Successful Factors of Little Sheep in China

Topics: Franchising, Brand, Yum! Brands Pages: 2 (642 words) Published: July 20, 2011
Little Sheep, the China's leading hot pot chain, operates about 480 restaurants in China, Japan and even in North America nowadays. The success of the business and its rapid growth in the past decade can be contributed by 3 factors: (1) strong desire for achievement of the founder, Zhang Gang; (2) economic reform programs launched in China since 1980s causing the significant increase in GDP per capital; (3) partnership with 3i in order to strengthen its industry expertise and management team. The assigned readings intellectually support my interpretation on the company’s success. Zhang’s first job was a worker in a stated-owned factory. With his strong desire to achieve and willingness to take risks, he made a move to invest on clothes retailing and later entered the cell phone market. Given his success in cell phone business in Inner Mongolia, he would never settle. Stepping in catering industry as a hobby, Zhang shown his passion and determination in giving the best food, a naturally flavored soup base, to his customers. Zhang demonstrated his persistence through the 7-year trademark battle with government body in protecting the brand value from replicating his business model by anyone. In fact, Little Sheep did not always run smoothly without a hitch. Owing to its rapid expansion by an aggressive franchise strategy in 2002, public as well as the media started claiming its substandard quality and service in certain stores which hurt the brand image badly. Under the severe circumstance, Zhang never gave in. Instead, he sustained his business by putting effort in monitoring the performance of existing franchisees and seeking for new partnership opportunities to further expand his business. As a matter of fact, the business grew with the flow of the boosting economy in China. With the economic reform since 1980s, the GDP kept increasing in China. Inner Mongolia also benefited from it and became one of the wealthiest regions in terms of GDP per capital in...
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