What were the strategy and competitive advantages of Jollibee in the Philippines? JFC observed that the fast food market in Philippines had a high growth potential. They were the first movers in the market and therefore able to build up brand recognition. JFC’s success could be attributed to its differentiation strategy that created and sustained a competitive advantage especially against McDonalds.
The McDonalds was a global giant strictly following the philosophy of standardization especially with its hamburger line. JFC realized that it could attract customers with superior tasting products for more affordable prices due to their tight control over operations management. JFC was also aware that the founders of Jollibee (Tan family) had a family tradition (a capability) of making delicious food tailored for the needs (local tastes) of Filipino customer.
In conclusion, JFC offered a more tailored menu with a sweeter hamburger, an innovative chicken product, a kid-oriented chicken plate in line with the preferences of consumers whereas McDonalds did little or nothing to modify its products due to mainly its US based decision process. This might be, because the global operating competitor McDonalds would jeopardize its brand image and values, if they would adapt local needs – the contrary applies for JFC.
The flatter organizational structure allowed JFC to respond to market changes more quickly. In addition being closer to the market as well as better connected (Many franchisees were friends of Tan family) helped JFC to establish themselves better.
JFC’s managers knew that offering tasty hamburgers were not sufficient. They took the initiative to replicate and improve the McDonalds operating structure so that Jollibee became more competitive at store level. Lessons learned from the competitor at the early stages of the small food chain enabled it to reduce production time and ensure consistency and cleanliness of its products.
The combination of being the first in the market, service with innovative products and opening new and efficient store at good locations allowed Jollibee to expand the growing fast food market to new consumers. In addition, Jollibee’s organizational culture and philosophy summarized by ‘Five Fs’ (Friendliness, flavorful food, fun atmosphere, flexibility in catering customer needs and focus on families) sustained the competitive advantage against competitors by enhancing the customer experience and optimizing processes to keep costs low and quality high.