How was Jollibee able to build its dominant position in the fast food in the Philippines? What sources of competitive advantage was it able to develop against McDonald's in its home market?
Jollibee built a dominant position in the fast food market in the Philippines by creating a spicy homestyle hamburger that appealed to the Filipinos taste and created a fast food environment that was fun and family oriented, following the “Five Fs” (philosophy adopted by the company – friendliness, fun, flavorful food, flexibility, family) In 1981, competition entered the picture for Jollibee as McDonalds entered the Philippines market with rapid expansion of 6 stores in 2 years. McDonalds grabbed 27% of the fast food market to Jollibee’s 32%. Jollibee countered the competitions popular “Big Mac” by creating a large hamburger called the “Champ”’. Jollibee’s research indicated that the Filipinos still preferred their spicy taste to the plain beef patty taste, and one large burger as opposed to the Big Macs two smaller patties would appeal to the Filipinos large appetites, thus their advertising focused on taste and size. By 1983 the country was experiencing economic and political unrest which slowed down expansion of foreign investors. Jollibee used this as an advantage, being their home country, and pressed forward with expanding their food offerings and advertising. In 1987, foreign investors returned to continue their expansion in the Philippines to find that Jollibee held the dominant position in the fast food market with 31 stores.
By 1993 Jollibee had expanded domestically throughout the Philippines, had gone public, still maintaining majority ownership in the company, and began testing the unchartered waters of the international market unsuccessfully at this point. By the end of 1993, Jollibee’s total sales where listed as $3,386 (million of pesos) with a