Jollibee Foods Corporation is owned by a Chinese-Filipino Family, Tan, and is headed by Tony Tan Caktiong (TTC). From its humble beginnings as an ice cream parlor, the fast-food chain grew into a national favorite in the Philippines. The historical events in its home country have forced the leaders to create strategies that would enhance its operations and increase revenue. A great part of the business depends on the franchises owned by different people all over the country and in different parts of the globe. However, the company encountered problems as they entered the international market.
The Key Issue
After reading the case study written on Jollibee Foods Corporation, it is obvious that the company is facing difficulties with regard to international expansion. There are several strategies used in the past but success seems to be out of the companys reach. The company also has limited resources that makes international business ventures a big gambling game. The combination of scarce resources and risky tight competition in the international scene made it more difficult for the international and overseas managers to make decisions that would benefit and gain the agreement of the international and domestic partners.
Most of the disagreements from the Philippines and international counterparts rose because of a) the stringent rules offered by the need to standardize the operations of the fast food chains, regardless of whether it is located in the domestic or international territories and b) the need to fit to changing cultures abroad. Being a fast food chain requires uniformity according to the standards set by the mother company. One of the characteristics of the fast food chain that make it appealing to people is that it gives people the assurance that they can get what they expect each time they visit the store, regardless of the location. Jollibee Foods Corporation has decided to bring this characteristics and made the domestic and international chains parallel to one another. The decision to transport the Philippine standards to the international chains clashed with the need to customize the fast-food chain according to the needs of the people. It is clear that there is a clamor for a customized Jollibee that would address the food preferences and traditions of each country. However, this need can not be given because it brought pressure on operations and quality control, making it difficult for the managers here to oversee the chains abroad that use different protocols. The situations is especially true for the decision of Jollibee to move into the San Francisco area using the Filipino-to-Asian-to-Hispanic-to-Mainstream approach. The question remains as to whether this strategy could lead to a successful business venture in light of the difficulties faced in previous attempts to international expansion.
Recommendations
Based on the problem identified, the company needs to strategically use their resources. If the company can not introduce massive changes into their operations to suit the culture of the new market, it is best to stay within areas that have large Filipino populations. Doing so would provide the fast food chain with a ready market. One of the known areas in the US that has a significant number of Filipino consumers is that of Hawaii. Considering the large segment of people who share the Filipino culture, the place could serve as the best starting point for the company.
Likewise, the company should develop standards for the countries where there is a great concentration of successful Jollibee chains. Where the economies of scale would permit, it is best for the company to construct an operations office in the country and provide all necessary powers to the head. The purpose of doing this is to allocate the responsibility of maintaining the operations and control on a single unit. With this, the Philippine headquarters could save time and resources because there is a central unit they can refer to when they need the information regarding the quality and operations of the different chains. Lastly, they should allow the international chains to incorporate culturally significant food items that can be controlled by the front-line employees.
The Key Issue
After reading the case study written on Jollibee Foods Corporation, it is obvious that the company is facing difficulties with regard to international expansion. There are several strategies used in the past but success seems to be out of the companys reach. The company also has limited resources that makes international business ventures a big gambling game. The combination of scarce resources and risky tight competition in the international scene made it more difficult for the international and overseas managers to make decisions that would benefit and gain the agreement of the international and domestic partners.
Most of the disagreements from the Philippines and international counterparts rose because of a) the stringent rules offered by the need to standardize the operations of the fast food chains, regardless of whether it is located in the domestic or international territories and b) the need to fit to changing cultures abroad. Being a fast food chain requires uniformity according to the standards set by the mother company. One of the characteristics of the fast food chain that make it appealing to people is that it gives people the assurance that they can get what they expect each time they visit the store, regardless of the location. Jollibee Foods Corporation has decided to bring this characteristics and made the domestic and international chains parallel to one another. The decision to transport the Philippine standards to the international chains clashed with the need to customize the fast-food chain according to the needs of the people. It is clear that there is a clamor for a customized Jollibee that would address the food preferences and traditions of each country. However, this need can not be given because it brought pressure on operations and quality control, making it difficult for the managers here to oversee the chains abroad that use different protocols. The situations is especially true for the decision of Jollibee to move into the San Francisco area using the Filipino-to-Asian-to-Hispanic-to-Mainstream approach. The question remains as to whether this strategy could lead to a successful business venture in light of the difficulties faced in previous attempts to international expansion.
Recommendations
Based on the problem identified, the company needs to strategically use their resources. If the company can not introduce massive changes into their operations to suit the culture of the new market, it is best to stay within areas that have large Filipino populations. Doing so would provide the fast food chain with a ready market. One of the known areas in the US that has a significant number of Filipino consumers is that of Hawaii. Considering the large segment of people who share the Filipino culture, the place could serve as the best starting point for the company.
Likewise, the company should develop standards for the countries where there is a great concentration of successful Jollibee chains. Where the economies of scale would permit, it is best for the company to construct an operations office in the country and provide all necessary powers to the head. The purpose of doing this is to allocate the responsibility of maintaining the operations and control on a single unit. With this, the Philippine headquarters could save time and resources because there is a central unit they can refer to when they need the information regarding the quality and operations of the different chains. Lastly, they should allow the international chains to incorporate culturally significant food items that can be controlled by the front-line employees.
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