Executive summary of "Kentucky fried chicken A success story in China"

Degree course: Module: Lecturer: Submitted by:

International Business, M.A., 02nd semester International Strategy and Operations Management Summersemester 2014 Dr. Nils Stieglitz Eugen Hölzl, Jia Luo, Bingqi Tang, Xinhe Liu, Matriculation-no.: 493 396 5 Matriculation-no.: 492 574 4 Matriculation-no.: 493 581 6 Matriculation-no.: 492 682 8

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KFC entered the Chinese market in 1987 as an American company. 27 years later, KFC has established its presence in virtually every larger Chinese city and has developed its localization to an astonishing degree. KFC’s performance in the Chinese market significantly outgrew the brand’s performance in its home market in terms of revenue and outlet numbers. With more than 4.500 outlets, KFC China generates more than half of its yearly revenue for the Kentucky based Yum! Brands. There is no doubt that KFC China has written an impressive page in the history of western brands succeeding in the Chinese market. The aim of our case study was to answer three questions: what made KFC so successful in China? Which challenges and opportunities does the company face today? And which strategies are and/or should be in place? To answer the first question, standard macro-analysis tools were used and a detailed look at the market environment at the time of market entry was taken as well as the measures KFC undertook by then. The following are the factors that we believe contributed to KFC China’s success: Reposition: KFC’s reposition into a Chinese style western brand enabled KFC to catch the market trend when it entered the Chinese market. Localization: KFC used localized food to attract customers and employed local management to gain insights of Chinese market. Rapid expansion: KFC China took rapid expansion to garner and repeat first mover advantages,