KFC in China: Secret Recipe for Success

Warren Liu's book covers KFC's successful development from opening its first store in China to its current dominant position in the Chinese fast food industry. The author details every aspect of KFC's rise from leadership and strategy to supply chain and localization. The contents of the book are wonderful lessons for anyone who wants to establish successful business operations in China.The author points out that the appropriate leadership was an important factor in KFC's early and current success. A combination of Chinese cultural background and a proximity to Western thought in KFC's Taiwan management team helped KFC to penetrate the Chinese market as a Western franchise. Mr. Liu also points out that one of KFC's strategies was to expand rapidly, even during the Asian Financial Crisis. This expansion strategy both established KFC as the #1 fast food chain by number of outlets in China and as the cost and marketing leader among fast food franchises.In comparison to KFC's main Western rival in China, KFC outdid MacDonald's in both supply chain structure and localization of image and product. While MacDonald's imported its concept of outsourcing supply chain functions, KFC built its supply chains locally, which turned out to be cheaper and more effective. KFC's products are also more localized to Chinese consumer tastes and preferences, something that MacDonald's struggled to accomplish.In addition to the above the author also points to KFC's real estate development, training, employee mentoring, operational support, among other factors, coupled with its drive to succeed in China that differentiated KFC from other competitors that have not enjoyed the level of KFC-success in China.Anyone who's looking to enter or continue to navigate the Chinese market successfully will find the conclusions mentioned in this book helpful. The lessons from KFC are genuine and interesting to learn. Students of this book will appreciate the real-life examples from KFC's early days to today. These examples are practical and laid out systematically. In reading this book, the author makes it is easy and entertaining to see why and how KFC came to dominate the Chinese fast food market.

For those of whom has zero experiences in fast food industry, and who is very interested in setting up business there in China, to take advantage of the huge middle class market and explosive economy, this book is a MUST read. Warren offers an unique prospective to the start-up/grow-up/prosper phases of the KFC operations in China, from smooth transition of the corporate culture and branding, to the successful implementation of localization of management team via the Taiwan Gang, to supply chain/govertment relationship/customer relationship management, and future expansion strategy vs. competitor etc. Lots of insights and experiences which should be helpful for those who want to get their feet wet into possible (no matter franchising or start-up) business there in China.

Cite my friend's comment:'This book is very impressive in a way how it present the business strategies in understandable way. I am a chemistry student. But I really enjoyed the business stories hidden behind KFC's huge success in China.The secret the author is telling is not only to do with fast food industry, but also available for all the business which want to spread out into international market. Localization, fast decisions, right group of target and timing are all key things which have been deeply analyzed in this book. It's a real guidance for business in China.Love it. '

I have read a number of China success guides, but Warren K. Liu's work is original for a variety of reasons. Never before have I studied such an honest and detailed account of the inner-workings of an indispuitably successful brand in China: KFC. And all written from the perspective of anticipating its continued China dominance over global market leader, McDonald's. As a former vice president of business development and a member of the Tricon Greater China Executive Committee, Mr. Liu is certainly in a position to know how and why KFC became such a runaway success in China. "Also ran" brands such as KFC always have a chance at redemption in China, provided that they have the right strategy. Buick positioned successfully as a luxury brand in China is another example that comes to mind. However, the KFC experience in China is truly unique and much can be learned from Liu's detailed account.A major part of the story begins at McDonald's in Taiwan, where the vast predominance of KFC China's senior staff were recruited, including author Warren K. Liu. The amazing success of this experienced group Liu affectionately refers to throughout the book as the "Taiwan Gang" shows that recruiting the right talent, especially in terms of management, at the outset of global businesses entering the China market is key. The next stage, which Mr. Liu also details, is the effective handing over of key management positions to local Mainland Chinese colleagues after passing on skills. Overall, Liu identifies the quality of the management team as a key KFC business differentiator in China.KFC's brand positioning as "An American Brand with Chinese Characteristics" is also critical, demonstrating that Mr. Liu and his Taiwanese colleagues did their homework and understood the China context better than competitors. Given the mixed feelings of admiration and resentment that average Chinese have about Western brands active in China, this positioning is brilliant. It is also a word play on Chinese government economic policy. Meanwhile, Liu accurately describes McDonald's emphasizing individualism and self-expression in marketing communications, which obviously does not resonate as well in China.Warren K. Liu also includes some interesting sections in his book regarding the challenges of dealing with Chinese joint venture (JV) partners that will be of interest to many readers. KFC China's overall strategy of achieving rapid growth economies of scale, such that they now have twice as many restaurants as McDonald's China, is also extremely fascinating. Finally, other aspects mentioned including Chinese people preferring pork to chicken and all other meats, the importance of clean toilets in KFC's success, KFC's product localization in China, and how to use crises as opportunities to expand your business in China, are all compelling.To me however, the key point of interest in this case study is how KFC successfully positioned themselves as being "more Chinese" than McDonald's and how that has lead to KFC's continued market dominance.

Best book for strategy. Beautifully written