How was Jollibee able to build its dominant position in fast food in the Philippines?

How was it able to

compete successfully with McDonalds?

McDonalds was able to aggressively promote its products due to the financial backing it had. It had an
aggressive marketing campaign and also started at a brisk pace of opening 6 stores in 2 years time.
McDonalds occupied a market share of 27% which was very close to Jollibee's share of 31%. Jollibee's
first reaction was to occupy a second position in the market.
However, the company worked on a strategy which focussed on the following strenghts:
They focussed on the larger appetite of the Philipinos ( the company being local) and hence
could succeed in making their large burger 'Champ' popular among the masses.
The 'Champ' could perform impressively over the 'Big Mac'
The company also focussed on 'taste' as a factor and made sure that they made their Burger
spicy over the burger of McDonalds. This also appealed the local population and the local taste
made sure that the market share leadership remained intact
The target market was kept as the local population and the strenghths of the company were
made likewise.

Is their advantage sustainable? How would you evaluate Tony Kitcheners effectiveness as head of
Jollibees international division?

The advantage was sustainable but it was more aided by the political environment of the country which
forced McDonalds to take a step backward. The time lag which kept McDonalds away was responsible
for Jolibee acquiring a comfortable market leadership position.
However, had this not happened Jolibee would have had a tough time facing McDonalds as a
competitor. It would have had to re-formulate its strategy from time to time.

Tony Kitchner:
Kitchner adopted a strategy that focussed on two aspects Targeting Expats and Planting the flags
As per the former strategy the Expats working in countries of the Middle East, Hong Kong, Guam were
targeted. This according to Kitchner, would form the target base for the company and would help the
company achieve an initial base building.
The latter strategy of planting flags would focus on countries which did not have fast food chains
within them and hence by doing this they would start a trend in that country.
Tony Kitchner with this strategy could definitely expand the company's businesses and made the

company known Internationally. The concept of FSMs also helped the company sustain its partnership
with the Franchisees and helped them exapand their revenues.
However soon it was realized that growing International was not a very easy task. At the intitial stage,
in order to carve out an International Chain Image, the company changed the attire of its employees in
that office, it changed the logo of its International chains and made certain changes in its offerings.
Later stage, customization increased on a great extent. This resulted in an increased friction among the
International and Domestic divisions.
One gets a feeling that too much customization was a part of this strategy which resulted in a weak
brand building process. This is what made Jolibee slightly incompetant as the brand as compared to
larger brands like McDonalds. Because of this they did not have a name to attract customers towards
them and had to customize their offerings to go towards the customers. Here the profitability per store
was an important factor as against only expansion.

Which of the three options at the end of the case would you, as Noli Tingzon, choose? Why? How
would you implement your decision?

Jolibee has primarily and largely focussed upon the Philipino Expat population whenever they have
planned for an International market. The market segment that they target is this one. They rely on the
this segment to help them build their base and eventually target the other customers. The said strategy
has also given them good success in Hong Kong where the only population that gave a good response
was the Filipino population.
The store at Papua New Guinea would not guarantee an immediate result as the nation is not yet
exposed to fast food. Hence the process of building a taste for consumers, building a brand and also
then working on expansion would take time.
In California, there is already a huge population of Filipinos and the state hosts the largest
Filipino Expat population in the world. So the base that needs to be built for the company is already
available. The United States and also the state of California is used to having fast food chains
and is used to the concept of consuming fast food
Experience has made them realize that Americans also give a favorable response to their food.
Customization of the menu was not a great concern in California as compared to that in China
and hence the company had an opportunity to create its own standard and brand.