How Did Jollibee Create a Competitive Advantage in Its Domestic Market?
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5) How did Jollibee create a competitive advantage in its domestic market?
Jollibee started being successful because they had the understanding of their customer in The Philippines. Due to some economic crisis that occurred in 1983, they were able to produce and create a cheap product that actually achieved the taste Filipino citizen wanted which McDonald was not meeting. They were able to create the Champ burger which differentiated the restaurant from others and at the same time it created flexibility in the menu. After a certain period of time Jollibee was able to structure its company by staying true to their brand and at the same time shape to the changes in market. The ability of the company to adapt and understand the customers mind created a competitive advantage which made them the leaders in the Philippines beating McDonalds and any other fast food restaurant in the Philippines.
One of the key elements Jollibee possessed was the fact that they knew they culture and each of the things they liked this created market leadership in the community and made McDonalds hard to compete with them. McDonalds discovered the tastes Filipino people liked to late and after that it was obvious that the customer had a different view towards the restaurant.
According to Geert Hofstede and the cultural dimensions the Philippines have a great power distance which implies that they are se to following orders from a higher superior. In other words if high rank people start enjoying something in this case Jollibee they will all follow them. As for the Individualistic degree, they have a very low score which makes them a very collectivist country. Being collectivist tells us that they are very loyal to the culture and community and anything that comes from that country will be preferred than an exported product. For the Masculinity score they have a very masculine society meaning that they work all the time and that they like to be decisive resolve problems through fights. The Philippines is not high on uncertainty avoidance they do not feel threaten by innovation but they do not like having unnecessary rules. Finally for the last degree of Hofstede dimension chart. The Philippines are considered to be a short term orientation culture. They respect traditions but they are very impatient on achieving quick results.
In conclusion, Jollibee was very smart because they evaluated their culture first and adapted to them. Another thing that helped the company was that it is a local restaurant and people in the Philippines tend to be more attracted to local things instead of new things. Jollibee used their competitive advantage of being a local company that has been in a country for a long time and they stuck to their values and became leaders against other competitive brands which later on gave them the power to start their franchises and become global company.