Jollibee Vs. McDonald's: Filipino Burger Kings Fight Against Global Giant
What’s the first name that comes to your mind when someone asks about fast-food restaurant? Most probably, it is McDonald’s, the world’s largest food service organization. McDonald’s holds more than 40% share of the US fast-food burger market, many times the share of its nearest competitor. However, if you ask the same question in the Philippines, the answer that you’ll get will be Jollibee.
Jollibee Foods Corporation is not a household name when it comes to the global market. But in the Philippines, it’s the king of the burger market. One industry analyst said “if McDonald’s is the Goliath of fast food, Jollibee is its Filipino David.”
The rivalry between Jollibee and McDonald’s looks like no contest. McDonald’s has more than 31,000 outlets in more than 100 countries out of which 3,000 outlets are in Asia. Jollibee has only 600 outlets and over 50 international outlets.
But despite these numbers, in the Philippines, small Jollibee has humbled the global giant. Jollibee has captured more than 65% share of the hamburger market in the Philippines. This is more than half of the fast-food market as a whole and about twice McDonald’s sales in the country. Its revenues are growing rapidly and profitably. They claim that they are the undisputed leader of the fast-food market in the Philippines.
Their secret is Smart Niching. Jollibee concentrates on serving the unique tastes of Filipino consumers whereas McDonald’s exports largely standardized fare to consumers around the world.
Both Jollibee and McDonald’s offer cleanliness, fast service and convenient locations.
Jollibee’s Champ burger competes with the Big Mac and its Peach Mango Pie replicates McDonald’s Apple version.
However, Jollibee’s menu and flavors are specially suited to Filipino tastes. The local chain cooks up sweet, spicy burgers and serves seasoned chicken and spaghetti with sweet sauce, the way Filipinos like it.
They serve these meals with rice or noodles and not with French fries.
In addition to the special understanding of the Filipino palate, Jollibee has also mastered the country’s culture and lifestyle.
Jollibee lures kids with in-store play activities and a cast of captivating characters.
Its massive Jolly Bee character with orange jacket and the blonde spaghetti-haired girl named Hetti are better known and loved in the Philippines than Ronald McDonald.
The well known Jolly Bee character epitomizes the Filipino spirit of lighthearted everyday happiness.
Although Jollibee is much smaller than McDonald’s in global terms, Jollibee concentrates most of its limited resources within the Philippines, where its restaurants outnumber McDonald’s. But its primary advantage comes from simply doing a better job of giving Filipino consumers what they want.
Jollibee has shown that through smart niching, small players can compete effectively against industry giants.
© 2010 Lasantha Wijesekera