The Success Factors of Kfc in China
Introduction
KFC has become synonymous with foreign fast-food after its entry in China. In 1987, KFC opened the first quick-service restaurant, which is totally a western-style, near Tiananmen Square in the capital of China, Beijing. KFC spread quickly after its first outlet in Beijing. It had the largest number of 11 outlets among the fast-food service restaurants in China in 1992. The number increased to 50 outlets in 1995. By 2001, there were more than 400 KFC outlets, which made KFC became the first international fast food chain to open the largest number of outlets. In 2004, the 1,000th restaurant opened in Beijing. Only six years later, KFC opened the 3,000th outlet in Shanghai. Graph 1: Number of KFC China’s outlets
25 years later, KFC has more than 3,800 stores all over Chinese 800 cities with annual growth of 300 new restaurants. One report (Bell & Shelman, 2011) said that KFC is opening one new outlet a day. The 25-year development of KFC in one of the most diverse countries with the largest population in the world is amazing. Its annual revenue is over $1 million each restaurant and profit margin is about 20 percent. Which is to say that the number of outlets, revenue and market share are all much higher than its competitors.
It is not easy for international restaurants adapted to Chinese market and became so successful. The study of KFC’s strategies and its secret recipe for success is significant. This discussion will try to figure out KFC’s secret strategies which can be absorbed by other international chain restaurants. The following parts are going to discuss the local strategies of KFC, compare the difference between KFC and MacDonald and conclude some general suggestions for international chain restaurants to entry into China.
Literature Review
The review part is going to talk about what KFC China’s local strategies and other persons’ opinions of these strategies. When international food chain restaurants face an emerging market (such as
KFC has become synonymous with foreign fast-food after its entry in China. In 1987, KFC opened the first quick-service restaurant, which is totally a western-style, near Tiananmen Square in the capital of China, Beijing. KFC spread quickly after its first outlet in Beijing. It had the largest number of 11 outlets among the fast-food service restaurants in China in 1992. The number increased to 50 outlets in 1995. By 2001, there were more than 400 KFC outlets, which made KFC became the first international fast food chain to open the largest number of outlets. In 2004, the 1,000th restaurant opened in Beijing. Only six years later, KFC opened the 3,000th outlet in Shanghai. Graph 1: Number of KFC China’s outlets
25 years later, KFC has more than 3,800 stores all over Chinese 800 cities with annual growth of 300 new restaurants. One report (Bell & Shelman, 2011) said that KFC is opening one new outlet a day. The 25-year development of KFC in one of the most diverse countries with the largest population in the world is amazing. Its annual revenue is over $1 million each restaurant and profit margin is about 20 percent. Which is to say that the number of outlets, revenue and market share are all much higher than its competitors.
It is not easy for international restaurants adapted to Chinese market and became so successful. The study of KFC’s strategies and its secret recipe for success is significant. This discussion will try to figure out KFC’s secret strategies which can be absorbed by other international chain restaurants. The following parts are going to discuss the local strategies of KFC, compare the difference between KFC and MacDonald and conclude some general suggestions for international chain restaurants to entry into China.
Literature Review
The review part is going to talk about what KFC China’s local strategies and other persons’ opinions of these strategies. When international food chain restaurants face an emerging market (such as
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