Fast food chains have increased the eating-out habits of people particularly in the Philippines. Through this trend of eating-out spending, there is now a fierce competition in the market. The question is, how come the Filipino David able to fight the U.S. Goliath in terms of market leadership?
Jollibee and McDonald’s are two well-known fast-food chains in the country. These two food chains have this great competition in terms of market control. We all know that McDonald’s is a global brand and is popular worldwide, which serves more than 31,000 outlets in more than 100 countries. In case of Jollibee it only serves more than 750 outlets nationwide.
Despite these numbers, still, Jollibee was able to dominate McDonald’s here in the country. Jollibee mainly focuses within the Philippines where its number of restaurants outstrip McDonald’s. McDonald’s has a total of 293 restaurants only, half of the Jollibee’s restaurants with a total of 623 as of 2010.
Jollibee is now popularly known as the “King of the Burger Market”. In year 2002, the Economist Magazine cited a Taylor Nelson Sofres study showing that Jollibee was the most often visited fast-food restaurant in the Philippines. Apart from this, it was also featured in several magazines such as Euromoney, Wall Street Journal Asia, Far Eastern Economic Review, and Forbes – where it was able to make to the Forbes’ top 50 elite list with an estimated market value of $4.2 billion and a sale of $1.7 billion with the two biggest conglomerates in Asia (Alliance Global Group and Ayala Corp.) as of August 2013. Its founder Tan Caktiong was also recognized as the World Entrepreneur of the Year in 2004.
The advantage of being its home country gave rise to its success. A study was conducted among the top 1000 Corporations belonging to Business World, where the Gross Revenues had reached of almost Php70 billion pesos, and it was surprisingly led by the Jollibee Foods Corporation.
Their unparalleled success is through their customers’ intimacy which said to be one of the weaknesses of McDonald’s, reason for Jollibee to take over in market leadership.
Though, both of them offer cleanliness, fast service, and convenient locations; and in addition promoting Filipino values, promote advocacy (for kids, family, friends) and charities which encourage customers and various shareholders that will contribute to their market sales. Yet, the distinction is on its menu preferences, one of the Jollibee’s secrets.
“Menus with local tastes”, is its pride and advantage to keep its dominant position in the market. The Filipino burger fight against the global giant; the burger itself which serves a spice that matches the savoury of Filipino food. Unlike McDonald’s that serves only a plain beef patty. It doesn’t sell hotdogs as well for it was prohibited by its founder (Ray Kroc) as he regarded them the hygienic preparations of hotdogs. The local tastes were not able to master by McDonald’s easily, because it follows its own preferences which are part of its global menu standard.
Aside from menus, another reason that helped them grow its sales was through acquisitions. These food chains purchased by Jollibee Foods Corp. include, Chowking, Greenwhich, Red Ribbon, Mang Inasal, and two foreign brands such as Burger King and Delifrance. Through these acquisitions, Jollibee was able to expand the business, reach its customers easily, boosts its cashflow, and sustains growth on its sales.
However, McDonald’s has managed to increase its market share over the recent years. But, how come McDonald’s never beat Jollibee as market leader? According to a column written by Ardy Roberto of The Philippine Daily Inquirer, for McDonald’s, it is more than just the food it offers. The question for them is, if they had the same number of restaurants as the number of their nearest competitor, what would be the market share looks like? This argument was raised by McDonald’s Vice President for Marketing and Communications, Margarita B. Torres, talking about the number of restaurants as related to the market sales and shares.
Now, Jollibee is maintaining its leading position by being nationalistic oriented. Its local preferences really suites the Filipino palate that serves as their weapon to fight against a big chain as in the case of McDonald’s. Even a small local business can surpass a multi-national giant. Nevertheless, fast-food chains continue to take place in the market and business industry together with the fast changing lifestyle of Filipinos.