How Was Jollibee Able to Build Its Dominant Position in Fast Food in the Philippines? What Sources of Competitive Advantage It Was Able to Develop Against McDonald’s in Its Home Market?

1.) How was Jollibee able to build its dominant position in fast food in the Philippines? What sources of competitive advantage it was able to develop against McDonald’s in its home market?

Ans.) Jollibee was able to coup up very well during the oil crisis in 1977 with their innovative ideas. They have forecasted that the surge in oil price will have direct and adverse effect on the ice cream sector since the production costs are much higher for Ice cream business, thus they have migrated to Burgers. This idea of moving to a new segment has clearly shown the ability of the decisive management team to act sharp at times of market crisis. The way in which the strategic decisions are carried out during this period was remarkable. It has defeated the existing cut-throat competitor Mc Donald’s and leading foreign investors at that time by producing more at a cheaper available price in the market. They have invested their cash flow much on the production and delivered products that are delicious to the major customer base. The sales has grown tremendously which led to claim the dominance in the market and has become a leading brand passing ahead of McDonald’s. They took over Greenwich Pizza to enhance their market strengths by a way of consolidation and had a JV with DeliFrance.

The approach was rational in the beginning days and they have studied the pulse of the American customer by introducing big burgers to counter Big Mac’s. The credit is to be awarded to the expert management team who has done intense R &D of the market and planned their finances accordingly.

Even though a new brand in the market in has stood firm to the rough waves of its competitor without giving any chance of tarnishing their brand value and market share.

Sources of Competitive advantage: The major source was being the new and first of its kind competitor to the existing big brands in Philippines and attracting the customers with their products in delivering customer specific requirements, tastes and preferences. One interesting learning here is that Jollibee being a new entrant in the market has attracted the customers by understanding their tastes, which McDonald’s was unable to get hold of. It’s small in number and has hit the right button of “Customer Satisfaction” as per the region preferences.

It was so flexible that a big brand like McDonald’s couldn’t withstand the variety of items Filipinos prefer in their menu list attracting the locals with reasonable prices. The timeliness and strategic analysis of the market is the key to its huge success in Philippines.

2.) How would you evaluate Tony Kitchner’s effectiveness as the first head of Jollibee’s international division? Does his broad strategic thrust make sense? How effectively did he develop the organization to implement his priorities?

Ans.) As the first head of Jollibee kitchner has a vivid and vibrant focus on generating a huge brand value culminating in to a world class company, he has the attention to detail at all minor aspects of the business ranging from the dress code, vision, research of individual markets, local markets, plans for strategic menus at different segments of the markets as per the local preferences are well planned.

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