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KFC Success in China

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KFC: China

1. Explain how KFC succeeded in China, in terms of context, people, strategy and execution, as outlined by Warren Liu of KFC.

2. How important are adapting to local tastes, use of local management and developing local brands to KFCâ??s continuing success in China?

3. What broad lessons does KFC China offer for firms marketing products and services internationally?

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1. Explain how KFC succeeded in China, in terms of context, people, strategy and execution, as outlined by Warren Liu of KFC.

The marketing strategy of a business depends on the context. The culture, market environment, people diversity, and geography affect the success of the product in a certain locality. China has a rich complex culture and for companies to be successful, they have to acquire a deep understanding of the Chinese market context.

KFC had an effective leadership team, "Taiwan Gang" with pioneering team members who have accumulated lots of experiences in the fast-food industry, were western-educated, and since they were mostly from Taiwan and Asia, they inherently understood China and were able to apply what they have learned to the marketing of their products.

The store's localization strategy has been a key to success. KFC has localized its products and designed them to appeal to the Chinese appetite by integrating their food with flavors, sauces, spices, congee, and more. Its core product offering which is chicken, is the second preferred food by most Chinese. They have also introduced more new products that fit the Chinese market's taste preference. KFC has integrated its localization strategy not only to product development but also to the other aspects of its ...

Solution Summary

781 words; 3 references; responses to 3 questions on how KFC succeeded in China (also attached in pdf file)

See Also This Related BrainMass Solution

MiniCase 15: Yum! Brands

• Yum! Brands is the result of a spin-off by PepsiCo, where it sold its fast-food chains KFC, Taco Bell, and Pizza Hut. Do you consider this spin-off successful? Why or why not? Explain.
o Evaluated the success of the spin-off by looking at the value created since the divestment, and whether PepsiCo is better or worse off as a result.
o Used information in the case and other online research to defend the position taken.

• Why is Yum! Brands so much more successful in China than in the U.S., its home country?
o Used information in the case and other online research to describe specific actions taken by Yum! Brands in China to help establish competitive advantage.
o Identified the type of strategy at Yum! Brands in China, using from Rothaermel Chapter 6 and other course readings.
o Contrasted this strategy with how Yum! Brands competes in the U.S. fast food industry.

• Why was Yum! Brands KFC so successful in China, while other U.S. fast-food companies - such as Pizza Hut (also owned by Yum!), McDonald's, and Burger King - were so much less successful?
o Applied Porter's Five Forces analysis to explain how Yum! Brands' strategy provides sustainable competitive advantage vs. other U.S. fast food companies.
o Used information in the case and other online research.

• Given Yum! Brands recent challenges in China, do you consider this to be a temporary problem, or a harbinger of losing its competitive advantage?
o Applied PESTEL or SWOT analysis to assess the recent immediate challenges described in the MiniCase.
o State whether these are temporary problems that can be ignored, or something that Yum! Brands must address.
o Recommend specific actions that should be taken by Yum! Brands to respond to these threats.

• What recommendations would you give David Novak, Yum! Brands' CEO, to overcome the company's current challenges in China?
o Used PESTEL or SWOT analysis from the previous question determine other threats to long-term competitive advantage in China
o Recommended other actions to defend and sustain competitive advantage, using information provided in Rothaermel Chapters 8 and 9.

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