KFC in China Yum! Brands, Case Study

Even the decor and layout of KFC and East Dawnings provide a connection to the typical Chinese life; "layouts are designed to resemble Chinese homes" (Case 7-2). Yum! provides visitors with a unique experience which is not dominated by American "young and hip" (Case 7-2), but pays respect to the home country. "A plaque at the entrance of one KFC describes it as "an exchange channel between KFC fast-food culture and Chinese folk culture" (Mellor, W. January 26, 2011. PP. 1). These operational strategies place KFC as the superior brand for fast food dining; "KFC is certainly doing better than McDonald's at becoming more Chinese" (Mellor, W. January 26, 2011. PP. 1).

What Successful Companies have in Common

Without question the success of companies in China depends on adaptation to local Chinese ways of doing business and the intricacies of culture. While not to indicate that Chinese consumers do not want the West, rather they embrace the chance to experience Western culture; Chinese consumers do appreciate and respect those companies which seek to provide connectivity to the Chinese culture and the local flavor to which they are accustomed. Adaptation is the key strategy, how best to continue offering products or services which provide a fusion between Western brands and Chinese culture. A story from KFC illustrates this concept:

Yum's cultural flexibility doesn't end with the localized menu. While fast-food restaurants in the West often host kids' birthday parties, KFCs in Urumqi, capital of the Xinjiang autonomous region that's home to the Muslim Uyghur people, advertise parties for the families of boys who have just undergone the religious ritual of circumcision.(Mellor, W. January 26, 2011. PP. 1).

Companies can learn from Yum! KFC which; "got in early, adapted the product, expanded aggressively and gave their Chinese managers real decision-making power" (Mellor, W. January 26, 2011. PP. 1).

Conclusion

For Yum! Brands their Chinese revenue and store growth is a compelling story.

"David Novak, Yum's chairman and CEO, noted the China business 'continues to fire on all cylinders' (Fontevecchia, a. April 18, 2012. PP. 1). With designs "to eventually have 20,000 outlets in the country" (Case 7-2), Yum! Brands, with KFC as its standard bearer, offer the Chinese consumer a mix of Western flair with traditional Chinese menus and culture. This recipe will continue to pay dividends for Yum! even as new rivals attempt to poach the company's strategy. Going forward the company will focus on harnessing its palpable energy in China to deliver on the synergies between Western and Chinese culture.

References

Case 7-2. KFC China Targeting Through Localization

Fontevecchia, Agustio. (April 18, 2012). Yum! Brands' Profit Jumps 73% in Q1 Despite

China Concerns. Forbes.com. PP. 1. Retrieved May 3, 2012 from http://www.forbes.com/sites/afontevecchia/2012/04/18/yum-brands-protif-jumps-73-in-q1-despite-china-concerns/

Mellor, William. (January 26, 2011). McDonald's….....