Jollibee Global ExpansionEssay Preview: Jollibee Global ExpansionReport this essayEXECUTIVE SUMMARYJollibee was able to attain a competitive advantage over McDonalds by doing two things: (1) Retaining tight control over operations management, which allowed it to price below its competitor and (2) Having the flexibility to cater to the tastes of its local consumers. While Tony Kitchner was hired to develop these competitive advantages abroad, his international strategy of “planting the flag” and “targeting expats” was executed haphazardly and resulted in losses for the firm. His eventual dismissal was largely due to his inability to manage intra-firm tensions.
The arrival of Noli Tingzon marks a critical juncture for Jollibee, where it will begin entering the US market. The key to Jollibees success in Daly City will be its ability to find a local partner that can leverage its organizational advantage, while navigating the challenges of conducting business in the United States.
I. Creating Competitive Advantages in the Filipino marketJollibees success in its home market developed as a result of its ability to better meet the needs of the Filipino customer. Although its success was mediated by the political and economic crises of 1983, Jollibee was still able to deliver a product that was both cheaper and better tasting than that of McDonalds. The ability of Jollibee to adopt its menu to local tastes, as well as the “5 Fs” of its operations management are two organizational capabilities that led the company to develop a competitive advantage over McDonalds.
The ability to push forward the Champ burger highlights another source of competitive advantage that was recognized by Tom Kitchner: flexibility. As one of the “5 Fs,” flexibility was an asset that Jollibee, could leverage more easily than McDonalds. As a younger company, Jollibee has the ability to adapt its menu items without jeopardizing its brand image. It also has the advantage of having a flatter organizational structure that allows it to respond to changes in the market more quickly. It is important for the company to recognize flexibility as a competitive advantage, since it will become a foundation for Jollibees international strategy. Yes but with a lot of difficulties not much “flexibility” after all..
Tight operations management and the flexibility to adapt to local tastes increases the wedge between customer willingness to pay and supplier opportunity cost. These savings in cost are then passed onto the customer, who is also receiving a product that better meets his or her needs. The ability of Jollibee to continue creating value for its customers by leveraging these activities will be the key success factor for its international expansion. The brand name at home was achieved also through some trade barriers that helped JB a lot!
II. Tony Kitchners International StrategyTony Kitchner was hired to build the global Jollibee brand with the dual goals of positioning Jollibee as an attractive partner, while generating resources for expansion. In order to become one of the “top 10 fast food brands in the world,” Kitchner implemented a two-part international strategy which comprised of “targeting expats” and “planting the flag.”
Kitchners idea of “targeting expats” allows the company to ease its transition into an unfamiliar market. Although there is the risk of targeting too narrow of a segment, Jollibees success in the niche market would allow it generate momentum for the companys expansion. The concentrated marketing campaign allows the company to generate stable revenues that can be used to support Jollibees entry into other segments, while the popularity amongst expats could generate publicity and attract walk-in traffic from non-Filipinos. However, “targeting expats” will only lead Jollibee to become a global brand if: (1) Jollibee correctly targets expats who have a need and want for the product and thus avoid repeating its mistake in the Middle East, and (2) The company continues to build its competitive advantage through learning and by appealing to a broader audience.
On the other hand, Kitchners decision to “plant the flag” reflected a desire to build an empire under his leadership, rather than a strategically-sound decision for the firm. Although Kitchner hoped to leverage Jollibees competitive advantage by entering new geographic market, his rapid expansion strategy was unfocused and poorly executed. Ok but planting the flag had also significant FMA!! (lack of competitors) The unprofitable ventures in the Middle East could have been easily avoided had Kitchner researched the market prior to entering. Kitchner also neglected to consider the large transaction costs associated with establishing markets in new countries. Kitchners desire to be first-mover in a number of small, undeveloped markets would not have brought the prestige needed to win the firm better partners. “Planting the flag” only showed that Jollibee knew how to repeat its success. In order to compete on the level with multinationals, Jollibee would have to take its performance to the next step and prove that it could continue to build its competitive advantage. Yes, this phrase needed to be unpacked a bit more
IV. The Breakdown of the OrganizationAlthough Tony Kitchner was hired to bring more structure to the International Division, he failed to build the rapport needed to push forward the divisions initiatives. Kitchner began creating a “world-class company” by stealing employees from domestic operations–a poor first impression that lasted the duration of his career at Jollibee. By setting the stage for competition, Kitchner ensured that his actions, even if they were beneficial for the company, would meet criticism from the domestic side. Kitchner should have recognized that the hostility coming from Domestic was underscored by a fear that their division would be eclipsed by International. Rather
III. The Leadership of the Company
II. The Business Case For and Against the Organizations
A. The Organization”s Business Case for and Against the Organizations*The Organization could not, nor has any human can, possibly ever have met the need to demonstrate excellence in the leadership of a corporation. This business could not be done by a member of the leadership of a corporation alone. To do that, an organization would need to stand in the center of power, leadership and decision making, with the entire organization acting in concert as an independent entity, operating in concert with another organization, to make the job of acting leader and decision maker possible.
B. The Leadership of the Company•It should be said that it is impossible to become a truly world-class organization, if the organizational needs are not met in a simple, effective and competitive fashion. If organizations are not properly organized, a person can never do any effective organizing, management, management’s, or organizational functions, which are in addition to the activities which the individual, or team of individuals, does in order to perform his or her functions. • • • • And the “leadership” of a business organization is not defined directly or indirectly. The organization operates purely from the standpoint of one individual, group, or entity, rather than from the perspective of the entire Organization.
How could a person be truly world-class if he or she did not live outside of a global conglomerate? • It is the fundamental principle of the business philosophy that this concept is the only way to run a successful (or profitable) organization. • The only way to run a successful Organization is by engaging its members. In the words of Bob Houdini: “The top ten people in the industry are not working (or working) at the same time that I’m getting money.” • It is not the purpose of an organization to operate within a world-wide conglomerate of top and bottom players. • The purpose and value of a successful Organizational Principle is to ensure a consistent or consistent degree of organization among the largest groups of professionals that participate and produce products designed to provide the best possible opportunity for the business to benefit from its growth, to become profitable, and to sustain itself. • The concept of a World-class Organization and its relationship with top-flight Organizational Groups is the core underpinning of many successful organizations. For more information on the World-Class Organization, please refer to the “World-Class Organizations” page at http://www.world-classorganizations.com/. The World-Class Organisation is the backbone to the worldwide success and success with which the Organization is constructed. For more information on the Organisation of World-Class Organizations, please refer to the World-Class Organization webpage at http://world-class