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Jollibee Foods Corp. (A) International Expansion Case Solution
The case study provides a review of Jollibee’s operational and strategic activities. Domestic strategies are discussed along with the international expansion strategies. Jollibee, a market leader in the Philippines’ fast food industry, had to modify its future plans as a reaction to the entry of competitors like McDonalds. The modification not only transformed the company into a domestic market leader but made it an important market player internationally. Due to the internationalization of the company, its organizational structure had to be re modified, and the management had to face a number of issues during this process. The expansion plan of Jollibee in the new markets of California, Hong Kong and Papa New Guinea has to be re considered by including the region specific factors into the market research.
Following questions are answered in this case study solution:
How was Jollibee able to build its dominant position in fast food in the Philipines? What sources of competitive advantage was it able to develop against McDonald’s in its home market?
How would you evaluate Tony Kitchner’s effectiveness as the first head of Jollibee’s international division? Does his board strategic thrust make sense? How effectively did he develop the organization to implement his priorities?
As Noli Tingzon, how would you deal with three options described at the end of the case? How would you implement your decision?
Provide advice to the top management team at Jollibee. What should Tingzon do not ensure global success? Which option competitive advantages can Tingzon exploit to improve its global position?
Jollibee Foods Corp A International Expansion Case Analysis
1. How was Jollibee able to build its dominant position in fast food in the Philipines? What sources of competitive advantage was it able to develop against McDonald’s in its home market?
Jollibee was established as a specialized ice cream outlet which expanded its expertise into sandwiches due to the probability of increasing prices of ice cream in 1970’s. Gradually; Jollibee introduced a range of hamburgers, which became hugely popular among burger lovers. The unique feature of the working environment was the friendliness of employees among each other. An environment of respect and honor motivated the employees to work whole heartedly. Excellence was acquired through collaborative teamwork and proper training of the staff. Unity and wholeness were the two basic characteristics prominent in every individual who was working in the company. It promoted honesty and tolerance by training the managerial staff to observe and learn. The slogan of Jollibee was focused on family and friends, and the fun time spent with them. Happiness and taste were the two important points on which the whole marketing strategy was based upon.
Jollibee relied on the three B’s in order to attain a dominant position in the fast food industry. It committed to raise the standards of the fast food industry as whole by setting a high standard for its competitors and other players in the industry. Brand loyalty and satisfaction was carefully monitored in order to make sure that the customer who leaves after having his burger meal, should return to have another meal. Jollibee targeted a wide variety of customers to broaden its customer base and meet the demands of a greater number of customers. In 1980’s, international competitors such as Mcdonalds had to deal with the international crisis and limit their investment in the Philippines. Jollibee took advantage of the situation and expanded the menu options to capture the market left behind. This strategy took the company into a whole new level of fast food market.
2. How would you evaluate Tony Kitchner’s effectiveness as the first head of Jollibee’s international division? Does his board strategic thrust make sense? How effectively did he develop the organization to implement his priorities?
Tony Kitcher was selected as the first head of International operations when the company decided to put emphasis on the international business of the chain. The mission was to make Jollibee successful internationally as it is successful domestically. Upon the arrival of the new head, the separation of domestic and international division was ordered and implemented in order to increase the potentialities of both the divisions individually. A formal wear was introduced in the international division to make the company look as a fast food leader and a multinational instead of a local fast food business. After altering the outlook of the employees, Kitcher turned towards the inner structure of the company. He made a professional team along with various prominent international business experts, recruited new department heads for every department of the new division and abstained from internal hiring of employees.
Strategic thrust was based upon the mission of making Jollibee a market leader in the fast food industry. Kitcher focused on benefiting from the potentials available for the company, and building a name in the top most brands of the industry. He used the concept of entering into new markets and making Jollibee as the standard fast food chain of the country. This strategy proved to be effective as the pioneer companies are the leader companies of that particular area; for example, Jollibee in Brunei. Kitcher established a franchise division within the company and recruited franchise managers whose basic task was to build a connection between the parent company and franchise. A project manager assisted in the initial process of opening up a new franchise in another country.
3. As Noli Tingzon, how would you deal with three options described at the end of the case? How would you implement your decision?
Noli Tingzon has joined Jollibee on an important point of the company’s business history, as the entry of Jollibee marks a new era for the future prospect of the company. He has to work with a well established partner to avoid any mismanagement on the part of its international partner. According to the three decisions based on the future strategy of the company, entry into Papua New Guinea requires a special effort and the management has to set a high quality standard for the people which will eventually discourage new entrants into the market. However, the menu should be customized according to the demand of customers and Jollibee should expand into multiple outlets to mark its territory. This option seems to be less viable for the company because of low promised profitability and reliability issues with the domestic partner. Jollibee is operational in a highly populated area of Hong Kong, and the outlet is performing at a satisfactory rate due to a number of issues prevalent. Jollibee store is popular among the Philippine natives, but Chinese locals are seldom attracted to the menu offerings of the store. Human resource problems and ethnic issues have become a hurdle in the way of dominant success of the brand in Hong Kong that is why it should focus on the improvising the existing operations rather than expansion in the same area. Jollibee can target the fast food lovers in California by modifying their menus according to the taste of different ethnic groups in the area. Furthermore, it has to deal with the competitors already present in the market by variations in price and improvisation in the quality of meals in the stores.
4. Provide advice to the top management team at Jollibee. What should Tingzon do not ensure global success? Which option competitive advantages can Tingzon exploit to improve its global position?
The top management at Jollibee should be open about the inclusion of new ideas. They should opt for the strategy of innovation and creativity to make an international brand out of Jollibee. New markets should be targeted after a thorough research of the likeliness and taste preference of the potential customers of the region. If there is no option that would result in a perfect product for the new customers, a new product should be designed and introduced which would have the ability to attract a greater number of loyal customers.
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