Jollibee Foods Corporation is a Philippine based quick service restaurant company that began in 1975 and has since expanded to over 1,000 stores internationally through acquisitions and organic growth, with a vision of becoming a truly global brand by 2020. The company has pursued a strategy of targeting areas with large Filipino populations initially and is now focusing on high growth markets in countries like China, Indonesia, and Vietnam. Jollibee faces challenges in expanding globally such as competing with well-established international brands and adapting operations and menus to local tastes and regulations in new markets.
2. Overview: Emerging Market
Financial
Infrastructure
Uncertain High High Risk
Regulation
Growth
Market
Inefficiencies
3. Philippines
Export led economy
Member of ASEAN
High economic growth
Large consumer market
Privatization initiatives by government
4. Vision
We are the best tasting Quick Service Restaurant(QSR)
The most endearing brand…
that has ever been…
We will lead in product taste at all times…
We will provide excellent customer service in every
encounter…
Happiness in every moment…
By year 2020, with over 4,000 stores worldwide, Jollibee is
truly a GLOBAL BRAND
(and the Philippines will be admired worldwide)
5. Jollibee Foods Corporation
Began in 1975 as an ice-cream parlour
Headquartered in Pasig City, Philippines
Revenue in 2011: PHP 63 Billion (USD 1.47
Billion)
Employs 40,000 people worldwide
Philippines, Thailand, Singapore, Indonesia,
Hong Kong, United States and China
7. Growth
2011
- Purchased Chowking stores
-Purchased 54% share of BK
Titans, Inc. (Philippines),
- Obtained 50% of San Pin Wang
in China
* 2001 stores in Philippines and
468 stores in foreign countries
11. Global Expansion Strategy
Large
Filipino
population
New
International
Strategy
High
growth
fast food
market
12. Analysis of Strategy
Limited markets to target
Retainnon-Filipino customer base through
improving quality, consistency and
standardization
Generic menu
Emphasis on research to provide localized food
menu
Avoid excessive localization
Stick to its segment of Quick Service
Restaurants (QSR)
13. Globalization Challenges
Filipino companies have little exposure to
competition with foreigners
Expansion through M&A: Talent management
and best practices difficult to streamline
Higher labour costs, lower margins
Competition from well established global firms
with deep pockets
Limited Markets with overseas Filipino
communities
14. 2012 and beyond
Expansion into rapidly growing fast-food
market: China, Indonesia, Vietnam, Middle-
East
Improve operational efficiency and adjust to
local tastes
Revenue split: International/Domestic
Current 20:80
Target 50:50
15. 2012 and beyond
Strategy,
Factor Related Demand
Country Structure,
Endowment Industries Conditions
Rivalry
High Foreign Many global
Anti-trust
Saudi Labor Needs for social competitors are
legislation, Low
Arabia Dependency, spaces entering the
entry barrier
Duty Free market
Natural resources
Still strong Most domestic
and good location Most companies
Malaysia demand for local- firms operate
to be attractive to are small scale
oriented products within the country
foreign investors
High quality
Openness to Sophisticated Open and
Singapor inputs from
foreign consumers, vigorous
e outside i.e. HR,
companies diversity competition
IT, Capital
Skilled work force
Fast food
in agriculture, Agricultural
Australia Westernized taste competition is
Good business
Financial infrastructure: Banks, unified currency, stock market (liquidity in debt and equity markets) High risk: Political instability, domestic infrastructure problems, volatile currency, limited equity opportunities. Uncertain regulation: No strict standards in accounting and market regulation Market inefficiencies: Many large companies are state-run oligopolies or private, inefficient labour market
Badly affected in 2008 and 2009 by economic crisis, growth slowed to 3.8% and 1.1% in 2008 and 2009, 7.6% in 2010, around 6% between 2004-07 ASEAN: Association of Southeast Asian Nations, strong relations with neighbours, access to the markets 60% of population below age 65 Poor business friendly environment, complicated tax structure, unpredictable regulation and large state owned enterprisesFig1: Market capitalization of Philippines stock exchange,Fig 2: Economic growth
Expand into countries with large expat Filipino population Niche and narrow market segment, so marketing necessary to attract non-filipino population Strategy failed : 1) Jollibee failed to target filipino population which actually needed the product. 2) Failed to use competitive edge to attract broader audience. 3) Plant the flag reflected empire building, and entering markets without strategic opportunities
Expand into markets with heavy concentration of overseas filipinos Target markets with high growth in fast food market. Acquire local brands and expand them Target for 2017: 50% revenues from overseas operations
Philippines government followed heavy protectionist policies to protect local companies from foreign competition Higher labour costs and strict labour laws in developed countries will squeeze Jollibee’s margins Jollibee’s strategy of expansion is driven by national pride and to exploit overseas filipino market. This will soon saturate the expansion options