McDonalds & KFCs Success in China Essay Example | Topics and Well Written Essays - 1000 words - 1

McDonalds & KFCs Success in China - Essay ExampleIn 2004 KFC open(a) its 1000th restaurant in China, and enjoyed a great deal of success. KFC entered the Chinese market before McDonalds, thats why the latter had to come up with a strategy to deal with this dilemma. McDonald used the same strategy as of KFCs. They looked for partners when they entered China chose Guy Russo as Greater China international relationship partner. International magnification of both the fast food giants lies in franchising. Successful franchising lowers expenses that they would otherwise have to bear and also increases inciter loyalty. For instance, KFC entered Asia in 1970. The franchising strategy worked like this they gave franchising rights to a joint venture company, including two Japanese and one local anesthetic when they entered Taiwan in 1984. Many claim that KFCs early entry into China is one of the major factors that contributed to their huge success in terms of revenues and expansion in Chi na. On the other hand, McDonalds used a similar strategy in 1971, the first McDonalds restaurant opened in Tokyos Ginza district. It was a marketing strategy that was following the rival KFCs. It seems like economics Game theory one challenger opens an outlet somewhere, the other follows, strangling the hold on market share. The move into Asia of both the giants seems like a ball game one makes the move, the other reacts. And reaction was what McDonalds needed in China. KFC was cashing in a stria more than McDonalds. McDonalds with its 1000 outlets in China compared to 2300 of KFCs was raking in less revenue per outlet. Some put it at $900,000 per outlet compared to KFCs $1.2 Million per outlet. This was the dilemma that McDonald faced. So what was their strategy? One of the many problems that McDonalds faced was any go for replication or adaptation.