store that sold another person's ice cream to a
worldwide force that rescues failing restaurant franchises is an inspiration for all Filipinos.

Jollibee's background is a typical narrative of an aspirational family finding prosperity in

new pastures. His parents moved the entire family out of Southeast China. They settled in Davao
and built a restaurant there. Tan Caktiong received his degree in chemical engineering from the
University of Santo Tomas. When he was 22, visiting an ice cream factory encouraged him to
seek a Magnolia Dairy Ice Cream franchise. Using P350,000 from his family's resources, he
launched two locations in Cubao and Quiapo. Because ice cream was not viable, Tan Caktiong
added hot savory items to the menu. In 1978, he terminated his franchise and transformed his
eateries into the first incarnation of Jollibee due to its immense popularity.

Jollibee Mascot chose the bee because of its relationship with honey, which recalled the
sweetness of life. Manuel Lumba, a marketing consultant, is credited with Jollibee's earliest
branding efforts. Lumba met Tan Caktiong in 1978 when Jollibee was still known as "Jolibe,"
and the now-prolific CEO was seeking direction for the company. In an interview with
Entrepreneur, Lumba stated, "While observing the visitors, I observed that there were leftovers
of several things, but not the hamburger sandwich. I believed the firm had a potential winner at
that point."
 His six-year-old daughter's comic books inspired the bee design. "Why couldn't I have a
bee if Disney had a mouse?" Then he added a chef's cap to represent high-quality cuisine. A
crimson dinner jacket with a matching vest and white gloves that reminded me of Disney
characters—he enlarged the cheeks by drawing inspiration from Tony Velasquez's comic book
character Nanong Pandak. A marketing firm refined the basic design. Tan Caktiong spend
millions to get the trademark. The name also needs revision. Jolibe evolved into Jollibee. Tony
Caktiong added extra Ls and Es to make "jolly bee" more recognized. Lumba went well beyond
a simple makeover. He gambled money and reputation by acquiring commercial space in a PBA
game, bringing Jollibee to the broader public's attention. He revised the restaurant's design and
suggested that every branch launch with pomp.

After Jollibe became Jollibee and ceased selling ice cream in 1978, the Yumburger
became the company's signature product. The famous spaghetti was introduced a year later,
followed by the adored fried chicken. By the time a competing fast-food company established
itself in the Philippines in 1981, Jollibee had already established a solid foothold in the local fast-
food market. In the next decade, Jollibee extended its dominance by introducing the palabok,
Champ hamburger, Jolly Twirls, Jolly Hotdog, and Peach Mango Pie in the 1990s. Filipinos need
to remember that these are still Jollibee's best-selling items today. Jollibee introduced different
mascots and menu items. By 1987, Jollibee had become a global brand, opening its first
international location in Brunei.

Jollibee has expanded branches worldwide, from Papua New Guinea to Milan; mascots
have come and gone (RIP Mico); TV series have been developed; even prime leaders have dined
there. Jollibee has visited the Philippines and had a makeover, becoming a Funko Pop (twice!)
and starring on Glee and comic books such as The Flash and The Avengers. Tan Caktiong stated
in an interview in 2010: "Jollibee and his cheeky grin have become synonymous with a Filipino
success story that is now a source of national pride. In 1978, Jollibee was a relatively primitive
and strange-looking bee that no bank would handle. The estimated current value of the Jollibee
brand is several billion pesos.

The Jollibee Food Corporation owns and runs many restaurants in the Philippines and
abroad. Mang Inasal, Chowking, Greenwich, Red Ribbon, and Burger King Philippines are
among its local brands. Internationally, it owns both Smashburgers and Panda Express
Philippines. Its acquisition of The Coffee Bean & Tea Leaf is an unsurprising continuation of its
global conquest..

Statement of the Problem

Principal Problem

 What is Jollibee Foods Corporation's method of achieving company

globalization?

Supplementary Problem

 What measures must Jollibee enterprises use to preserve progressive growth?

 How can Jollibee Corporation compete with other fast-food restaurants?
 How can Jollibee Foods Corporation retain its signature menu without customers
tiring of the same items?

Jollibee utilized franchising to develop its business swiftly and gain market penetration.
Franchising is the driving factor that gives the Jollibee Food Empire its power. Because so many
franchisees are targeting the exact location, Franchisee confronted Jollibee's management with
the issue of selecting a franchisee or persons with a strong business track record and a positive
reputation in the community to guide them through their flaws. Jollibee continues to dominate
the hamburger industry despite the emergence of new international competitors.

Jollibee only hires individuals with a strong business track record, a positive reputation in
the community, a commitment to offering overall customer value and satisfaction, and
exceptional people skills. And to increase business profits and attract more customers.
Additionally, they use cutting-edge technology in their operating system to enhance the products
and services they provide to clients. They innovate to obtain a competitive advantage over their
rivals, particularly McDonald's. It can give an organization the means to enhance its competitive
edge and performance in a competitive market. And specific opportunities, such as extending a
business into a new city, can be anticipated. The threat posed by Jollibee is McDonald's intense
competitiveness. In the Philippines, Jollibee had 57 percent and 302 company-owned and
franchised locations, while McDonald's had 36 percent and over 200 outlets. And an external
environment that might negatively impact its performance or attainment of its objectives. People
in the Philippines have less money to spend on food due to the economic situation.

Areas of Consideration: SWOT Analysis

Figure 1. SWOT Analysis

STRENGTH

 Jollibee dominates the hamburger industry despite the presence of international

competitors.
 Jollibee offers American-influenced burgers to stay up with customers' changing tastes
and lifestyles.
 Jollibee's wonderfully flavorful burgers, chicken, and sweet spaghetti captivated the taste
buds of every Filipino.
 Jollibee uses franchising to increase its company and market share rapidly.

WEAKNESSES
 Difficulty in deciding which Franchisee to award the same area
 The selection criteria for franchisees could be more precise.

OPPORTUNITIES

 Jollibee Food Corporation offers the BOTP (business operational training program) to
prospective franchisee candidates, which includes seminars and exposure to all levels of
restaurant operation.
 Jollibee Food Corp. has a conservative heritage and allows franchisees to push innovation
to lead them and recruit equally driven individuals that help to succeed fast food
business.

THREATS

 Jollibee Food Corp. has a significant challenge with keeping up with the demand for the
production of the product to distribute in all over 302 franchise-owned stores.
 Jollibee's wrong choice of a franchisee may destroy the company's reputation with subpar
quality products and services. This will affect the brand name resulting in a loss of
quality of service, product, etc.
 ALTERNATIVE COURSES OF ACTION

Diversification. Jollibee may expand its company by purchasing some of the most well-
known firms in the world. Businesses utilize methods of diversification with the expansion
goal in mind. Introducing a new product into the supply chain to increase sales is known as
product innovation. These items may constitute a new subfield within the sector in which
your firm is already active. At the firm's level, this strategy is referred to as diversification.
When compared, business diversification is the process that takes place when an organization
enters a new market.

Market Development. Jollibee Foods Corporation may form franchise partners in

countries with an existing Filipino minority, as this is one of the company's primary focuses
on expanding its business globally. Instead of looking for a new market, companies can focus
on developing their current customer base through market expansion, which is a strategic
activity. To expand its customer base and increase revenue, the company is looking for
additional distributors to help market its product to various end users.

Cobranding for many companies of JFC's present enterprises, such as Red Ribbons,
ChowKing, and Burger King Philippines, may be utilized for cobranding by JFC's subsidiary,
Jollibee Foods Corporation. This possibility exists because of JFC's ownership structure.
Products that raise consumers' knowledge of the Jollibee brand will be manufactured by a
company owned and managed by JFC. As part of a marketing technique known as
cobranding, multiple brand names are combined on a single good or service to form a
strategic partnership. The term "cobranding" (or simply "cobranding") refers to a variety of
branding collaborations that often incorporate the brands of at least two different businesses.
Brand partnerships are another common name for cobranding. A unified brand results from
strategic cooperation, in which each company contributes elements such as its logo, brand
identifiers, and color palette.
 Advantages and Disadvantages of Actions

1. Diversification
 Pros
The intent of the Franchisee is an excellent indicator of the company's future course.
Describes the objectives of the Franchisee. Jollibee Foods Corporation can leverage
existing experience, knowledge, and resources inside the organization when expanding
into new operations. This may lead to the transfer of talents, such as research and
development expertise, and the sharing of resources.
 Cons
the riskiest and most expensive kind of strategy in the Ansoff Matrix, as it combines the
introduction of new items and a new market.

2. Market Development
 Pros
The spreading of risks by increasing the number of sites via the investment of others
allows for the more rapid growth of the network and a more remarkable ability to adapt to
shifting market demands. Marketing to current Filipinos is a safe choice for the
corporation, as Filipinos are already familiar with the Jollibee brand image.
 Cons
The franchisor must have adequate resources for recruiting, training and supporting
franchisees. Until the franchisor can pick the ideal candidate for the firm, there is a
greater chance that unfit franchisees may tarnish the brand at the outset of the franchise
program.

3. Company Co-Branding
 Pros
 Because Jollibee Foods Corporation previously held a substantial portion, if not all, of the
acquired firm, considerable research and costs are reduced because JFC already possesses
its valuable resources. Cobranding can boost the market share and exposure of both
 businesses. Cobranding enables individual franchisees to share marketing and operational
expenses. This can be particularly crucial for national franchise brands.

 Cons
 The necessity of a complicated joint venture and profit-sharing agreement is a downside
of cobranding. Reaching a cobranding agreement may be time-consuming and complex,
including extensive talks and complex legal contracts. No matter what legal and financial
arrangements the franchisees go, neither franchise must have an economic edge over the
other.

 Conclusion

Jollibee is a thriving Philippine-based food business with hundreds of food chains and
franchisees embedded in its roots. If the financial state of a company (profits, store growth,
market share, etc.) is used to measure its success, then this paper's study will prove worthless.
However, there is more to uncover on the pathos side that the brand has appropriately accessed,
which is what this study seeks to understand. This leads to the following questions: How did
Jollibee, the most successful fast-food company in the country, overcome its deficiencies relative
to its far superior competitors during the early stages of its expansion, even though its
competitors were vastly superior?

Jollibee Foods, founded by its chairman Tony Tan Caktiong in 1975 as an ice cream
shop, is today one of Asia's largest quick-service restaurant chains by market value. Jollibee, the
company's leading brand, has become a household name in the Philippines. Jollibee Foods
Corporation had a net loss of P12 billion in the first half of 2020 due to system-wide retail
closures brought about by the coronavirus epidemic. Half of Jollibee locations were temporarily
shuttered during the second quarter, resulting in a 48.4% drop in revenue to P30.7 billion,
according to the company's financial statement released on August 5, 2020. By the end of the
quarter, 88% of stores had reopened on a limited basis, focusing on delivery and takeout. In the
second quarter of 2020, sales plummeted 46.6% to P23.3 billion due to the absence of dine-in
guests.

The rivalry made it challenging for JFC to maintain a profit despite the escalating
inflation during the epidemic and the current state of the economy. Competition from smaller
and larger fast-food chains became a burden to JFC's franchisees' profits. JFC is the trademark
fast-food brand of the Philippines. In this report, scholars argue how JFC might resolve these
inevitable problems with JFC's continued development and expansion plan.

Jollibee also offers a conventional and seasonal menu that may satisfy Filipinos' nostalgic
cravings—having difficulty maintaining them with inflation. To maintain profitability, JFC must
incorporate inflation into its menu. However, Jollibee's customers were thrilled by the return of
the beloved dishes. Some Filipinos could not help but note the significant price increase over
time. They regarded it as evidence of the country's rising inflation rate. With the inflation
increase, this issue may result in a rapid shift in the target market and a loss of consumers.
 Recommendation

Tony Tan Caktiong brought happiness to the Filipino community via the dishes his
business provided. Jollibee Foods Corporation must continue comprehending the Filipino
community and international clients to adapt to the ever-changing market demands. JFC's
research and development organization should broaden its focus from the market environment to
specific business sectors. Consideration should also be given to restructuring the organizational
chart into a regionally oriented structure. A regionally oriented design can give them a
competitive edge in rapid action on issues and proposals requiring an outright decision in
reaction to unanticipated events. With such techniques, JFC will continue to satisfy the demands
of its clients and will be able to manufacture products that are suitable for Filipino palates.

The ability to offer reduced costs makes Jollibee a prominent force in the Philippines'
fast-food business. In addition, their recipe is tailored to the Philippines market's preferences and
what clients are accustomed to consuming. JFC is well-known for acquiring the national brands
of many food chain firms. In this way, JFC will be able to serve a larger market with more than
only Jollibee items but with a range of foods to pick from and successfully diversified services,
which will show how they will have expanded their market share.

Jollibee must improve its market expansion. To sustain the target market, prices are
reduced. Find an alternate source of raw materials for mass-produced goods with a reduced-price
range. Growth is only as successful as a company's ability to keep up with emerging technology
and market trends. JFC's strategy for staying relevant places digital transformation at the
forefront. The company is investing in the knowledge to discover and implement the most
effective technique for upgrading its business operations using digital technology.
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