Case Study: KFC China's Distribution Strategy
Case Study: KFC China’s Distribution Strategies
Through years of endeavour, KFC China has grown to be the largest restaurant company in mainland China (Bell). KFC has applied successful distribution strategies that helped tremendously in its development. KFC China has started to focus more on lower tier cities and built up its reputation throughout the country (Yang 20). The franchise model is changed into the company-owned outlet model that allows greater controls of restaurants scattered around in China, however, it reduces the speed of KFC China’s expansion (Bell). The company built up its own supply chain that requires a huge investment but ensures the qualities of their products. The distribution strategies of KFC China are applied due to the distinctive characteristics of the Chinese market and have both pros and cons that affect KFC’s development and its chances of being successful.
As the huge competition in first tier cities, KFC China has started to focus more on lower tier cites (Yang 20). This strategy has benefited KFC by enlarging its market and making its brand more widespread. There were more than 3000 KFC outlets in 650 cities in China with one new restaurant opening a day in 2011 and the Chinese market has become KFC’s highest-growing and highest-margin market (Starvish; Yang 18). However, as the number of stores increases, the flavours of the food vary more rapidly due to unbalanced skills of employees, different supply chains or the lack of experiences of
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