KFC’s Explosive Growth in China

1. KFC’s Explosive Growth in China Andrew Kranda Mike Boring

2. Part of Yum! Brand w/ Pizza Hut • First opened in Beijing in 1987 • Now over 3,000 in 650 cities • Was owned by PepsiCo at the time • China division chairman and CEO Sam Su • Su's strategy was that KFC "would not be seen as a foreign presence but as part of the local community… Our opportunity was to take the best ideas from the US fast-food model and adapt them to serve the needs of the Chinese consumer.” The Beginning

3. Homogenize or not? • Close ties with government • Hires local management • Sources food from within country • Changes menu to suit Chinese tastes and style of eating Keys to Success

4. Many of 250,000 employees are college students • Employees have leeway in showing up to work • Company provided video games for breaks • “provides crucial social skills for young adults.” • Creates lifelong Yum! Brand customers • Train and retain quality employees • Source products from within China whenever possible Business Culture

5. Appeal to Chinese style of eating - Group sized dishes • Small # of items familiar to Western visitors • The Chinese KFC menu may include fried dough sticks, egg tarts, shrimp burgers, and soymilk drinks, as well as foods tailored to the tastes of specific regions within China • Helping customers make healthier choices “The Chinese Way”

6. “KFC succeeded in China both because it was not McDonald's and because in many ways it decided it wouldn't be KFC either.” • Would this business model be successful for other American companies? • Should McDonalds follow this idea or keep their locations primarily homogenous? Questions