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. (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.). 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. Perhaps the greatest tribute to the strategy is that many consumers around the world believe Nestlé is a local company. McDonald’s famous golden arches and Yum! KFC rushed to establish a presence in 16 locations from which it could grow and develop. 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. 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. 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. Buying locally is essential to keeping costs low, and it strengthens the parent company’s relationship with the Chinese government. Taco Bell was similarly positioned by Yum! It also offers congee, a popular rice porridge that is hard to make at home, which is KFC’s number one seller at breakfast. Owning the restaurants allows the company to closely control every aspect of their operation, from menu to decor, and to monitor results and the success of new products. Although customers didn’t like the food much, KFC made steady progress, according to Sam Su, now the chairman and CEO of 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. 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. KFC China’s five competitive advantages all depart from the U.S. model. 1284 Words | 6 Pages. McDonald’s opened its first restaurant in China in 1990 and plans to double the number of outlets there to 2,000 by 2013. For example Twain’s many was suffering a setback in China. Brands, the parent company of Kentucky Fried Chicken (KFC), are opening a KFC store every day. Asia delivers for McDonald’s. The opening of the first KFC restaurant in 1987 was largely covered by local medias and was watched by millions of Chinese. KFC China’s executives believed that the company’s U.S. model, although good enough to do moderately well in the largest Chinese cities, wouldn’t lead to the level of success the company sought. 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. Harvard Business Publishing is an affiliate of Harvard Business School. Utilising a different strategy compared to other Western fast service counterparts, KFC has become the largest restaurant company in mainland China. Abstract. The kfc case study. CASE STUDY ON KENTUCKY FRIED CHICKEN(KFC) SUBMITTED BY: SUBMITTED TO: MANISH SINGH SHEKHAWAT MR. VIKAS KUMAWAT 12EBKEE056 2. 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. Founded by Colonel Harland Sanders in in the early 1930s by cooking & serving food for hungry travelers. as an upscale restaurant, but it was shut down in China after a five-year experiment. This, like the company’s extensive logistics network, is an advantage that is difficult for any competitor to emulate. If it’s there for the long haul, it should install local managers whose vision is to build an organization that will last. China has some fast food chains. Harvard Business School. Not affiliated Global companies face a crucial question when they enter emerging markets: How far should they go to localize their offerings? KFC’s approach may not apply across the board, but it suggests a mind-set that can position multinationals to win in emerging markets. Like every other multinational in China, KFC made its way up the learning curve by trial and error. Focusing on owned restaurants rather than franchises enabled the company to make changes where necessary to meet local needs. Across the company, from logistics to food preparation to customer service, employees require extensive training, and experienced managers must be constantly developed as the company grows and changes. 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. order now. portfolio; it has some 500 dine-in restaurants and 120 delivery-only outlets. In the absence of logistics providers, KFC China created a distribution system to ensure adequate and high-quality supplies. Brands, the parent company of Kentucky Fried Chicken (KFC), are opening a KFC store every day. Bell, D. E., & Shelman, M. L. (2011). 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. 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. They made a special effort to welcome extended families and groups. Franchising has long been a mainstay of the fast-food industry, because it reduces investment costs and risk and enables rapid geographic expansion. Global companies face a critical question when they enter emerging markets: How far should they go to localize their offerings? Some Western health problems are already showing up in China. In 1987, when the first Chinese KFC opened in Tiananmen Square, Western-style fast-food restaurants were unknown in China. Wendy’s/Arby’s has only about 300 restaurants outside North America. Customer case study examples. In China, Yum! > 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.” 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. Kentucky Fried Chicken (KFC) The first KFC was opened in Tiananmen Square, China 1987; it struggled as western food was unknown to the east. held a 27% stake in Little Sheep, and earlier this year it proposed to increase its ownership level to 93%. Brands is opening a KFC store every day. 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. China division execs, Su now CEO. Cite as. 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 In China Case Study. In The Dragon’s Cave• KFC China is opening almost one outlet a day. 1. Burger King has about three dozen restaurants in China, where its first outlet opened in 2005. 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. Ever since KFC China opened its first outlet, in Beijing in 1987, the number of foreign-owned chain restaurants has grown steadily in China. HBS cases: KFC’s explosive growth in China. Kfc Case Study China The US chicken giant adapts its Western business model in Chinese market through acknowledging the social and cultural differences. McDonald’s no match for KFC in China as Colonel Rules Fast. 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. Rice on the menu at Shanghai KFC. Teaching employees how to interact with customers is no small matter. In fact, it is the limiting factor in the chain’s expansion, according to Sam Su. 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. Therefore, I can research different cultures from KFC’s branches and make an analysis of potential problems and challenges related to the case. Kfc Case Study China - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. But in the most populous country in the world, a fast-food giant stepped off the conveyor belt Many Chinese still wore the tunic suits of the Mao era, and bicycles were the main means of transportation. In China, Yum! 1863 Words 8 Pages. Wang, P. (2011). 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. Should they adapt existing products just enough to appeal to consumers in those markets? 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. 3 billion (Li 2004), the China presents an increasingly large buying force. (In 2008 Yum! pp 17-23 | 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. 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. But KFC China’s model was more complex and evolving rapidly. To meet this challenge, KFC China established a distribution arm in 1997, building warehouses and running its own fleet of trucks. KFC was a novelty, a taste of America. Yum! Two men’s race: McDonalds and KFC in China. Mellor, W. (2011). Execution of the strategy turned on a fluke of corporate ownership. KFC was a novelty, a taste of America. Wang, P. (2011). With KFC as its flagship chain, Yum! 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. Jargon, J. A Case Study of Kfc’s Cross-Cultural Marketing in China . Most of all, it is, like China’s economy, dynamic and capable of expanding still further—at a remarkable pace. Authorities scrutinized the scenario and found that KFC China case study support, KFC created. The 2002 China national Nutrition and health Survey revealed that 22.8 % Chinese. Relatively few outlets, and bicycles were the main means of transportation restaurant, it! Localization have been free to pursue its homegrown strategy information is provided for the fast. 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