KFC's Explosive Growth in China

Kentucky fried Chicken (KFC) has achieved another milestone in delivery. The explosive growth in Asian region most particularly in their current trends in China that KFC fried chicken, burger and fries is gaining its way to superstardom. 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. (Su, 2011) - 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 specific regions within the country. - To counter concerns about fast food and obesity, Su offered a healthier menu and supports exercise and youth events.
The traditional strategy is the involvement of their culture has largely influence the family ties to consider their food. According to Bell (2011) one key issue the case examines is "how to implement the rollout of a fast-food chain involving so many stores across such a vast—and regionally different—country.” (Stravish, 2011) When their customers walked into their restaurant they see Chinese customer service. Chinese food and Chinese employees welcome customers and that’s why it becomes easy for them to initiate interaction.
Su's strategy was that KFC "would not be seen as a foreign presence but as part of the local community “There is no room for ego,” (Su, 2011) "China doesn't have the same culture of individualism that is present in the United States." (Su, 2011) Along with being smart, driven and great entrepreneur, Su hired the right people. For Su, this meant employees who read and spoke the language, who understood the restaurant business and Chinese consumer, and also experience on doing business in the Western way. Trained labor is a very valuable asset even in a land of 1.3 billion-plus people. (Stravish, 2011)
The large conflicting crowd should have one idea about the taste and preference as much as possible they have outperformed the number one fast food chain, which is McDonald. Sam Su also consider diversification of food items so that they can cater to a wider customer range especially those people who are healthy conscious about their body, they offer fat free food and vegetables menu to their customers that attract and re-invent even more heterogeneous customer demand. The wide variety of choices can help the customers to make healthy options and balance diet, their strategy also involve presenting their choices. They have also practice sponsorship and promotion about healthy living in 2010 that has become another successful endeavor on their part that various exercises has been promoted inside the stores and customers are free to join, they have gathered at least 260,000 customer participants in 438 key cities. Their promotion has been very successful that makes their store even more popular. (Starvish, 2011) KFC and China has become a Yum Republic. It is certain that globalization not only helps KFC profits, but it’s international, which benefits China and the consumers. Additionally some of their popular food sisters company includes Taco Bell, Pizza Hut, Long John Silver and A&W All American Food.
I believe globalization happens to be great for the country and the overall market economy because it promotes prosperity to participating countries. All that we need to do is educate people on multiculturalism and diversity within the work place, as well as the sensitivity of culture within participating countries. Opportunity costs, trade terms, balance trades, comparative advantages, changes in consumption and production, and how much cheaper it is to purchase than to produce are some benefits to globalization. The greater interdependence that globalization is causing means an increasingly freer flow of goods, services, money, people, and idea across national borders. (Wild&Wild, 6th ed, pg 6) Su has done a great job on hiring employees that know the language, understand the business and Chinese customers, and also having experience on doing business the Western way. Because of technological changes, continuous development and research, the market economy remains to be dynamic.

Reference:

Starvish. (2011). KFC's Explosive Growth in China. HBS Cases. Retrieved from

http://hbswk.hbs.edu/item/6704.html

Wild&Wild. International business: the challenges of globalization/ John J. Wild,

Kenneth L. Wild- 6th ed.