KFC Expanding Globally By: Austin Katsnelson

KFC One of the most popular fast-food restaurants in the nation Owned by Yum! Brands in China Significant market share growth outside of the U.S. Open first Beijing store in 1987 KFC has grown to over 3,800 location in 800 cities Opening a new restaurant a day, with the intention of reaching 15,000 outlets

Why KFC Expanded? To gain access to new customers To achieve lower cost and enhance the firm’s competitiveness To capitalize on its Core Competencies To spread its Business Risk across a wide spread market

Go Global, Act Local Go Global, Act local market strategy Understanding the local cultural, economic and regulatory differences in China Identified likes and dislikes at the cultural level KFC hired managers who speak the local language, understand Chinese restaurants Followed Chinese strict foreign investment laws

Identifying Likes and Dislikes Serves food that appeals to Chinese tastes, items you wont find on an American KFC menu Chicken with Sichuan spicy sauce, rice, egg tarts, and soybean milk It is part of Chinese culture to eat in groups, so KFC offers larger dishes for sharing

Changes KFC made KFC hired managers that read and spoke the local language Understood the Chinese consumer and restaurant trade Understood the Western way of doing business as well as Chinese way KFC carefully followed Chinese strict foreign investment laws Entered into Joint Ventures with local producers, different than the U.S. approach

Franchising Strategy Used for global expansion with the efforts of service and retailing enterprise Benefits: Less cost incurred as compared to licensing Franchiser just has to expend only the resources to recruit, train, and support franchises Used goodwill No compromise on product quality

Multi-Country Strategy Is one which varies from country to country according to the taste and preferences of the people Differences in: Culture Economic Political Demography Social Values Competitive conditions in different countries

Conclusion Although Chinese market often represents a huge risk for many foreign companies, KFC’s “Go Global, Act Local” market penetration strategy created and filled an untapped marketplace by identifying and prioritizing cultural, business and regulatory sensitivity. Since opening its first store in Beijing in 1987, the KFC has grown to over 3,800 locations in 800 cities. KFC China offers important lessons for global executives who seek to determine how much of an existing business model is worth keeping in emerging markets and how much should be thrown away.

Sources recipe-in-china-go-global-act-local/?Itemid=2 recipe-in-china-go-global-act-local/?Itemid=2 amp-the-global-fast-food amp-the-global-fast-food