Instruction: Prepare a reaction paper on the case study of Jollibee, in your own words (200) based on the
theories learned from the first topic using this format. Either hard or soft copy. Due on September 15,
2023.
I. Introduction
II. Analysis on issues the case mention
III. Reaction
IV. Recommendation
V. Conclusion
You can answer individually or group maximum of 2 members with group list upon submission.
Jollibee - fast food the Filipino way
(2017, Mar 26). Retrieved from https://studymoose.com/jollibee-fast-food-the-filipino-waycase-study-essay)
1. Introduction Strategic management is a comprehensive study of how a firm performs during
its course, with regard to its predetermined objectives, how they plan to achieve these objectives,
and how much resources are expendable for those objectives. The process to determine the
strategic management involves considerations of company’s strategic advantages and matching it
with existing conditions in business environments. Gerry Johnson and Kevin Scholes (2001)
reveal there are three ‘origins’ of strategic management.
In their book, Exploring Strategic Management, they mention that a corporate strategic
management could rise from: ? Experience of operating corporation’s daily activities ? Regulated
designing steps as mentioned above or, ? Novel and innovative ideas that come form
evolutionary and complex understanding of the business environment.
Concerning the strategic management, this paper discusses the case on Jollibee Food Corp
(Jollibee). The company has worldwide reputation as fast-food provider from Philippines.
The interesting part when discussing about Jollibee Food Corp lies on the fact that the company
was named to be McDonald’s a huge embarrassment, according to the Economist on its February
2006 issue.
Moreover, the discussion will address the potential future strategies for Jollibee Fast Food. The
report will highlight a through analysis of the organization under review, together with
recommendations for future strategies to secure opportunities, or to defend against threats.
Furthermore, the analysis of Jollibee Fast Food will also focus upon applying the theory of
strategic management.
There are six points of discussion about Jollibee Fast Food; they are systematic process of
strategic management and decision making, key strategic problems, key strategic opportunities
and threats, value, alternative courses of action, and recommendations as to the company’s future
course.
2. Analysis of Jollibee Fast Food 2. 1. Key issues of Systematic Process of Strategic
Management and Decision Making The development of business involves a series of suitable
decision making that drive a company to achieve a designated position in a particular market or
industry.
Concerning the decision making nature, I found a brief explanation from a research, where the
researchers explains that there is no “pure” decision merely based on intellectual logic or
“purely” based on emotion (Biology Daily, n. d. ). Their remarks suggest that in every kind of
the decision making process, there is an appropriate mixture between emotion and reason of the
decision makers. This suggestion is in line with nature of storytelling that also composes of
mixture between the two factors.
Although decision-making process could not merely depend on rational process, I found that it
makes sense to assume that too much emotion may cause a decision to be flawed or vague.
Under such circumstances, in order to make a sensible decision we must dispassionately consider
evidences we have. The theoretical perspectives in strategic management and decision making,
as mentioned above, also happened in the case of Jollibee in which the decision to adopt
McDonald’s and U. S. fast food chain and to localize their offerings involves both rational and
emotional decision making. 2. 1. 1. “Copy” Strategy.
As mentioned above, strategic management involves three broad activities; they are performs
during its course, with regard to its predetermined objectives, how they plan to achieve these
objectives, and how much resources are expendable for those objectives. Concerning the Jollibee
case, during its first stage, the company asserts that from the start, their objective is to copy
existing fast-food business practice in order to avoid reinventing new wheel and take benefits of
tested experiences. In order to achieve the objective, Tony, the founder of Jollibee, and his
brother went to the U.
Since 1978 in order to gain knowledge about running a fast-food business. The main role model
for Jollibee is undoubtedly McDonald’s that later becomes the company’s main rival not only in
the Philippines market but also overseas. The interesting part of Jollibee action is that the
company decides to compete with multinational fast-food chain like McDonald’s and Burger
King by adopting the so-called ‘symbol of Filipino Pride’. This strategic management is taken
since the company realizes they cannot compete with McDonald’s that have strong financial
backup and supply chain. 2. 1. 2. Address Local.
Preferences
In addition to copy the fast-food practice that McDonald’s and other U. S. fast-food chain,
Jollibee also address the local preferences when competing with U. S. fast-food chain in
Philippines market. For example, from the start in 1978, Jollibee address the Fillipino habits like
eating in groups, each person orders separate dishes. By adopting local preferences, Jollibee has
extensive number of menu compared to U. S. fast food that offer limited menu. Moreover, like
McDonald’s that has Ronald as the mascot, Jollibee also provides their mascot appeared as ‘a
human like bee’ two years after the fast-food chain establishment.
The success of Jollibee continues running although McDonald’s entered Philippines in 1981
since the U. S. competitor did not localize their offering and their price was higher by 5 to 10
percent than Jollibee. Moreover, in order to attract and serve Filipino, Jollibee practice the local
greeting culture by saying Magandang Umaga Po, the local preferences that McDonald’s and
other U. S fast food retailers do not adopt and practice. 2. 1. 3. Market Expansion Another
decision that is noteworthy in the case of Jollibee is their globalization strategy. The company’s
first overseas outlet was in Brunei in 1987.
The decision to expand worldwide was because the company saw opportunities in foreign
markets although their market expansion strategy slowed down due to economic recession in
1997. The decision to adopt dual strategy to expand internally (Philippines market) while
keeping their eyes open to international market amidst global economic recession highlight that
the company employs both rational and emotional decision. The situation occurs since Jollibee
believe that the recession would go away while market opportunities would grow at a breakneck
speed afterwards.
In addition to initial overseas outlet in Brunei, the company immediately presents other overseas
outlets in Indonesia, Hong Kong, and the U. S. The decision was based on the fact that the three
countries have significant number of Filipino working there. In the U. S. for example, Jollibee
first exists in Daly City, California, whwre 25% of the city population was Filipino descent. 2. 2.
Key strategic problems and issues which have arisen and why they have arisen Jollibee has a
great reputation in managing its outlets throughout Philippine and neighboring countries.
In its home markets, Jollibee is practically the leader in the fast-food industry, outperforming
McDonalds by far. The company also gained success in foreign Asian markets, especially ones
with significant population of Filipino nationals. Nevertheless, the company is currently facing
the challenge of maintaining corporate growth and surviving within the increasingly competitive
industry and facing various crises. 2. 2. 1. Core Issue The company is currently planning to
expand its business to the United States and perhaps even the European countries.
Management believes that such undertaking is necessary to ensure growth for corporate
international business. However, analysts stated that this undertaking might not be as successful
as Jollibee’s management predicted. This is due to the fact that competition in the global fastfood industry is much more intense compare to the Philippine markets and the Asian market. The
company will have to face competitors in their homeland, which is a scenario that receives
significant critics because Jollibee is known to be profitable because it took advantage of its
knowledge and insights of Philippine people’s tastes and preferences.
Such advantage will not be present in the US or European market. In short, to successfully
perform the internationalization strategy, Jollibee cannot rely on existing strategies. New
strategies that appeal to US consumers must first be discovered. This is the main issue faced by
the company today. 2. 2. 2. Technical Obstacles Besides this main problem that will obstruct
Jollibee’s expansion strategy, there are others. In entering the US markets, Jollibee is also facing
technical problems like procuring suitable real-state and designing the right retail format.
Because of the different construction style in US and different consumer preferences,
management of the company is forced to build outlets which are actually different than their
original plan. 2. 2. 3. Attracting New Customers The company is also having problems in
attracting customers. The original strategy of the company is to appeal to Filipinos who are
working or living within the targeted country. However, the amount of Filipino nationals who
live in the United State is far from sufficient to generate Jollibee’s targeted revenue.
Management is dealing with this problem by adding new products that suited local customers.
Nevertheless, some of these new products are very different than the original offering of Jollibee
and Jollibee is inexperienced in providing such products to the market. Furthermore, this strategy
threatens to eliminate Jollibee’s original trademark. The company needs to discover a way to
increase the appeal of Jollibee’s original offerings to local customers. 2. 3. Attracting Good
Employees Besides having trouble getting customers, Jollibee is also having problems attracting
good employees to work in its outlets.
Being a new brand in the market with no locally reputable achievements, the company is
struggling to attract good people to work in the company. The problem deserves quite an
attention because the company is also inexperienced in facing this problem. In its previous
markets, the company simply has to pick and choose between abundant applicants. The company
needs to revaluate its human resource management programs and discover strategies to attract
good employees. 2. 4. Key strategic opportunities and threats Strategic management is the art of
designing the business to reach the highest possible success level.
The core questions addressed by a good strategic management process are: 1. ‘what are our
business objectives? ’ 2. ‘how are we going to achieve those objectives? ’ 3. ‘what resources are
needed to achieve such objectives? ’. (‘What is’, 2007) In the case of Jollibee, the company
already has a good design of vision and mission statement and the values in achieving those
objectives. Corporate values include: “customer firsts”, “excellence through teamwork”,
“frugality”,” spirit of family and fun”, “humility to listen and lead”, “honesty and integrity”.
Corporate mission is to “bring great taste and happiness to everyone”. Corporate vision includes:
“being the most dominant and best-tasting service restaurant”, “reaching every Filipino”,
“provide great product taste at all times”, etc. The company is planning to achieve this objectives
by attaining the 3B, which are” boosting the standards of fast food industry”, “build brand
satisfaction”, and “broaden the reach to customers”. These statements represent the first
component of strategic management.
However, Jollibee must work to evaluate the second and third component mentioned above. In
facing existing challenges and to achieve corporate objectives, Jollibee must search into its
organizations for competitive advantages and develop the valuable edges to help the company
gain more share of the market. These advantages must be cross referenced to the conditions in
Jollibee’s foreign markets to discover the appropriate corporate strategy to apply in the foreign
markets. The core strategic advantages of the company are: • Innovation.
In its home market and the market it has been operating in since its inception, the company was
known to be highly innovative. The company developed from an ice cream parlor to a chain of
the most successful fast-food counters in Philippine. Today, the company has not lost its touch in
innovation. New products are developed and designed as the company perform its daily
operations and generated new menus and methods of preparing food. • Sensitivity toward all
customer segments In my personal opinion, Jollibee is successful because of its main weapon,
sensitivity toward customer preferences.
The company took notice of the different segments of customers that come into the outlets and
find the best possible way to satisfy their needs. Creating a variety of meals instead of the
standard and non-variative products which is considered to be the character of fast-food outlets,
designing children’s meals, creating a special program to address the take-away segment are just
some example of how the company address the needs of its customers • Preserving Quality of
Operations The company uses the newest technologies to enhance its operations.
The manufacturing process within the outlets is constantly improved by benchmarking programs
and adopting new processes and technologies. This should be identified as a weapon of corporate
growth and entry into foreign markets. • Good relationship with Franchisers The company treats
is partners and franchisers like family in accordance to Philippine customs. Inputs are regarded
and the company truly work together with franchisers to develop the quality of outlets’
operations. • Leadership Some analyst believed that most of the current success of the company
is the result of one man’s hard work.
Without the leadership qualities and the boldness to spot a good strategy and actually go through
with the idea, Jollibee would not be what it is today. There is little doubt in stakeholders’ minds
that corporate survival and growth for all the years are directly related to Tony’s presence as
corporate leader and mentor. Identifying these strengths and cross referencing them to the
challenges faced by the company in its internationalization plan, we should be able to conclude
the following strategic opportunities:
• The company possesses notable chances to succeed in international markets because of its
qualities. However, because the international markets have much more intense competitive
environment, the company must always try to develop the quality of its operations in all aspects.
Preserving the present quality of operations and active innovation, and also enhance them to a
new level will allow the company to be among the top players of the international fast-food
industry. • Facing new environments, all companies must go through a stage of adaptation.
Adoption of local characteristics is generally necessary in order to get the first customers into the
outlets. The company, who has a reputation of being innovative and sensitive toward customer
preferences, should see this as an opportunity to create new products, new programs, new
packages or other new and appealing strategies that will attract customers into Jollibee’s outlets.
• In managing the human resource, the company should rely on its proven qualities for leadership
and managing good relationship with partners.
If the company is having trouble in initially attracting good employees into the outlets, the
company should consider using Filipino employees. By training them to meet the highest
standard of the industry and giving them the best employment deal in the market, Jollibee will
set an example to the general workforce in the market. The present condition of the company
however, also has strategic threats that must be paid attention to. Some of them are: • Letting go
previous formats and being creative Research indicated that previously successful companies
generally have problems adapting to new conditions and developments.
This is caused by the illusion that they have discovered the recipe for success and refuse to
change along with the environment. Jollibee must educate its managers and employees not to fall
into this mind trap and understand the reality that the corporate profit will diminish and corporate
existence will be threatened if all components of the organizations failed to change along with
the environment. New strategies that will strengthen corporate competitive advantages are
required, especially in this internationalization program. • Dependency toward single leadership.
In Jollibee, most of the bold and innovative strategies are led by a single leader which is a
dangerous culture when the company intends to go international. The principles of globalization
stated that business internationalization means that the company also has what it takes to perform
localization of business operations. In a localization concept, local leaders must have the
authority and freedom to act in response to conditional changes (Beck, 1999). Having privately
owned and franchise outlets overseas will make it necessary for delegation of leadership.
• Losing corporate characteristics Other strategic threat is losing corporate characteristics and be
called a copycat or business imitator. Unlike the previous years of Jollibee when the company
must perform serious benchmarking to mimic McDonalds, today the company is recognized for
its own brand and characteristic. Corporate strategy must be aimed at increasing the appeal of
existing offerings and not blindly mimicking local competitors to gain more customers. Such a
plan is not viable in the long term. 2. 5. Value if decisions taken by managers.
Jollibee’s success is not without apparent reasons. Management of the company displayed that it
has performed its best in all aspects of corporate operations, especially in adhering to customer
preferences and maintaining high quality manufacturing processes. In the modernism
perspective, Jollibee would be successful in all its business endeavors as long as the company
maintains all of the present business credibilities. This is in line with modernism philosophy who
believes that human endeavor, logic and technology are the main factors that shape the world
(Nichols, 1995).
However, reality revealed that the company is not vulnerable from problems and issues, and it
must be noted that most of the problems are generated by external factors and not internal. In
other words, the company remains credible as it is originated, but the quality of its performance
is threatened. This is hardly accord with principles of modernism. On contrary, this is more
suitable to the postmodernism perspective. In the postmodern perspective, social, cultural and
spiritual factors are significantly influencing occurrences of the world.
Postmodernism proponents adopt a more ‘flexible’ or ‘fluid’ view of the world, with
appreciation but not worshiping logic and modern technologies (Bertens, 1995). In the light of
this discussion between modernism and postmodernism, we discover the reality that the business
world is a constantly fluctuating place, where a company might be the indisputable leader today
but could be reduced to runner ups the next day. Jollibee is in an important stage of its
development, which is expanding to one of the biggest and most challenging markets in the
world.
This represents the possibility that Jollibee will face more challenges and uncertainties in
addition to currently present. In its foreign markets, the company need to reevaluate its
operations both internally to refit corporate human resource management and externally to
increase the marketing appeal of the company (Castels, 1996). 2. 6. Consideration of alternative
courses of action According to case of Jollibee, there are many actions that Jollibee considered to
be excellent. However, there are many opportunities for the fast-food chain to improve their
service.
for instances, concerning the global expansion, currently, the company still believe their recipe to
develop the true taste for Filipino since their target customers are Filipino descent. However,
since customers in the global markets do not come from Philippines or not wholly Filipino,
therefore, the company needs to adopt local taste as well. For instances, when serving American
customers, Jollibee needs to incorporate local taste instead of forcing the Filipino taste for
American people. 2. 7.
Recommendations of Company’s Future In order to provide suitable analysis for a company’s
future, we should incorporate suitable business analysis tools so that we can obtain enough
information and develop suitable strategy from it. One of business analysis tools that is suitable
for Jollibee case is Ansoff Matrix. This analysis tool is basically a marketing tool, publicized by
the Harvard Business Review in 1957 (Tutor2U, 2005). The concept elaborates how companies
direct their corporate strategy to achieve corporate growth.
As each company rely on different competitive advantage for profitability and growth, the
Ansoff Matrix simplifies the complicated nature of ‘personal’ corporate competitive advantages
by dividing all of them into four large quadrants. In order to alleviate the limitation that the
analysis tool has, Bruce D Buskirk, in 1998, add another two quadrants (6 in total) in the Ansoff
Matrix.
The addition quadrants address the influence of high tech environment in a business (Figure 1).
Figure 1 Ansoff Growth Strategy Market (Expanded) Source: Available at http://www.zanthus.
com/databank/strategy/business_strategy. asp Concerning the case of Jollibee, the
recommendation can be developed into several components as depicted by Ansoff Matrix. But
two most important factors for recommendation are Future and New Technology.
• Future Concerning product future (product development and diversification), Ansoff matrix
suggests that a company needs to promote their product and repositioning the brand. This
strategy is the least risky since its does not require massive capitalization to obtain new resources
(QucikMBA, 2004).
This is important since the positioning of Jollibee is formerly to become the Filipino choice
while markets/customers come from diverse culture and nationality. The situation suggests the
company need to develop global taste. Remember, McDonald’s success is because they have a
wide range of products that address global tastes plus some adjustment to local tastes.
• New Technology Considering the benefits of IT for supporting the Jollibee operation, the
company needs developing Management Information with following benefits: ? Simplifying the
product and the production process?
Using customers demands as a guide to enhance products and services ? Reduce cycle time ?
Improve quality and precision of products (food and beverage) delivery ? Avoid miscalculation
in billing statement To be specific, Jollibee can increase their revenue by simplifying the
purchasing process by using corporate e-commerce, for instances, where customers can reserve a
place at any Jollibee’s outlets. Similarly, by using e-commerce customer can purchase any
Jollibee’s products and have them by home delivery services. The situation highlights that the
adoption of technology will give the company with new revenue sources.
3. Conclusion Fast food industry is an interesting business since people need food and therefore
the industry grows fast. Concerning issue, this paper discusses the strategic management of
Jollibee Food Corp (Jollibee). Moreover, the analysis of Jollibee Fast Food will also focus upon
applying the theory of strategic management and address six points; they are systematic process
of strategic management and decision making, key strategic problems, key strategic
opportunities and threats, value, alternative courses of action, and recommendations as to the
company’s future course.
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