KFC’s Winning Recipe In China – “Go Global, Act Local”

KFC’s Winning Recipe In China - “Go Global, Act Local”The Yum! Brands US-based company KFC is one of the most popular fast-food restaurants in the nation and has had significant market share growth outside of United States. KFC’s global growth strategy was easy: Expand by staying local! Understanding the local cultural, economic and regulatory differences becomes a key element in any global business strategy. Let’s take a look at KFC’s market penetration success story in China, for example.

With its “Go Global, Act Local” market penetration strategy, KFC adapted their fast-food model to fit the Chinese market by positioning itself as a native company, not a foreign. Specifically, KFC’s success in China was accomplished by taking the following strategic steps:

First, KFC identified customers’ likes and dislikes at the local and cultural level. Besides chicken, it serves food that appeals to Chinese tastes, items you’d never find on an American KFC menu: chicken with Sichuan spicy sauce, rice, egg tarts, and soybean milk. It is also part of the Chinese culture to eat in groups, so KFC offers larger dishes for sharing.

Second, KFC hired managers who read and speak the local language, who understand the Chinese consumer, the restaurant trade, as wells as the Western way of doing business.

And finally third, KFC carefully followed Chinese strict foreign investment laws and entered into Joint Ventures with local producers – a departure from its traditional US based franchise approach.

Although Chinese market often represents a huge risk for many foreign companies, KFC’s “Go Global, Act Local” market penetration strategy created and filled an untapped marketplace by identifying and prioritizing cultural, business and regulatory sensitivity. Since opening its first store in Beijing in 1987, the KFC has grown to over 3,800 locations in 800 cities with finger lickin’ performance. Colonel Sanders’ recipe was secret, but KFC’s success in China is not.

image credits: growthstrategy.com

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Growth Thinking - Emerging Markets and GPIWayne Simmons is an accomplished executive, innovator, value creator, and entrepreneur and co-author of GrowthThinking: Building the New Growth Enterprise. As CEO and Co-Founder of The Growth Strategy Company, Wayne leads the vision, strategy and growth of the company. He has worked for global advisory firms Ernst & Young, Deloitte Consulting, and has been a trusted advisor to C-level executives at Fortune 500 corporations, venture capital firms, and small and midsized companies. Wayne was trained in airborne reconnaissance for US Army Intelligence; and is an alumnus and Fellow of The Wharton School of the University of Pennsylvania.

Growth Thinking - Emerging Markets and GPIKeary Crawford is a results-driven executive leader with extensive experience in operations, M&A and finance for start-up, entrepreneurial and middle-market companies. As co-founder and COO of The Growth Strategy Company, she manages the strategic growth and vision, and day-to-day operations; and is co-author of GrowthThinking: Building the New Growth Enterprise. Keary was trained in Behavioral and Social Sciences and is a Fellow and alumna of the Executive Development Program at the Wharton School of the University of Pennsylvania.

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