For the other reason, being the biggest restaurant chain in China, KFC enjoys advantages in scale economy, which minimize its cost in office rent and supply chain (Warren, 2008). KFC is very much decentralized in its operation, their franchises and joint ventures have a good deal of latitude in the way the conduct their business (James and Melissa, 2005). Without a third party and a series of useless automated facilities, KFC China’s distribution and logistics system saved a lot of time and reduce the cost pressure (ibid, 2011). L. W. and Melissa. 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. Principle objective of this assignment is to analysis Overall Marketing Strategies of KFC (Kentucky Fried Chicken). In addition to localized supply, KFC also initiated a program to consolidate suppliers. 2011). Global Health They have served over 68 million customers daily (Burger Business, 2012). On the other hand, for the same reason, KFC has low need for a common organizational culture that is same across the multinational network of subunits. In 1999, Jose Bove was declared a national hero when he along with other activists destroyed Mc Donalds under construction. Consumer Behaviour - Holiday Decision Making Process. Potential demand in foreign market Saturation of domestic markets Follow domestic customers that go abroad. John S. , “KFC – ‘a foreign brand with Chinese characteristics’,” September 22, 2008. ttp://www. McDonalds are a leader in the fast food industry. Introduction • Based in Louisville, KFC Corporation is the franchisor of the world's most popular chicken restaurant chain. The unified rule helps KFC easily manage and enter the global market. We’ve looked into KFC’s international marketing strategies in China to identify exactly what the chicken powerhouse has been doing so well. “An American Brand with Chinese Characteristics”, KFC China positions itself as a special occasion for residents but not only a cheap dining place (Warren, 2008). 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). While, local adaptation of corporate standard, policy, and management system cannot take place without a supportive organizational architecture. Ironically, among all the contributions to the success of KFC China made by its corporate parent, none outweighs the importance of “leaving it alone” (Warren, 2008). On the other hand, KFC China faces with relative high pressure on local responsiveness. Glocalization-The McD and KFC Way ? Furthermore, a lack of common supply chain means a loss of common system standards, then the absence of quality control of products (ibid, 2011). that has adapted to localization to make their profit in the foreign country. Production and logistics strategies are implemented attempting to lower the costs of value creation and add value by better serving customers’ need (Hill, 2011). KFC’s Operation Strategies By- Palash Goyal 2014MBA-15 5/26/2016 1 2. L. C. , “The cultural politics of food and eating”, Blackwell, 2005, p. 169. The company opened 372 new restaurants in 46 countries during the quarter, bringing its global footprint to 22,886 locations (4,062 in the U.S.) with 6 percent net new unit growth. 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. KFC insisted on promoting CHAMPS to its global market because KFC’s organizational goal is to satisfy all customer needs in the world. Kentucky Fried Chicken (KFC) is among those who were able to quickly respond to the trends. Served with 1 Original Recipe Tender, individual popcorn, individual fries, individual salad, regular drink, chocolatechip cookie and 1 dip. 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. KFC is one of the global companies. KFC is a global company with a diverse and ever-changing workforce, faces significant challenges in operating their businesses internationally but they faces those challenges strategically, adapt with policies to these markets. Kentucky Fried Chicken stands for high-quality fast food in a popular array of complete meals to enrich the consumer’s everyday life. Recovery for many foodservice locations, including quick service chain KFC Global, has been slow but steady since the onset of the COVID-19 global pandemic. In other word, the fast food restaurant also known as a quick service restaurant. IZZATUL LIYANA BINTI ZAINON 231636 today as Yum! B. N, “Competing by design: the power of organizational architecture,” Oxford University Press, July 10, 1997, p. 7. KFC’s mission statement includes selling food in a fast, friendly environment that Through globalization, Yum Brands can be found in over 100 countries. Brands chief operating officer David Gibbs described it. The KFC’s most significant food brand as its name suggests is fried chicken (Liu, 2008). That is why KFC China competes on the ability to customize their products or services to meet the needs in the particular Chinese market. Monday, 02 May 2011 16:22 Over the last few days I have been witnessing huge hoardings put out by McDonald's promoting their newest additions to their menu. Organizational architecture includes a broad dimension of structure, process, incentives, control and people, which can be an invaluable tool for shaping the way it gets things done (David, Michael and Mark, 1997). Although KFC recently entered in vegetarian fast food category but they have limited menu items as compared to other chains like subway, Pizza-hut, Mac Donald’s, who are already an established player in the segment. 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. htm Karen. N. , Michael. KFC was a novelty, a taste of America. Rather than attempting to separate the two, KFC pursues avenues of adapting itself to best suit local tastes and preferences, from both culinary and operational perspectives. informs. China. To sum up, to build the modern marketing mystery KFC Chin, based in Shanghai, not only have an explicit strategic choice of localization, but also be supported by the corporate parent’s decentralized organizational architecture. Brands had a record year in 2019, but then 2020 hit. We are consuming so much, and so quickly, that we are already living far beyond the earth's capacity to support us. It is because that China, other developing countries as well, treats food as the very heart of their society, inextricable from national and regional cultures (David and Mary, 2011). To beginning with, the worldwide area structure and decentralized decision-making responsibility contribute a large parts of KFC’s remarkable success in China. vid=195 Maryann. KFC Canada Delivery Menu Deals is here! We know that sometimes it's hard to find inspiration, so we provide you with hundreds of related samples. org. In week five we learn about the importance of globalization and how it can help your company’s profits grow. It is crucial for country subsidiaries which focus on local responsiveness to have decentralized operating decisions (Hill, 2011). 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. M. A. and Charels. KFC’s global CMO organised a multi-market team of marketing representatives to come together and attempt to create a global campaign that was a response to the pandemic. Nowadays several promotional tools such as coupons, bonus packs, free samples and sweepstakes are very commonly practiced activities offered by manufacturers to its consumers but the, changed the world.” By now, you would have already figured it out. At first, the localization strategy implies the lack of interdependence between each subunit. KFC adapted localization strategy in China by changing the flavor of food to. Meanwhile, a McDonald’s and Kentucky Fried Chicken were seen on multiple corners. Hill, “International Business: competing in the global marketplace,” 8th, McGraw-Hill, 2011. Hence they judge the performance based on the local conditions that differ from other countries. By continuing we’ll assume you’re on board with our cookie policy. Suppliers (Weak Force): As seen in the Yum! “KFC and Yum! They have also adopted promotion. As the first Western-style restaurant entering into China of the Mao era, it provided its customers about an exotic environment and a taste of America (David and Mary, 2011). On one hand, it is impossible that KFC compete with its rivals mainly by reducing the price. With the pass of time, KFC has started to create different types of menus after having a competition with McDonald’s. It was a place where residents with spending money could go for a special occasion. Kentucky Fried Chicken is also an American based fast food chain restaurant. How Have Changes in Technology Contributed to the Globalization of Markets, P&G Japan the Sk-Ii Globalization Project, How Globalization and Technology Changes Have Impacted the Corporation You Researched, KFC and McDonald’s — a model of blended culture, Consumer Attitudes to Western Fast Food Restaurants, Free online plagiarism checker with percentage. Although the restaurants decorated similar with a dominate tone of red, KFC China was influenced by Chinese culture to a large extent due to the local conditions. FMI - Pizza Hut, KFC/ PFK, Taco Bell, Burger King and Panera Bread — Laval, QC KFC - General Manager Laval, QC H7X 3S9, Canada Req #373 Thursday, November 12, 2020 At KFC, we feed the world. KFC’s global marketing strategy is a strong example of this because it acknowledges that food and food services are inextricably linked with a country’s customs and culture. Tricon Global Restaurants, which owns the KFC chain, started in 1999 to sign on local Chinese franchisees after freezing its franchise program in 1993 in favor of running its own stores. china. Globalization of KFC. No matter considering the number of restaurants, profit or market shares, KFC dominants the Chinese food market with 2200 branches over. At the very beginning, each KFC market had its own group of chicken suppliers who can supply multiple markets and get different paid for the almost same products without control. C, “KFC China’s recipe for success,” INSEAD knowledge, December 23, 2010 http://knowledge. James. The International and China Division segments can account for over 60% of the company’s total, Model, assess the strength of each competitive force in the fast-food industry. With the multi-brand strategy, Yum has also found a way to achieve a competitive advantage over its competitors by way of globalization. KFC is world’s largest fast food chain that based on chicken. In terms of global performance, KFC was in 2014 ranked as the 7 th largest fast food chain of restaurants (Dorfman, 2014). Thus one subunit is responsible for its own performance which will not lead to performance ambiguity. And yet, nearly a sixth of our fellow humans go to bed hungry each day: both an unnecessary tragedy and a source of social and, insult to the national cuisines that they cherish. Not only buying locally in a large scale drops the costs of transportation and transaction, but also it strengthens the parent company’s relationship with Chinese government (David and Mary, 2011). KFC China, based in Shanghai, is a functionally self-contained country subsidiary that the first important move after entering was to selected local partners with government connections and effectively leveraged their tangible and intangible local resources (Karen, 2010). Thus instead of a purely Western one, Chinese consumers drawn to this mixed brand position due to the situation in China of 19th century. Whether these Operations strategies of KFC 1. In these countries, local responsiveness is very important and the key element to win over consumers in a great deal is an abundance of flavors with an inviting ambience (ibid, 2011). Thirdly, since the need for integration and coordination among their subunits is low, there is low need for each self-contained country subsidiaries to have common processes and share same organizational culture. Among several value creation activities, which aims at gaining competitive advantage, production and logistics of KFC China will be discussed next. 2008, We use cookies to give you the best experience possible. Mainly there are two aspects of reasons towards KFC’s relatively low cost reduction pressure. This structure facilitates local responsiveness, especially important in the consumer goods industry, summed by Liu (2005), a former member of the company’s Greater China executive committee (John, 2011). E. B. and Mary. Get access to this section to get all the help you need with your essay and educational goals. As the localization strategy and the decentralization structure it conducts, the Brand’s corporate headquarters delegated lots of authority on control metrics to KFC China. R. “Quality Management at Kentucky Fried Chicken,” Interfaces 25, 1995, P. 6-21. http://interfaces. GROUP F cater to the taste of local people. https://acasestudy.com/kfc-and-the-global-fast-food-industry-case-study While, the local supply alliances are limited in a few major food items including the KFC Original Recipe mix in order to protect critical trade ecret, plus cobbed corns because the local-grown-and harvested crops hardly met KFC’s product standard (Warren, 2008). The following part will discuss the organizational architecture of KFC China in four separate aspects, structure, process, incentive and control, and culture. A light-hearted, humorous, bold and emphatic way to put the brand on the map at a time like this. Globalization Headquartered in United States of America (USA), McDonalds is known as the emblem to globalization with their successful worldwide franchises. According to the research, there are more than 4600 KFC restaurants in 500 different cities in China in the year 2014 which is much more than McDonald’s 1000 restaurants. Not only does the support from the corporate parent on decentralization, the success of KFC also results from its key functional strategies for Chinese markets. Billboards holding a bucket of KFC ’ s profits grow and eating ”, Blackwell, 2001 p.! Is seen as a symbol of peaceful globalization in the foreign country, 2005, p. 6-21. http //interfaces! 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