In the mid-70s, Tony Tan Caktiong had a successful small ice-cream parlour in Manila. When he expanded the business by adding burgers to the menu, he heard the news: McDonald’s was preparing to enter the Philippines.

Competing against one of the world’s biggest brands is daunting to any small business owner. Tan’s friends and associates warned him that his store would be eaten alive, unless he considered selling his business to McDonald’s, or be its franchise holder. Both options were safe bets, but Tan didn’t play it safe: “I have a third option. I can fight McDonald’s.” And fight he did.

Tan flew to the US to learn exactly what he was up against.

Returning to the Philippines armed with first-hand knowledge of what a major American fast food chain looks like, Tan reinvented his store using everything he had learned in the US. He introduced a friendly cartoon mascot, bright and cheerful uniforms for the staff, a child-friendly ambience, a menu of deep fried favourites, and the belief that there’s no such thing as too much marketing. 

Tan also made adjustments to his menu, adding Filipino specialties to the regular fast food standards, such as pancit palabok, a popular noodle dish.

Jollibee was reborn and ready to fight. By 1981, when McDonald’s first set up shop in the country, they were forced to play catch up with Jollibee. The American chain simply didn’t offer anything new to the market, while the local franchise already had nine branches and a strong brand position, thanks to aggressive advertising.

Brand building has always been a priority for Jollibee, and the company has spent millions appealing to children and families. The result is a level of brand awareness usually reserved for major global competitors like, well, McDonald’s. A mid-90s market study found that nearly 100% of respondents in the Philippines knew the Jollibee brand. According to Jollibee Vice President for Finance, Raffy de la Rosa, “The Jollibee mascot is probably the most widely recognised character in the country.”

The chain now has outlets in Taiwan, Indonesia, Vietnam and the US, and in the Philippines sales continue at roughly double those of McDonald’s.

The Jollibee story is legendary in the Philippines and still echoes in its business schools, perhaps because there are few stories like this left to tell. Take India’s Ramesh Chauhan, who fought valiantly against Coca-Cola with his own Thums Up cola – now a Coca-Cola owned brand. Or London’s sandwich specialists Pret a Manger, started by college friends with a £17,000 loan – now partly owned by McDonald’s.

McDonald’s has tried to learn from and address the issue of local tastes, wherever it operates. In Quebec, the French province of Canada, you’ll find McPoutine, the McDonald’s version of a popular dish made of french fries, gravy and cheese curd. McDonald’s in Brazil added the McCalabresa, a sandwich with a pepperoni patty coated in vinaigrette, based on a traditional Brazilian street food. In Germany and the Czech Republic, McDonald’s serves beer. 

Nevertheless, even the biggest players are not immune to backfiring when entering new markets. When Disney decided to open an amusement park in Hong Kong, the prospect of millions of visitors from the mainland had Mickey and Co drooling at the potential windfall. However, the theme park has faced unexpected competition from one of Hong Kong’s older amusement attractions: Ocean Park. Since Hong Kong Disneyland opened its doors, Ocean Park has had record attendances. In 2006, Forbes magazine named Ocean Park one of the world’s top ten amusement parks. Disney World in Florida, EuroDisney in Paris and Tokyo Disney were also on that top ten list, but Hong Kong Disney World wasn’t.

With its cheaper ticket prices, diverse range of animal attractions (including two panda bears, a major draw in Asia), cable cars and stunning location, Ocean Park is a local brand that’s benefited from the presence of a global competitor.

Ironically, it was the Disney decision to move to Hong Kong that preserved Ocean Park. Just before 2000, the park was on the verge of closing its doors. It was run down and not popular with locals and tourists. Once word of Disney emerged, the park underwent massive renovations, took on new management, added new attractions that played to their strengths, and developed a fresh new image. Like Jollibee, they beat the big boys to the punch. In fact, the prospect of big brand competition turned out to be inspiring, not devastating.

Hong Kong Disney has worked hard to adjust to its new market, using widespread marketing and a stable of local celebrities to bolster the brand in Asia, particularly after a rocky start. Yet Ocean Park Chairman Allan Zeman is confident the future will continue to be bright for Ocean Park. “If we didn’t have the goods, people wouldn’t come,” he says. “I’m pretty confident we’ll keep appealing to locals and tourists.”

So much has the park’s image improved that it was recently named one of Hong Kong’s most admired brands in a survey conducted by brand management consultancy The Ingram Brand Company and Synovate. Ocean Park scored the highest rating for any brand in terms of “delivering on promises”. Ingram’s Wendy Lam adds that ultimately, real brand power is not simply about brand image. “Brand building is really much more about what you do, than what you say you do or how you look.”

A great example of that is American Apparel, the brainchild of Dov Charney, company founder and CEO. In a market that has long gotten used to the notion that all clothes are manufactured in Asia because it’s too expensive to produce in the US, Charney decided to do exactly the opposite of what every business guru has advised since the early 90s.

Using anti-corporate, anti-globalisation attitudes as part of its marketing arsenal, American Apparel opened its first manufacturing location in downtown Los Angeles and then its first retail shop in 2003. It now has 143 outlets in 11 countries. Much of its success has come at the expense of companies like Gap, a giant casual clothing retailer that has seen its share of market slide in the last few years.

American Apparel’s line includes T-shirts, jeans, khaki pants, hoodies and exercise wear – all strikingly similar to Gap. But Gap’s reputation and that of many other fashion retailers is the polar opposite to American Apparel. Many of these companies have been stung by allegations of worker exploitation in third-world countries. Over 80% of Gap’s production is in low-cost countries, compared to American Apparel’s LA-based production base, relatively high wages and benefits, and even free English classes. A video produced by American Apparel shows the employees engaged in a protest in favour of immigrant workers’ rights.

There are other brand lessons to be learned as well. Most clothing retailers, from Gap to Calvin Klein, rely on celebrity endorsements, waif-like models, professional photo shoots, and a distinctly chic image. On the other hand, the American Apparel website features attractive but everyday people in seductive poses, and photographed in homes or apartments. It bears the hallmarks of an online personals site.

What the American Apparel case shows, like Jollibee and Ocean Park, is that global brands can be beaten at their own game. “In The Art of War, Sun Tzu said that ‘the clever combatant imposes his will on the enemy, but does not allow the enemy’s will to be imposed on him’ – it seems to me that this is the key for smaller brands facing a larger, homogenised competitor, and that is well illustrated in these case studies,” says Ged Parton, CEO of Synovate’s Global Brand Practice.  

Whether by taking a page out of a competitor’s playbook and adding a local touch, or by taking the role of an anti-brand, there is always room for the next big thing.

Marlboro Man frozen out
While the Marlboro brand dominates most of the world’s best-known cigarette brands, Canadian smokers have a history with a different brand of cigarettes named Marlboro. Since 1932, a competitor of Phillip Morris has owned the Marlboro name in Canada, and has stubbornly held it to defend against Phillip Morris’ world-famous brand. Most Canadians are unaware of the “Canadian” Marlboro brand, and its sales figures barely even register each year. Yet it has kept Phillip Morris’ Marlboro brand out, and allowed lesser-known Canadian cigarette brands to keep their flame alive.