Kfc Case Study

1984 words 8 pages
CASE STUDY: KFC in China
Kentucky Fried Chicken (KFC)- one of the most known fast food chains in the world started in the early 1930's by Kernel Sanders in the Southern USA as a small franchise operation. Colonel Sanders has become a well known personality throughout thousands of KFC restaurants World wide. Quality, service and cleanliness (QSC)represents the most critical success factors to KFC's global success.
Throughout its 35-year history, the company has gone through several stages and has answered to a legion of corporate parents from Heublein to R.J. Reynolds. The most significant stage was when the enterprise was sold to the American giant, Hubelin International in 1974. Rapid growth throughout the use of franchising together
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In addition, due to the complexity of many barriers to entry into China, a potential partner with sufficient contacts/networks with government agency officials may smoothen the process of setting-up operations in the nation.
The potential joint-venture partner should be large, well established, provide excellent distribution channels and have personal network access to government officials. It should also have modern equipment and a good management record. It is recommended that a partner is found by backwards integration. In other words, a good domestic poultry supplier. In order to ensure total commitment and balance of power between the two partners, a 55/45 joint venture, with KFC as the dominant partner should be set-up.
By building on each partner's core competencies, knowledge, and efficiencies, a mutually beneficial synergy effect could be achieved as a result of joint venture activities. For instance, the local partner can learn from KFC how to produce a better product at a lower cost and further expand on its new competitive positioning. KFC, on the other hand, can maintain quality supply which is detrimental to its success.
A joint venture will also significantly ease the entry to the virgin Chinese market. A new entrant would find it very difficulty to form local and personal

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