...aloe juice instead of orange juice. American companies hoping to capitalize on China’s $186 billion fast food and processed food market have entered the country en masse. However, while they are selling the same brands they sell in the United States, they have developed much different flavors in the hopes of better attracting Chinese buyers. Frito Lay recognized early on that Chinese taste buds were quite different from American taste buds. Popular flavors in the United States did not appeal to Chinese consumers prompting Frito Lay and other U.S. companies to research Chinese preferences and develop products specifically for the local market. Accordingly, Tropicana sells cantaloupe juice, Chips Ahoy cookies are orange flavored, and Wrigley’s sells Chinese herbal medicine gum. Even toothpaste companies are selling products designed to tempt Chinese consumers. Crest sells a lotus flower flavored product, while Colgate offers salt flavored toothpaste. U.S. companies focused on the Chinese culture as a starting point for developing new product flavors. Product researchers inspired by traditional Chinese cooking came up new flavors like Szechuan spicy, sweet and sour tomato, and mango. Pepsi Co’s Harry Hill points out that because the market is so competitive, new products are being launched on a regular basis. The same trend is changing the strategies of fast food companies in China. McDonald’s has introduced purple taro pie, Starbucks sells drinks with jelly cubes on the bottom...
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...analysis of fast food consumption propensities in China Name: _____MIKE_______________ Class: 6E Lecturer: CHRISHTINE AND JOHN Due Date: ABTRACT This report analyses fast food consumption propensities in China and compare with Australia in the 5-year period from 2007 to 2011. After Introduction, it firstly illustrates favourable and challenging factors in China, clarifying fast food market and pointing out the influences of population and Chinese population on fast food market. Subsequently, it analyses fast food consumption trend with several statistics provided, forecasts consumption propensities, and accesses Chinese and Australian fast food markets for the next five-year period. Additionally, marketing strategies for Chinese market to adapt market alternation are formulated to alleviate investment risk and develop permanent trademark in China for the next 5-year period from 2011 to 2016. Finally, using this information as a foundation, the report concludes by summarizing and re-emphasizing the main points of all sections in the report. TABLE OF CONTENTS ABTRACT 2 TABLE OF CONTENTS 3 TABLE OF FIGURES 4 1.0 INTRODUCTION 5 2.0 ANALYSIS OF FAST FOOD MARKET FAVOURABLE AND CHALLENGING FACTORS IN CHINA 5 2.1 Favourable factors 6 2.1.1 Population 6 2.1.2 Chinese strong economy 6 2.2 Challenging factors 7 3.0 AN ANALYSIS OF FAST FOOD CONSUMPTION PROPENSITIES AND FORECAST IN CHINA AND AUSTRALIA 8 3.1 China 8 3.1.1 Market...
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...1|Page Coursework Header Sheet 220924-625 Course FINA1035: Strategic Financial Mgt Course School/Level B/UG Coursework Report Assessment Weight 100.00% Tutor EA Warren Submission Deadline 19/03/2015 Coursework is receipted on the understanding that it is the student's own work and that it has not, in whole or part, been presented elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged in accordance with the University's Regulations regarding Cheating and Plagiarism. 000652920 Tutor's comments Grade Awarded___________ Moderation required: yes/no For Office Use Only__________ Final Grade_________ Tutor______________________ Date _______________ 2|Page 0006529208 Strategic Financial Management Report: McDonald’s Part 2: External Analysis Zaheer Mansuri Word Count: 3038 Tutor: Liz Warren 3|Page 0006529208 Contents PESTLE ..................................................................................................................................................................... 4 Political:............................................................................................................................................................... 4 Economic:............................................................................................................................................................ 5 Sociocultural:...
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...Case Study and SWOT Analysis: Ronald McDonald’s Goes to China This study focuses on the multinational fast food giant McDonald’s Corporation, with particular attention paid to the corporation’s situation in China. Given the disparity in cultural foods between Western countries like the United States, and China, and that McDonald’s food very much reflects food preferences in the U.S., it is very interesting to see how McDonald’s works to capture China’s attention and takes hold in the Chinese market. This case study includes: a company profile of McDonald’s; a situational analysis; a SWOT analysis that performs an investigation on internal and external circumstances of the fast food chain in China and Hong Kong; an identification of some of the problems that the chain is facing in China; possible solutions to the identified problems. McDonald’s: Company Profile McDonald’s Corporation was established in 1955 in the state of Illinois. The corporation franchises, operates and develops a global network of restaurants, that each sells a limited menu of value foods. McDonald’s is the most popular ‘fast food’ service retailer in the world, with more than 30,000 restaurants in over 119 countries serving approximately 50 million people every day (McDonald’s, 2005). Popular menu options include the Quarter Pounder, Big Mac, Happy Meal, Egg McMuffin and Chicken McNuggets, as well as a large range of other menu options including fries, chicken sandwiches, salads and sundaes at reasonable prices...
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...wAnalysis external environment for fast-food industry Presume that China is the potential market for a new fast-food enterprise to open, I would like to analyze relative conditions related to the extension of the market. General macroeconomic conditions In 2014, the economic conditions in China is enthusiastic. According to the data from National Bureau of Statistics of China, Total Retail Sales of Consumer Goods in January and February have experienced a generally increase, going up by 11.8%. Compared with the increasing pace in 2013, it was slowed down in the first two month in 2014. This may means the motivations for consuming in 2014 would be weaker. At the same time, the consumptions in restaurant also decreased by 0.5%, which may be a detrimental signal for restaurant industry. While it is possible that this phenomenon is triggered by the pledge of consumptions in luxury restaurant instead of fast-food industry. If this hypothesis is correct, the food consumption in fast-food restaurants may go up as the industry is actually an alternative to be a substitute for this high monetary required cuisines. Population demographics China, generally speaking, is the country owning the largest population which represents 19.30% of global population at 1,384,694,199. Also, China is one of the country with high population density at 139.6 people per square kilometer and almost 70% of people will live in urban area by 2035. The large population base guarantees adequate passengers...
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...Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) Development in China Wei Hu & Yuanyuan Xie Bachelor’s Thesis 28. 04. 2013 International Business Administration Bachelor’s degree (UAS) SAVONIA UNIVERSITY OF APPLIED SCIENCES THESIS Abstract Field of Study Social Sciences, Business and Administration Degree Programme Degree Programme in International Business Author(s) Wei Hu & Yuanyuan Xie Title of Thesis Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) development in China Date 28.04.2013 Pages/Appendices 53+2 Supervisor(s) Jari Niemelä &Heikki Likitalo Client Organization/Partners McDonald's Corporation & Kentucky Fried Chicken Corporation Abstract McDonald's and KFC are two international fast food restaurants. They both expended their businesses in global scale. It is obvious that McDonald surpassed KFC in terms of sales and fame in international level. However, in China, KFC performs better than McDonald's. The aim of this study is to find out how these two companies developed differently in Chinese market. By making a comparative study of McDonald's and KFC, different operation and competitive strategy theory will be integrated with their development situation. Research is made based on strategy theory, Internet sources and interviews. The thesis is started with general information, Chinese fast food industrial situation introduction and thesis structure. After having introduced the two companies background, we illustrated strategy...
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...Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) Development in China Wei Hu & Yuanyuan Xie Bachelor’s Thesis 28. 04. 2013 International Business Administration Bachelor’s degree (UAS) SAVONIA UNIVERSITY OF APPLIED SCIENCES THESIS Abstract Field of Study Social Sciences, Business and Administration Degree Programme Degree Programme in International Business Author(s) Wei Hu & Yuanyuan Xie Title of Thesis Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) development in China Date 28.04.2013 Pages/Appendices 53+2 Supervisor(s) Jari Niemelä &Heikki Likitalo Client Organization/Partners McDonald's Corporation & Kentucky Fried Chicken Corporation Abstract McDonald's and KFC are two international fast food restaurants. They both expended their businesses in global scale. It is obvious that McDonald surpassed KFC in terms of sales and fame in international level. However, in China, KFC performs better than McDonald's. The aim of this study is to find out how these two companies developed differently in Chinese market. By making a comparative study of McDonald's and KFC, different operation and competitive strategy theory will be integrated with their development situation. Research is made based on strategy theory, Internet sources and interviews. The thesis is started with general information, Chinese fast food industrial situation introduction and thesis structure. After having introduced the two companies background, we illustrated strategy...
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...American company in the fast-food industry. We will be discussing about some aspects of this company generally, but we intend to give more details on the company Kentucky Fried Chicken(KFC) which is one of the Strategic Business Units (SBU) of Yum!Brands. We will give the profile of Yum!Brands and KFC, and also analyze the strategy of the company, its internal and external environment, its position vis-à-vis its competitors, its competitive advantage and how far it has come/how well it is doing today. We intend to focus on one local market, so in this project we are taking KFC China as our case study. We decided to choose Yum!Brands and specifically KFC as our project case study because we have noticed the rapid growth of the fast-food industry. Fast-food is a typical American trend which reflects the American eating culture of “grabbing a quick bite” so to speak. Today people are very busy, not only in America but all over the world. People have less time to sit and eat a home cooked meal, especially at lunch time when almost everyone is out of the house and working. The most convenient thing to do is to go for a “fast-food”. We noticed that this trend has even moved from being just a lunch-time substitute for home cooked meals to being a fun time meal between friends, colleagues and family. Some corporate bodies even order fast-food for meetings or corporate get-togethers. It is easy to hear that a company in the high-tech industry or car industry makes a lot of money, but...
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...outsourcing) the new college graduate would have had a difficult time finding a job that pays as well as a typical BPO firm. (Kuruvilla & Ranganathan, 2007) Another example of globalization I would like to highlight is the growth of the western fast food business/restaurants into China. Before the event (growth of fast-food business/restaurants) the Chinese population was healthier and had limited options for eating out which included your typical Chinese restaurant, wontons sold on the side of the street and local food merchants. After the event (growth of fast food restaurants) the Chinese society/culture has had many changes, including obesity, change in types of food choices which in turn affected the Chinese overall health and economy (Cheng, T, 2003) Part B The growth of the fast food business/restaurants into China is a great example of globalization on a native non-Western culture. Fast food restaurants found that global business expansion would be a way to grow business and increase profits. Fast food was only introduced into China in 1987, with opening of the first KFC. They become successful overseas by adapting to the local culture. McDonald’s opened their first franchise in 1990; there are now over 800 McDonalds in China and an additional two hundred in Hong Kong....
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...Professor Gervais April 24, 2012 Yum! China Case Analysis Yum! Brands China, a division of the Yum Brands Company, is a fast food restaurant company that owns several restaurant chains such as KFC, Taco Bell, Pizza Hut and Long John Silvers overseas. Yum! China first opened its KFC in Beijing in 1987 and over the years has successfully expanded its operations and other chain restaurants throughout Mainland China, becoming one the largest fast food companies in that region. Seeing the success of Yum! overseas has spawned other western chains to open up in China. With growing competition from Subway, Dairy Queen, Starbucks, McDonalds and Burger King, Yum! China has been able to successfully manage the pressure and increase their presence in China. 1. What were the special challenges in business environment that Yum! had to overcome it he 1990’s to develop its business in China? When Yum! started its operations in the early 1990’s the company has barriers to overcome in launching their operations in China. Yum! had to get through the government restrictions, handle their missteps in advertising, invest in a supply chain, expand company growth, organize a team, and contend with ownership. Government ‐ When Yum opened restaurants and wanted to expand faster, the company had to follow regulations imposed by the government. At that time, government was more interested in bringing in foreign companies that could bring technology into China. That changed when the Deng Xiaoping...
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...Strategy Report for Yum! Brands Deirdre Chew Karen Bonner Mitchell Amsler April 14, 2010 Yum! Brands Table of Contents Executive Summary ...................................................................................................... 3 Company Overview ....................................................................................................... 4 History ......................................................................................................................... 4 Business Model ........................................................................................................... 5 Competitive Analysis .................................................................................................... 6 Supplier Power ............................................................................................................ 9 Buyer Power ................................................................................................................ 9 Entry and Exit ............................................................................................................ 10 Substitutes and Complements ................................................................................... 11 SWOT ........................................................................................................................... 12 Strengths .............................................................................................................
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...regions were similar, they were still different. Each province had a dialect different from each other. Since we have decided to extend our fast food hamburger franchise to include UAE (United Arab Emirates), Israel, Mexico and China we must first do some research on the culture, language, religious beliefs, and values of these new countries. The first thing I would research is the different cultures and how they will impact the business. Does their culture even allow for this type of food? In the articles that I researched, the countries that I will expand my franchise to will only have one major issue, which is the same issue in the United States. That issue is obesity. United Arab Emirates – With American fast food already being global I foresee no issues with the type of food prepared in my fast food chain expanding to the UAE. Since the 1980’s the Middle East has had American fast food chains. (Pulitzer Center, 2012) According to Shane McGinley “The UAE restaurant market is set to grow 30 percent to $780m in the next four years and will be dominated by American-style fast food brands, an industry expert have said.” (McGinley, 2011) Israel – Nathan Jeffay say “For two decades it has been flying the flag for American fast food in a sea of falafel shops and shwarma joints.” (Jeffay, 2010) He also states that several American fast food chains have already failed in Israel. So moving my franchise there would entail a complete change of the menu to exclude burgers and include...
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...past 10 years, Chinese government was loosen restriction foreign companies invested in China Market. The general environmental forces that could influence or have influenced McDonald’s development in China Demographic force: * Due to uneven wealth distribution in China, they applied the use of a tier pricing model to sell products at a range of prices for consumers with different purchasing power. Political and government force: * Due to underpaying their part-time employees, the government implicated that the salary needed to be increased, so that they raised their cost at the same time. Technological force: * With its technological know-how, it has developed its own internal supply network, including farms in China to sell to both the domestic and export market, helping it maintain stable and secure supply. Social cultural force: * For teens’ and young adults’ growing appetite for Western food and nightlife, it had begun extending its business hours to 24 per day since the beginning of 2006. * For Changing Chinese lifestyle in the growing popularity of internet shopping among China’s younger generation, it partnered with Chinese online shopping site to attract internet users. * For fast-paced lifestyle of young Chinese, it launched home delivery service to expend over its original in-store service. Economic force: * There is a continuous inflation in China. It makes McDonald’s products price has been raised increasingly every year. *...
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...for success in China COUNTRY LEVEL With the largest population in the world, the emerging economy of China was an easy target for companies to begin their international growth. The opportunity to make money in this country is what excites companies to try and integrate their businesses into the area. China is currently a part of the BRICS association making it one of the five major emerging economies in the world. China is located in Southeast Asia along the coastline of the Pacific Ocean. It sits as the fourth largest country in the world and is currently the second largest economy in the world measured by the Purchasing Power Parity Scale. This scale shows that a product in two different countries should have the same price when expressed at the same currency. With China’s size and increasing economy they have really worked to open their economy to international trade. This opens up the market for companies to try and enter and become successful. (Economy, 2010). Companies like KFC and McDonalds saw they opportunity and began to enter the Chinese market. These bolds moves paid off for some and not so much for others. Throughout the analysis we will see who the real winner is and what the future holds for these industries. QUICK-SERVICE INDUSTRY Both KFC and McDonalds are part of the quick-service industry. Many people know this industry as fast food but this is the correct name for it. This industry has been around for years and is currently a mature industry. That means that...
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...Hoi Shan Wu Prof. Dennis Lee Doing Business in China 16 May 2017 KFC in China As China develops the pace of life has gotten quicker. The Chinese people’s demand for fast food service with good hygiene has grown due to fit their busier lifestyle. An analyst from China Venture Group, Wan GE, said that fast-food has become the first choice for 85% of Chinese city residents when eating out. (Hu and Chen) The fast-food industry in China is fast growing with an 11.6% growth from 2010 to 2015. (Fast-Food Restaurants in China: Market Research Report) Kentucky Fried Chicken (KFC) a subsidiary of YUM! Brands, was the first quick-service restaurant (QSR) to enter China in 1987, and remains China’s number one QSR today with more than 5000 restaurants in over 1100 cities. (Yum! Restaurants in China) KFC started as a joint venture company; 60% stake held by KFC, 27% by the Beijing Tourist Bureau and 13% by Beijing Food Production. In 1988, Bank of China bought 25% of the venture, diluting KFC to 51% of shares. The first KFC was opened in Beijing, Qianmen, five minutes away from Tiananmen square. (Qingfen) When KFC first entered China, it was a great success. It was an eye-opener into American cuisine and culture. Chinese consumers had the perception that anything from the west is the best; since KFC is from the west it was the best. Chicken is the second preference of meat followed by pork in China. Naturally Chinese customers loved KFC’s fried chicken not only because of the product...
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