As Hill (2011) pointed, when pursuing its competing strategy, a multinational company would face two types of pressure that affect their ability to maintain profitability and ensure profit growth, the one is cost reductions and the other locally responsiveness. Intensive cost reduction pressure will rise when companies compete in the industry where products are indifferent and the main competitive weapon for the producers is price. On the other hand, pressure of local responsiveness come from national differences, such as consumer tastes and preferences, which requires companies to provide different products and conduct value adding activities.
Among several strategies for multinational companies, KFC China to a large degree rooted in localization strategy, with relative high pressure in local responsiveness and less in cost reduction. Mainly there are two aspects of reasons towards KFC’s relatively low cost reduction pressure. On one hand, it is impossible that KFC... [continues]
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