jolibee.pdf

7/27/2019 Jolibee.pdf

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Jollibee Foods CorporationKeys to cracking the US market

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Executive Summary: Expand, but slowly.

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Jollibee is well positioned to enter into the U.S. fast food market and has proven

its readiness through its success in Guam a high labor cost environment. HighFilipino populations in California make it an ideal point of entry into themarket, making TTCs long-held dream a reality.

Proven Successful TacticsExpansion into Hong Kong targeting Filipinopopulations was an instant, overwhelming

success.Adjust menu to local tastes. Cater to theFilipino population, but also recognize American

taste buds and tailor accordingly.

Building brand recognition first this is whatenables McDonalds to select strong partners

and gain premium locations.

ChallengesTook McDonalds 20 years for intloperations to count for more than 50% of

sales.Strained global-domestic relations at

Jollibee and plant the flag mentality. With

new locales half a world away Jollibee HQ

must be flexible and cooperative to

maintain strong relationships with a new

US based franchise.

Recommendation: Expansion into the U.S to challenge McDonalds on its home turf is an absolutely viable goal.However, this must be done with care. Specifically, opening only a few locations targeted specifically at Filipinopopulations in California is our gateway to brand recognition. Additionally, tailoring the menu to local American taste

will be a key component of our strategy. Daly City and the Bay Area are attractive entry options, as they have arelatively low concentration of fast-food competitors, and a high concentration of immigrants from the Philippines.


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Agenda

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Introduction: Expand into the U.S. Keys to Expansion into U.S. Fast Food Market for Jollibee Past ventures have proven immediate success with Filipino population. Brand recognition is critical to gain foothold in new markets Tailoring menu to local tastes has proven successful.

Challenges and Lessons: Expansion cannot simply be a plant the flag maneuver, as past ventures have shown. It must be

slow and deliberate in order to build brand recognition and an efficient operation.

Closing: Low fast food presence and high affluent Filipino population in BayArea California make it an attractive option. Tailor the menu to focus theofferings and appeal to both Filipino and American taste buds.

Sources


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Introduction

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Expansion into the U.S. Fast Food Market is critical to Jolibeescontinued growth.

Manila businessmen are 40% partners in the venture, reducing capital investment directly fromJolibees resources.

Low competition is seen in the Bay Area of California, and a high Filipino population. International operations account for 50% of total sales at McDonalds.

The consumer market outlook: Americans love food. Common knowledge details that Americans are a people who love food. A 24 hour channel

called The Food Network is beamed to approx. 83% of homes that have television in the U.S.

according to tvbythenumbers.com. It is a culture wired to explore and adopt new, fast, and

easy food offerings.

Success of Jollibee in Guam proves preparedness for U.S. Operating methods in a high labor cost environment were developed and proved successful. In Guam, 25% of population was of Filipino extraction, but food also appealed to Americans

based there.


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Expansion into the U.S. fast food marketshows great future potential

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History

Jollibee growth had been internally financed until 1993. Movement offshore from 1986-1997 has brought great

opportunities for expanding the Jollibee brand and namerecognition throughout the world.

Today

Over 220 stores in the Phillipines and abroad bring in annualrevenue of $179M USD. McDonalds operates 14,000 stores inthe US alone. This is a large market waiting to be tapped.

Manila-based businessmen have entered as 40% partners in aU.S. venture, reducing the risk and liability to Jollibee. Heavy Filipino populations in the U.S make it an attractive

market to enter.


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Low competition, high target population

make Californias Bay Area attractive.

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Phillipine ex-pats know the Jollibee brand. This givescompetitive advantage and instant success walking into aheavily Filipino market.

Brand recognition enables a franchise like McDonalds tosecure prime locales. Building Jollibee in the new market iscritical to success and ease of expansion down the line.

BrandRecognition

Jollibees expansion cannot simply be a plant the flag maneuver to expand asquickly as possible and growing the business footprint. Past ventures, such asthose in Singapore, Taiwan, Brunei, and Indonesia have shown that this is not aneffective method of growing the business. It must be slow and deliberate in orderto build brand recognition and an efficient operation in a new market place.

MeasuredGrowth

Expansion into the U.S. Fast Food Market is critical to Jollibees continued growth. It is worthnoting that McDonalds has grown to 50% of its total sales being accounted for throughinternational operations. Manila businessmen are 40% partners in the US venture, reducing capitalinvestment directly from Jollibees resources. This makes a stronger case than the alternativeoption, dominating an emerging market through expansion into Papua New Guinea, a populationof only 6.3 million vs. 316.8 million in the U.S. financed entirely by Jollibee. This carries highercost and does not offer the same growth opportunity.

StrongBusiness

Case


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Tailoring the menu to local tastes is a critical strategycomponent of tapping into a new market

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Fast-food in the United States has a well-established menuincluding burgers, fries, and pop. While certain menu items mayappeal to the Filipino base, the same items may turn off theAmerican crowd.

At the first couple stores, gauging and experimentation should occur withthe menu. Jollibee staples such as Chicken and mushroom pasta andPalabok Fiesta may prove to be discordant with American fast-foodtastes. Start with a diversified menu, and whittle down after the marketdetermines what works and what doesnt.

Jollibees current menu is highly diversified and may prove to appear too far diversified. Ex:Pasta, Chicken, Burgers, Hot Dogs, Rice in the United States represent foods that would befound at 4 different types of fast-food restaurants this may lead to a lower qualityperception among American consumers, who may become confused at what Jollibees product

differentiation and specialization is.


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Challenges and Lessons Learned Past events

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Dont just plantthe flag

Indonesian expansionhas shown that abrute force effort tosimply plant the flagis not an effectivemeans to growJollibees business.Expansion into theU.S. exposes Jollibeeto an excellent

opportunity andbrand new market.

It takes time

Took McDonalds 20years for intloperations to countfor more than 50% ofsales. Our goal ofopening 1000 Jollibeestores abroad beforethe year 2000 iscertainly ambitious,but not realistic if the

plan is to be thoughtthrough and set upfor success.

CooperativeRelations

Strainedinternational-domestic relations atJollibee havehindered business.With new locales halfa world away Jollibee HQ must beflexible andcooperative to

maintain strongrelationships with anew US basedfranchise.


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Closing: Expansion Recommendations

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Start with slow growth, targetingCalifornias Bay Area. There are fewcompetitors, and an existing affluentFilipino population.

A measured entry enablesJollibee to establish recognition,and work out the kinks. Do notsimply plant the flag.

Menu tailoring will position

Jollibee for popularity andsuccess among Filipino andAmerican audiences alike.

Expand into the

United States in

order to grow

Jollibee


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Works Cited

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Bartlett, C. A. (2001).Jollibee foods corporation (a): International expansion. Business Case Study, Harvard Business

School, Cambridge, MA, .

Seidman, Robert "List of How Many Homes Each Cable Networks Is In - Cable Network Coverage Estimates

As Of August 2013 .

Menu, about us. (2013, 10 05). Retrieved from http://www.jollibee.com.ph/

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