INSTITUT PENGURUSAN DINAMIK SARAWAK,
WISMA MORNIE, NO.1, JALAN HAJI TAHA,
93400 KUCHING SARAWAK.
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Student Details
No.
1
NAME
SRI VIBI FIFIANI BINTI MUHAMMAD ISKANDAR
Student Details
MATRIC NO.
RCB21302006
Assignment Details
Course Code / Title: RMGT4143 Contemporary Issues in Business (1)
Assignment Title: Group Project & Presentation
Due Date: 23/05/2023
Lecturer: Miss Ave Chellmonda
Declaration
I hereby declare that this assignment is my work, and does not involve plagiarism or collusion.
Contents
1. Why do you think McDonald failed in the Philippines?........................................................ 3
2. How did Jollibee beat a huge corporation like McDonald's in the Philippines? ................... 3
3. When Jollibee decided to internationalize or ventured into their market in the United
States, they were only able to serve their customer that familiar with their brand. Justify how
Jollibee can compete back in the US with the other giant company by relating your
explanation to 4 elements of the CAGE Distance Framework. ................................................. 3
Reference ................................................................................................................................... 5
1. Why do you think McDonald failed in the Philippines?
Based on the video, one of the main reasons McDonald's failed in the Philippines is the
company's failure to localize its menu options. The second reason is most of the Philippines
people preferred sweet and tastier dishes.
2. How did Jollibee beat a huge corporation like McDonald's in the Philippines?
McDonald's was defeated by Jollibee in the Philippines thanks to its localization strategy. First
of all, Jollibee was able to adapt its menu to the local population's tastes, allowing it to offer a
variety of foods that Filipinos liked. Second, by keeping prices lower than McDonald's, Jollibee
was able to draw in customers who were on a tight budget. Thirdly, Jollibee was successful in
establishing a regional brand identity, which helped it gain the trust of and put customers at
ease.
3. When Jollibee decided to internationalize or ventured into their market in the United States,
they were only able to serve their customer that familiar with their brand. Justify how Jollibee
can compete back in the US with the other giant company by relating your explanation to 4
elements of the CAGE Distance Framework.
A company should conduct a careful investigation. An organization can gain from applying the
C.A.G.E. Distance Framework to compete fairly and equitably with other firms and achieve
their goals. The distance framework has divided differences in how other countries conduct
business into four areas to aid the study. The "distance" between countries is seen from a more
comprehensive perspective due to its inclusion of Culture, Administration, Geography, and
Economy. The Jollibee Corporation uses C.A.G.E Analysis to gain an understanding of the key
differences between its home market and its target global market, which is McDonald's. It also
helps because it enables the company to continually assess market demands.
Cultural Distance
A group of people or an entire organization's actions and interactions are shaped by its shared
beliefs, customs, and practices, which are referred to as its culture. Language, race, and religion
are all factors in the cultural diversity between different countries. The CAGE Difference
Framework prioritizes the cultural gap between nations. First of all, Jollibee adapts its menu
to suit the tastes of its local clients. Every nation has its preferences. They may find it tasty, but
we do not. Jollibee decided to develop several menus that would suit the preferences of the
locals who live in the United States. Burgers, spaghetti, and other dishes are prepared using
American flavors. Secondly, Jollibee introduced Filipino foods to people living in the United
States. For example, spaghetti with banana ketchup and hot dogs, and fried garlic rice served
with morning meals.
Administrative Distance
The simple definition of administrative distance relates this to historical and political
distinctions among nations, especially those without colonial relationships. Government
corruption and the lack of a common currency both increase administrative distance. The
Jollibee corporation must accurately determine how the domestic market and the global market
differ politically and administratively. Under the current administration, Jollibee should
consider the likelihood that the government will meddle in the business world. For instance,
how is it possible for Jollibee to open a franchise in the United States with such ease in terms
of a license? However, the Food and Drug Administration manages some products' import and
export. License agreements with foreign organisations in particular must follow agency
requirements. The licensing agreement will also be subject to all applicable international
agreements and all applicable tax laws of the United States.
Geography Distance
The third component of the CAGE Distance Framework is geographic differences or the
distance between two countries. Size, mode of transportation, climate, and other differences
are among the other factors that play a part. Popular locations were chosen by Jollibee for its
restaurants. Some of their locations are situated in shopping centers and alongside major
thoroughfares, enabling customers to get a quick meal to state their appetite. Customers can
visit Jollibee's stores whenever they want, which makes their lives easier because they no
longer need to look for stores. Next, Jollibee decided to locate their company close to Filipinos
who live in the United States. Filipino Americans were joyful when Jollibee decided to open
stores and bring these dishes back to the United States. Without ever having to return to the
Philippines, they can eat at Jollibee restaurants in the United States.
Economy Distance.
We are aware that two of the key components of the global distance economy are the cost of
labor and the variation in consumer wealth across countries. Additionally, although not
impossible, it is more difficult for a company from a country of wealth to enter and survive in
a poorer country. Since they are aware of the high cost of living in the US, the company has
benefited from Jollibee's expansion there. These reasons are why this company uses strategic
pricing to attract customers. Because of this, Jollibee's prices are competitive across the board,
which could help them increase their profits. Jollibee's main objective is to provide delicious
food at an affordable price. Compared to its competitor McDonald's, Jollibee offers
combination meals at a lower price. Jollibee is aware that more than just the aforementioned
factors are necessary for opening franchises in the US, but they also understand that they may
experience this favorable response because their marketing strategies include demographically
targeted consumer targeting. Additionally, it makes it easier for Filipinos to buy local goods
there. There are many Filipino workers, as a result, they have less money available for other
fast food. Customers may benefit from the existence of fast food restaurants like Jollibee due
to the low prices. Jollibee must understand the target segment in the foreign country as well as
the per capita income, the target segment's lifestyle, and the cost.
Reference
Ariton, G. (2020, July 8). How Jollibee beat McDonald’s to become the Philippines’ fastfood chain of choice – meet billionaire Tony Tan Caktiong, the ‘chicken joy’
entrepreneur. South China Morning Post.
https://www.scmp.com/magazines/style/news-trends/article/3092165/how-jollibeebeat-mcdonalds-become-philippines-fast?onboard=true
CNBC [@CNBC]. (2018, November 20). Why is McDonald’s struggling in the Philippines?
Jollibee. Youtube. https://www.youtube.com/watch?v=kpHeXMbIy2s
Shastri, A. (2021, September 14). Detailed marketing mix of jollibee corporation 2023. IIDE. https://iide.co/case-studies/marketing-mix-of-jollibee/7