JOLLIBEE FOODS CORPORATION

Jollibee is the largest fast food chain in the Philippines, operating nationwide
network of over 750 stores. Jollibee enjoys the lions share of the local market
that is more than all the other multinational brands when combined being a
dominant market leader in the Philippines.

Jollibee Foods Corporation (JFC) is a food empire with interest in America fast
food chain (burgers, fries, fried chicken, etc.) including pizza chain (Greenwich),
and Chinese fast food (Chow King). Jollibee is slowly acquiring these companies.
Jollibee used franchising to rapidly expand business and achieve market
penetration.

Jollibee Foods Corporation also develops high technology in the operation system
to improve products and services they offer to their customers. They innovate so
that it will gain an advantage against its competitors. It can provide an
organization with means to improve its performance and competitive advantage
in a competitive market. Some opportunities can be foreseen, such as being able
to expand a franchise into a new city. The threat of Jollibee is the high
competition against McDonalds. Outside environment can adversely affect its
performance or achievement of its goals. Due to economic crisis in the
Philippines, people have less money to spend on their meals.

After establishment of Jollibee International, it faced conflict with the mainland

Jollibee because of the alterations in the menu served internationally. This
conflict led to independence between the two parties until Tony Kitchner left the
Jollibee International Division. Jollibee many acquire business that is best suited
to other countries tradition and culture, with this, JFC can take little steps to
slowly introduce their products to foreign markets for them to achieve higher
profits for another business expansion and acquisitions.

OBJECTIVE: To be able to know how Jollibee Foods Corporation could expand to

foreign markets and to acquire new companies and generate funds to open new
outlets.

S.W.O.T. ANALYSIS:

Strengths
Adaptability of operations on different scenarios
Filipino pride as a fast food corporation
Recognized brand
Diverse menu list
 Jollibee acquired Red Ribbon Bakeshop in 2005
Jollibee dominates the hamburger market despite foreign competitors
Jollibee captured the palate of every Filipino with its uniquely flavored
burgers, chicken and sweet spaghetti
Jollibee uses franchising to rapidly expand its business and market
penetration

Weaknesses
Lack of in-depth planning and research in the expansion to foreign markets
Poor coordination between the national and international units
International vs. Domestic practice
Disunity of employees due to foreign branch autonomy

Opportunities
JFC provide BOTP (business operational training program) for new
applicants franchisee which provide seminars and hands-on exposure to all
level of store operation
The promising nature of international markets and also the available
potential due to the migration of Filipinos in certain countries
JFC has a conservative background and accept franchisee in order to drive
innovation to lead them and hire equally driven people that helps to
successfully fast food industry
Being an agricultural country, full integration in sourcing raw materials
could be done
Acquisition of various fast food restaurants
First food company to be registered in the PSE

Threats
Possibility of the market to refuse the companys food chain
Existing food chains
Great challenge with keeping up the demand for the production of product
to distribute in all over branches that are franchise-owned
Wrong choice of franchise may destroy companys reputation which will
affect brand name
McDonalds as direct competitor
Competition from both international and local companies/ entries

ACTIONS TAKEN:
Tony Kitchner was hired to build the global Jollibee brand with the dual goals of
positioning Jollibee as an attractive partner, while generating resources for
expansion. In order to become one of the top 10 fast food brands in the world,
Kitchner implemented a two-part international strategy, which comprised of
targeting expats and planting the flag. Kitchners idea of targeting expats
allows the company to ease its transition into an unfamiliar market. Although
there is the risk of targeting too narrow of a segment, Jollibees success in the
niche market would allow it generate momentum for the companys expansion.
The concentrated marketing campaign allows the company to generate stable
revenues that can be used to support Jollibees entry into other segments, while
the popularity amongst expats could generate publicity and attract walk-in traffic
from non-Filipinos. However, targeting expats will only lead Jollibee to become
a global brand if: (1) Jollibee correctly targets expats who have a need and want
for the product and thus avoid repeating its mistake in the Middle East, and (2)
The company continues to build its competitive advantage through learning and
by appealing to a broader audience.

On the other hand, Kitchners decision to plant the flag reflected a desire to
build an empire under his leadership, rather than a strategically sound decision
for the firm. Although Kitchner hoped to leverage Jollibees competitive
advantage by entering new geographic market, his rapid expansion strategy was
unfocused and poorly executed. The unprofitable ventures in the Middle East
could have been easily avoided had Kitchner researched the market prior to
entering. Kitchner also neglected to consider the large transaction costs
associated with establishing markets in new countries. Kitchners desire to be
first-mover in a number of small, undeveloped markets would not have brought
the prestige needed to win the firm better partners. Planting the flag only
showed that Jollibee knew how to repeat its success. In order to compete on the
level with multinationals, Jollibee would have to take its performance to the next
step and prove that it could continue to build its competitive advantage.

RESULTS:
Although Tony Kitchner was hired to bring more structure to the International
Division, he failed to build the rapport needed to push forward the divisions
initiatives. Kitchner began creating a world-class company by stealing
employees from domestic operationsa poor first impression that lasted the
duration of his career at Jollibee. By setting the stage for competition, Kitchner
ensured that his actions, even if they were beneficial for the company, would
meet criticism from the domestic side. Kitchner should have recognized that the
hostility coming from Domestic was underscored by a fear that their division
would be eclipsed by International. Rather than cultivate this fear, Kitchner
should have made it explicit that the International Divisions success would have
reflected on the company as a whole. By simply increasing communication,
Kitchner could have enlisted Domestics support in his endeavors.

Under the companys early divisional structure, value-chain activities such as R&D
and Finance were controlled by the Philippine operations. The failure to gain
access to these resources hindered Internationals ability to modify the logo, store
layout, and menumodifications, which were potentially beneficial for Jollibee.
Kitchner fostered tension within the organization and it was ultimately this
contribution that led to his dismissal.