Kfc Globalization
Among the last two decades of entering, KFC, shorten from Kentucky Fried Chicken, a once lack-luster American fast food brand, outperformed all other competitors and rapidly became the biggest restaurant chain in China. No matter considering the number of restaurants, profit or market shares, KFC dominants the Chinese food market with 2200 branches over China and a speed of 300 new branches annually, unmatched by its arch rival and world market leader McDonald (John, 2008). The successful expansion of KFC China has been one of the mysteries of modern marketing. The success of a company always results from its choice of strategy with regard to low cost and value creation and its ability to configure the internal operations to strategic emphasis (Hill, 2011). This essay will first focus on the main competitive strategy KFC chooses and why it is chosen, and then analyze the architecture choose of KFC China in four aspects and lastly discuss the key functional strategy implemented in KFC China.
As Hill (2011) pointed, when pursuing its competing strategy, a multinational company would face two types of pressure that affect their ability to maintain profitability and ensure profit growth, the one is cost reductions and the other locally responsiveness. Intensive cost reduction pressure will rise when companies compete in the industry where products are indifferent and the main competitive weapon for the producers is price. On the other hand, pressure of local responsiveness come from national differences, such as consumer tastes and preferences, which requires companies to provide different products and conduct value adding activities.
Among several strategies for multinational companies, KFC China to a large degree rooted in localization strategy, with relative high pressure in local responsiveness and less in cost reduction. Mainly there are two aspects of reasons towards KFC’s relatively low cost reduction pressure. On one hand, it is impossible that KFC compete
As Hill (2011) pointed, when pursuing its competing strategy, a multinational company would face two types of pressure that affect their ability to maintain profitability and ensure profit growth, the one is cost reductions and the other locally responsiveness. Intensive cost reduction pressure will rise when companies compete in the industry where products are indifferent and the main competitive weapon for the producers is price. On the other hand, pressure of local responsiveness come from national differences, such as consumer tastes and preferences, which requires companies to provide different products and conduct value adding activities.
Among several strategies for multinational companies, KFC China to a large degree rooted in localization strategy, with relative high pressure in local responsiveness and less in cost reduction. Mainly there are two aspects of reasons towards KFC’s relatively low cost reduction pressure. On one hand, it is impossible that KFC compete
References: David. E. B. and Mary. L. S., “KFC 's Radical Approach to China,” Harvard Business Review, November, 2011 http://hbr.org/2011/11/kfcs-radical-approach-to-china/ar/1 David. N., Michael.T. and Mark. B. N, “Competing by design: the power of organizational architecture,” Oxford University Press, July 10, 1997, p.7. Hill, “International Business: competing in the global marketplace,” 8th, McGraw-Hill, 2011. James. L. W. and Melissa. L. C., “The cultural politics of food and eating”, Blackwell, 2005, p. 169. John S., “KFC - 'a foreign brand with Chinese characteristics ',” September 22, 2008. http://www.china.org.cn/business/2008-09/22/content_16515747.htm Karen Maryann. H. A., “International HRM: managing diversity in the workplace” Blackwell, 2001, p. 303-306 Uday