McDonald’s AND KFC: RECIPES FOR SUCCESS IN CHINA
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McDonald’s AND KFC: RECIPES FOR SUCCESS IN CHINA
China is the only known country with the largest population. The population estimate of China 1,393,836 as of the year 2014. The inhabitants of China as a country have the highest levels of preference in using meat than other countries in the world. Compared to the United States, Chinese people eat twice as much meat as the people of the United States. At the time of the entrance of KFC into the Chinese markets, it was perceived as a new concept altogether for the Chinese people. Before this, the Chinese people new about fast foods, but it was not as much as in KFC.
It was in the year 1987 that the Chinese KFC outlet was opened in China. The restaurant was so quick in service delivery and started to gain access to the Chinese markets. Following the KFC was the McDonalds that was opened as a first outlet in the Chinese market. McDonald’s fails to get the much-needed attraction of the potential consumers in the Chinese markets like the KFC, although it has remained to be successful in the market. KFC’s success was based on the fact that they based on customer preferences. The KFC restaurant narrowed down to what the Chinese people loved or needed for a restaurant. Initially, when it started, KFC offered very specific recipes, but it started to focus o the Chinese meals instead of with a variety of delicacies to be offered for the Chinese people. The restaurant introduced some new recipes that the people of china loved, and that is where it gained its strengths in business.
Fast foods are known to be relatively fresh than food that is from shelves in supermarkets. The McDonalds have the lions share when it comes to first foods. McDonald’s has only 1000 outlets that span the cities of china. The company is in its endeavors trying hard to open up at least 100 new restaurants in China. The restaurants ai highest in the perspective of maintaining the best quality of food and consistency of the foods. Despite all the efforts, Mcdonald’s fail to understand the nature of the Chinese people’s choices in their markets. On the menu, about 80% of the foods were United States’ while the remaining 20% were people demand menu. The failure of McDonald’s began this way, and their recipes were not directed towards the people of China in general. KFC o the other hand focus their decisions on the demands made by the people of China. The KFC restaurant finds out what the people of china prefer to eat other than just preparing any meals for them to start buying. First, the Chinese people prefer using meat, and the McDonalds restaurant recipes start from vegetables.
KFC targets major cities in China, out of which it has spread at least 2300 restaurants across 500 cities in China. The KFC has indeed made efforts to capture the Chinese markets and gain the lion share compared to their competitors. The food from the KFC restaurants is mainly Chinese meals targeting the Chinese people in the markets and which has seen it grow compared to its counterpart McDonald’s.
SWOT analysis
Strengths
KFC restaurant
KFC entered the Chinese market earlier before there were any concepts of first foods in the country. Ever since it has seen tremendous growth associated with the types of foods, it offers to the Chinese people. KFC took advantage of being the first fast-food company in China and is still enjoys the benefit up to date. Being the first to enter the Chinese market, the company has been able to learn about the Chinese culture and adopt a system of business where the customers are given what they want rather than what the company first intended in the business model. KFC has a flexible business strategy and has helped it grow over the years. The restaurant adapted a recipe that was attracting many people in the country. China is a country full of meat lovers. KFC having this in mind, it knew that the people love meat and that is what it gave them for all these years. It has since seen it span the whole of china with many outlets, 2300 in number in 500 cities. The growth of KFC has been spearheaded by the sole focus of the restaurant to provide the customers with what they need.
McDonald’s restaurant
It was the second first food restaurant to open up its chain in china, at least three years after KFC was already in business. The restaurant has consistency in strategies of operations and sticks to the same plan it had at the start of the business. The quality of the products by the restaurant is of high quality, and this has been maintained over the years without faulting. A good business offers high quality [products to its customers where possible.
Weaknesses
KFC
KFC is the largest restaurant for fast food, has challenges too. The company, over the years, was unable to find managers that would run the outlets. The lack of qualified personnel was the main challenge for the business when it started its operations in China. China had very few cooks who were qualified to work in a fast-food restaurant, and this posed the biggest challenge in the long run. The other weakness exhibited by KFC is the ever-changing business plan. The changes pose a big challenge when it comes to maintaining a given level of quality for their meals.
McDonald’s
McDonald’s is the second-largest fast-food restaurant in China and has a few weaknesses here and there. The first problem that makes the restaurant drag in growth is the fact that it has a stack to its menu. The menu is 80% of US foods and only 20% Chinese. The menu has not attracted as many customers in China since the Chinese people only identify with their culture, which is mainly comprised of meat. The lack of flexibility and focus of the restaurant on Chinese delicacies has made it lose an attraction of a wider customer base in China.
Opportunities
Opportunities for fast food around the world is overwhelming. The people around the world are now going for fast food since it is very fresh compared to the foods from other restaurants and the shelves in supermarkets. Any business aims to grow its market share. The two restaurants are finding new avenues for setting up outlets around the world. The markets for food are never-ending.
Threats
The competition posed by other small food restaurants in china has a small sign in the area. The two restaurants are competing against each other for customer share even though they are doing so at different angles. The competition shown by KFC is stiff, given that it was the first entrant in the market and has gained much popularity in China and the whole of Asia than any other fast-food company. The two companies enjoy the benefits of economies of scale due to the large numbers of outlets they have across china.
Applied Strategies
KFC: The applied strategy for KFC is the focus they have on the customers as the basis of business and not just the initial plan. The company has a flexible system of operation in that it has studied the market and found out what the customers’ needs are. China being a country with the largest population, has a big opportunity for the two companies. The people of china love meat, and that is what KFC is providing. The flexibility in the business plan in most cases attracts new ideas that would see the growth of the company.
McDonald’s: The strategies applied here are the ones targeted at maintaining high-quality products in their outlets. The products offered are of high quality and to ensure that this is maintained, the initial business plan is not altered.
Both of the restaurants have a strategy of opening up many food outlets across the country. The food outlets are meant to reach a bigger market share for the two companies. The strategies applied by the two companies are aimed at growth for the company. The ones for KFC seem to gain more weight compared to its counterpart. Targeting the customers is the vital approach any business needs to take to attract more sales and expand into more markets. It is imperative to say that the KFC company has grown due to its approach in business combined with good leadership skills from its directors.
The companies are looking forward to expanding more into the country with McDonald’s targeting at least 100 new outlets every year. By the end of three years from now, the two companies will have grown into all cities of china and into the other Asian countries.
The two companies are ready for new entrants into the fast-food business by expanding their businesses into as many cities as possible in china to gain popularity. The popularity and economies of scale the two will have in the future will simply scare away any potential competitor that may try to enter into the market to provide services in fast food.
To enter this market for any potential competitor is not easy, but there is always a way in business. China has a big population meaning that it has opportunities for as many fast-food service providers depending on how they operate their businesses. To enter this market, one needs to have enough resources to open up food outlets to counter the ever-increasing number of food outlets for McDonald’s and KFC. The secrete to beating the two is on the customers need. The Chinese are consumers of meat and a variety. As a new entrant, there is need to come up with new ideas on the needs of the people combine with culture since the Chinese people have there delicacies intertwined in their culture as a people.
In conclusion, fast food is a trending business around the world, and new drivers of the business are slowly coming in to play. Entry into the business requires a lot of resources to run and maintain new outlets. Leadership is crucial in the business combined with acumen in business, then the growth and expansion of your business are inevitable.
References
Zhu, L., Anagondahalli, D., and Zhang, A., 2017. Social media and culture in crisis communication: McDonald’s and KFC crisis management in China. Public Relations Review, 43(3), pp.487-492.