Jollibee

The company did not seem to be content with ruling the fast-food market in the Philippines (Refer Exhibit II); it was aggressively expanding on a global scale as well. By 2002, Jollibee had over 31 outlets abroad. Some of the countries it had expanded into were the US, Hong Kong, Vietnam, Indonesia and Brunei.

The story of the evolution of a small ice cream parlor into a fast-food giant with a net income of P 1.05 billion for the year 2002 (Refer Exhibits III and IV for financial statements) has been closely-followed for years by many companies, corporate leaders, business analysts and strategists.

BACKGROUND NOTE

The history of Jollibee dates back to 1975, when a Filipino entrepreneur Tony Tan Caktiong (Tony) set up a two-outlet ice cream parlor business in the city of Manila. His father used to operate a kitchen in Fujian (China), which was where Tony's association with the food services business began.

Though the ice cream parlor business was doing well, Tony wanted to do something bigger in the foods business - in the form of a fast-food outlet chain. His vision was inspired by the global popularity of companies like McDonald's (which incidentally, was planning to enter the Philippines during that time), Wendy's and Burger King (these two already had a presence in the Philippines).

Deciding against becoming a McDonald's franchise, Tony established his own chain of seven hamburger outlets in 1978 under the name Jollibee. In 1979, Tony and his brother went to the US to study the fast-food business. They spent a couple of weeks looking at the kind of equipment used, the retail outlets, the food served and various other things. Tony decided to copy almost each and every aspect of US fast-food majors, particularly McDonald's. He said, "From the start, we were willing to copy." The aim was to avoid 'reinventing the wheel' and to benefit from tested business practices.

By establishing Jollibee in 1978, Tony pre-empted McDonald's entry into the country. Tony was aware that Jollibee could not compete with McDonald's which had financial muscle and decades of expertise in the business..............