According to an article entitled “International Expansion: Jollibee” written by Viking (2010), Jollibee was able to attain a competitive advantage

over McDonald’s by doing two things, first is by retaining tight control over operations management, which allowed it to price below its competitor and the second one is by having the flexibility to cater to the tastes of its local consumers. While they hired Tony Kitchner to handle their international relations to develop competitive advantages abroad, his international strategy is by planting the flag and targeting expats but it was executed haphazardly and resulted in losses for the firm. His eventual dismissal was largely due to his inability to manage intra-firm tensions. Likewise Viking (2010) said that it is important for the company to recognize flexibility as a competitive advantage, since it will become a foundation for Jollibee’s international strategy. Tight operations management and the flexibility to adapt to local tastes increases the wedge between customer willingness to pay and supplier opportunity cost. These savings in cost are then passed onto the customer, who is also receiving a product that better meets his or her needs. The ability of Jollibee to continue creating value for its customers by leveraging activities that is the key success factor for its international expansion. Tony Kitchner was hired to build the global Jollibee brand with the dual goals of positioning Jollibee as an attractive partner, while generating resources for expansion. Although there is the risk of targeting too narrow of a segment, Jollibee’s success in the niche market would allow it generate momentum for the company’s expansion. Furthermore Andrew (2011) stated that when 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

the company expanded into eight new national markets in just two years. According to Ungson (2008).. The company plans on opening more stores. however if it is initial expansion into international markets. capital requirements. more questions arose regarding the effectiveness of adapting from the expatriate customer experience to the local customer base. McDonald's beats Jollibee in revenue per store. The company’s incursion into China also exposed a weakness in its otherwise successful business model. both financially and operationally. some alarming events materialized. (2011) they said that as Jollibee looks to the future it seeks greater expansion opportunities. However. as well as the local Chinese. Undeterred by these developments. Rising food and fuel costs are putting pressure on the company to raise prices. Not too long later. brand preference and customer loyalty. raising questions as to whether Jollibee’s products. An international division was created to take charge of these operations. which had been so carefully attuned to the Filipino palate. Consumer spending in the Philippines is starting to weaken. and in more markets. Under a new executive. the flagship brand is coming under attack from McDonald's as it continues to open more new stores in the Philippines. and better cost and supply chain management. According to a 2007 report by Tony Lopez in the Manila Times. In a journal entitled “JOLLIBEE FOODS CORPORATION AND THE GLOBAL MARKET” by Rarick et al. but it now faces a number of challenges. the company found itself overextended. better kid's meals. Caktiong to establish the first ice cream shop in 1975 lives on. It appears that the same pioneering spirit that enabled Mr. In addition.specialized know-how. and strategically situated distribution channels. Jollibee continues to look ahead by expanding its restaurant chains into new markets. . Moreover. that is. Jollibee has experienced great success in its relatively short history. especially among lower income consumers as their disposable income has declined. were attractive to the Chinese local market. both Filipino expatriates in China. economies of scale. and has been gaining ground through better customer service. this division’s dogmatic stance on procedures began to cause strains with Jollibee’s domestic operation. including the Indian market.

It only suggests Jollibee’s liquidity as the buyer of companies available for sale one of which happened to be Mang Inasal whose owners probably got an offer which was difficult to refuse.html http://www.74 billion represents “cash in banks. after barely 10 years in business. Jollibee became the first food service company to be listed on the Philippine Stock exchange. That was probably the time that people realized how gargantuan the Bee had grown since its humble beginnings in” Not that it had to dip into these big savings. The first rule of business expansion is when you’ve grown bigger you don’t stop. it was the amount that Jollibee paid to do it – P3 billion – for a 70% stake in Mang Inasal. you grow even bigger.OTHERS: In a simple setting Oyama (2011) mentioned that acquisition of more companies is the game that Jollibee is playing. No. the company joined the ranks of the Philippines Top 100 Corporations. In 1993. Jollibee has been on that path for some time now and there seems no stopping it. Recently in the domestic front. Bibliography: http://essaysforstudent. Filipinos were rocked by the news that Jollibee had acquired majority stocks of fast-food chain Mang Inasal.php/features/y101-predicts/349-jollibee-attacks-companyto-keep-expanding. Likewise Ungson (2008) said that in 1984.html . It wasn’t so much the acquisition that stunned the Perez (2010) said that there is no reason to doubt the ability of Jollibee to raise money to pay the owners of Mang Inasal for a controlling ownership of the chicken house. its cash and cash equivalents amounted to more than P9 billion of which more than P2.html http://www. Also in 1897. Jollibee reached the 500 pesos million sales mark. It then became the first Philippine fast-food chain to break the P1 billion sales mark in As of September 30. catapulting the company onto the list of Top 500 Philippine Corporations. thus broadening its capitalization and laying the groundwork for sustained expansion locally and beyond the Philippines.

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