In an industry heavily dominated by companies belonging to the west, Jollibee has been able to make a name for itself in due course of time. Jollibee Foods Corporation or JFC is aimed at franchising, operating, and developing QSRs (Quick Service Restaurants). The Business Model of Jollibee here is aimed at explaining how Jollibee’s engagement in various areas of property leasing, manufacturing to support QSRs has contributed to its success.
The blog analyses the business model of Jollibee, its revenue model, its value proposal, and other variables. See our other blogs for information about Jollibee Marketing Strategy.
Let’s start with discussing about the company in brief:
Jollibee is the Philippines’ largest fast-food chain brand with a network of over 1400 outlets. Jollibee is a leading leader in the Philippines and is more than all other multinational fast-food brands that merge PH, he enjoys the lion’s share of the local market. Jollibee serves tasty, quality, and inexpensive food goods that include their superior service Chickenjoy, mouthwatering Yumburger, and scrumptious Jolly Spaghetti among other wonderful products with rigorous adherence to the highest standards of food quality, service, and cleanliness. In the U.S., Canada, Macau, Singapore, Malaysia, Saudi, Hangkong, Singapore, United Arab States, Qatar, Oman, Kuwait, Bahrain, Italy, and in the United Kingdom, Jollibee is embarking on an aggressively international plan of expansion with more than 270 international branches. The mission of Jollibee is to serve delicious meals and bring everybody the delight of eating. Jollibee is a family-centred brand promoting family values and cohabitation. Jollibee brand principles are based on the following in the joyful Filipino market: customer focus, speed with excellence, humility to listen and learn, family and fun spirit, and completeness.
Business Model of Jollibee
JFC is one of the world’s largest fast-food companies to have originated in Asia and the largest in the Philippines. The success of its flagship brand marked the beginning of JFC’s acquisition of its competitor brands within and outside the Philippines like Red Ribbon, Mang Inasal, Chowking, Greenwich Pizza. Right now JFC has over 5,900 stores across the world. The total retail sales are at 82.1 billion pesos. JFC’s focus on its manufacturing, its logistics framework, its menu, its marketing strategies, its founder’s leadership, and its attention paid towards globalization are some of the key factors that, according to them, have contributed greatly to their success. The Asian Business Review also once stated that constant efforts in the areas of innovation, testing, and piloting are something that Jollibee owes its business growth too.
1. Value Proposition
Jollibee is known for its delicious food and high-quality s.tandards. Jollibee’s success can be attributed to its delectable menu offerings, which include the superior-tasting Chickenjoy, mouth-watering Yumburger and Champhamburger, and delectably satisfying Jollibee Spaghetti, as well as creative marketing programs and efficient manufacturing and logistics facilities. Well-trained teams that work in a culture of integrity and humility, as well as a fun and family-like atmosphere, make it feasible. Customers are greeted with a clean and welcoming in-store environment as well as friendly and fast service at every Jollibee location. And it is this tried-and-true combination of great-tasting cuisine, commitment to world-class operating standards, and the global appeal of the brand’s family values that is propelling Jollibee’s expansion both locally and internationally.
2. Customer Relationship
Jollibee is a well-known Filipino brand, and customer happiness has always been a vital factor in the company’s success. Jollibee has evolved to be one of the most well-known and preferred brands in the Philippines by never losing sight of its objectives. In the Philippines, it is now the market leader among fast-food chains, with a market share of more than half of the industry.
3. Key resources
Physical Resources • Jollibee’s physical resources consist of production equipment, storage facilities, distribution centres, and workers. Resources Technological Jollibee invests in cutting-edge technology for its operating systems to continuously train its managers to stay ahead of the competition.
4. Key Activities
Offer burgers, chicken, pies, fries, morning dishes, and desserts, among other items. To serve consumers, hire staff such as a manager, cashier, and service team, as well as delivery drivers. Join forces with food-delivery applications. Constantly consider product innovation to provide clients with a variety of culinary options.
5. Key Partners
- Fresh N’ Famous Foods.
- Red Ribbon Bakeshop, Inc.
- Mang Inasal Philippines.
- Perf Restaurants Inc.
- Smashburger IP Holder.
- Superfoods Group.
- The Coffee Bean & Tea Leaf
6. Revenue Model of Jollibee
Jollibee Foods Corp., a home-grown rapid food corporation, managed to restore growth in the final three months of 2020, which was not enough to save the company from a pandemic loss last year. In its announcement to the stock exchange on Monday Jollibee captured the financial year 2020 with a total net loss of P11,5 billion, a reversal from P7,3 billion net income in the previous year. The good news is that Jollibee repaired profit in the fourth quarter with net revenues of P2 billion in the first three quarters of 2020, however, earnings were still down 34.5 per cent year on year. The Executive Director, Ernesto Tanmantiong, hopes the recovery will be sustainable. Jollibee shares were closed each time at P179.50.
Breakdowns in the figures have led Jollibee to a 27.8% crash year-on-year by 2020 at EUR 176 billion in its broad sales system a measure of all sales for customers both in the companies and the franchisees. Revenues plummeted 27.9 per cent per year to 129.5 billion PP owing to lockdowns that prohibited customers from restaurant ‘permanent store closures and reduced sales per store.’ Even before the pandemic hit, the profit of the Jollibee Group decreased slowly after two foreign loss-making companies, Smashburger and Coffee Bean & Tea Leaf, were bought in 2018, could not quickly turn around. Annually 2019, in the second quarter of 2020 the bottom line of the corporation fell 14.4 per cent, and the health issue acted as a final clue.
JFC or Jollibee Food Corporation’s primary aim is to stay at the top as a leading quality service and product provider. Accomplishing the same requires Jollibee to focus on the following key factors:
- Ensuring the supply of services and products of high quality.
- Make sure that customers are being provided with value.
- It also needs to employ resources in building an excellent customer experience.
Starting as ice cream by the founder and his family, Jollibee shifted to serving Hamburgers with a customized taste. The shift might seem simplistic now but was a well-thought-out consequence of the 1977 oil crisis that would have doubled ice cream prices. People in the Philippines have a thing for spicy food and that’s exactly the information that Jollibee decided to use to its advantage. Jollibee employed its resources towards catering to the Filipino taste and was able to serve dishes customized to suit the local preferences in a manner no one else around them was doing.
The operational fact of Jollibee reflects its constant pursuit of excellence. Usage of pre-fabricated in the construction of its outlets’ new outlets talks a lot about its efforts aimed at saving both time and money. With two of its commissaries in Pasig City and Mandaue City, JFC caters to fast-food requirements in the Luzon Area (Pasig City) and the Visayas-Mindanao area. The principal outlet’s activities carried out at both these commissaries included planning of raw materials and ingredients, manufacturing of processed foods, warehousing, logistics, distribution, its outlets, and more.
So, that was the business model of Jollibee. This company is a successful business that has had considerable expansion; yet, if you are to become a large global player in the quick food industry, you confront intense rivalry. I came to the opinion that Jollibee should be entering the UK market, but not alone, following different analyses by Jollibee and by the fast-food business in general. Jollibee should form a joint venture with a declining company, like Burger King, which requires support to start sales yet again. Since Burger King has been founded in the UK for some time, they can provide insights into the culture and functioning of the UK fast food business and consumer behaviour. Consumer preferences appear to impact Asian-influenced dishes as illustrated in Appendix 2, which offers Jollibee an exceptionally significant opportunity. Jollibee has the experience and substantial achievements with joint ventures of the past, as Deli France shows, and so joint ventures on this developing brand and company appear the ideal option in the UK market.
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