How can companies create value in the Fast Food industry?
In the 1960s, fast food industry pioneers had developed the following value proposition that became the standard for the industry worldwide: deliver quickly cheap and good-quality food in a clean dining environment.
How was Jollibee able to develop a dominant position in the Philippines?
The dominant position of Jollibee in the Philippines fast food market was the result of several factors:
Firstly, the company was a first-mover. It allowed Jollibee to pick good locations and good franchisees. Jollibee had established its n°1 position long before McDonald’s opened there.
Secondly, recipes were developed locally using culturally desirable ingredients destined to satisfy primarily the taste buds of Filipinos. Indeed, market research indicated that Filipinos preferred Jollibee burgers’ spicy taste to McDonald’s plain beef patty.
Thirdly, the well-developed operations management capability of the company was a key factor to its dominant position. Indeed, this allowed Jollibee to offer all the benefits reflected in its business philosophy – that is the “Five Fs”: Flavorful food, Fun atmosphere, Flexibility in catering to customer needs, and focus on Families – at an affordable price.
Fourthly, since Jollibee was portrayed as a company with a friendly atmosphere and operations similar to that of a “beehive,” it created a bee mascot which became popular to a point that children flocked to it when seen in public – an operations and marketing strategy which supported an increase in company recognition and foundation for dominant market share.
Finally, Jollibee financed its growth internally. This alleviated the burden of debt and interest allowing the company to focus more resources on growing. The Tan family retaining control was essential to maintain a dominant position. The family was open to learning and brought in key managers whose expertise would complement the family’s experience.