KFC’s success in China By Sakina Mohammed

Key Highlights KFC – largest restaurant chain in China with 4500 outlets in 900 cities 40% share of the Chinese fast food market McDonald’s market share is 16%, with only about 2000 outlets.

Timeline 1973 – KFC opens 11 outlets HongKong 1983 – KFC unsuccessfully ventures into Taiwan PepsiCo acquires KFC First restaurant opened in Tiananmen Square Sam Su joins KFC China as Regional Marketing Director Spun off by PepsiCo as Tricon Global Restaurants, Inc 1997 – Sam Su becomes president of China Division Tricon changes it’s name to YUM Brands Sam Su became CEO and chairman of YUM Restaurants, China

Strategies For Success in the Chinese Market Menu Restaurant Layout Training Locations and Logistics

Menu Expanded menu to suit the Chinese palate 50 new products introduced each year Recipes adapted to suit regional tastes

Restaurant Design Twice the size of US outlets Larger kitchens Family-oriented ambiance

Training Intensive hands-on training program for new employees Focus on safe food-handling practices and customer service

Location and Logistics Focus on smaller cities for greater visibility Established distribution network with warehouses and fleet of trucks Temporary warehouses and reserved space on cargo planes for weather emergencies Most ingredients purchased locally Strong supplier relationships

Comparison of KFC US and China Operations China Sales up 16% Profit Margin – 22% 50 menu items Family style dining Company-owned United States Sales down 2% Profit Margin 11% 29 menu items Take-out focused Franchised

Bibliography Bell, D. & Shelman, M.L (2011). KFC’s Radical Approach to China. Harvard Business Review. Retrieved from KFC’s Winning Recipe in China: “Go Global, Act Local” Retrieved from Yum! Senior Officers. Yum! Brands. Retrieved from Mellor, William (2011). McDonald’s No Match for KFC in China as Colonel Rules Fast Food. Bloomberg. Retrieved from rules-fast-food.html