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KFC vs McD Strategic Management
- 1. Jenny, Krystal, Roddy, Sheby STRATEGIC MANAGEMENT
- 2. What is your evaluation of the attractiveness of China as a market for fast food franchises? Large population size. 01 China economic Development 02 Dietary changes 03
- 3. What are the obstacles involved in China Government Role Customer Base and eating habit The Cost factor Cultural Consideration Legal / Business issue
- 4. Should Wendy’s invest in China? • YES.
- 5. Approach of KFC and McDonald’s in China
- 6. Approach of KFC in China • KFC-1987(First mover in China)-Joint Venture KFC brand was the first foreign quick-service restaurant chain to enter China. • Local Ingredients • Chicken was purchased from Beijing Animal Production, and some vegetables were all purchased locally. • Localization of Menu • Large-scale menu localization in 1998, KFC has introduced many Chinese item onto their menu, Such as mushroom rice, tomato and egg soup.
- 7. Approach of KFC in China • B-KFC Recruitment • From the beginning, KFC hired elites from other Asian countries. • Hiring those applicants with high school graduates, could speak some English, did not have previous restaurant work experience, and had a willingness to work hard. • Management Team • The company paid well to hire highly educated and motivated restaurant staff, and used its training system to develop those staff into future restaurant managers. • 80% of China KFC’s district general managers were university graduates, some from top schools.
- 8. Approach of McDonald’s in China • Expansion of KFC • KFC’s expansion route was from east to west, form cities to towns, and blanketed China with wider coverage by linking outlets presence in cities and towns. • “STAR System” • KFC established the system for its Chinas, and supplier who passed the STAR test could also easily achieve national ISO9002 and HACCP certification. • Franchised • In 2000, KFC authorized the first individual franchisee in Changzhou.
- 9. Approach of McDonald’s in China • McDonald’s On 1990, McDonald’s opened its first outlets in China. • Global Supply Chain Partners • McDonald’s with HAVI Food were partners, HAVI Food also established a logistic center exclusively for McDonald’s, and there were three major distribution centers in Beijing, Shanghai, Guangzhou.
- 10. Approach of McDonald’s in China • Standardized Global Menu with Local selection • In order to maintain quality and consistency, McDonald’s imposed standardization in domains- ingredient procurement, food preparation and food quality. • Franchised • McDonald’s has always been a franchising company and franchisees have played a significant role in its success.
- 11. What are the strengths and weaknesses of the McDonald’s model? The KFC model?
- 12. Strengths and Weaknesses of McDonald’s in China • Strengths • Mixes a uniformity menu at every store, with localized food options to suit the tastes of the local consumer. • High quality customer service which directly corresponds to China’s elite class of individuals. • Weaknesses • The price of McDonald’s is still high when compared to some other local Chinese fast-food restaurants in China. • A major ingredient of McDonald’s is the cooked beef patty, the majority of Chinese adults do not like how they taste.
- 13. • Strengths • KFC biggest strength is its core product, chicken in the preferred main dishes running a close second to only pork among Chinese consumers. • Benefit from a localized menu, before introducing any new product into the market they survey customers, and participate in product sampling. • Weaknesses • Food quality related issues; Food quality has always been a major issue for the fast food brands whether it is KFC or McDonalds. Strengths and Weaknesses of KFC in China
- 14. 4. What lessons about International strategy can be draw from this case? Localization is more suitable than globalization that help enterprises to adapt to local culture Make themselves become International’ Local Restaurants Time of settling the first outlet in the market and implemented their strategies Langauge, value and customer behaviors of national culture are main factors to affect the implementation of marketing strategy In the international markets
- 16. Set up their products, services and promotion customized relate to local market. Enterprises should try to integrate into and treat them as an inherent member but not a foreigner to the local culture in the target market. Since consumers reinterpret the brand’s marketing actions according to their cultural backgrounds and lenses, brands’ proximity to local culture will allow them to build better relations with their consumers and to better respond to their needs.
- 17. For the customers, this is a course of interaction, which results in a culture that is neither quite global or homogeneous across countries, nor really a set of different local cultures, but a state of “fragmentation where different cultures coexist. Thus, international companies need to reach a balance to fulfill this new fragmented consumer culture
- 18. Thank you
Notes de l'éditeur
- China has an attraction in this field because they might interested in some facts from cHINA 1) China has large population size about 1.42 billion 2018, Which have 61,29 of the working age population. (15-60). where in this age, they are very busy for school and work and they almost spent all their time outside compared to in the home. 2.) China is classified as an upper middle-income country by the World Bank, and its rapid growth over the decades has pulled hundreds of millions of its citizens out of poverty. With the average of their monthly income is about 7600 Yuan equal to 1.100 usd. 3) People are getting more urbanized and busy, with less time to cook at home. Western fast food is considered more sophisticated and more hygienic than Chinese fast food Moreover, In the opinion of some Chinese, dining at a Western restaurant welcomingly labels you as middle class with money to spend. So even though they are really craving local delicacies, they will choose to spend more money on the fashionable Western option that they don’t even enjoy. Because after all, losing face is a big no-no here. they will go to fast food restaurants to hang out also eat some food there. they usually go there after school or work. So, Fast food has become popular as income levels have risen, people are more in a hurry and working harder and have more money but less time to cook.
- 1) They must know about government policies, local business practices, operational conditions, language, and so on. But nowadays, Many foreign investors choose to establish a Joint Venture with a local partner since it is the fastest means of setting up a business in mainland China. 2) Some failed restaurants forget to really consider their habits and fail to satisfy them with their menu offerings. We can see an example of KFC in China. While KFCs in China serve fried chicken, they also serve a variety of local dishes like egg tarts, congee (rice porridge), and the "Dragon Twister.” 3) determine prices for products, must consider the prices offered by competitors. 4) he language barrier in China will put any foreigner at an overwhelming disadvantage. Even if you have a Chinese partner to assist you with communications, you will always need to rely on translations and could potentially miss out on important discussions and decisions. 5).In legally, if you abide by the law and avoid cutting corners you should be fine. If you have a solid contract and all agreements in writing, you will be adequately protected should any legal battles ensue. And for visa issues it will take more than 3 months to complete the business registration and you won’t be able to apply for a work visa or residence permit before obtaining this https://www.echinacities.com/expat-corner/5-Challenges-to-Opening-a-Restaurant-in-China
- Even though Wendy sells food that is almost the same as McD, but there are differences between them. Wendy’s burgers use square patties which is different from any other fast food restaurant. And despite being most expensive than McDonalds, but their prices are still pretty reasonable. and Wendy's can replicate the strategy carried out by KFC, by releasing a menu of local Chinese food. So if you’re looking for something a bit different than usual, it's possible that the Wendy's shop there won't be as busy as Mcdonald's, which obviously people who like to try new foods will come and try, when Wendy's service is good they are willing to come back.
- oversea-Hong Kong, Taiwan and B-KFC Recruitment some with decade of experience in the QSR industry, and most with a deep understanding of the language, culture, habits and customs of China.
- In past KFC has faced significant criticism over its use of trans fats in the cooking of non-veg items. For the modern customers health is a priority. They are looking for products cooked in safe and hygienic oils without any trans-fats. The fats in its fast food items, still continues to trouble KFC. Since it meals in chicken items mainly, its menu is bond to remain calorie heavy.