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KFC in China - Problems, Successes, and Challenges for American Franchisers

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After opening the first KFC restaurant in Beijing, China in 1987, KFC earned initial success from the Chinese people who were curious about the taste of foreign cuisine at that time. Being a fast-food restaurant, KFC adopted “ convenience, efficient service, comfortable environment, pleasing music, and jovial atmosphere” as its goals and principles. This style of management excelled in China in its initial years. Since these kinds of the foreign restaurant were exotic on that time, managers took the advantage of charging higher prices of hamburger (10 Yuan) and Coke (5 Yuan) compared to their local counterparts in the United States.

In the 1990s the number of fast-food restaurants like KFC in China increased by 100. The initial success was followed by minor setbacks in the following years. The local people of China started to get used to the food that was being served in KFC and other fast-food restaurants like McDonald's. This was proved by several managers who noticed that some customers who usually stop by and eat at their restaurants were now going to local Chinese restaurants where their favorite Chinese cuisines are served.

During special occasions like Spring Festival and Mid-autumn Festival, KFC and other fast food restaurants were empty. Customers also complained about the lack of variety of food that was served and was not as good as their food. The management of KFC, as well as other fast-food restaurants, started making adjustments in their menus and cuisines as a way of absorbing the Chinese culture. In summer 2001, KFC introduced many Chinese meals on their menus. Examples of Chinese foods that were introduced are “ Preserved Sichuan Pickle and Shredded Pork Soup” .

The introduction of Chinese cuisines was a success as the Chinese felt the respect of foreign restaurants on their cuisines. More varieties with blends of Chinese style were added like Mushroom Rice, Tomato and Egg Soup, Traditional Peking Chicken Roll, and Happy French Fry Shakes.

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