Jollibee Foods Corporation

International Operations

In the 1990s JFC started looking at the overseas market. They initially
focused on reaching communities with a large Filipino population to
capitalize on its brand awareness, targeting markets where there were
substantial number of overseas Filipino workers. JFC started international
operations in Saipan and Guam, then in Hong Kong, Vietnam, Brunei,
Indonesia, Dubai and Kuwait. In 1998 they entered the US market which they
sought because of the 2 million Filipino immigrants living there who are very
familiar with the Jollibee brand. JFC also wanted to appeal to the Americans
and other ethnic groups there.
JFCs international expansion strategy focused on markets which they
could develop the Jollibee brand and put up the supply chain to support the
stores in those selected markets. They first targeted California, with plans to
expand into Nevada, Hawaii, and New York in later years. They employed a
franchise model in the US, which draw on local capital and entrepreneurial
drive. In 2001, they purchased Tokyo Teriyaki House, which they renamed
Tomis Teriyaki House. In 2004 they expanded in Vietnam, planned to
introduce Chowking to Indonesia, and purchased 85% ownership of Yonghe
King in China, a Chinese style fast food chain, after earlier attempts to put up
Jollibee have failed. The Yonghe King stores grew, which attributed 6% to JFC
systemwide sales.
JFCs strategy in venturing into the international market was very
sound. They based it on the fact that there are ripe markets outside the
Philippines where there are huge populations of Filipinos. They capitalized on
the familiarity of the Filipinos with the Jollibee brand, which proved to be
successful because they were able to continue expanding in different cities
across the USA, Southeast Asia, and the Middle East. A particularly good
move was investing in a local fast food chain, Yonghe King, in China. Their
early attempts to put up the Jollibee brand in China failed, so they turned
their attention on a local chain to develop, which grew from 77 stores to 89
in 2004. The Japanese chain Tomis Teriyaki House did not do so well and
they had to close all the 3 stores in the US by 2003. I commend JFC on their
drive to pursue the Filipino markets abroad. Even though some localities are
more difficult to penetrate using the Jollibee brand, they were still able to
adapt to a different strategy that will be more compatible with the locals
tastes and preferences.

Source: Jollibee Foods Cooporation Case

Leonardo R. Garcia, Jr., De La Salle College of Saint Benilde, Philippines
Christopher H. Lovelock, Yale University
Jochen Wirtz, National University Singapore