This is our analysis by comparing KFC and McD in their Strategic Management. We are group study in Strategic Management class Group member are: Jenny, Krysta, Roddy, and Sheby IMBA CLASS. National Kaohsiung University of Science and Technology.

1. Jenny, Krystal, Roddy, Sheby
STRATEGIC MANAGEMENT

2. What is your evaluation of the attractiveness of
China as a market for fast food franchises?
Large population
size.
01
China economic
Development
02
Dietary changes
03

3. What are the obstacles involved in China
Government
Role
Customer
Base and
eating habit
The Cost
factor
Cultural
Consideration
Legal /
Business
issue

4. Should Wendy’s
invest in China?
• YES.

5. Approach of KFC and
McDonald’s in China

6. Approach of KFC in China
• KFC-1987(First mover in China)-Joint Venture
KFC brand was the first foreign quick-service restaurant chain to enter China.
• Local Ingredients
• Chicken was purchased from Beijing Animal Production, and some vegetables
were all purchased locally.
• Localization of Menu
• Large-scale menu localization in 1998, KFC has introduced many Chinese item
onto their menu, Such as mushroom rice, tomato and egg soup.

7. Approach of KFC in China
• B-KFC Recruitment
• From the beginning, KFC hired elites from other Asian countries.
• Hiring those applicants with high school graduates, could speak some English,
did not have previous restaurant work experience, and had a willingness to
work hard.
• Management Team
• The company paid well to hire highly educated and motivated restaurant staff,
and used its training system to develop those staff into future restaurant
managers.
• 80% of China KFC’s district general managers were university graduates, some
from top schools.

8. Approach of McDonald’s in China
• Expansion of KFC
• KFC’s expansion route was from east to west, form cities to towns, and
blanketed China with wider coverage by linking outlets presence in cities and
towns.
• “STAR System”
• KFC established the system for its Chinas, and supplier who passed the STAR
test could also easily achieve national ISO9002 and HACCP certification.
• Franchised
• In 2000, KFC authorized the first individual franchisee in Changzhou.

9. Approach of McDonald’s in China
• McDonald’s
On 1990, McDonald’s opened its first outlets in China.
• Global Supply Chain Partners
• McDonald’s with HAVI Food were partners, HAVI Food also established a
logistic center exclusively for McDonald’s, and there were three major
distribution centers in Beijing, Shanghai, Guangzhou.

10. Approach of McDonald’s in China
• Standardized Global Menu with Local selection
• In order to maintain quality and consistency, McDonald’s imposed
standardization in domains- ingredient procurement, food preparation and
food quality.
• Franchised
• McDonald’s has always been a franchising company and franchisees have
played a significant role in its success.

11. What are the strengths and weaknesses of the
McDonald’s model? The KFC model?

12. Strengths and Weaknesses of McDonald’s in China
• Strengths
• Mixes a uniformity menu at every store, with localized food
options to suit the tastes of the local consumer.
• High quality customer service which directly corresponds to
China’s elite class of individuals.
• Weaknesses
• The price of McDonald’s is still high when compared to some other
local Chinese fast-food restaurants in China.
• A major ingredient of McDonald’s is the cooked beef patty, the
majority of Chinese adults do not like how they taste.

13. • Strengths
• KFC biggest strength is its core product, chicken in the preferred
main dishes running a close second to only pork among Chinese
consumers.
• Benefit from a localized menu, before introducing any new product
into the market they survey customers, and participate in product
sampling.
• Weaknesses
• Food quality related issues; Food quality has always been a major
issue for the fast food brands whether it is KFC or McDonalds.
Strengths and Weaknesses of KFC in China

14. 4. What lessons about International
strategy can be draw from this case?
 Localization is more suitable than globalization that help enterprises to adapt to local
culture
 Make themselves become International’ Local Restaurants
 Time of settling the first outlet in the market and implemented their strategies
 Langauge, value and customer behaviors of national culture are main factors to affect
the implementation of marketing strategy In the international markets

16. Set up their products, services and promotion customized relate to local
market.
 Enterprises should try to integrate into and treat them as an inherent
member but not a foreigner to the local culture in the target market.
Since consumers reinterpret the brand’s marketing actions according to
their cultural backgrounds and lenses, brands’ proximity to local culture
will allow them to build better relations with their consumers and to
better respond to their needs.

17. For the customers, this is a course of interaction, which results in a
culture that is neither quite global or homogeneous across countries,
nor really a set of different local cultures, but a state of
“fragmentation where different cultures coexist.
Thus, international companies need to reach a balance to fulfill this
new fragmented consumer culture

18. Thank you