Case Study

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Case Study 1: KFC and McDonald’s in Shanghai)
Question 1:
Who is running the more successful business in Shanghai: KFC or McDonald’s? Why? KFC is running the more successful business in Shanghai. The reasons are as follows: 1. In 2002, Shanghai KFC ranked first among China’s 500 catering companies with an annual turnover of 804 million yuan. (see Exhibit 2) 2. According to a survey published in IMI Consumer Behaviors and Life Patterns Yearbook 2002, the five most popular western fast-food brands were KFC (81.5%), McDonald’s (67.6%)...(see Appendix Exhibits A-G) 3. According to the study, KFC appeared to have the upper hand over McDonald’s in terms of the rate of introducing new products. The Shanghai survey showed that more consumers reported they had tried KFC’s new products (see Exhibit 3) 4. Customer Volumes: On weekdays, the average daily customer volumes for KFC and McDonald’s were 3549 and 2191 respectively. On weekends, these figures rose to 4266 at KFC and 3749 at McDonald’s. (See Exhibits 15 and 16) Question 2:

What is the appeal of KFC and McDonald’s for different segments of the market? Why? No.| Market Segment| Appeals of KFC and McDonald’s|
1| Under 18 years old, children| Taste; new products; new toys; safety playing facility.| 2| 18-30 years, young adults| Nice environment, music; quick meal served.| 3| 35-55 years, middle-aged group| High hygiene standard; standards and measures to ensure that the preparation of food was properly carried out.| 4| Over 55 years, senior customers| Nice environment; entertainment facilities for children.| Question 3:

What actions should the management of KFC and McDonald’s be taking for their respective companies’ future in Shanghai? In particular, what strategies should be adopted in relation to older consumers and expanding the demand for breakfast? 1. KFC and McDonald’s should continue developing products and offering 24-hour service. 2. KFC and McDonald’s can make...
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