Jollibee: Fast-Food, the Filipino Way

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Case Details:

Case Code : BSTR052
Case Length : 20 Pages
Period : 1985 - 2003
Organization : Jollibee
Pub Date : 2003
Teaching Note :Not Available
Countries : Philippines
Industry : Fast Food

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"The Jollibee story is an inspiring saga of corporate vision, commitment to quality and customer service, and state-of-the-art strategic marketing."

- An article on Philippine Marketing Association's website, www.pma.philonline.com.

"If McDonald's is the Goliath of fast-food, Jollibee is its Filipino David. The Philippines is a huge embarrassment to McDonald's."

- The Economist, February 28^th, 2002.

"Jollibee has grown to be so well loved that every time a new store is opened, especially overseas, Filipinos form long queues to the store without fail. It is not just a place where they feel at home; it is a stronghold of heritage, a monument of Filipino victory."

- www.jollibee.com.ph.

Introduction

In early 2003, message boards on many websites on the World Wide Web were flooded with rather disturbing news about Jollibee Foods Corp. (Jollibee), a fast-food major from the Philippines. The message claimed that the company had misled millions of customers into eating what they believed were burgers containing pure beef.

Jollibee was reported to have been using earthworms in its beef patties for many years to get customers 'addicted' to certain so-called chemical elements in earthworms. The company strongly denied the above allegations through a statement released on its website. It showed in detail its manufacturing facilities on its website and stated that the allegation was a hoax. The incident soon died a natural death - however, it seemed to have brought Jollibee in the 'big league' of global fast-food majors who had been accused of such practices in the past. Not that it needed any such dubious claims to fame - the company had been earning laurels from the global corporate world for many years now; In 2001, The Far Eastern Economic Review¹ (FEER) named it the top corporation in the Philippines and the sixth leading corporation in Asia.

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Jollibee had also won recognition for its contribution to the economy of the Philippines and the success of its strategies by the Asian Business Review, leading management consultants Hewitt Associates, and many Filipino corporate bodies. Jollibee also had the distinction of being one of the very few companies that had been able to give multinational fast-food giants such as McDonald's and Burger King a run for their money. While Jollibee had a market share of over 60%, its closest rival, McDonald's had less than half of that.

Including its pizza and pasta outfit (Greenwich Pizza), its Chinese quick-service restaurant chain (Chowking) and its bakery products chain (Delifrance), Jollibee had well over 902 outlets across the world by the end of 2001 (Refer Exhibit I). The company did not seem to be content with ruling the fast-food market in the Philippines (Refer Exhibit II); it was aggressively expanding on a global scale as well. By 2002, Jollibee had over 31 outlets abroad. Some of the countries it had expanded into were the US, Hong Kong, Vietnam, Indonesia and Brunei. The story of the evolution of a small ice cream parlor into a fast-food giant with a net income of P 1.05 billion² for the year 2002 (Refer Exhibits III and IV for financial statements) has been closely-followed for years by many companies, corporate leaders, business analysts and strategists.

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1] A leading Asian business magazine from Asia. The over five-decades old weekly FEER is owned by Dow Jones & Company, which also publishes the Asian Wall Street Journal.

2] In May 2003, 52.5350 Philippine pesos (P) equaled 1 US $.