A comparison of KFC and McDonald’s marketing strategy in China: Localization or Globalization
Abstract
McDonald’s is the greatest fast food chain in the world, its company sales and operate income was largely exceeded KFC on a global scale, but it confronted a strong challenge from KFC when it emerged into China. This essay analyzes the comparison between KFC and McDonald’s marketing strategy, emphases on finding the similarities and differentiations from “Seven P Formula” and finally makes a conclusion that localization is more suitable than globalization as the marketing strategy when fast food chain emerged in China’s market.
Introduction
Localization or Globalization has long been discussed when choosing strategic orientation…show more content… McDonald’s first restaurant opened in China in 1990, and now it has 2003 outlets all around the China. From the apparent distinction of the outlets, it is necessary to analyses the similarity and differentiation between them.
The largest difference was the time these two companies settled in China and implemented their strategies. Franchising is a business format that the franchisor grants a license to franchisee and franchisee then can use it logo, products and goodwill. For example, McDonald’s allow other business man open their chain by using the same name if they have paid initial fee and ongoing management service fee (Colin, C et al, 2012). KFC use collaborative model of direct and franchise chain which laid the solid foundation of completive advantages. KFC is earlier than McDonald’s to implement franchising, who established the first franchising restaurant in 1993 and continue implement "do not start from scratch" mode, which means franchisee do not need to found a location, recruiting and training new employees but apply to join in and take over a mature restaurant. In that situation, franchisees can omit the preparatory work and incorporate themselves to the standard management system as soon as possible. However, McDonald’s insist on implementing direct chain operate until 2003, while KFC has developed about 40
