KFC's Explosive Growth in China Adam Burlison & David Meigs

Yum! Brands 40% market share of fast-food chains, McDonalds‘ 16% 2011 in China – 500 Pizza Huts in 120 cities – 3,000 KFC in 650 cities 2012 in China – 630 Pizza Huts in 120 – 3,700 KFC in 700 cities – Leading retail developer in China with nearly 4,500 restaurants in more than 700 cities.

KFC KFC first opened in Beijing, China in 1987 KFC was owned by PepsiCo while entering China – PepsiCo allowed China KFC Division Chairman and CEO Sam Su managerial freedom

KFC CEO Sam Su’s success: – Understood they were an American business model operating in China – Cultures are different than one another Chinese are far less individualistic – Intended KFC to be part of the local community KFC China procures most its products from within China Altered menu selection in various regions due to specific tastes

KFC CEO Sam Su’s success: (cont.) – Value trained labor and loyalty Friendly employer/employee relationship Encourage college educations for employees – Handling health concerns Created healthier menu Support exercise and youth events

Questions? Why do you think KFC is out-competing McDonalds in China? If you were attempting to enter the Chinese market, what lessons from Sam Su would you adopt or do differently?

Sources /mcdonald-s-no-match-for-kfc-in-china- where-colonel-sanders-rules-fast-food.htm 26/mcdonald-s-no-match-for-kfc-in-china- where-colonel-sanders-rules-fast-food.htm