Kfc China Case Study. We recently studied KFC China’s transformation of the business model that had made Kentucky Fried Chicken a global brand, and we learned how, in the process, the company accumulated strengths and competencies that now pose formidable barriers to competitors. KFC realised that the US fast food model needs to be adapted because China’s culture is not individualistic which is the characteristic of the US culture. China is again selected as the case study market because though it is the largest fast food chain restaurant in the world, McDonalds has been unable to gain competitive advantages over KFC in the Chinese market, and it recently announced that it would be exiting the market. Customers spend the equivalent of $2.50 to $3.50 per visit, a price point that puts KFC way above street vendors and local restaurants and even somewhat above other fast-food chains. pp 17-23 | But the chain was then a unit of PepsiCo, which took a hands-off approach—it was more concerned with beating Coca-Cola than with selling fried chicken. Over 10 million scientific documents at your fingertips. Brand’s Kentucky Fried Chicken (KFC) are among the most iconic fast food establishments in the United States of America, but had mainly stayed in the home country. How KFC make a stride in China’s QSR market. Customer case study examples. McDonald’s opened its first restaurant in China in 1990 and plans to double the number of outlets there to 2,000 by 2013. KFC China’s menus typically include 50 items, compared with about 29 in the United States. In 2010 an executive said that Asia would be the brand’s largest growth engine within three to five years but that BK planned to proceed cautiously in China. Two men’s race: McDonalds and KFC in China. Most of all, it is, like China’s economy, dynamic and capable of expanding still further—at a remarkable pace. Most products are sourced in China. Brands, the parent company of Kentucky Fried Chicken (KFC), are opening a KFC store every day. Although the problem was resolved quickly, Yum! The local food safety authorities investigated the situation and found that KFC China had been aware of the situation since 2010 but had chosen to remain silent. Recently, Yum! If it’s there for the long haul, it should install local managers whose vision is to build an organization that will last. 192.254.250.18. … KFC China closely monitors the entire supply chain, all the way back to animal feed companies and other input providers, and it trains employees in personal hygiene, including how to dress for the workplace and how often to wash their hands. Aware of a growing sense in the West that high-fat, high-carbohydrate foods play a role in the obesity epidemic, Su asked himself how Yum! Taco Bell was similarly positioned by Yum! Therefore, I can research different cultures from KFC’s branches and make an analysis of potential problems and challenges related to the case. KFC China’s success in winning over Chinese consumers grew out of a deep understanding of the differences between established and developing markets and a willingness to radically alter the U.S. business model. Teaching employees how to interact with customers is no small matter. KFC China offers important lessons for global executives seeking guidance in determining how much of their existing business model to keep in emerging markets—and how much to throw away. Brands. KFC outpaced its nearest competitor, McDonald’s, by more than 1,000 restaurants in China and is outpacing its development by a roughly three to one. Case Study YUM - KFC’s in China Introduction Homogenization has made it easy for fast-food joints to circle the globe, spitting out carbon copies of themselves, their burgers, and their fries along the way. KFC China’s menus typically include 50 items, compared with about 29 in the United States. The chain, which opened in Shanghai in 2005, offers such favorites as beef rice and bean curd at prices similar to KFC’s. Execution of the strategy turned on a fluke of corporate ownership. China’s strengths in service, logistics, and training have positioned the company to support additional restaurant formats, including a local one with which it had no experience: Chinese fast food. By 1999 it was opening dozens of restaurants a year, and in 2002 it picked up the pace even further. So the company changed its recipes to suit the regions. The opening of the first KFC restaurant in 1987 was largely covered by local medias and was watched by millions of Chinese. The case provides information on the external environment of the company – the global restaurant and fast food market.KFC is one of the leading companies in fast food and […] It also offers congee, a popular rice porridge that is hard to make at home, which is KFC’s number one seller at breakfast. Not logged in Tray mats carry educational messages. New recruits at KFC often have to learn basic people skills and teamwork. Mexican food, with its emphasis on dairy and beans, didn’t appeal to Chinese consumers. Kfc In China Case Study. The authors, both of Harvard Business School, examined why KFC China has been able to find fertile ground in a market that is notoriously challenging for Western fast-food chains. has focused on acquiring a competitor, Little Sheep, a Hong Kong–listed chain of hundreds of Mongolian-style hot-pot restaurants. Nutrition information is printed on every package. Many Chinese still wore the tunic suits of the Mao era, and bicycles were the main means of transportation. By 2010 Yum! Kfc Case Study China KFC rushed to establish a presence in 16 locations from which it could grow and develop. Case Study 1 Introduction Since KFC opened the first outlet in Beijing in 1987, the fast-food giant has occupied its dominant position in China(Bell and Shelman 2011). Case Study 1 KFC China should continue its strategy of rapid expansion through China, as there are an increasing number of female workers in the workforce and they should expand particularly in developing and affluent cities to take advantage of … (2011). KFC’s rapid expansion in China has allowed the company to widen the gap between itself and competitors: McDonald’s has about one-third as many outlets and owns a 16% market share. Some Western health problems are already showing up in China. The company’s managers sought to stretch the brand so that consumers would see KFC as part of the local community—not as a fast-food chain selling inexpensive Western-style items but as restaurants offering the variety of foods and the traditional dishes that appeal to Chinese customers. © 2020 Springer Nature Switzerland AG. Yum!’s initial hope was to create a large national chain, but Chinese food poses significant challenges in a fast-food context: Noodles and vegetables must be prepared just before serving; customers are highly discerning about freshness and traditional flavors; and tastes vary widely across regions. Wang, P. (2011). Jargon, J. With KFC as its flagship chain, Yum! In China, Yum! outlets) are popular with mall developers. McDonald’s famous golden arches and Yum! To succeed, the fast-food giant had to throw out its U.S. business model. 1863 Words 8 Pages. This case study is related to corporate culture of KFC China and its related effect on marketing strategy of the business. From site selection to grand opening, it takes KFC China four to six months to bring a new restaurant into the world—about half the time required in the U.S. In fact, it is the limiting factor in the chain’s expansion, according to Sam Su. The menu variety adds traffic and encourages repeat visits. The company prides itself on being a “learning organization.” Teams of new employees work side by side with experienced ones in established outlets; once trained, they move to a new location. CASE STUDY ON KENTUCKY FRIED CHICKEN(KFC) SUBMITTED BY: SUBMITTED TO: MANISH SINGH SHEKHAWAT MR. VIKAS KUMAWAT 12EBKEE056 2. It now offers a lengthy menu that includes seafood pizza, beefsteak, and fried squid, and it attracts an older and more affluent crowd than KFC does. Local consumers and netizens were in an uproar over the scandal, which eventually in 2013 broke the group's 11-year streak of double-digit growth. Hostesses teach lessons on nutrition to kids. No such networks exist in many of the world’s emerging markets. In an effort to please local consumers, the company reinvented its menu and varied spiciness levels from region to region. I choose KFC Company as the case study because KFC Company is the worldwide company that has many branches around the world. In the United States and Europe, fast-food chains rely on networks of distributors to ensure that food is handled properly and kept refrigerated from the farm to the restaurant. Starbucks opened in China in 1999 and has about 450 shops there; the company plans to have 1,500 by 2015. Global companies face a crucial question when they enter emerging markets: How far should they go to localize their offerings? Although young “white collars” in Shanghai might eat a KFC lunch with friends once or twice a month, a family in a smaller city might go once or twice a year, to celebrate a special event. In the absence of logistics providers, KFC China created a distribution system to ensure adequate and high-quality supplies. held a 27% stake in Little Sheep, and earlier this year it proposed to increase its ownership level to 93%. The typical Western approach to foreign expansion is to try to sell core products or services pretty much as they’ve always been sold in Europe or the United States, with headquarters watching closely to make sure the model is exported correctly. Focusing on owned restaurants rather than franchises enabled the company to make changes where necessary to meet local needs. This was still a very conservative nation, not prepared for the “Fast Food” … KFC’s executives believed that the dominant logic behind the chain’s growth in the U.S.—a limited menu, small stores, and an emphasis on takeout—wouldn’t produce the kind of success they were looking for in China. has experimented with developing East Dawning, a chain that takes its name from a line in an ancient Chinese poem. They enlarged the outlets, which are about twice the size of those in the U.S., to allow for bigger kitchens and more floor space where customers can linger. as an upscale restaurant, but it was shut down in China after a five-year experiment. As KFC expands rapidly in China, it formulates specific strategy aiming to Chinese customers and accomplishes unprecedented success. Later this year Two Fen will publish a series of in-depth essays on China’s economic transformation to commemorate this 40th anniversary. 3 billion (Li 2004), the China presents an increasingly large buying force. Cross-cultural influences on brand identity impressions: KFC in China and the United States. (More than 90% of Yum!’s outlets in China are company owned, compared with 12% in the U.S. and 11% in other international markets.). In recent years Yum! Brands could take action to forestall such problems in China. The kfc case study. The 2002 China National Nutrition and Health Survey revealed that 22.8% of Chinese adults were overweight, up from 6% in 1982. Wang, P. (2011). Summary: In 2007, KFC had opened 2000 outlet stores in china, leaving rival MacDonald’s far behind, achieving high praise from Chinese consumers and defeating challengers again and again. Breakfast key to growth of foreign fast food market in China. The US chicken giant adapts its Western business model in Chinese market through acknowledging the social and cultural differences. KFC will be a really important case study in terms of scrutinising how the tendering process and procurement took place, how the collaboration was established and run (given that we now have ISO standards for managing collaborative relationships), how the handover was carried out with the previous partner involved. In The Dragon’s Cave• KFC China is opening almost one outlet a day. With all this activity to support, KFC can’t position itself as the cheapest dining option—nor does it want to. In China, Yum! This service is more advanced with JavaScript available, Marketing Cases from Emerging Markets PUBLICATION DATE: June 23, 2014 PRODUCT #: HK1043-PDF-ENG. A Case Study of Kfc’s Cross-Cultural Marketing in China . The Chinese, who until the1980s, were used to untidy restaurants and unfriendly service, have embraced the ambience, rich decors and friendly service of KFC. If there is an overriding lesson to be drawn from KFC’s experience in China, it is that when entering an emerging market, a multinational must decide whether it wants to garner quick extra sales or to establish a long-term presence. China division execs, Su now CEO. Or should they rethink the business model from the ground up? Brands, the parent company of Kentucky Fried Chicken (KFC), are opening a KFC store every day. Brands, the parent company of Kentucky Fried Chicken (KFC), are opening a KFC store every day. (Current base: ~3300)• KFC China intends to reach 15000 outlets by 2015.• The strengths and competencies KFC China has developed over the years, now pose formidable threats to its competitors. Many Chinese still wore the tunic suits of the Mao era, and bicycles were the main means of transportation. 2 pages, 953 words. A master of adaptation is the Swiss food giant Nestlé, which has created an array of products that incorporate differing regional flavors—and cater to local tastes—in coffee, chocolate, ice cream, and even water. Harvard Business School. In China, Yum! Harvard Business Publishing is an affiliate of Harvard Business School. But despite an abundance of willing workers, staffing is a perennial obstacle. China is a country that is located in East Asia. It was a place where residents with spending money could go for a special occasion. Expansion should be progressed in order to take advantage of China’s increasingly growing economy. They understood that in China, as in many other developing countries, food is at the very heart of society, inextricable from national and regional cultures, and that an abundance of flavors and an inviting ambience would be necessary to win over consumers in great numbers. KFC’s radical approach to China. In the mid-1990s a fellow participant at a seminar in the U.S. asked Su why he would want to bring “junk food” to China—a question that started him thinking deeply. Fast-food culture grows in China. Rejecting the measured growth of its China competitors and of KFCs in other countries, KFC China set its sights on rapid expansion. Kfc And China Case Study. China has some fast food chains. Like every other multinational in China, KFC made its way up the learning curve by trial and error. Once such an approach is entrenched, companies are reluctant to rethink the model. This was an expensive undertaking, but necessary if the company was to expand rapidly, carry a lengthy and complex menu, and introduce new products quickly. But the company works with its suppliers to build their capabilities and capacity; it is even working with growers to introduce U.S. varieties of sweet corn. Show More. China revenues and operating profits in 2010 were $4.1 billion and $755 million, respectively; comparable figures for the overall company were $11.3 billion and $1.77 billion. The results of the strategy of heavy localization have been impressive: In the first half of 2011 sales at Yum! Introduction The case “KFC and the Global Fast Food Industry in 2003-2004” by Jeffrey A. Krug describes the development of the KFC company and its strategy. Moreover, a national presence means that KFCs (and other Yum! Reuters (2012). INTRODUCTION KFC is based in Louisville, Kentucky, and is the world’s most popular chicken restaurant chain. U.S. retailers and food corporations that have spent years saturating the huge home market tend to cling to what has worked in the past. But in the most populous country in the world, a fast-food giant stepped off the conveyor belt The restaurant margin for those six months was 22%—well above the U.S. margin of 11%. In 1987, when the first Chinese KFC opened in Tiananmen Square, Western-style fast-food restaurants were unknown in China. But KFC China’s model was more complex and evolving rapidly. This often starts with selling imported goods to the expat community or opening one or two stores for a trial run. It permits centralized purchasing, which reduces costs, and gives the company a larger share of outlet profits. Executives say they believe there is huge potential to drive coffee consumption in China. McDonald’s no match for KFC in China as Colonel Rules Fast. But the strategy that emerged was remarkably clear and embodied five truly radical elements: turning KFC into a brand that would be perceived as part Chinese; expanding rapidly into small and midsize cities; developing a vast logistics and supply chain organization; extensively training employees in customer service; and owning rather than franchising the restaurants. Pizza Hut is a part of the Yum! It works well when a pool of experienced, entrepreneurial candidates are available to run franchises and when restaurant operations are relatively simple—built around, for example, a limited menu of easy-to-make products. One-child families and the proliferation of home computers mean that Chinese children interact less with other people than they did in previous generations. Some 70% of McDonald’s Chinese outlets are open 24 hours a day. The clean, efficiently run restaurants have Chinese decor and serve Chinese food exclusively—no U.S.-style fried chicken, no pizza, no burgers. KFC and Pizza Hut owner Yum Brands sees profits rise. Like KFC, it has undergone a transformation in China. This case KFC in China focus on KFC is able to please the Chinese palate with its 'finger licking good' chicken that is part of the well-established dietary habits of the Chinese. China reported a resulting 30% drop in operating profit in the second quarter of 2005. Abstract. They made a special effort to welcome extended families and groups. STEP 2: Reading The The Kfc In China Harvard Case Study: To have a complete understanding of the case, one should focus on case reading. Download Citation | Case study 2: KFC in China | In China, Yum! One factor in this decision was the presence of McDonald’s in China’s four largest cities. The kfc: human resource problem in china. Franchising has long been a mainstay of the fast-food industry, because it reduces investment costs and risk and enables rapid geographic expansion. Mintel (2012). Asia delivers for McDonald’s. Utilising a different strategy compared to other Western fast service counterparts, KFC has become the largest restaurant company in mainland China. Dairy Queen has some 300 Chinese outlets. This is a preview of subscription content. It was a place where residents with spending money could go for a special occasion. To meet this challenge, KFC China established a distribution arm in 1997, building warehouses and running its own fleet of trucks. In 1987, when the first Chinese KFC opened in Tiananmen Square, Western-style fast-food restaurants were unknown in China. Free Powerpoint Templates Page 2 3. KFC China offers important lessons for global executives who seek to determine how much of an existing business model is worth keeping in emerging markets and how much should be thrown away. Menus offer spicy chicken, rice dishes, soy milk drinks, egg tarts, fried dough sticks, wraps with local sauces, and fish and shrimp burgers on fresh buns. portfolio; it has some 500 dine-in restaurants and 120 delivery-only outlets. The number of overweight and obese children aged seven to 17 has tripled to 8.1% over the past 10 years, according to the same agency. Su (who joined KFC China in 1989) created a knowledgeable, motivated top management team, hiring ethnic Chinese and painting a scenario they could believe in: The company they would build would make China a better place. Brands China Division, which owns KFC and a number of other brands in the country. KFC’s approach may not apply across the board, but it suggests a mind-set that can position multinationals to win in emerging markets. > Case Study of KFC: Establishment of a Successful Global Business Model Case Study of KFC: Establishment of a Successful Global Business Model By mid 1950s, fast food franchising was still in its infancy when Harland Sanders began his cross-country travels to market “Colonel Sanders’ Recipe Kentucky Fried Chicken.” KFC China’s five competitive advantages all depart from the U.S. model. 1284 Words | 6 Pages. Global companies face a critical question when they enter emerging markets: How far should they go to localize their offerings? In the United States, by contrast, KFC outlets are designed primarily for takeout—most of the dining is done at home. With a closely involved parent, KFC China might not have been free to pursue its homegrown strategy. Quick Service Restaurant (QSR) web (2010). Kfc In China Case Study. Witkowski, T. H., Ma, Y., & Zheng, D. (2003). KFC established 16 beachheads as a way of quickly expanding throughout the country. © Springer-Verlag Berlin Heidelberg 2014, http://www.qsrweb.com/article/95404/Yum-Brands-promotes-two-Yum-China-Division-execs-Su-now-CEO, http://www.bbc.co.uk/news/business-13153516, http://www.mintel.com/press-centre/press-releases/910/breakfast-key-to-growth-of-foreign-fast-food-market-in-china-reports-mintel, http://www.investmentu.com/2011/February/fast-food-culture-grows-in-china.html, http://www.bloomberg.com/news/2011-01-26/mcdonald-s-no-match-for-kfc-in-china-where-colonel-sanders-rules-fast-food.html, http://english.peopledaily.com.cn/90001/90778/90860/6912182.html, http://www.strategicsourceror.com/2011/11/kfc-raises-prices-in-china.html, http://www.reuters.com/article/2012/02/07/yum-idUSL2E8D77CY20120207, http://www.euromonitor.com/fast-food-in-china/report, http://blog.caijing.com.cn/expert_article-151538-15237.shtml, http://online.wsj.com/article/SB10001424052970204397704577074982151549316.html, Coventry Business School, Coventry University, https://doi.org/10.1007/978-3-642-36861-5_4. This is the first of several historical case studies that illustrate how important aspects of Chinese political economy have evolved over the first 40 years of the country’s Reform and Opening policies. Another word for things in an essay a short essay on earth sap sd module case study case china study in Kfc solution sample of essay pdf research paper filter design, competitive analysis case study pdf christmas celebration essay in hindiCase study research in entrepreneurship central idea of an essay on man. This, like the company’s extensive logistics network, is an advantage that is difficult for any competitor to emulate. Much of what the company has accomplished is the result of its homegrown strategy—and of the independence that PepsiCo gave Su and his leadership team in the early days. This process is experimental and the keywords may be updated as the learning algorithm improves. HBS cases: KFC’s explosive growth in China. Burger King has about three dozen restaurants in China, where its first outlet opened in 2005. KFC was a novelty, a taste of America. Kentucky Fried Chicken (KFC) The first KFC was opened in Tiananmen Square, China 1987; it struggled as western food was unknown to the east. In 2005 the company developed the concept of a “new fast food” that would be “nutritious and balanced” and promote “healthy living.” It eliminated “supersize” items and added roast chicken, sandwiches, fish, shrimp, and more fruit and vegetable dishes to its menus. order now. It announced earlier this year that it was considering expansion in China. KFC China had a brush with this issue a few years ago, when a colorant that had been linked to cancer was found in one of the company’s sauces. Having an average growth rate of 8% in GDP and a population of 1. China locations that had been open a year or more rose 16%, compared with a decline of 2% at U.S. locations. Starvish, M. (2011). When KFC opened in Beijing, it was one of the first companies to promote excellent customer service—a concept then unfamiliar in China after decades of communism. One of the most impressive stories of a U.S. multinational in an emerging market is unfolding right now in China: KFC is opening one new restaurant a day, on average (on a base of some 3,300), with the intention of reaching 15,000 outlets. KFC China’s rapid growth poses challenges: A highly visible company could easily become the target of a consumer or government backlash against the perceived negatives of fast food. 1. Concern in the West over high-fat, high-carbohydrate foods prompted the company to begin changing its menu and educating consumers about health. China has a total area of 3.7 million square miles. has become China’s largest restaurant company by far, with more than 250,000 employees and about 40% of the market for fast-food chains. It is said that case should be read two times. Part of Springer Nature. D’Altorio, T. (2011). Training adaptions of KFC in China Since KFC started its business in China in 1978, KFC in China has developed to be the largest restaurant company in China and become a separated incorporation belonged with Yum! KFC lost part of its market share in the recent years in China, but their success in the Chinese market is legendary.. KFC entered the Chinese market in 1987, and it’s now the largest restaurant chain in the country, with a total of 4,563 restaurants.KFC controls as much as 40 percent of the Chinese market share, while McDonalds, far and away the most popular fast food restaurant in … But this is not the KFC you know in America. The company has achieved this success by abandoning the dominant logic behind its growth in the United States: a limited menu, low prices, and an emphasis on takeout. KFC raises prices in China. Copyright © 2020 Harvard Business School Publishing. Some times will make the company lost the market or suffer a setback. The company says its strong sales in the Asia/Pacific, Middle East, and Africa regions are led by results in China, and it cites the appeal of such conveniences as delivery, drive-through, and extended hours. Founded by Colonel Harland Sanders in in the early 1930s by cooking & serving food for hungry travelers. To circumvent the traffic jams that sometimes extend for miles in the winter, it relies on contingency plans that involve renting temporary warehouses and reserving space on cargo airlines. The extended menu means that food preparation is more complex in Chinese KFCs than in American ones and requires more hands (thus the bigger kitchens).These outlets typically employ 60 people—nearly twice as many as in the U.S. Often one of those employees is a hostess who greets customers and organizes pastimes, such as learning English songs, for young children in play areas. For those six months was 22 % —well above the U.S. model dynamic. Set its sights on rapid expansion like KFC, it is the limiting factor in this decision the... Hut owner Yum brands sees profits rise food market in China resulting 30 % drop in operating profit the... Throughout China to concentrate purchasing with the suppliers that perform best publish a series of in-depth essays on China s... Become the largest restaurant company in mainland China this year two Fen will publish a of. But KFC China ’ s opened its first outlet opened in 2005 U.S. business model in market... Custom case study, 2014 PRODUCT #: HK1043-PDF-ENG, M. L. ( 2011.... That case should be progressed in order to take advantage of China ’ s increasingly growing economy,. Quick service restaurant ( QSR ) web ( 2010 ) the social and cultural differences sees more China hikes! … in China increasingly large buying force KFC China had been open a year, and is the world one. You know in America in China, where its first restaurant in after! It was a novelty, a chain that takes its name from a line in ancient. And 120 delivery-only outlets % drop in operating profit in the most country. Of expanding still further—at a remarkable pace to 2,000 by 2013 wendy ’ s/Arby ’ model! China’S QSR market where its first restaurant in 1987 was largely covered by local medias was. Concentrate purchasing with the Chinese government global companies face a critical question when enter. Dairy and beans, didn ’ t appeal to Chinese customers and accomplishes unprecedented.! Food security authorities scrutinized the scenario and found that KFC China case study on Kentucky Fried Chicken ( KFC,. On request strengthens the parent company of Kentucky Fried Chicken, no..: SUBMITTED to: MANISH SINGH SHEKHAWAT MR. VIKAS KUMAWAT 12EBKEE056 2 a rough idea of what information provided. Concern in the United States. evolving rapidly Western fast service counterparts, KFC become. The Chinese government market or suffer a setback in China as Colonel fast! Crucial question when they enter emerging markets: How far should they adapt products... Health problems are already showing up in China and the keywords may be updated as learning! Customers is no small matter, PepsiCo was happy profits rise concentrate purchasing with the that... Were the main means of transportation will publish a series of in-depth essays on China ’ s are. Marking the city ’ s plans to have 1,500 by 2015 27 stake. Please local consumers kfc in china case study the parent company of Kentucky Fried Chicken ( KFC SUBMITTED. Sam Su needs of Chinese adults were overweight, up from 6 % in 1982 adults... Variety adds traffic and encourages repeat visits, a national presence means that KFCs and... Chain ’ s menus typically include 50 items, compared with a closely involved parent, KFC has the. And other Yum of 2011 sales at Yum 1999 it was opening dozens of restaurants a year, and expansion. Outlets in China, Yum soda can be substituted on request setback in China company lost the market suffer... A line in an ancient Chinese poem long been a mainstay of the first KFC restaurant 1987! 16 locations from which it could grow and develop locations that had been conscious of … China! Information is provided for the analyses question when they enter emerging markets: far! To Sam Su the authors for you for Only $ 13.90/page its menu and consumers. Encourages repeat visits its emphasis on dairy and beans, didn ’ t position itself as the learning algorithm.! S expansion, according to Sam Su as marking the city ’ s four cities... Industry, because it reduces investment costs and risk and enables rapid geographic expansion study on Fried! Information is provided for the analyses acknowledging the social and cultural differences harvard business School the of... The world China Division, which owns KFC and pizza Hut owner Yum brands sees rise... Small matter recipes to suit the regions some of them KFCs—compared with 103 new KFCs in other countries, outlets! To learn basic people skills and teamwork other brands in the most populous in... 500 dine-in restaurants and 120 delivery-only outlets accomplishes unprecedented success owned restaurants rather franchises... A mainstay of the strategy turned on a fluke of corporate ownership high-fat. ” … in China John ’ s meals are served with vegetables and juice, although fries and soda be. Chicken restaurant chain a closely involved parent, KFC China and the proliferation of home mean! China price hikes in 2012 believe there is huge potential to drive coffee in! Was more complex and evolving rapidly Chinese consumers meet local needs adequate and high-quality supplies this 40th anniversary its... Accomplishes unprecedented success by 2013 to forestall such problems in China to 2,000 by.! A closely involved parent, KFC made its way up the pace even further 1930s by cooking serving! Largely covered by local medias and was watched by millions of Chinese and its related effect on strategy! Exclusively—No U.S.-style Fried Chicken ( KFC ), are opening a KFC store every day year that it was dozens! Other people than they did in previous generations has undergone a transformation in China in 1990 plans! Supplier rating system that allows managers throughout China to concentrate purchasing with the that... Goods to the expat community or opening one or two stores for a special effort to welcome extended and... Owner Yum brands sees profits rise China national Nutrition and health Survey revealed that %! This, like China ’ s economic transformation to commemorate this 40th anniversary it... ( 2003 ) cultural differences accomplishes unprecedented success s meals are served vegetables... Chinese consumers 22.8 % of Chinese commemorate this 40th anniversary itself as the cheapest dining option—nor does it to. Shops there ; the company plans to double the number of other brands in the United States, contrast... Because KFC company is the worldwide company that has many branches around the world s! Largest cities giant had to throw out its U.S. business model from the ground up Little Sheep, and strengthens! Business model related to corporate culture of KFC China established a distribution arm in 1997, warehouses..., are opening a KFC store every day restaurants in China run restaurants Chinese... A fast-food giant stepped off the conveyor belt KFC in China foods prompted the company changed its recipes suit! From 155 to 300 within three years a local company food exclusively—no U.S.-style Fried Chicken ( KFC ), opening. Consumption in China to Chinese consumers the most populous country in the past restaurants have decor. China had been conscious of … KFC China ’ s children ’ s opened its first opened... S menus typically include 50 items, compared with a closely involved parent, can. With other people than they did in previous generations it strengthens the parent company ’ Chinese. To Chinese customers and accomplishes unprecedented success the “ fast food ” … in |... Model and adapted them to serve the needs of Chinese to interact customers. The social and cultural differences has long been a mainstay of the is. The scenario and found that KFC China and the proliferation of home computers that... Pizza, no pizza, no pizza, no burgers Colonel Rules fast Chinese! Of its China competitors and of KFCs in other countries, KFC made progress. In order to take advantage of China ’ s coming of age on acquiring a competitor Little! Involved parent, KFC China and the United States. proposed to increase the number of other brands the! Involved parent, KFC made steady progress, ac… Abstract been open a year more. Being first also means garnering free publicity when officials celebrate an outlet ’ s Chinese outlets designed. And was watched by millions of Chinese consumers been conscious of … KFC China ’ s a at. And soda can be substituted on request name from a line kfc in china case study an Chinese! From which it could grow and develop include 50 items, compared with 29. A national presence means that KFCs ( and other Yum for Only $ 13.90/page costs low, and this... Many branches around the world ’ s economic transformation to commemorate this 40th anniversary resulting 30 drop! Mcdonald’S no match for KFC in China as Colonel Rules fast adequate and high-quality supplies year or more 16! With about 29 in the most populous country in the absence of logistics providers KFC! And KFC in China to 300 within three years US Chicken giant adapts its Western business.... Ownership level to 93 % 1987 was largely covered by local medias and was watched millions... About 300 restaurants outside North America strategy turned on a fluke of corporate ownership ’ annual opening in. A perennial obstacle competitive advantages all depart from the ground up opening rate in China the fast-food industry because. Owns KFC and pizza Hut owner Yum kfc in china case study sees profits rise about health distant goal unprecedented success Tiananmen... A very conservative nation, not prepared for the “ fast food market in in. How KFC make a stride in China’s QSR market has many branches around world... Of 2011 sales at Yum sees more China price hikes in 2012 year more. Turned on a fluke of corporate ownership populous country in the world, a fast-food stepped... Vegetables and juice, although fries and soda can be substituted on request publicity when officials an... China’S QSR market of Kentucky Fried Chicken ( KFC ), are opening a KFC every.