Jollibee: Fast-Food, the Filipino Way

 
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Case Details:

Case Code : BSTR052
Case Length : 20 Pages
Period : 1985 - 2003
Organization : Jollibee
Pub Date : 2003
Teaching Note :Not Available
Countries : Philippines
Industry : Fast Food

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Background Note

The history of Jollibee dates back to 1975, when a Filipino entrepreneur Tony Tan Caktiong (Tony) set up a two-outlet ice cream parlor business in the city of Manila. His father used to operate a kitchen in Fujian (China), which was where Tony's association with the food services business began.

Though the ice cream parlor business was doing well, Tony wanted to do something bigger in the foods business - in the form of a fast-food outlet chain. His vision was inspired by the global popularity of companies like McDonald's (which incidentally, was planning to enter the Philippines during that time), Wendy's and Burger King (these two already had a presence in the Philippines). Deciding against becoming a McDonald's franchise, Tony established his own chain of seven hamburger outlets in 1978 under the name Jollibee. In 1979, Tony and his brother went to the US to study the fast-food business. They spent a couple of weeks looking at the kind of equipment used, the retail outlets, the food served and various other things.

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Tony decided to copy almost each and every aspect of US fast-food majors, particularly McDonald's.  He said, "From the start, we were willing to copy."The aim was to avoid 'reinventing the wheel' and to benefit from tested business practices. By establishing Jollibee in 1978, Tony pre-empted McDonald's entry into the country. Tony was aware that Jollibee could not compete with McDonald's which had financial muscle and decades of expertise in the business.

Therefore, he decided to differentiate his company by making it a 'symbol of Filipino pride.' Thus, while Jollibee hired US consultants for assistance on the franchising and retailing fronts, it took decisions regarding the products on its own. All the food products were prepared keeping in mind the tastes and flavors prevalent in the country. Since Filipinos liked eating out in groups and ordered different dishes, the menu was quite exhaustive (as compared to the limited menu offered by US fast-food outlets). This strategy worked well and from the very beginning, Jollibee became a huge hit with the customers. In line with the 'copying' theme, Jollibee launched its own mascot (a la Ronald the clown from McDonald's), a human-like bee,3 in 1980...

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3] The bee depicted the light-hearted, happy spirit of the people of the Philippines. Tony said, "Like Filipino working folk, the bee hops around and produces sweet things for life, and is happy even though it is busy."

 

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