It also offers congee, a popular rice porridge that is hard to make at home, which is KFC’s number one seller at breakfast. 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. New recruits at KFC often have to learn basic people skills and teamwork. Cross-cultural influences on brand identity impressions: KFC in China and the United States. 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! 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. 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. Yum! 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. Harvard Business Publishing is an affiliate of Harvard Business School. This Case is about MANUFACTURING, MARKETING, STRATEGY, SUPPLY CHAIN. If it’s there for the long haul, it should install local managers whose vision is to build an organization that will last. Brands is opening a KFC store every day. KFC rushed to establish a presence in 16 locations from which it could grow and develop. KFC was a novelty, a taste of America. Witkowski, T. H., Ma, Y., & Zheng, D. (2003). Like every other multinational in China, KFC made its way up the learning curve by trial and error. Show More. Copyright © 2020 Harvard Business School Publishing. In the chain’s early days, when the same recipes were served at all outlets, Shanghai customers complained that dishes were too hot, while diners in Sichuan and Hunan complained that they were too bland. 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. China division execs, Su now CEO. Initially, fast reading without taking notes and underlines should be done. ... We Will Write a Custom Case Study Specifically For You For Only $13.90/page! 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. 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. 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. outlets) are popular with mall developers. One-child families and the proliferation of home computers mean that Chinese children interact less with other people than they did in previous generations. 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! © 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. Spiciness levels are very important to customers. It announced earlier this year that it was considering expansion in 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. 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. By 2010 Yum! 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. 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. I choose KFC Company as the case study because KFC Company is the worldwide company that has many branches around the world. portfolio; it has some 500 dine-in restaurants and 120 delivery-only outlets. 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. D’Altorio, T. (2011). 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. McDonald’s famous golden arches and Yum! Breakfast key to growth of foreign fast food market in China. 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