kfc case study
KFC Case Study
Introduction
If one international brand must be selected as the most favourite one for Chinese consumers, it would be Kentucky Fried Chicken, or KFC as it is known more commonly. According to questionnaire survey conducted by the globally-renowned marketing researching company AC Nielsen in 30 China cities in 1999, KFC was accepted by Chinese consumers as “the most popular brand” and ranked as the No.1 among top ten international brands in China. With the increasing abundance of managerial experience, the expanding number of staffs and the gradually impeccable management system, KFC accelerates its velocity of development since entering the Chinese market in 1987. Up to now, there are over 3,200 outlets in more than 700 cities across China and the number keeps growing rapidly, which makes China the largest overseas market of KFC. It cannot be denied that KFC has achieved great success in China and the prosperity cannot be separated from its effective international business development roadmap for the Chinese market.
Mode of Entry
In the late 1980’s and early 1990’s when KFC entered China joint ventures were the only viable option for mode of entry due to government regulation. Initially KFC China formed joint ventures with local partners chosen by the government. The first joint venture was with the Government Poultry Department but this faced problems.
Afterwards, KFC successfully partnered with the Tourist Department to form a joint venture because they had sufficient funds. This model was successfully replicated with many local partners across China. It effectively leveraged the tangible and intangible local resources of the joint venture partners, over time transferring them to KFC.
Once joint ventures were no longer required by the government in the mid 1990’s KFC began buying out its partners and refrained from entering into new joint ventures. This gave KFC control and avoided disagreements commonly associated with
Introduction
If one international brand must be selected as the most favourite one for Chinese consumers, it would be Kentucky Fried Chicken, or KFC as it is known more commonly. According to questionnaire survey conducted by the globally-renowned marketing researching company AC Nielsen in 30 China cities in 1999, KFC was accepted by Chinese consumers as “the most popular brand” and ranked as the No.1 among top ten international brands in China. With the increasing abundance of managerial experience, the expanding number of staffs and the gradually impeccable management system, KFC accelerates its velocity of development since entering the Chinese market in 1987. Up to now, there are over 3,200 outlets in more than 700 cities across China and the number keeps growing rapidly, which makes China the largest overseas market of KFC. It cannot be denied that KFC has achieved great success in China and the prosperity cannot be separated from its effective international business development roadmap for the Chinese market.
Mode of Entry
In the late 1980’s and early 1990’s when KFC entered China joint ventures were the only viable option for mode of entry due to government regulation. Initially KFC China formed joint ventures with local partners chosen by the government. The first joint venture was with the Government Poultry Department but this faced problems.
Afterwards, KFC successfully partnered with the Tourist Department to form a joint venture because they had sufficient funds. This model was successfully replicated with many local partners across China. It effectively leveraged the tangible and intangible local resources of the joint venture partners, over time transferring them to KFC.
Once joint ventures were no longer required by the government in the mid 1990’s KFC began buying out its partners and refrained from entering into new joint ventures. This gave KFC control and avoided disagreements commonly associated with