FIN 502 Page 1

Group 2: Patricia Fassler-Mize, Jesse Galindo, Maggie Jones, Ted Lasc, !onna Li
Jollibee Foods Corp.: International Expansion
Executive Summary
Jolli"ee #as a co$pan% originall% esta"lised "% te Tan &a$il% in '()5 as a &a$il%-o#ned ice crea$ parlor in
te Pilippines, "ut #as soon &orced to cange its $ar*et caused "% te oil crisis o& '()) - a &actor #ic #ould
a+e inerentl% caused te price o& ice crea$ to dou"le, -lread% esta"lised in te &ood industr% and a+ing
o+erco$e te initial "arriers &aced "% tose entering it, te Tan &a$il% success&ull% di+ersi&ied te co$pan% to
selling sand#ices, Fro$ tat point, Jolli"ee "egan e.panding teir success "% launcing a total o& &i+e stores
"% '()/, &ounding #at #e see toda% as Jolli"ee Foods 0orp,
1. How was Jollibee able to build its dominant position in fast food in te !ilippines" #at are te
sources of competitive advanta$e was it able to develop a$ainst %c&onalds in its ome mar'et"
Tere #ere se+eral contri"uting &actors in Jolli"ee1s rise to a do$inant position in te Pilippines &ast &ood
$ar*et, 2ecause te% #ere alread% doing "usiness in te &ood industr%, te entr% "arrier #as lo# in $a*ing te
si&t to &ast &ood, -dditionall%, te recipe #as de+eloped locall% using culturall% desira"le ingredients destined
to satis&% te taste "uds o& te patronage, Te "rand #as 3uic*l% de+eloped using te 4Fi+e F1s5 tat #ere
Jolli"ee1s "usiness pilosop%: Fla+or&ul Food, Fun, Fle.i"ilit%, and Fa$ilies, Jolli"ee1s a"ilit% to o&&er all o&
tese "ene&its at an a&&orda"le price led te co$pan% to tis do$inant position, Furter$ore, since Jolli"ee #as
portra%ed as a co$pan% #it a &riendl% at$ospere and operations si$ilar to tat o& a 4"eei+e,5 te% created a
"ee $ascot #ic "eca$e popular to a point tat cildren &loc*ed to it #en seen in pu"lic 6 an operations and
$ar*eting strateg% #ic supported an increase in "rand recognition and &oundation &or do$inant $ar*et sare,

-noter success &actor in "uilding te Jolli"ee 7$pire in te Pilippines #as tat te co$pan% &inanced teir
gro#t internall%, Tis alle+iated te "urden o& de"t and interest and Jolli"ee #as a"le to &ocus $ore resources
on gro#ing, Te Tan &a$il% retaining control o& te Jolli"ee co$pan% #as essential to $aintaining teir
do$inant position, Te &a$il% #as open to learning and "rougt in *e% $anagers #ose e.pertise #ould
co$ple$ent te &a$il%1s e.perience,
In '(/' Mc!onald1s entered te $ar*et, representing a large potential co$petiti+e treat &ro$ a ne# $ar*et
entrance, -ltoug Mc!onalds1 #ere#ital to conduct a co$petiti+e ri+alr% #as superior in resources and
e.perience, Jolli"ee sougt to use cultural pro.i$it% to teir ad+antage and de&ended teir $ar*et sare #it a
larger, $ain a$"urger tat #as considered "etter tasting according to $ar*et researc, 8eeing as o# Jolli"ee
esta"lised itsel& in te Pilippines "e&ore Mc!onald1s $o+ed in, Jolli"ee #as a"le to sape te e.pectations
and pre&erences o& teir consu$ers "% using local resources and te understanding o& teir people, gi+ing te$
a signi&icant ad+antage against an% co$petitor atte$pting to co$e into te $ar*et, -nd, since Mc!onald1s
a$"urger patties #ere seen as plain, and Jolli"ee1s #as geared &or a spic% taste #ic teir consu$ers gre#
&ond o& - one #ic #ould appeal to teir consu$ers1 larger appetites, -lso, Mc!onald1s $assi+e internal
econo$ies o& scale $a% a+e dra#n do#n costs signi&icantl% in co$parison to Jolli"ee, "ut te &ounded Jolli"ee
consu$ers o& te Pilippines care not a"out costs i$plied to Mc!onald1s, so $uc as te% are concerned &or te
taste o& te actual "urger, Furter$ore, #it Mc!onald1s "eing suc a giant conglo$erate, it $ade little to no
e&&ort atte$pting to adapt to te pre&erences o& te locals, Jolli"ee, on te oter and, adapted its $enu
accordingl%, and too* into account te needs o& te people, Forces outside Jolli"ee1s control also elped
i$pro+e te co$pan%1s position #en political insta"ilit% created a ostile en+iron$ent &or &oreign in+estors,
9ile "eing e.posed to co$petition &ro$ Mc!onalds, Jolli"ee too* te initiati+e to "enc$ar*, replicate, and
i$pro+e upon Mc!onald1s success&ul operating $odel, #ic ena"led te$ to "eco$e $ore co$petiti+e
troug i$pro+ed $anage$ent e&&icienc% at te store le+el $a*ing te$ $ore co$petiti+e do$esticall%, -nd,
External factor (political) was important
but it was not a key. Your statement that
JB benchmarked, replicated and
improved uponis really the critical
factor. !e should also include bein" a
early mover allowed JB to pick "ood
locations and "ood franchisees.
FIN 502 6 Jolli"ee Foods 0orp, Page 2
Group 2: Patricia Fassler-Mize, Jesse Galindo, Maggie Jones, Ted Lasc, !onna Li
#it Mc!onald1s te$poraril% out o& te picture, te% too* ad+antage o& "roadening te $enu to attract $ore
consu$ers and lo%alt%, road te national pride instilled "% te assassination, and "% te ti$e Mc!onald1s tried
co$ing "ac* to e.pand, Jolli"ee alread% ad esta"lised a total o& :' stores and do$inant presence, Te% also
gained *no#ledge necessar% &or e.panding to oter countries,
(. How would you evaluate )ony *itcner+s effectiveness as te first ead of Jollibee+s international
division" &oes is broad strate$ic trust ma'e sense" How effectively did e develop te or$ani,ation to
implement is priorities"
9e "elie+e ;itcner #as una"le to gain te solid &ooting e #as loo*ing &or during is e.pansion e&&orts
pri$aril% "ecause e didn1t do a +er% good <o" o& deter$ining #at it #as going to ta*e to "e success&ul in
tose ne# countries, =is pri$ar% ideas o& 4targeting e.-pats5 and 4planting te &lag5 #ere "old and decisi+e in
teir design, "ut ;itcner needed to ta*e it a step &urter to see i& tose ideas #ere sustaina"le, ;itcner1s
"ac*ground #it anoter igl% recognized "rand >Pizza =ut? pro"a"l% did i$ a disser+ice in is tin*ing
since Jolli"ee did not a+e te #orld#ide "rand recognition tat Pizza =ut ad - a *e% &actor in te success >and
&ailures? o& Jolli"ee and a "attle e #asn1t used to &igting, In re&erence to Ge$a#at1s 4!istance 8till Matters5
article, ;itcner #ould a+e "een #ise to ta*e a deep-di+e into te &our di$ensions o& 4distance5: cultural,
ad$inistrati+e, geograpic, and econo$ic, =e #ould a+e seen tat Jolli"ee ad a $ore di&&icult tas* in&iltrating
di&&erent countries tan <ust creating te Jolli$eal,
Jolli"ee ad a de&inite co$petiti+e ad+antage #en co$paring teir decision to e.pand internationall%
according to Porter1s 45 Forces Model5, Te% o"+iousl% targeted countries #it little or no ri+alr% a$ong
co$petitors and tried to $anage te treat o& possi"le entrants, 9ere te% &ell sort #as in teir lac* o&
understanding o& local su"stitute products as #ell as te #a% te% $anaged te Francisee relationsip #it te
parent co$pan%, 9e "elie+e tat i& te% ad trul% adopted a $ore o& a 4partnersip5 arrange$ent #it teir
local o#ners and $anagers, te% $a% a+e "een $ore success&ul in teir long-ter$ o"<ecti+es, -s e+idenced in
te case, ;itcner #as slo# to adopt a local attitude and culture until it #as al$ost too late in $an% instances,
7ntering / ne# national $ar*ets in a t#o %ear ti$e period is e.tre$el% audacious and costl%, TT01s co$$ent
tat 49e pre&erred to go slo#er, $a*ing sure tat eac store #as pro&ita"le so tat @Tis creates a good, long
ter$ relationsip5 $a*es sense strategicall%, 0onsidering te di&&iculties large corporations li*e Mc!onald1s
and ;F0 a+e penetrating &oreign $ar*ets, it #ould a+e "een prudent to open one or t#o national $ar*ets at a
ti$e and anal%ze and learn &ro$ tose endea+ors, !espite s$all earlier atte$pts tat taugt so$e lessons, $ore
could a+e "een learned "% launcing te International !i+ision at a $ore sedate pace,
Te de+elop$ent o& te International !i+ision #as organized e&&icientl% and rapidl%, -dding e.ternal
pro&essionals &or $ar*eting, &inance, 3ualit% control, and product de+elop$ent elped *eep inno+ati+e ideas
curning, An&ortunatel%, te di+ision tat arose "et#een te do$estic and te international side de$onstrate a
lac* o& co$$unication and "itter &eelings a"out 4poacing5 and oter *e% issues, Te o+ersigt and support o&
&rancises and o+erseas location #as $aster&ul "ut $ore attention sould a+e "een gi+en to culturing and
supporting te local talent, #ic #as dee$ed so crucial to te success o& tese operations,
-s $entioned in te article 4Going Glo"al: Lessons &ro$ Late Mo+ers,5 te international di+ision $anager tried
to rein+ent te co$pan%1s "usiness,
i
=e o+ere$pasized te di&&erences in te o+erseas $ar*ets, isolated is
o+erseas $anagers &ro$ te success&ul Pilippine organizations, and s%ste$aticall% di&&erentiated is operating
s%ste$s, store design, $enus, ad+ertising te$es, and co$pan% logo and slogan, =e #ould a+e "een #ise to
incorporate te Jolli"ee co$pan% pilosop% into is di+ision to &oster te ca$araderie tat #as sorel% lac*ing,
-. .s /oli )in$,on0 ow would you deal wit te tree options described at te end of te case" How
would you implement your decision"
#or one thin", his strate"y was not
focused. $ore importantly, it was not in
line with what made JB a success. %lease
watch the interview with &'.
But, his division was a company within a
company. ()&'*)+ is an extremely
important issue for success and ',-s
division was out of control
FIN 502 6 Jolli"ee Foods 0orp, Page :
Group 2: Patricia Fassler-Mize, Jesse Galindo, Maggie Jones, Ted Lasc, !onna Li
Noli Tingzon too* on te role o& General Manager o& te International !i+ision in Jul% '((), =e #as &aced #it
tree options &or i$$ediate gro#t tat #ould sape te co$pan%1s &uture international strateg%, Te options
#ere Papua Ne# Guinea: Baising te 8tandard, =ong ;ong: 7.panding te 2ase, and 0ali&ornia: 8upporting
te 8ettlers, Tingzon ad learned te i$portance o& selecting a colla"orati+e operating partner, coosing good
locations, re$aining &le.i"le to address cultural distance issues, and te need &or pro&ita"ilit%, Tingzon recei+ed
con&licting ad+ice &ro$ di&&erent people #itin te organization on te "est approac to proceed #it Jolli"ee1s
international strateg% &ro$ continuing te aggressi+e 4Plant te &lag5 strateg% to a $ore ris* ad+erse
47.panding sare in a &e# countries strateg%,5 9e reco$$end Tingzon operate so$e#ere "et#een te t#o
reco$$endations and appl% lessons learned &ro$ Jolli"ee1s prior international endea+ors, 7ac &oreign
e.pansion opportunit% $ust "e torougl% e+aluated to ensure a ig li*eliood o& $ar*et and &inancial
success,
In Papua Ne# Guinea, tere #as +irtuall% no &ast &ood or decent places to eat, - poorl% $anaged : store &ast
&ood cain ad recentl% se+ered ties #it an -ustralian cic*en &rancise, Te original plan tat Ton% ;itcner
ad proposed #as to open <ust one store in te capital cit% o& Port Mores"%, Noli Tingzon "elie+ed tat one
store #ould onl% co+er te costs to de+elop te $ar*et in Ne# Guinea and tat at least tree or &our stores
needed to "e opened, In co$parison tere are '200 &ast &ood outlets in te Pilippines #ic as a population o&
)5 $illion co$pared to te goal o& 20 stores &or 5 $illion people in Ne# Guinea, Te GNP per capita o& A8!
2500 #as te sa$e in "ot countries, Te potential &rancisee #as #illing to open &i+e stores and #ould e+en
put up te capital, Te "ene&its o& opening te stores in Ne# Guinea are &irst-$o+er ad+antage, &rancisee
#ould put up te capital, Jolli"ee #ould not ris* teir e3uit%, no co$petition, and putting &ast &ood at ser+ice
stations #ould create a constant &lo# o& custo$ers, Te ris*s o& opening te stores in Ne# Guinea are te taste
o& te product $a% not appeal to consu$ers, anoter &ast &ood cain $a% enter $ar*et "e&ore "rand pre&erence
and lo%alt% can "e esta"lised, and cultural di&&erences $a% "e di&&icult to o+erco$e, Cur reco$$endation
#ould "e to enter into a &rancise agree$ent #it Gil 8al+osa, "ecause te "ene&its out#eig te ris*s, Te
i$ple$entation #ould include dra#ing up a &rancise agree$ent #it Gil 8al+osa, &inalize te locations o& te
&i+e stores and as Te 8o&t 8*ills &or Glo"al Managers sa%s it "est 4-$ong te rarest o& traits is te a"ilit% to
"alance te need &or consistent corporate practices #it te need &or regional uni3ueness,5
Cpening a &ourt store in =ong ;ong see$ed li*e a "ad idea, Tere #ere $an% operating and cultural distance
learning issues tat needed to "e resol+ed including di&&icult% in retaining 0inese sta&& and appealing teir
product o&&erings to locals, Jolli"ee also e.perienced une+en product 3ualit% and #ea* "rand recognition in tis
$ar*et, Tingzon needed to ree+aluate te =ong ;ong strateg% and resol+e all e.isting issues &irst "e&ore
considering opening a &ourt store, Besol+ing tese issues #ould re3uire $uc colla"oration #it Jolli"ee1s
do$estic di+ision, Te "ene&its o& opening a &ourt store in a "us% intersection #ould enance Jolli"ee1s
+isi"ilit% and "rand recognition a$ong te locals, #ic could lead to &urter e.pansion, Te do#nside to a
ne# store #ould "e re+a$ping te $enu, cultural issues, and sta&&ing pro"le$s, Cur reco$$endation #ould not
"e in &a+or o& opening te &ourt store in =ong ;ong "ecause te ris*s o& not "eing success&ul are too great, Te
decision to open a &ourt store in =ong ;ong $a% "e re+isited at a later date,
It #as TT01s drea$ to open Jolli"ee stores in Mc!onald1s "ac*%ard and a+ing alread% acie+ed success
operating stores in Gua$, an -$erican territor%, e.panding to 0ali&ornia see$ed li*e a no-"rainer, 0ali&ornia
as "ot a large Filipino e.patriate population and -sian population, =o#e+er, #it an% e.pansion opportunit%,
Jolli"ee $ust torougl% assess $ar*et potential >Possi"le store locations, sales &orecast, cultural distance
issues, and potential partners? "e&ore $a*ing a decision, I& te results o& te anal%sis indicate 0ali&ornia is a
good e.pansion opportunit%, #e #ould reco$$end Tingzon $o+e &or#ard #it opening one store in 0ali&ornia
&irst to pilot te appeal o& teir e.isting $enu o&&erings and assess #eter te A,8, $ar*et can "e supported
&ro$ te Pilippines, #ic is '2 ours "% plane and / ti$e-zones a#a%, Te "ene&its o& Jolli"ee entering te
.ood analysis. / am impressed with your
use of other sources. /t may be a "ood
idea to use 01forces model and come up
with a table in various locations for
comparison purposes.
FIN 502 6 Jolli"ee Foods 0orp, Page D
Group 2: Patricia Fassler-Mize, Jesse Galindo, Maggie Jones, Ted Lasc, !onna Li
$ar*et in 0ali&ornia #ould "e to o&&er a su"stitute product and co$petition to te oter &ast &ood cains, create
"rand lo%alt% a$ong te Filipino and -sian custo$ers, and open te door to &urter e.pansion in 0ali&ornia,
Te ris*s are &ierce co$petition in te &ast &ood $ar*etplace and te taste $a% not appeal to -$ericans oter
tan te Filipino custo$ers, Cur reco$$endation #ould "e to open a store in 0ali&ornia, I$ple$entation #ould
include deter$ining te "est location to open te &irst store, &inding a suita"le &rancisee, e$plo% local
e.patriates, and as te "rand pre&erence and lo%alt% occur, e.pand to oter areas o& 0ali&ornia,

1. Cec' te Jollibee website to update te case information. .lso0 cec' and see ow your answer to te
2uestion 3- above mi$t be affected by your update.
Tingzon and TT0 ulti$atel% agreed to $o+e &or#ard on all tree pro<ects, Te% deter$ined tat te =ong ;ong
and A,8, pro<ects #ere o& $a<or strategic i$portance #ile 4te Ne# Guinea proposal, #ile not strategicall%
+ital, #as <udged to a+e enoug $o$entu$ and co$$it$ents "eind it tat it sould pro"a"l% continue,
altoug #ort $ini$al support,5
ii
2ased on is anal%sis, Tingzon re<ected te 4plant te &lag5 strateg% out o&
concerns tat it spread resources too tinl% and didn1t allo# &or enoug control o+er &rancise operations, =e
reorganized Jolli"ee1s international operations and canged te &ocus to slo# gro#t in a &e# *e%, ig
potential $ar*ets, Tis pilosop% is consistent #it tat o& 07Cs o& oter glo"al co$panies including 7tan
-llen1s 07C Faroo3 ;at#ari, ;at#ari contends tat too rapid a glo"al e.pansion can de+astate a co$pan%,
iii

Tingzon see$s co$$itted to sustaina"le gro#t,
-ccording to te corporate #e"site, Jolli"ee International currentl% as o+er 50 locations in 2runei, =ong
;ong, Eietna$, 8audi -ra"ia, Fatar, and A,8,
i+
Tere are no# a total o& 2G Jolli"ee stores in te A,8, including
( stores in Nortern 0ali&ornia, '5 stores in 8outern 0ali&ornia, one store in Las Eegas, and one store in Ne#
Hor*,
+
-ccording to Jolli"ee1s #e"site, te co$pan% as $odi&ied its glo"al strateg% and stopped international
&rancising te$porar%,
Te 0ali&ornia &rancise as "een a success, 8ince opening te &irst A,8, store in !al% 0it% in '((/, te
co$pan% as e.panded teir A,8, presence to a total o& 2G stores, Te co$pan% as te ad+antage in te
0ali&ornia $ar*et "ecause tere are a lot ne# i$$igrants entering te state #it /0,000 Filipino $igrating per
%ear,
+i
Jolli"ee currentl% as onl% one =ong ;ong store located in 0entral, i$pl%ing tat at least t#o 0entral
stores a+e "een closed since '((/ in addition to te ;o#loon district store, Finall%, tere is no Jolli"ee
presence in Papua Ne# Guinea indicating tat e&&orts to e.pand to tis countr% #ere not success&ul,
Tingzon1s strateg% o& 4&ocus5 see$s to a+e "een success&ul in de+eloping te $ost pro$ising $ar*ets, Gi+en
te ad+antages o& 20I20 indsigt, e #ould a+e "een #ise to in+est &e#er resources in =ong ;ong and Papua
Ne# Guinea #ile re$aining &ocused on 0ali&ornia and te A,8, C+erall, o#e+er, Tingzon1s &ocus on
sustaina"le gro#t as elped position Jolli"ee as one o& te largest glo"al &ast &ood cains,
.ood update2 .rade2 3.045
i
Bartlett, (hristopher and .hoshal, 6umantra. 7.oin" .lobal2 +essons from +ate $overs.8 The Magazine.
9arvard Business *eview. $arch1:pril ;<<<. *etrieved July 0, ;<== from http244hbr.or"4;<<<4<>4"oin"1
"lobal4ar4=.
ii
Bartlett, (hristopher :. Jollibee Foods Corporation (B): Global Focus. 9arvard Business *eview. :u"ust ;,
;<<=.
iii
7(E) !ei"hs (onse?uences of .lobali@ation.8 i.lobe 6tudent Edition. $c.raw19ill 9i"her Education. $ay
;<<3. *etrieved July 0, ;<== from http244hi"hered.mc"raw1hill.com4sites4<<3>;A;A<34studentBview<4;<<3.htm.
iv
Jollibee (orporate !ebsite. *etrieved July 3, ;<== from http244www.Collibee.com.ph4index.phpD4international.
v
Jollibee #ood (orporation. 86preadin" +an"hap 6arap .oodness :cross the E6:.8 *etrieved July <0, ;<== from
http244www.Collibeeusa.com4aboutBus.html.
vi
#ilipino :merican. 89istory of :sian :merican /mmi"ration.8 *etrieved July <0, ;<== from
http244en.wikipedia.or"4wiki4#ilipinoB:mericanF/mmi"ration.