Jollibee

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QUESTION 1
Jollibee had a unique company policy that was the embodiment of its CEO’s vision. According to Tony Tan Caktiong – the company’s President and CEO – employees should work happily and efficiently. The company’s philosophy became known as the “Five Fs”: friendliness, flavored food, a fun atmosphere, flexibility in caring for customers’ needs and focus on families. This philosophy was the key ingredient to an effective and well developed operations management capability which gave the company the ability to offer its products at affordable prices, while being attentive to customers satisfaction. Being the first big fast food chain in the Philippines it had a first mover advantage with respect to its competitors. Furthermore it was a local company, thus it was well aware of consumers preferences and habits. When McDonald’s entered the market in 1981, Jollibee had already a well established market, with 11 stores in the country. Jollibee had a wide margin in the hamburger business, but within a couple of years the enormous spending capabilities of McDonald’s made the margin between the market shares very narrow. Jollibee was able to respond to the threat and developed a new product, the Champ, which was in direct competition with McDonald’s Big Mac. Since market research had showed that Filipinos still preferred the taste of Jollibee’s hamburgers, they focused the Champ’s advertisement and promotions on its taste and size, to diversify it from the Big Mac. This strategy worked well also due to the subsequent political events that brought by a wave of national pride. The political and economic crisis that took place in the mid 1980s led foreign investors, including McDonald’s, to shrink their market in the Philippines and not to seek out new investment opportunities until the political situation stabilized. Jollibee experienced a surge in demand and began branching out – it reached 28 stores in 1985 [Exhibit 1 – case study] – developing and broadening...
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