Kentucky Fried Chicken (Kfc) And Mcdonald’S In Shanghai Essay
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KENTUCKY FRIED CHICKEN (KFC) AND MCDONALD’S IN SHANGHAI
CASE ANALYSIS STUDY QUESTIONS
1. Who is running the more successful business in Shanghai – KFC or McDonald’s? Why?
There is no doubt that China has become the highest-growth market of Kentucky Fried Chicken. Seventeen years after opening the first KFC outlet in China, KFC has celebrated its 1000th restaurant milestone in Beijing on January 16, 2004. As the Yum! Brands, Inc., the parent company of KFC, states in the 2003 annual customer mania report , "China continues to be our Rising Star, driving double digit sales growth for the fifth consecutive year and record operating profit up over 42% in 2003." The number is the best annotation for the announcement in the year of 2003 China has accounted for $157 million in KFC's operating profit.
The prominent success of KFC in China's market can be attributed to its franchise policy and scientific managerial operations, well known as CHAMPS, which measures operational basics like Cleanliness, Hospitality, Accuracy, Maintenance, Product Quality and Speed. Moreover, the accomplishments are the reward towards KFC's comprehensive understanding of Chinese culture and its excellent localization strategies specifically manipulated to meet the characteristic requirements of the estimated 450 million urban Chinese consumers.
KFC appeared to have upper hand over McDonald’s in terms of the rate of introducing new products. Most of the KFC’c new products developed to suit the Chinese tastebuds such as breakfast items based on both Chinese and Western cuisines, Mexican chicken rolls, spicy double layer hamburgers, and New Orlean wings. In addition, KFC had been introducing new products every two to three months, considered as high frequency to attract customer’s interest and stimulate consumption. In contrast, McDonald’s new