Top foreign brand in China: KFC

 What! a KFC in China!! Feels like home. Pictures, Images and Photos

KFC and more accurately, owners of KFC, Yum! Brands Inc. is the foreign company with the largest presence in China. KFC dominates the fast food market in China and is well over twice as large as McDonald’s there. This is unlike almost every other part of the world and certainly the opposite of the fast food market in North America. McDonald’s is the largest fast food company in the world and they are not used to being beaten by any other American company.

However, KFC implemented a better strategy than McDonald’s in China. While McDonald’s tried to stay true to their menu and kept their product offering in China somewhat similar to what the rest of the world knows (burgers and fries), KFC fused local dishes with their famous fried chicken. They also looked more to local employees to make big decisions instead of just taking their instructions from the U.S. headquarters. This allowed KFC to enter the hearts, minds and stomachs of more Chinese people.

For KFC, this resounding success in China could not have come at a better time. Back at home KFC is not doing too well. McDonald’s and other fast food chains are beating them consistently. According to a Bloomberg report on this topic (click here to read it), there are currently about 3,200 KFC locations throughout China, but the goal is have 20,000 KFC’s in China eventually. By then, it seems that more than half of KFC’s profits will come from China.

KFC is seeing success mainly because they had a better business strategy. They thought about how best to succeed in China and then executed their strategy well. Although it is not too late for McDonald’s or others to follow KFC’s model for China, it will be more difficult because KFC has built a loyal customer base. This is really a good lesson in international business. Any business can learn from KFC even if they are not in the food business at all or looking to do business in China at all.