In an effort to please local consumers, the company reinvented its menu and varied spiciness levels from region to region. Brands could take action to forestall such problems in China. Tray mats carry educational messages. This case study is related to corporate culture of KFC China and its related effect on marketing strategy of the business. Customer case study examples. Brands promotes two Yum! The policy has a few unavoidable exceptions, including certain herbs and spices—for KFC’s “secret” fried chicken recipe—that can’t be obtained in China. 2 pages, 953 words. Brands’ annual opening rate in China surpassed 500 restaurants, most of them KFCs—compared with 103 new KFCs in the United States.) For a hundred years Nestlé’s country managers have been empowered to say no to the head office if a product or a campaign doesn’t suit their locales. 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. has experimented with developing East Dawning, a chain that takes its name from a line in an ancient Chinese poem. 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! 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. Initial reading is to get a rough idea of what information is provided for the analyses. Starvish, M. (2011). In 1987, when the first Chinese KFC opened in Tiananmen Square, Western-style fast-food restaurants were unknown in China. China has some fast food chains. So the company changed its recipes to suit the regions. CASE STUDY ON KENTUCKY FRIED CHICKEN(KFC) SUBMITTED BY: SUBMITTED TO: MANISH SINGH SHEKHAWAT MR. VIKAS KUMAWAT 12EBKEE056 2. Most of all, it is, like China’s economy, dynamic and capable of expanding still further—at a remarkable pace. Taco Bell was similarly positioned by Yum! If it’s there for the long haul, it should install local managers whose vision is to build an organization that will last. 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. KFC established 16 beachheads as a way of quickly expanding throughout the country. 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 company introduces about 50 new products a year (some of them are offered only temporarily), compared with one or two in the U.S. Its executives have what they consider to be a very aggressive program for new product development, which is handled by a committee of managers from marketing, operations, product safety, and the supply chain. 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. To meet this challenge, KFC China established a distribution arm in 1997, building warehouses and running its own fleet of trucks. It also offers congee, a popular rice porridge that is hard to make at home, which is KFC’s number one seller at breakfast. 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. Although customers didn’t like the food much, KFC made steady progress, ac… Free Powerpoint Templates Page 2 3. Kfc In China Case Study. 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. held a 27% stake in Little Sheep, and earlier this year it proposed to increase its ownership level to 93%. KFC China’s menus typically include 50 items, compared with about 29 in the United States. Rather than go head-to-head with the Big Mac, KFC decided to embrace smaller cities and to build a national business with outlets all over the country. Starbucks opened in China in 1999 and has about 450 shops there; the company plans to have 1,500 by 2015. portfolio; it has some 500 dine-in restaurants and 120 delivery-only outlets. 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. Moreover, a national presence means that KFCs (and other Yum! 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. Global companies face a crucial question when they enter emerging markets: How far should they go to localize their offerings? Kentucky Fried Chicken in China (C) case study (referred as “Kfc Fried” for purpose of this article) is a Harvard Business School (HBR) case study covering topics such as Global Business and strategic management. These keywords were added by machine and not by the authors. 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. Typically they try to sell core products or services pretty much as they’ve been sold in Europe or the United States, with headquarters calling all the shots—and usually with disappointing results. The chain has relatively few outlets, and nationwide expansion is still a distant goal. 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 […] A Case Study of KFC’s Cross-cultural Marketing in China 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. 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. Concern in the West over high-fat, high-carbohydrate foods prompted the company to begin changing its menu and educating consumers about health. 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. as an upscale restaurant, but it was shut down in China after a five-year experiment. With all this activity to support, KFC can’t position itself as the cheapest dining option—nor does it want to. It now has the most advanced and integrated cold-chain system in China, with 11 full-service logistics centers and six satellite centers serving every province except Tibet. It was a place where residents with spending money could go for a special occasion. (2011). Scale allows the company to reduce costs, and being the first to enter a city means getting the pick of locations with good foot traffic and visibility. Ever since KFC China opened its first outlet, in Beijing in 1987, the number of foreign-owned chain restaurants has grown steadily in China. The area food security authorities scrutinized the scenario and found that KFC China had been conscious of … 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. Although the problem was resolved quickly, Yum! In China, Yum! This is a preview of subscription content. 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 … How KFC make a stride in China’s QSR 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. In The Dragon’s Cave• KFC China is opening almost one outlet a day. McDonald’s opened its first restaurant in China in 1990 and plans to double the number of outlets there to 2,000 by 2013. 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. The clean, efficiently run restaurants have Chinese decor and serve Chinese food exclusively—no U.S.-style fried chicken, no pizza, no burgers. With a closely involved parent, KFC China might not have been free to pursue its homegrown strategy. This was still a very conservative nation, not prepared for the “Fast Food” … To maintain its current restaurant-opening rate, KFC needs at least 1,000 new managers and 30,000 new crew members a year, and they must be ready the minute an outlet opens, because it is likely to be packed. 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. 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. New recruits at KFC often have to learn basic people skills and teamwork. Mintel (2012). (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.). 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. Being first also means garnering free publicity when officials celebrate an outlet’s opening as marking the city’s coming of age. A Case Study of Kfc’s Cross-Cultural Marketing in China . Brands. In China, Yum! Wang, P. (2011). It is said that case should be read two times. 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. 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. Utilising a different strategy compared to other Western fast service counterparts, KFC has become the largest restaurant company in mainland China. 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. In 1992, after the Chinese government granted foreign companies greater access to markets, KFC China’s managers gradually developed the blueprint that would transform the chain. By 2010 Yum! 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 example Twain’s many was suffering a setback in China. 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. Witkowski, T. H., Ma, Y., & Zheng, D. (2003). Many other companies have followed KFC’s example in customer service (last year McDonald’s announced that it was opening a Hamburger University in China), but KFC’s training program functions exceptionally well, churning out a continual stream of new managers. Breakfast key to growth of foreign fast food market in China. Although customers didn’t like the food much, KFC made steady progress, according to Sam Su, now the chairman and CEO of Yum! In 1987, when the first Chinese KFC opened in Tiananmen Square, Western-style fast-food restaurants were unknown in China. Fast-food culture grows in China. THE RESEARCH APPROACH 2.1 Research objective The research objective of this case study is to find out the potential reasons why KFC achieve greater success over McDonald’s in China market, which is contradictory in most other countries. 1. Many Chinese still wore the tunic suits of the Mao era, and bicycles were the main means of transportation. The kfc case study. The US chicken giant adapts its Western business model in Chinese market through acknowledging the social and cultural differences. Focusing on owned restaurants rather than franchises enabled the company to make changes where necessary to meet local needs. One-child families and the proliferation of home computers mean that Chinese children interact less with other people than they did in previous generations. Filed Under: Research papers Tagged With: Fast-food. 985 Words 4 Pages. KFC rushed to establish a presence in 16 locations from which it could grow and develop. Yum! HBS cases: KFC’s explosive growth in China. 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