Jollibee Case Analysis

Topics: Philippines, Strategic management, Jollibee Pages: 11 (3338 words) Published: February 19, 2013
International Business Case Analysis|
Jollibee Foods Corporation (A) International Expansion|


Executive Summary
Jollibee Food Corporation is a Filipino fast food brand that opened in 1975 and has been on the path of expansion since then. IT capitalised on the changes that came its way to fight the competition from brands like McDonalds and KFC. The case highlights the global expansion strategy that they followed backfired due to which they had to consider revamping their strategies. The company has an opportunity in Papua New Guinea, California and Hong Kong but before taking that decision they need to work upon their previous issues to ensure the success in these countries. Till now the firm is being operating in two parallel organisations with no cooperation and coordination among the two which has resulted in chaos and a strained relation between the two. We have through this case analysis provided a complete picture of the Jollibee operations along with the strategies and the way ahead. An analysis presented that the company is currently in between the internationalization and localization strategy. We have recommended the company to follow transnational strategy that would help them achieve an advantage over the competitors. Industry and Firm level Analysis * INDUSTRY LEVEL ANALYSIS

The fast food industry is basically a very highly competitive market that strives on cost leadership. The industry is faced by both international players who have huge finances The industry faces low margins and experiences profits on the basis of the economies of scale. The key to achieve economies of scale is selecting the right location to attract traffic and a highly efficient operation management. In the fast food industry the product offering are almost the same. So what make a difference are the things like the service, providing extra drinks / any other supplementary product with your main product. The profitability depends on the customer traffic, location, operation management. Expansion happens mostly through Franchisees and Joint Ventures, it is very important to attain Economies of Scale to do well in this kind of industry as the cost of all other things as we all know is just increasing manifold. And even then the consistency in the food quality is one of the major areas of concerns. * POTTER’S FIVE FORCES

i. Rivalry Among The Competitors: High
* As explained in the case the competitor had an advantage in terms of brand name, the profitability, the customer base they had . Also high because of the high standardization in terms of quality, quantity, price, procedures and processes which are similar and there’s competition to get better in these aspects. ii. Threat Of New Entrant To Industry - Low

* Due to the high tariff barrier and the advantage of economies of scale, differentiation that a firm gets over time. Also in this industry people mostly don’t shift easily due to the taste adaptation and the ability to trust any other brand quality is low. iii. Threats Of Substitute Product– Low

* Jollibee managed to serve their customers at affordable price, good service and the hence gained a brand name eventually, so the threat of a new substitute is low , again because of the ability or nature of consumers to shift to other brand easily is low. iv. Bargaining Power Of The Suppliers- Low

* The raw material required for food industry could be sourced from multiple suppliers and the shifting costs are less. v. Consumers Bargaining Power- High
* Company depends on the consumers for its profitable business and the company needs to adhere to the consumer’s tastes, preferences and prices as there are many competitors to whom they may shift to. Also the entrants are expected to be less in number, so it is better to suit the needs of the existing buyers than to stand different from them. *...
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