Kentucky
Fried Chicken (KFC), is the world’s second-large fast food chain following
McDonald’s. KFC specializes in fried chicken and is a successful brand of its
parent company, Yum! Brands [1]. Serving fresh fried chicken to consumers, KFC
now has more than 750,000 employees and more than 18,000 restaurants around the
globe in 120 countries [2]. Although McDonald’s has a stronger presence in the
global fast food market, KFC is more dominant in China. KFC China has more than
250,000 employees with about 40% of the market share while McDonald’s has only
16% market share and fewer outlets [3]. The reason is that KFC has an excellent
strategy implementation for the Chinese market and the company tailors the
products based on local demand. However, I think KFC makes too much effort on
localization.
KFC opened
its first restaurant in China in Tiananmen Square in 1987. The executives of
KFC China believed that KFC’s strategy in the U.S. market is good but not
enough to bring the company the level of success they want in China. So, the
company implemented a series of strategy to embrace the Chinese market.
First, the
fast food giant keeps adding Chinese elements to its brand image. KFC China’s
rapidly changing menu usually includes 50 items, while the U.S. menu typically
consists of 29 items. Besides the signature dishes, KFC China keeps launching
new products for a limited time frame. Many of their new products have strong
Chinese characteristics. For instance, KFC China not only offers coffee for
breakfast but also offers hot soy milk and fried bread stick with competitive
price. For the lunch and dinner menu, a customer can have Chinese style taco,
and rice served with fried chicken and sauce. Although the new products might
not be as popular as the signature fried chicken, the variety does attract customers
like students and young “white collars.”
Second,
KFC China trains employees well. Because
of the more complex menu, the larger restaurants around the country, and the
large Chinese population, KFC has to hire more employees at each store. All of
the employees are well trained so that they are very efficient at the peak
hours. After finishing ordering at the counter, a customer usually will not
wait for more than three minutes to pick up the food. The high efficiency makes
KFC a popular lunch choice for people who are busy.
However,
the localization strategy also has some negative impact. To me, the KFC menu is
changing too fast. They not only update the menu with new products but also
change the prices of combo meals and the rules for combining foods as a combo.
Almost for every year when I go back to China, I have to learn how to order
with their new menu. The company also reduced the sizes of burger and fried
chicken to promote its “new fast food” and “healthy living” concepts. But with
the less amount of food per serving, the price is continually increasing over
time. It disappoints customer constantly. Maybe KFC should invest more in
R&D to cut cost instead of shrinking the food size again and again.
[3]
https://hbr.org/2011/11/kfcs-radical-approach-to-china
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