Kfc Report

There is no doubt that China has become the highest-growth market of Kentucky Fried Chicken. Seventeen years after opening the first KFC outlet in China, KFC has celebrated its 1000th restaurant milestone in Beijing on January 16, 2004 (business wire, 2004). As the Yum! Brands, Inc., the parent company of KFC, states in the 2003 annual customer mania report , "China continues to be our Rising Star, driving double digit sales growth for the fifth consecutive year and record operating profit up over 42% in 2003." The number is the best annotation for the announcement--in the year of 2003 China has accounted for $157 million in KFC s operating profit.

The prominent success of KFC in China s market can be attributed to its franchise policy and scientific managerial operations, well known as CHAMPS, which measures operational basics like Cleanliness, Hospitality, Accuracy, Maintenance, Product Quality and Speed. Moreover, the accomplishments are the reward towards KFC s comprehensive understanding of Chinese culture and its excellent localization strategies specifically manipulated to meet the characteristic requirements of the estimated 450 million urban Chinese consumers. In the analysis of KFC s success in China, several questions were generated. How did KFC grab the opportunity to penetrate a huge market known as the fastest growing economy in the world? How does KFC find the balance point between the quick service restaurant and the ancient Chinese culinary tradition with more than 5,000 years history? How does KFC adapt its inherent individualism-driven American culture to Chinese collective community? I would analyze the localization strategies of KFC from a cultural perspective and try to answer the above questions.

2.KFC s Entry into China

In this section, I will present an overview of KFC s overall process of entry into China market. External and internal environment of China would be discussed.

2.1.Open China, New Opportunities

The economic reform opened China market to the outside world and