Topics: Philippines, Jollibee, Fast food Pages: 35 (4779 words) Published: December 9, 2012


Case 7

5:15 PM

Page 532

Jollibee Foods Corporation

The Philippines’ leading food service company has grown both organically and through acquisitions. Ranked among Asia’s top companies, it now dominates the fast-food market in its home country, where it offers four separate fast-food concepts under separate brand identities, led by the original Jollibee stores. However, despite international aspirations, it has made only modest progress overseas, where recent growth has come primarily from purchase of the Yonghe King chain in China. Around the world, when someone says “fast-food restaurant” the chances are high that the first name that comes to mind will be McDonald’s, the world’s largest quick-service restaurant chain. In 2005, McDonald’s held a 20 percent share of the U.S. fast-food market, triple that of its nearest competitor Burger King. This was not the case,

however, in the Philippines where, for more than two
decades, fast-food had been synonymous with the name
Jollibee. In the global business arena, Jollibee Foods
Corporation (JFC) was not exactly a household name. But
in its niche, the Philippines, where it controlled four
brands—Jollibee, Delifrance, Greenwich Pizza, and
Chowking—it dominated the market.
During the 1990s, JFC extended its sights overseas,
opening a small number of restaurants in several Asian
and Middle Eastern locations. The company’s chairman
and CEO, Tony Tan Caktiong, observed:
Internationalization remains a key component of our
business strategy, even as we continue to reinforce
our domestic network of stores. Our goals of continued growth, profitability and market leadership, as well as our contribution to the development of our
country, may lie not just in continuing to expand
aggressively at home but also in becoming a truly
multinational Filipino corporation.
By June 2005, the total number of stores worldwide
in the JFC Group had grown to 1,200, of which 1,079 were
located in the Philippines and the balance in several
other countries, led by the recently acquired Yonghe King
chain in China. Jollibee had recently beaten 31 other
entrepreneurs from around the world to win the 2004
World Entrepreneur of the Year award, sponsored by
Ernst and Young, one of the world’s top accounting

Humble Beginnings
In 1975, Tony Tan Caktiong, a Filipino of Chinese ancestry,
and his brothers opened two ice- cream parlors in Manila’s commercial districts of Cubao and Quiapo. These icecream parlors were an instant hit among food-loving Filipinos, who came to associate the stores with special

occasions such as birthdays and holidays. In no time the
Tan brothers had decided to expand their menu and began
offering other quick-meals such as hot sandwiches,
spaghetti and burgers. After its second year of operations,
the Tan brothers noted that the store was actually earning
more from the side orders, specifically their burgers, than
from the ice-cream.
Following the taste and feel of the market, the Tan
brothers decided to develop their own unique brand by
coming up with a menu that would appeal to the Filipino
palate. Jollibee was conceived as a fast-food outlet of highquality but reasonably-priced food products tailored especially for Filipinos, who were served by a jolly, “busy-as-abee” restaurant crew. Hence the birth of the bright red and yellow “Jolly Bee” mascot, which had since become a

favorite among Filipino children. In response to the growing popularity of their sweet homemade burgers—made from
their mother’s secret recipe—and the other hot meals, Tony Tan and his brothers formed Jollibee Foods Corporation
(JFC) in 1978 to exploit the possibilities of a hamburger concept more fully. By that time the firm had seven outlets. When McDonald’s entered the Philippine market in
1981 and began opening stores in...
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