KFC strategy in china

docx

School

Centennial College *

*We aren’t endorsed by this school

Course

333

Subject

Marketing

Date

Jan 9, 2024

Type

docx

Pages

Uploaded by CountApePerson979

As of my last knowledge update in January 2022, McDonald's and KFC are two prominent international fast-food chains that entered the Chinese market in the early 1990s. Please note that specific details about their contractual strategies may have evolved since then, and I recommend checking more recent sources for the latest information. McDonald's in China: Contractual Strategy: McDonald's initially adopted a direct investment strategy when entering the Chinese market. In 1990, it opened its first restaurant in Shenzhen, marking the beginning of its expansion in China. The company focused on wholly-owned subsidiaries, maintaining tight control over operations, quality standards, and brand consistency. This approach reflected McDonald's global strategy of standardization. Initial Challenges and Adaptation: However, McDonald's faced significant challenges in the Chinese market. The company struggled to fully understand local consumer preferences and adapt its menu to suit Chinese tastes. Additionally, the fast-food model of McDonald's clashed with Chinese dining habits, where communal meals and a preference for freshly cooked food were prevalent. The initial failure of McDonald's in China was partly attributed to its inability to resonate with local consumers. The company experienced setbacks, closures, and financial losses, prompting a reevaluation of its strategies. KFC in China: Contractual Strategy: KFC, on the other hand, adopted a franchise model in China. In 1987, KFC opened its first outlet in Beijing through a joint venture with a local partner, Beijing Tourism Corporation. This approach allowed KFC to leverage the local partner's knowledge of the market, understanding of consumer preferences, and familiarity with the regulatory environment. Success Factors: KFC's franchising strategy played a crucial role in its success in China. The joint venture model enabled quicker adaptation to local tastes and preferences, as the local partner had a deeper understanding of the Chinese consumer landscape. KFC also demonstrated flexibility in its menu, introducing items that catered to Chinese culinary preferences, such as rice-based products and localized flavors. Moreover, the franchise model allowed KFC to expand rapidly across the country, leveraging the local partner's existing infrastructure and knowledge of the market. Comparison: Contractual Strategies and Market Performance: The different contractual strategies pursued by McDonald's and KFC in China reflect their contrasting approaches to market entry and adaptation. McDonald's initial failure was partly attributed to its standardized approach, while KFC's success was attributed to its flexible and localized franchising strategy.

Adaptability and Localization: KFC's franchise model allowed for a quicker and more effective localization of its offerings. The company was able to adapt to the preferences of Chinese consumers, offering a menu that blended international appeal with local flavors. This adaptability played a crucial role in KFC's widespread acceptance and success in China. Conclusion: In conclusion, the initial failure of McDonald's in China can be attributed, in part, to its standardized approach and direct investment strategy. KFC's success, on the other hand, was influenced by its franchising model, which facilitated adaptability and localization. While contractual strategy is just one factor among many that contributed to the performance of these fast-food giants in China, it underscores the importance of understanding and adapting to local market dynamics for international businesses.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

Write-up 5.docx

Write-up 4.docx

SAD Project- Angelique Johnson.docx

Global Marketing Factors.docx

W10_SWOT-Analysis_Final.docx

MKTG716MarketingAuditWorksheetSummer2023v2.docx

Marketing - Chapter 10.pdf

Part_1_wkst Kayla E Kirk.docx

Marketing Plan_updload.docx

BUS 360 Exam #1 Notes.docx

Prep Quiz 16.pdf

Danimal.docx

Recommended textbooks for you

Principles of Management

Management

ISBN:9780998625768

Author:OpenStax

Publisher:OpenStax College

Foundations of Business (MindTap Course List)

Marketing

ISBN:9781337386920

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:Cengage Learning

Foundations of Business - Standalone book (MindTa...

Marketing

ISBN:9781285193946

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:Cengage Learning

SEE MORE TEXTBOOKS

Recommended textbooks for you

Principles of Management
Management
ISBN:9780998625768
Author:OpenStax
Publisher:OpenStax College
Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...
Marketing
ISBN:9781285193946
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning