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DEVELOPING NEW BUSINESS IDEAS244

accepted an invitation to move the family to Davao in the southern
islands of the Philippines in order to set up a Chinese restaurant.

After graduating from the University of Sto. Tomas in 1975 with a
degree in chemical engineering, Caktiong responded to an
advertisement posted by an ice-cream parlour looking for franchisees.
Borrowing the initial capital from his father, Caktiong set up two ice-
cream parlours in the Philippines’ capital of Manila. Following cultural
convention, his siblings came to Manila to help. While Caktiong and his
wife managed one of the stores, his brother and sister handled the
other.

Caktiong’s hands-on style and close rapport with the customers made
him realise that a market existed for more than just the ice-cream which
his two stores currently sold. The ice-cream parlours started serving hot
sandwiches and other meals, whose sales soon outstripped ice-cream.

Inspired by the global popularity of such fast-food companies as
McDonald’s, which had yet to enter the Philippines, Caktiong acted on
the feedback from his two stores. The company changed its name in
1978 from the Magnolia Ice Cream House to Jolly Bee, and despite the
fact that ‘no bank dared to touch them’, established seven outlets to
explore fully the possibilities of the hamburger concept. The name was
shortened to Jollibee several months later, with the happy bee
symbolising industriousness and the creation of pleasurable food.

Caktiong’s strategy to pre-empt the entry of McDonald’s into the
Philippines was bold. Other American fast-food giants such as Burger
King were already in the market and McDonald’s was understood to be
preparing entry plans. Caktiong observed that the foreign fast-food
outlets did not localise their products to cater for Filipino tastes.
Caktiong knew little about fast-food operations. His tangible resources
were extremely limited compared with the gigantic financial muscle and
operational expertise of the American multinationals. In addition, the
business skills available from within his family were limited and
Chinese-Filipino tradition dictated that management positions were
retained within the clan.

Caktiong realised, however, that he possessed one key factor which the
multinational companies could never obtain: ‘[our] indisputable edge is
our knowledge of our fellow Filipinos and their taste.’