May 20, 2020

Jollibee Foods: conquering the world stage

Strategy
Digital Transformation
Jollibee
Jollibee Foods Corporation
5 min
Jollibee Foods: conquering the world stage

Fast-growing Filipino fast food company Jollibee Foods Corporation speaks to Business Chief about the company’s international expansion strategy

Filipino fast food company Jollibee Foods Corporation (JFC) has enjoyed a meteoric rise since its birth as an ice cream parlour in 1975. As of this year, Jollibee’s internationally recognised brand has a foothold in several markets around the world, including the US, Canada, the UK, Saudi Arabia, Kuwait, Vietnam, Hong Kong, Brunei and Qatar. The firm operates 14 brands and 4,300 outlets across 20 countries, and its ambitions have yet to lose any momentum. Its aggressive expansion programme saw a year of milestones in 2018, with Jollibee opening its first European restaurant in Milan and later breaking ground in Macau, London, Toronto, and New York’s Manhattan. Jollibee also opened its hundredth Vietnamese store in early 2018, making it one of the country’s fastest-growing restaurant chains. JFC spoke with Business Chief to discuss the roots of this success, the sustained policies that continue to strengthen its brands, and its plans for the future.

“Our dream has been getting bigger – we wanted to become the biggest in the Philippines and once we achieved that, we wanted to become the largest in Asia,” JFC says. “When we became the largest Asian restaurant company in the world, we sought to dream bigger. Today, our dream is to become one of the top five restaurant companies in the world.” The firm’s expansion model is currently focused on three key markets: the Philippines, the US and China. Despite being the largest restaurant chain in the Philippines, Jollibee recognises huge potential for growth in its home country having penetrated only 10% of its municipalities. Meanwhile, the US and China offer the largest and most lucrative markets in the world. JFC’s efforts are consolidated under the company’s two-pronged expansion strategy: brand acquisition and brand expansion. Jollibee itself is a tried and true brand with a menu that has demonstrably accrued loyal fanbases in each of its operational territories. This brand strength is then augmented by market-specific acquisitions. “In China, we acquired the Yonghe King brand whose soy milk and youtiao are well loved by its patrons,” the company says. In the US, in tandem with plans to open more Jollibee outlets, the firm acquired Smashburger which competes as a JFC subsidiary in the emergent ‘better burger’ market. As it gears up to launch a new Mexican concept, JFC has teamed up with Rick Bayless, seven-time James Beard awardee, to develop the project. The firm cites value creation amongst its acquired brands as one of its most significant successes. “For example, in the Philippines, we’ve practically made all our acquired brands strong leaders in the segment,” JFC says.

In terms of Jollibee, JFC’s flagship brand, its success with international expansion has been compounded by the loyalty of Filipino customers residing overseas. Jollibee says on its website that “It is more than home for them”, referring to the familiarity Filipino customers enjoy in the firm’s international outlets. Word of mouth is a potent marketing tool in regions with a Filipino presence, particularly in the 34 US stores strategically located to capitalise on high Filipino populations, and Jollibee augments the good faith of its compatriots with targeted marketing campaigns and focus groups among local consumers. While its core products remain the same across its operational markets, Jollibee offers region-specific additions to its menu to better cater to local tastes, such as the Saigon Chili Chicken offering in Vietnam, and Chicken Burgers in the US. To ensure the values and quality the company strives for are upheld by franchisees, JFC conducts values integration programmes which ensure its outlets are driven by the same business practices that have spawned the company’s successes. “We also ensure that there is always a venue for open communication,” JFC adds.

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The company does not forget the industriousness and determination of its workforce when detailing the factors that have bred the company’s continued success. “Where we are today is the product of the collective hard work of our employees and stakeholders,” JFC says, and the firm backs this faith in its staff with a dynamic talent management strategy. “This means we provide holistic learning and development opportunities, industry-competitive rewards and recognition, and we build an inclusive culture where people feel respected and valued,” JFC explains. The firm structures its roles to enable employees to find success, its staff undergo functional and leadership development programmes throughout their time with the company, and a fast track development programme is in place to develop and retain the top talents that join the firm.

Naturally, expansion is only as effective as a company’s ability to remain up to date with emergent technologies and trends in the industry. Digital transformation is at the forefront of JFC’s strategy for remaining current, and the company is investing in the expertise to identify and action the strongest method for enhancing its business practices with digital technologies. “In the future, we see half of our sales coming from online orders,” JFC says. While the firm’s online sales remain relatively small for the time being, it is confident in the growth and strong performance of its current offering and predicts huge potential in its upcoming ramp up of online deliveries. With regards to the biggest challenges facing the company today, the company says building capacity underlines much of the work it is doing to optimise its operations. With such rapid growth, to the tune of 465 store openings in 2017 alone, JFC recognises that its internal infrastructure must be reinforced to handle the boost in operational volume. “Our challenge is meeting the demands in terms of supply chain, logistics and building our stores, and there remains vast opportunities for growth,” it says. “We need to invest in our commissaries and add warehouses to keep supplies closer to the stores, and we are continuing to expand our store network aggressively so location is also key to meet the demand.”

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