Name: Chicell Mae S.

Macapayag

Analysing the Fast-Food Industry:

Jollibee in the Philippines

Jollibee is the largest fast food chain in the Philippines, it was founded in 1975 by
Tony Tan Caktiong. with over 1,150 stores nationwide. It first opened as an ice cream
shop, which eventually inspired the creation of the Jollibee brand. Since then, Jollibee
has expanded to over 1,400 locations throughout numerous nations, making it one of
the world’s most well-known and prosperous fast-food chains. The company’s success
can be ascribed to several things, such as its emphasis on client happiness and
flexibility in responding to changing market conditions. Jollibee’s menu features a
variety of options to suit various tastes and preferences, including traditional Filipino
cuisine and burgers, chicken, and spaghetti. In this study, the researcher will analyze
the Fast-Food Industry dynamics of Jollibee in the Philippines using Porter’s five forces
Model.

Competition in the Industry

The first of the Five Forces refers to the number of competitors and their ability to
undercut a company. The larger the number of competitors, along with the number of
equivalent products and services they offer, the lesser the power of a company.
In the case of Jollibee, they were not intimidated by the new competitor's coming
in the country. Instead, they sell products that appeal more to the Filipinos' taste. By
concentrating its resources on satisfying the Filipino palate, Jollibee has been able to
serve localized dishes that are unlike any found in the other fast-food chains in the
Philippines. In addition to offering the usual French fries that accompany the meals
found in McDonald’s, KFC, Burger King, and so forth, Jollibee also serves rice or
spaghetti, Filipino style. Even the burgers are cooked exactly as Filipinos want them
done, which is sweeter and with more seasonings, often likened to what a Filipino
mother would cook at home. Menus in outlets across the globe adjusted to local
preferences to differentiate it from other standardized players like McDonalds and KFC
who maintain the same menus worldwide with minimal changes. Jollibee even
incorporated recipes from employees to truly capture local tastes. “McDonalds entered
the Philippine market in 1981 and many assumed the Big Mac would soon dominate the
market. Surprisingly, Jollibee has secured a 65% market share and is out pacing
McDonalds at its own game. Jollibee accomplished this by local adaptation of the menu
and by positioning the food chain as a family restaurant.”
Potential of New Entrants into the Industry

Porter also believes that a company's power is also affected by the force of new
entrants into its market. The less time and money it cost for a competitor to enter a
company's market and be an effective competitor, the more an established company's
position could be significantly weakened.
As McDonalds came to the Philippines they already have more money and highly
developed operation systems. However, it doesn’t satisfy local taste in Phillipines.
Jollibee did go in for BLUE OCEAN strategy- expand in places where there is an unmet
need, which isn’t being met by any of the existing vendors, hence there is little or no
competition. Blue ocean is an entrepreneurship industry term created in 2005 to
describe a new market with little competition or barriers standing in the way of
innovators. The strategy aims to capture new demand, and to make competition
irrelevant by introducing a product with superior features. For Jollibee, they were able to
capture the Filipino market.

Power of Suppliers

The next factor in the Porter model addresses how easily suppliers can drive up
the cost of inputs. It is affected by the number of suppliers of key inputs of a good or
service, how unique these inputs are, and how much it would cost a company to switch
to another supplier. The fewer suppliers to an industry, the more a company would
depend on a supplier.
Jollibee Foods Corporation can strengthen its position against suppliers by
decreasing the dependency on one or a few suppliers. It will increase its price
sensitivity. Developing long-term contractual relationships with suppliers from different
regions not only lowers their bargaining power but also allows Jollibee Foods
Corporation to improve its supply chain efficiency.

Power of Customers

According to Porter’s theory, the customers have the ability to drive prices lower
or their level of power. It is affected by how many buyers or customers a company has,
how significant each customer is, and how much it would cost a company to find new
customers or markets for its output. However, with Jollibee they utilized the Filipino
taste of their products in the local market promotion. Local managed brands like
Jollibee in the Philippines, often have the advantage of intimate knowledge of consumer
tastes and consumer preference through local pride. Jollibee used the wave of
nationalist pride to promote a Filipino brand of hamburger. This strategy met with great
success. Investing in socio-civic programs designed to serve its host communities
further secured Jollibee’s position as a Filipino company for the Filipino. Advocacy
campaigns such as the early Christmas drive “ma-Aga ang pasko sa Jollibee,” again
endorsed by Aga Mulach to show their potential contributed to the company’s overall
success, not only with its customers but with all its stakeholders.

Threat of Substitute Products

The last of the Five Forces focuses on substitutes. Substitute goods or services
that can be used in place of a company's products or services pose a threat.
Companies that produce goods or services for which there are no close substitutes will
have more power to increase prices and lock in favorable terms. When close substitutes
are available, customers will have the option to forgo buying a company's product, and
a company's power can be weakened.
Jollibee Foods Corporation is reducing the threat of Substitute Products or
services by clearly emphasising how its offered product/service is better than the
available substitutes. They provide convincing reasons to the customers by offering a
better experience and high value for money. For example, Jollibee is offering a way for
customers to choose their own meal combination that is both “sulit and masarap”, for
about 75 PHP only.

Key HR Considerations for Operating Fast-Food Industry Like Jollibee

The role of Human Resource management in fast-food industry like Jollibee is
revering to a process of managing the relationship between the organization and its
employees. A major objective of human resource management is to make the interests
of the organization (Jollibee) and its employees coincide whenever possible. Also, to
hire the right persons to manage its operations and strategy planning. Furthermore,
training programs for employees should be planned as they embody the company
mission that is to create a friendly and family-oriented environment.

Investing in Jollibee
Investing in Jollibee Stock is a great way to hedge against inflation and make
your money work for you. This company has been around for quite some time. From its
performance history, we can see that it has always been able to bring in profits. This is
regardless of the economic conditions. As an investor, one should look at Jollibee as a
long-term investment. Jollibee stock will do well over time because this company has
shown strong signs of growth over the years. They have no signs yet of slowing down.
Jollibee is a company that has proven its worth in the market and has shown
tremendous growth. It is a great investment opportunity, especially if you want to
diversify your portfolio.
Conclusion

Moreover, Jollibee is a monopolistic competitive fast-food chain that is already a

very successful business that has been experiencing major growth; however, they have
intense competition to be faced if they are to become a major global competitor in the
fast food industry. According to Primer Media Inc., Jollibee is arguably the most
successful and iconic Filipino brand of all time. The country’s home-grown fast-food
chain is well-loved not only for its food but for the happy experience it gives to its
customers, something that is deeply-rooted in the local Filipino culture where eating is
something to be enjoyed with family and friends