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JOLLIBEE

Introduction

In early 2003, message boards on many websites on the World Wide Web were flooded withrather disturbing news about Jollibee Foods Corp. (Jollibee), a fast-food major from thePhilippines. The message claimed that the company had misled millions of customers into eatingwhat they believed were burgers containing pure beef.

Jollibee was reported to have been usingearthworms in its beef patties for many years toget customers 'addicted' to certain so-calledchemical elements in earthworms. The company

strongly denied the above allegations through astatement released on its website. It showed indetail its manufacturing facilities on its websiteand stated that the allegation was a hoax. Theincident soon died a natural death - however, itseemed to have brought Jollibee in the 'big league'of global fast-food majors who had been accusedof such practices in the past. Not that it neededany such dubious claims to fame - the companyhad been earning laurels from the global corporateworld for many years now; In 2001, The Far

Eastern Economic Review1 (FEER) named it thetop corporation in the Philippines and the sixthleading corporation in Asia.

Jollibee had also won recognition for its contribution to the economy of the Philippines and thesuccess of its strategies by theAsian Business Review, leading management consultants HewittAssociates, and many Filipino corporate bodies. Jollibee also had the distinction of being one ofthe very few companies that had been able to give multinational fast-food giants such asMcDonald's and Burger King a run for their money. While Jollibee had a market share of over60%, its closest rival, McDonald's had less than half of that.

Including its pizza and pasta outfit (GreenwichPizza), its Chinese quick-service restaurant chain(Chowking) and its bakery products chain(Delifrance), Jollibee had well over 902 outletsacross the world by the end of 2001 (ReferExhibit I). The company did not seem to becontent with ruling the fast-food market in thePhilippines (Refer Exhibit II); it was aggressively

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expanding on a global scale as well. By 2002,Jollibee had over 31 outlets abroad. Some of thecountries it had expanded into were the US, HongKong, Vietnam, Indonesia and Brunei. The storyof the evolution of a small ice cream parlor into a

fast-food giant with a net income of P 1.05billion2 for the year 2002 (Refer Exhibits III andIV for financial statements) has been closely-followed for years by many companies, corporateleaders, business analysts and strategists.

This article is a tribute and some sort of an eye opener to one of the largest Philippine Franchisetoday.

Who is Jollibee? What is Jollibee? Jollibee Philippines is one of the most popularphilippinefranchise. Originally opened as a Magnolia Ice Cream parlor at Cubao in 1975, the name was

originally called Jolibe. In 1978, the business focus shifted from ice cream to hamburgers.Jollibee studies showed a much larger market was waiting to get tapped. Lumba became TonyTans first business and management mentor. After changing the name to Jollibee, the Jollibeemascot was nspired by local and foreign childrens books. Developed by a managementconsultant named, Manuel C. Lumba working for Tony Tan Caktiong next created the productname Yumburger as well as the name Chickenjoy. Later Tony Tony made Manny Lumpa incharge of developing the franchise. The stores were re-designed, the service transformed into afull self-service, fast food operation with drive thrus. The first headquarters was located on MainSt. in Cubao, Quezon City. Lumba developed a long-term marketing strategy, listing up anumber of consumer promotions and traffic building schemes while maintaining internalstrengths required by Tony Tan.

We wont be going in detail on how Jollibee Philippines exactly work. We are here to analyzethe reason and principle of Jollibee Philippines success.

Acquistions in the Philippines

The corporation is actually known as Jollibee Foods Corporation. Oh and if you thought thatJollibee was the only fast food chain operated by this coporation, boy are you in for a surprise.To me, it seems like JFC owns a majority stake in all of the Filipino fast food niches. Do youever eat at Chow King? I know I love the halo-halo there, but did you know that in the year2000, JFC acquired Chowking! Thats right, all the delicious oriental style fast food from ChowKing is operated at a high level by the same corporation as Jollibee. Oh and thats not all. Seemslike Jollibee Foods Corporation has the idea that diversification is key to its future, and I thinktheyre on the right track. JFC also bought out the popular fast food pizza restaurant known asGreenwich Pizza. Additionally, in 2005, Red Ribbon Bakery became part of JFC. Keeping withthe baking theme, JFC acquired the French cafe and bakery known as Delifrance. The division ofJFC that handles business inside of the Philippines is known as Jollibee Philippines.

Acquisitions outside of the Philippines

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JFC has holdings in several other Asian countries including China and Taiwan. Theres aChinese fast food chain named Yonghe King in mainland China (based in Shanghai) that isowned and operated by JFC. Another Chinese restaurant chain named Hongzhuangyuan wasacquired on September 21, 2007. This chain has 33 locations in Beijing and was purchased forthe amount of US $50.5 million.

Wow! I sure was surpised when I learned about all those acquisitions. Its interesting to note thatwhen I walk into any of the chains above that theyre owned and operated by the samecorporation. Im glad that Jollibee has a great track record with the Filipino community and thatin addition to the amazing Jollibee Philippines, they can offer us a variety of different foodsranging from pizza, oriental food, coffee and baked goods. Yum!

Jollibee Philippines Organizational Structure

Success in any industry is acheived by a variety of factors, amount of capital, market segment

targeting, values held by company founders and the type of people who are hired has a bigimpact as well. Still, something that many companies lack to take them to the next level is theorganizational structure that allows the right people to be in the right place. Theres a saying thatgoes: First you gotta have the right people on the bus. Then you gotta make sure each person onthe bus is sitting the right seat thats designed specifically for their unique strengths. Only thendo you worry about where the bus is going.

I believe that Jollibee had the same idea when they introduced a host of changes to their businessbeginning in 1994. These changes were mostly focused on creating more structure and takingadvantage of more resources. First of all, they hired Tony Kitchner, the first outsider vice-president to handle their international operations. This was a key move to separate Jollibee

International from Jollibee Philippines. They introduced FSMs, known as Franchise ServicesManagers to help keep their franchise owners abreast of the new changes. These changes wereaimed at creating a world class view, and you could see some of the changes visibly throughthe newly differentiated logo to the new packaging. They also instituted a dress code change aswell as began to recruit from outside.

Overall, these changes certainly kept Jollibee ahead of the game, as 10 years in the future, theirsuccess would be so great as to garner the Entrepreneur of the Year Award by Ernst & Young forfounder Tony Tan Caktiong.

The Jollibee Philippines Mascot

I honestly wonder what goes through the heads of fast-food chain management and founderswhen deciding what their mascot should be. It must have been an interesting time when thecreators of McDonalds came up with the idea of a friendly clown dressed in red, yellow andwhite. I guess things were a bit simpler for Dave Thomas when he named the franchise after hisdaughter Wendy, though I would hesitate to call her a mascot. We all know how bad (or maybegood?) things can get when a fast food chain brainstorms the brilliant idea of a talking chihuahuathat speaks in Spanish about how much he wants (or loves?) Taco Bell. Interestingly enough, not

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all successful chains need a mascot (or maybe they werent memorable) in the case of chains likeArbys, but many do, like Jack of Jack in the Box and The King of Buger King all normalpeople with ridiculous masks or, um, heads.

Now what does this have to do with Jollibee in the Philippines? Well, many would attribute

Jollibees success in the Philippines to its mascot, sharing the same name as the franchise: theJollibee. Is it a coincidence that Jollibee chose its mascot to be bright yellow and red as well?Perhaps not as gaudy as those colors may seem, they are more than vibrant enough to catch theeyes attention. These colors exposed to children who grow up on Jollibeebegin a lifelongassociation of bright yellow and red with delicious, affordable and fast food. Reminiscent of thememorable flavors of popular condiments for hamburgers (or Yumburgers) and hot dogs, theyellow and red bee named Jollibee is dressed in a chefs hat along with a shirt and blazer.

Jollibees smiling face is friendly enough to be a favorite among kids, and his face is prevalent inmany locations that include playrooms for children. Clearly, this cartoon figure is aimed at theyounger generation, but it does not alienate the older generation, especially these days, when

many of us have grown up eating Jollibee. Its easy to say that this figure has been pivotal in thebranding and marketing efforts that have led to such success in the Philippines.

source: Jollibee philippines .com

Personal View About Jollibees Taste

This next few post is in my personal point of view. I have friends and relatives that live on theother parts of the world. They have shared all their experiences in dining at Jollibee fast foodchains. But one similar opinion they had is that not all Jollibee franchises are the same. Theyhave different tastes and hospitality when it comes to service. The food is somewhat different to

what we are served in the Philippines.

My friend in Hong Kong once told me, (the first Jollibee in Hong Kong) that the food is not asgood as it was on the Philippines. Is it because the Philippine native chicken better? However,Jollibee is Jollibee no doubt, whereever you see that Jollibee mascot, that orange stiped honeybee smiling at you, you can never resist!

Jollibee and Mc Donalds

Like any other franchise, fast food chains like McDonalds and Jollibee is one of the leaders in

providing employment for the Filipinos. It is said that 60% of all college students have hadexperience in working in this fast food chains during their college days. No doubt, fast foodfranchises helps the Philippine economy.