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Fast Food Rulers in China - Research Paper Example

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The Yum Corporation, which is KFC holding company, decided to explore overseas market specifically the Chinese market. China is a country with the highest human population; this means that it offered a promising market…
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Fast Food Rulers in China
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Fast Food Rulers in China

KFC offered food items common in most Chinese restaurants ( Lroche, Kalamas &Huang, 2005). This strategic approach depicts KFC as part of the Chinese community rather than a fast food joint selling low priced westernized food.
The company capitalized on small Chinese cities and the establishment of a national business with food joints spread across the country. As a result, the company cut down some of it cost due to economies of scale and distribution of risk. KFC engaged the services of Chinese hotel managers to provide advice on the food tastes. It also established partnership with local food chains and employed more Chinese to operate its emerging branches. So far, the company commands 40% stake in Chinese fast food market with 3300 food outlets in the 650 cities in China. In 1999, KFC developed a distribution chain by building warehouses and managing a fleet of distribution trucks. The trucks were fitted with refrigerators that ensured the foodstuff remain fresh while transporting them from the farm to the restaurants. Though it was an expensive affair, it was vital for the company’s rapid expansion to other cities (Schroder & McEacher, 2005)
On the other hand, McDonalds a key rival of KFC holds a 16% stake in the Chinese fast food market. Its approach was far different from it competitor. It chose to stick to its core strategy adopted in the US market. MacDonald menu had no additional dishes that matched the local taste. The layouts of MacDonald’s food outlet depicted a westernized culture. Its target market was the stylish wealthy status-conscious Chinese that sought to imitate the American lifestyle. The McDonald now boasts of 2000 outlets spread across the Chinese cities. It emerged as a global leader in the fast food industry, based on sales, market capitalization, number of employees and revenues (Shen & Xiao, 2014). Its success is attributable to the quality standards the company has maintained globally ... Read More
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