Essay About Kentucky Fried Chicken And Chinese Market

Kentucky Fried Chicken in China
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Case Study Analysis:Kentucky Fried Chicken in China (A)Date: 22.08.2015SITUATION ANALYSISThe case studies about the attempts to establish the Western-style fast food, Kentucky Fried Chicken (KFC) in China. It provides an insight on the Chinese market and challenges KFC would face in the Chinese market. The case focuses on the strategic decision making for selecting an apt location for its first store which would eventually estimate whether the investment would lead to for a huge gain or a huge loss.SWOT[pic 1][pic 2]PROBLEM DEFINITION:The intended geographic location KFC should select for its first store in China.OPTIONS:Location of the first store could mitigate the obvious risk of moving into China, Tony Wang had the following options for the location of their first store:TianjinShanghaiGuangzhouBeijingEVALUATION CRITERIA:Proximity of chicken suppliers and poultry processing farmsFrequency of western touristsProviding profile for national market penetrationProximity to customersRelations with the GovernmentTotal costs- Minimal transportation costs, land, laborEVALUATION CRITERIA AND ASSESSMENT OF OPTIONS:OPTIONSEVALUATION CRITERIA ASSESSMENT OF OPTIONS1.   TianjinProximity of chicken suppliers and poultry processing farmsLacked a convenient supply of chickensPopulation and potential customersLess frequented by touristsProviding profile for national market penetrationCouldn’t provide the necessary profileRelations with the GovernmentExcellent contacts with Tianjin municipal governmentTotal costs- Minimal transportation costs, land, laborNot very high costs2. ShanghaiProximity of chicken suppliers and poultry processing farmsEasy access to ample supply of chickensPopulation and potential customersNoise and pollution discouraged touristsPopulation-11,739,000Providing profile for national market penetrationYes- but need to promise an adequate return in FEC before making an investmentRelations with the Governmentone of the three self-administered municipalitiesTotal costs- Minimal transportation costs, land, laborbusiest harbor, transportation costs low3. GuangzhouProximity of chicken suppliers and poultry processing farmsLittle difficulty in locating adequate supplier of chickenPopulation and and potential customersFrequented by business people and tourists from Hong Kong on one day excursionsPopulation- 3,135,000 people in 1980Providing profile for national market penetrationLess probable than BeijingRelations with the GovernmentHad greater autonomy in approving foreign investment projects, reduced tax ratesTotal costs- Minimal transportation costs, land, laborIncreased costs if chicken has to be bought from some far off location4. BeijingProximity of chicken suppliers and poultry processing farmsSeveral poultry producers just outside the cityPopulation and potential customersCapital city- large customer base (9,029,000 people in 1980s), high economic development- low chances of failureFrequented by Western tourists Providing profile for national market penetrationGrab people’s attention and facilitate future expansion outside the cityPenetration here can test the market and macro environmentRelations with the GovernmentAutonomous municipal government, helps in building good terms with government and local suppliersTotal costs- Minimal transportation costs, land, laborEducation capital- Lot of students- hire students part time- less labor costRECOMMENDATION: