Jollibee junk food case study jollibee foods case

Philippines, Case Study, Case Research, Mcdonalds

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Jollibee

Fast food case study: Jollibee Food Corporation

Define the problem

The Philippine-based hamburger chain Jollibee Foods Organization is currently considering international growth. The first question it should answer is where: should it expand in to America, Hong Kong, or the expanding world marketplace of Papua New Guinea? If it decides to broaden into America it encounters another choice: should it give attention to mainstream America consumers or perhaps recent foreign nationals and Philippine expatriates? (Bartlett O’Connell 2001: 34)

Exterior concepts that could be applied: The challenges of globalization

Regionalization was vital in Jollibee’s original accomplishment: it provided larger spicy hamburger patties more attuned to local diners’ palates vs . McDonald’s more universal offerings. Political instability in the region resulted in unwillingness for international companies to create incursions in to the fast food landscape and allowed Jollibee to establish a secure foothold in the home country. However , poor initial selection of partners in another country, poor quality control, and substantial rents supposed its early on forays overseas into East Asia had been failures inside the company’s international organization, producing Tony Kitchner’s effectiveness because the initial head of Jollibee’s worldwide division mediocre at best (Bartlett O’Connell 2001: 39). The principal medium utilized for expansion was franchising, which include an agreement pertaining to “stores in their jurisdictions to fax them every day their figures to get sales by simply product, client traffic, and average admission and then monthly” to ensure effective quality control (Bartlett O’Connell 2001: 45).

There were numerous ‘fail safe’ measures with these foreign partnerships, for example a mandatory aware of headquarters in the event that sales characters declined for over two successive weeks. Regardless of the regionalization show in Jollibee’s early procedures, the menu, pricing, and in many cases the logo had to be adjusted pertaining to local flavor in many parts, to ensure customers’ palates were being satisfied and the brand was clearly well-known as a restaurant. The need for menu diversification often created conflict between home and worldwide operations, provided that since menu items were seldom erased, international choices were growing increasingly awkward in terms of all their operating costs (Bartlett O’Connell 2001: 47).

Jollibee’s issues reflect the idea of globalization, or perhaps the need to make an internationally-appealing brand that capitalizes after the possibilities and methods of a global economy. Globalized companies must tread a fragile balance among holding quickly to the primary brand id and portion local demands. For example , when ever Starbucks 1st infiltrated Japan, it insisted on protecting certain famous aspects of the Starbucks experience, such as prohibiting smoking inside stores to guarantee the aroma in the coffee permeated the entire eating area. However , the American coffee business did present green tea Frappucinos, less sweet foods, and also other components to match Japanese likes (No country is an island, 2007, The Economist).

Relevant qualitative data: The Jollibee photo

Jollibee at the moment brands on its own as a entertaining, family-friendly organization that offers one of a kind Philippine ease and comfort foods, but is also ready to expand the offerings based on local requirements. According to its past experiences, it has learned that “McDonald’s succeeded just about everywhere because we were holding very great at selecting the right companions. They can receive 100 prospects and choose the best – we don’t have the name to build that choice yet” (Bartlett O’Connell 2001: 40). In seeking to shift abroad, Jollibee has had trouble with locating both lovers and the right places by which to lay down roots. Even though it has used its menu to local tastes, there are concerns regarding keeping working costs low, given that the organization also would like to offer their signature spicy burgers whatsoever locations. It was able to wipe out McDonald’s in the home market through serendipitous personal circumstances and catering towards the local market. The question remains if it can translate this local success into different arenas.

Relevant quantitative info: Return on investment

At present, the company’s intercontinental expansion hasn’t justified the fee. “An ‘acceptable’ return on investment in international operations would need 60 Jollibee restaurants in another country with twelve-monthly sales of U. S. $800, 500, ” thus demanding a large, developing receptive marketplace which could assurance steady revenue (Bartlett O’Connell 2001: 50).

Describe the results of the analysis: The core concept of Joillibee

Jollibee offers a unique merchandise that is particularly palatable to Philippine consumers who are not necessarily enthralled with the ‘standard’ burger and fries made available from American restaurants, despite the refuge of ‘Americana’ that often appeals to consumers to patronize American fast food restaurants. Jollibee sets high specifications for item quality which usually it desires to maintain in international stores. However , it remains unsure if it can easily transport the business model overseas, keep operating costs low, and pioneer just enough to attract local buyers while still remaining recognizably faithful to its company.

Describe substitute actions: Several international sites

One feasible action is always to concentrate Jollibee’s focus on the financial markets which many closely appear like the Philippines: “to consolidate and build upon existing Jollibee markets that had either high income potential, just like Hong Kong, or perhaps relatively slight competition, such as Malaysia and Indonesia” (Bartlett O’Connell 2001: 50). This may allow for the organization to cash in upon their learning lessons from its earlier forays in the region and allow the company to stay to emphasize its localized perspective. Unfortunately, its current Hong Kong operations aren’t running easily. There is social friction between your Filipino and Chinese staff; McDonald’s includes a high degree of name identification vs . Jollibee’s weaker company position; and worst of all its menu requires substantial innovation (changing the way tea is brewed to a more time-consuming and popular method and changing the toast chicken recipe) to remain competitive (Bartlett O’Connell 2001: 51)

Another likely action should be to focus on the Filipino market in the U. S., although this elevates fears the fact that company will probably be ‘boxed in’ in terms of its appeal (Bartlett O’Connell 2001: 51). Continue to, by centering on the Cal market, the business would have access to a strong focus of Filipino customers and also be able to probably expand its outreach to Latino-American buyers. By building this base, it might be in a position to slowly develop a wider market appeal in the dominating American junk food market. The California companies are perhaps the most competitive fast food market in the whole nation in addition to already many local and regional stores offering several exotic cuisines. Yet this novelty-seeking element of public demand could work in Jollibee’s favor. “They also available they could adapt the labor-intensive Philippine operating strategies by developing different tools and cooking processes more in keeping with a high labor price environment” (Bartlett O’Connell 2001: 52). Finally, California has its own affluent buyers who could possibly be counted onto provide regular revenue, also during a economic depression.

The most unusual and interesting prospect is always to enter into the developing globe. Unlike Hong Kong or America, Papua Fresh Guinea offers virtually no rivals in the junk food market and is ‘hungry’ pertaining to viable alternatives: there is just “five mil people offered by only one poorly handled, 3-store fast-food chain, that had just lately broken jewelry with its Aussie chicken cafe franchise” (Bartlett O’Connell 2001: 51). In distinct distinction to the other available options, Jollibee would have minimal competition as well as its quality control and monitoring standards would clearly always be superior to the particular residents previously were presented.

But stepping into a solely untapped marketplace does have some clear drawbacks. First and foremost, there would be a scarcity of local partnerships to learn. Little existing market research can be available relating to what clients wanted by a fast food establishment. Likewise, this expanding world land is quite poor, and citizens may not have the luxury penalized able to eat out greatly. The small scale the market means there is a serious question whether it “could support the twenty stores that he noticed as the target critical mass

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