Key Success of Kfc

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Fall 2011


Case: KFC in China

In China, Yum! Brands is opening a KFC store every day. But this is not the KFC you know in America. A recent case study written by professor David Bell and Agribusiness Program director Mary Shelman reveals how the chicken giant adapted its famous fast-food formula for the local market. Key concepts include: • In China, KFC's strategy was to be part of the local community, not be seen as a foreign presence. • China division chairman and CEO Sam Su combined the best ideas from the US fast-food model and adapted them to serve the needs of the Chinese consumer. • Only a small number of menu items would be familiar to Western visitors: the Chinese KFC offerings include fried dough sticks, egg tarts, and foods tailored to the tastes of the different regions within China. • To counter concerns about fast food and obesity, Su offered a healthier menu and supports exercise and youth events within the local communities.

"Not only is this the story of a successful entry into China by a Western company, this case provides a glimpse of how quickly Chinese diets are changing as incomes improve. Because China is so big, this has a huge impact on the rest of the global food system. What happens in China, what Chinese people eat, impacts what you and I pay for food."

It turns out that unusual employee interactions, at least in comparison with Western business decorum, are the norm at Yum! Brands. And so the employer-employee relationship has more a feel of family (as are Chinese businesses). "In the United States, if you don't show up at work, what happens? You get fired," says Shelman. "In China, where many of the company's 250,000 employees are college students working their first job, it's like, 'Oh we understand that sometimes you feel like skipping class. If you decide...
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