Kfc Comparative Analysis

Detailed Analysis from an Organizational Perspective:

Globalization in today’s world is very interesting and unavoidable factor. There is no doubt that globalization has open many door for entrepreneurs and made a whole world as single market. Every business wants opportunity and expansion and look forward to globalize. As Pankaj Ghemawat discussed in criticism of “world is flat” book written by L. Friedman’s. Globalization has not yet reach to the extend, still data says there are lot to improve and still policy of the country differ from country to country and still distance matters a lot as mention in CAGE framework.

KFC, Kentucky Fried Chicken, is an American Fast Food, specialized in fried Chicken. As per the 2014 data, KFC operate

KFC, while entering China they preferred local partner because of China Government policy but later they adopted wholly owned strategy and they customized their product as pressure for local response was high, local culture and local competition. The CAGE distance framework helps in selection of the countries to enter for doing the business. Not always the way of doing business in home and parent country will be same ,Thus the ideology of the host nation do not always match with that of the country they want to enter. First important thing is to decide what type strategy we adopting to enter in international market, either cost differentiation is high or low and how is local responsiveness. As KFC are in to fast food business they have to see the local responsiveness as taste in USA and china is totally different. There is cultural and social difference as well, in USA people prefer takeout, whereas in china people love going to restaurants with family having their meal. This effect on the infrastructure of the KFC restaurant as in china they need more space and have to spend more on ambiance. As well as cost pressure are also high as already competitors like; McDonalds, subway, are there. As costs and local responsiveness pressure both are high they adopted transnational strategy to enter in

To compete with their competition and to lower the cost they build their own logistic network and own fleet truck, they choose the best supplier to maintain their quality and also started buying locally to reduced the cost and it helps to maintain good relation between host country government. They trained their employee regarding behavior with the customer and how to make customer satisfy in long term business. They studied about the consumer behavior, taste preference, age/demographic factor etc to understand the local market. As in the CAGE framework cultural, Administrative, Geographic and Economic factors they opted when people says it’s very hot about their food they change the menu as per their taste and made 50 menus with local taste and also started selling breakfast as per the local