Harvard Case - Just Kitchen: International Expansion to the Philippines
"Just Kitchen: International Expansion to the Philippines" Harvard business case study is written by Shweta Pandey, Sandeep Puri, Raghav Rasal. It deals with the challenges in the field of General Management. The case study is 15 page(s) long and it was first published on : Jan 24, 2024
At Fern Fort University, we recommend Just Kitchen proceed with its international expansion to the Philippines, utilizing a phased approach that prioritizes strategic partnerships, localized menu adaptation, and leveraging technology for efficient operations and customer engagement.
2. Background
Just Kitchen is a successful ghost kitchen concept operating in North America. The company focuses on providing a platform for multiple restaurant brands under one roof, leveraging shared kitchen space and delivery services. The case study centers around Just Kitchen's decision to expand internationally, with the Philippines being the chosen market.
The main protagonists are:
- Just Kitchen's Management Team: They are tasked with developing the expansion strategy and navigating the complexities of entering a new market.
- Potential Filipino Partners: These individuals or companies will play a crucial role in establishing Just Kitchen's presence in the Philippines, providing local knowledge and expertise.
3. Analysis of the Case Study
SWOT Analysis:
Strengths:
- Proven Business Model: Just Kitchen's success in North America demonstrates a robust and scalable model.
- Technology Focus: The company's reliance on technology for operations, marketing, and customer engagement provides a competitive edge.
- Brand Recognition: While limited in the Philippines, Just Kitchen's brand name carries potential for recognition and trust.
Weaknesses:
- Lack of Local Market Knowledge: Limited understanding of Filipino cuisine preferences, competitive landscape, and cultural nuances.
- Operational Challenges: Navigating the complexities of setting up operations in a new country, including regulations, logistics, and labor market.
- Potential Cultural Barriers: Adapting to Filipino food preferences and customer expectations.
Opportunities:
- Emerging Market Growth: The Philippines boasts a rapidly growing food delivery market with significant potential.
- Favorable Regulatory Environment: The Philippines has a relatively supportive regulatory environment for food delivery businesses.
- Partnerships with Local Players: Collaboration with established Filipino food businesses can accelerate market entry and access local expertise.
Threats:
- Intense Competition: The Philippines has a highly competitive food delivery market with established players.
- Economic Volatility: Economic instability in the Philippines could impact consumer spending and affect Just Kitchen's profitability.
- Supply Chain Disruptions: Potential challenges in sourcing ingredients and managing logistics in a new market.
Porter's Five Forces:
- Threat of New Entrants: High, due to the ease of entry into the food delivery market.
- Bargaining Power of Buyers: High, as customers have numerous choices and can easily switch between platforms.
- Bargaining Power of Suppliers: Moderate, as Just Kitchen will need to negotiate with local suppliers for ingredients and logistics.
- Threat of Substitutes: High, as customers can choose to dine in at restaurants or cook at home.
- Intensity of Rivalry: Very High, due to the large number of existing players and the competitive nature of the market.
Key Considerations:
- Localization: Tailoring the menu to Filipino tastes and preferences is crucial for success.
- Partnerships: Strategic alliances with local food businesses can provide market access, expertise, and brand recognition.
- Technology: Leveraging technology for efficient operations, customer engagement, and data-driven decision making is essential.
- Corporate Social Responsibility: Demonstrating commitment to sustainability and ethical practices will build trust with customers and stakeholders.
4. Recommendations
Phase 1: Market Entry and Pilot Launch (6-12 months)
- Strategic Partnerships: Identify and partner with established Filipino food businesses to launch a pilot program. This will provide access to existing customer base, local expertise, and supply chains.
- Localized Menu Development: Conduct thorough market research to understand Filipino food preferences and develop a menu that caters to local tastes.
- Technology Integration: Implement a robust technology platform for order management, delivery tracking, customer engagement, and data analytics.
- Limited Marketing Campaign: Focus on targeted marketing campaigns to introduce Just Kitchen to the Filipino market, leveraging social media and local partnerships.
- Operational Efficiency: Optimize kitchen operations, delivery logistics, and supply chain management for cost-effectiveness and customer satisfaction.
Phase 2: Expansion and Growth (12-24 months)
- Expansion to Key Cities: Based on the pilot program's success, expand to major cities with high demand for food delivery.
- Brand Building: Develop a strong brand identity that resonates with Filipino consumers, emphasizing local partnerships and cultural relevance.
- Customer Acquisition: Implement a comprehensive customer acquisition strategy, including targeted advertising, loyalty programs, and partnerships with local businesses.
- Data-Driven Optimization: Utilize data analytics to optimize menu offerings, pricing strategies, delivery routes, and customer experience.
- Corporate Social Responsibility Initiatives: Implement sustainable practices, support local communities, and promote diversity and inclusion within the organization.
5. Basis of Recommendations
These recommendations are based on:
- Core Competencies: Leveraging Just Kitchen's existing strengths in technology, operations, and brand recognition while adapting to the local market.
- External Customers: Understanding Filipino food preferences and catering to their needs through a localized menu and efficient delivery service.
- Internal Clients: Partnering with local businesses to create a win-win situation and ensure smooth operations.
- Competitors: Differentiating Just Kitchen through a focus on partnerships, localization, and technology-driven customer experience.
- Attractiveness: The potential for high growth and profitability in the Philippines, coupled with a strong business model and strategic partnerships.
Assumptions:
- The Filipino food delivery market will continue to grow at a healthy pace.
- Just Kitchen can successfully adapt its business model to the local market.
- Strategic partnerships can be established and maintained.
- Technological infrastructure and logistics will be readily available.
6. Conclusion
Just Kitchen's expansion to the Philippines presents a significant opportunity for growth and market leadership. By embracing a phased approach, focusing on localization, strategic partnerships, and leveraging technology, Just Kitchen can successfully navigate the challenges of entering a new market and capitalize on the potential of the Filipino food delivery industry.
7. Discussion
Alternatives:
- Organic Growth: Expanding organically without partnerships could be slower and riskier due to the competitive landscape.
- Acquisition: Acquiring an existing Filipino food delivery platform could provide immediate market access but could also come with integration challenges.
Risks:
- Competition: Intense competition from established players could hinder Just Kitchen's market share.
- Cultural Barriers: Misunderstanding Filipino food preferences and cultural nuances could lead to customer dissatisfaction.
- Operational Challenges: Setting up operations in a new country can be complex and time-consuming.
Key Assumptions:
- The Filipino food delivery market will continue to grow.
- Strategic partnerships will be successful.
- Technology and logistics will be readily available.
8. Next Steps
Timeline:
- Months 1-3: Conduct thorough market research, identify potential partners, and develop a pilot program plan.
- Months 4-6: Secure partnerships, finalize menu development, and establish operational infrastructure.
- Months 7-12: Launch the pilot program, gather customer feedback, and refine operations.
- Months 13-24: Based on pilot program success, expand to key cities, build brand awareness, and implement growth strategies.
Key Milestones:
- Secure strategic partnerships with established Filipino food businesses.
- Launch a successful pilot program in a key city.
- Achieve a target market share within the pilot program.
- Expand operations to major cities in the Philippines.
- Build a strong brand identity and customer base.
By taking these steps, Just Kitchen can successfully navigate the challenges of international expansion and establish a strong foothold in the growing Filipino food delivery market.
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Case Description
In May 2022, the founder and chief executive officer of Just Kitchen Holdings Corporation (Just Kitchen), a Canada-based and publicly listed operator of ghost kitchens in Taiwan, met with the company's management team to deliberate on the company's plan to expand into new markets, specifically, the Philippines. Their optimism for the Philippine market stemmed from the country's growing online food delivery industry, favourable demographics, and supportive government policies. While the founder his team explored this expansion possibility, they recognized that entering the thriving online food delivery market presented advantages and disadvantages, and questions loomed: What would be the most effective approach to enter this market? And, equally importantly, what challenges and pitfalls should they anticipate as they ventured into such a business opportunity in the Philippines?
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