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In America

In America, many restaurants who serve quick food like Wendy’s, McDonald’s, KFC, Chipotle, and subway are attempting to expand their services to other places other than the United States. Each quick service restaurant throughout America has tried but few have been able to succeed. The movement of these services can be challenging because each culture is different and do not relate to those around them. Two restaurants which serve food quickly have been able to move across the Pacific Ocean into China. The restaurants are McDonald’s and KFC. These fast food restaurants are the biggest expanders of fast food brands.
Chinese consumers spend more money on eating out has increased a substantial amount in the past decade in 2007. Since a great amount of money was being spent on going out there was an intense growth in the GDP. They have great potential in the future to open many more quick service foods. Another reason the owners of the two fast-food corporations found a reason to expand was that a growth in population had taken place. China has the greatest potential for being the largest population with the largest cities on any other country known to man. McDonald’s and KFC have had great amounts of success in China because many people had moved from desolate farming areas to urban homes in towns, cities, and villages also adding to the population grew quickly. Chinese families are large consumers of meat in general and both McDonald’s and KFC are basically all meat serving chicken and burgers. The businesses looked through the population and jumped at their chance to send their business overseas to add to the spending hoping that the members of their society would accept the foods they were trying to sell.
Both KFC and McDonald’s are quick food restaurants that serve food which was liked in China like chicken and hamburger. KFC is a business that serves fried chicken along with potatoes, corn, and other home-like foods. While McDonald’s is more of a spread of different kinds of food like chicken, many different types of hamburgers, fries, along with breakfast foods like egg sandwiches and hash browns. Each franchise makes food that is enjoyed in many countries which may raise the prices for the foods because more is being sold meaning they could make more money. At the time when the two food services joined the Chinese economy, the citizens had lower levels of disposable incomes. Meaning families should not have used the little amount of money they made on all of the fast-food they would order and eat often. Before these two restaurants joined the food industry of China they only consisted of smaller restaurants which served pre-made appetizers with very little dining environments. They lacked the funding needed to train employees and having well-managed dining rooms for customers to eat in. When the two restaurants moved into China they could not find enough staff who had at least five years of experience. They finally requested skilled managers from neighboring areas such as Taiwan and Hong Kong.
Quick service industries are rapidly growing throughout the countries and soon more will enter the Chinese economy causing more competition throughout the country. Even though the competition will continue to grow it will not always be the same because it will vary due to regions. In this case, a restaurant such as Waffle House, which is found on the Southern regions of the United States serves breakfast foods all day. Few restaurants found in the United States are able to serve food and have their name over the Pacific because they have not been able to attempt to move over to their production during the correct times where many people would be willing to try other places. Both McDonald’s and KFC were able to make it across the ocean but KFC is really in the boom over in China.
Fast-food services have two types of ownership that show the way they control their business. Corporate owned businesses are the most known because they are locally owned. These types are restaurants are run by the corporation along with every and any decisions made. The other way of ownership is franchisement, this goes along with entrepreneurs who want to join the business. The people who are a part of the second choice of ownership wants to open a business like McDonald’s franchise would need to pay something called a loyalty fee. A loyalty fee is money given to the corporation that gives the person who wants to open the franchise the right to make the business. But in order to open the business, they must follow certain criteria in order to open the building. Once given the permission to open the business they may move it anywhere, a teacher I once had was related to a woman who owned a few McDonald’s and attempted to open them in many different places but failed due to not having enough production to keep them running.
Fast-food definition from the Merriam-Webster dictionary is “of, relating to, or specializing in food that can be prepared and served quickly” Meaning fast-food and quick service food sounds exactly what it is. When someone who does not want to cook their own food or wait to be seated, taken their order and served a while later goes to a fast-food restaurant like McDonald’s, Wendy’s, Burger King, Rally’s, and even sandwich shops like Subway and Jimmy John’s. These restaurants serve quick food, may not be the healthiest, but for lower prices. The quality of these restaurants is nothing to be excited about, but they get the hunger of men and women around the world quickly and cheap meaning people can save money. Sit-down restaurants such as Applebee’s, LongHorn Steakhouse, Granite City Food and Brewery, and The Outback all have things in common. Each one of these restaurants you make reservations to, wait to be seated by a host or hostess, then you are waited on by waiters or waitresses, finally, you receive your meal, then pay your bill along with a tip for the waiter. You are spending more money and wasting more time when going into a sit-down restaurant.
Even though quick service restaurants are cheap they have more competition with each other because of the lack of difference throughout the prices between all of the fast-food corporations. Along with each serving foods alike. Most fast food restaurants serve foods like burgers and fries along with side meals like fruits or pies. The little amount of variation in the foods could cause an easy rise to new services like a pizza place, Vikings Pizza from Lyons, Ohio grew in production very quickly because being in a secluded area like Lyons caused many people to turn to the pizza as a fast-food service. This means smaller places with a variety of different foods can easily sneak into the market making it easier to get sell the product, however; just because it is easy to get into the market does not make it easy to brand the restaurant. This speaks highly on the industry causing the brand can have much more power to influence.
Now we look at two companies that started a chain reaction of quick service restaurants in which started a chain reaction to enter markets that are bigger than their own. The first restaurant, McDonald’s, was opened in Shenzen, China. After the first one was opened the quick food service spread throughout 94 cities with 566 different locations. McDonald’s came up with a very effective plan to grow their market in China with their logistics partner. HAVI Foods had a distinct order to make the move worth the chances. Before opening a partnership in China HAVI foods established three other centers in Guangzhou, Beijing, and Shanghai, these all connected to smaller satellite centers that would help McDonald’s have fully operational logistics system. Having these connections put McDonald’s in a great financial situation because they would be able to have the supplies to create the things they needed.
After the supply chain was put together, they needed to find out how and where they were going to build their locations in China, they decided they would attempt to start their building in the south where the largest and most used ports were located. The area where they placed the McDonald’s was known to be a popular area because of the GDP having an increase. After being successful in the south they moved to the eastern regions because the income of the citizens was higher and more successful meaning, they had more money to spend on the food. When in the United States you can franchise a restaurant with their permission but in China, they did not have the same rules meaning they could not franchise McDonald’s. This meant that every location claimed by McDonald’s was controlled and owned by the same company who placed the first McDonald’s.
McDonald’s came up with the idea to standardize three main locations which included quality, ingredients, and food preparation. By making this decision they were able to keep the same amount of work throughout the world. However; McDonald’s did not change their menus catering to the local food cultures they brought upon the people items like corn soup, pineapple sundaes, and spicy chicken fillets. These were all liked an immense amount by the Chinese population. Even though all the work put into trying to be the bigger and more used company they just could not beat the KFC corporations.
Kentucky Fried Chicken, better known as KFC, was invited into China with welcome hands unlike McDonald’s. After opening around 1,000 restaurants by 2004, they were doubling the amount McDonald’s was able to open. Even though McDonald’s attempted to help add some new product to their menus to get the Chinese to eat their more often KFC overpowered them because of the chicken. KFC was the first western fast-food service to attempt to move across the ocean and work their way into the market and succeed. After setting up a partnership with the Beijing Tourism Board and the animal company calling the KFC B-KFC. This idea was different from McDonald’s making them have a better chance of getting into China and winning the earnings easier and faster. KFC asked members of the Chinese nationals to manage and run the businesses instead of someone from another country coming in and taking a possible job that the Chinese could have had.
The salary at KFC was higher than some university professors giving them more money means a better chance of a good life. These positions started to get competitive with 20 applicants on any open positions. KFC felt it was better to higher young high school graduates that had no previous jobs or work experience. They would look for hard workers who would learn their job quickly and efficiently. This was different because traditionally anyone higher in a Chinese restaurant would need at least five years of work experience before joining.
KFC ran into some problems in their early years of opening, they had run into the choice during the Economic downfall in 1997. They had to make the decision on whether to cut costs or increase their sales. After long thoughts, they decided to take the later route and increase the sales by opening more locations and expanding into more territory. Thankfully this choice worked out in the end and helped the company immensely. By this time, they had so many locations opened, they had to figure out how to supply all the stores. In order to keep all the locations opened, they decided to put in a STAR system which would let them track the supplier’s quality helping the company achieve ISO and HACCP. They wanted their product to the businesses quickly, no more than a day so each one would be stocked and able to be prepped.
Just like McDonald’s, KFC wanted to keep the menu the same but added things to keep the Chinese culture interested in their foods incorporating some of their meals. They added different soups and many breakfast options just like McDonald’s. After a while they were able to open franchises independently.
In my opinion, I would have to say both franchises made great progress in their business and are currently still greatly used every day. I think they chose the right time and the right place to settle their headquarters to make a good profit off of the Chinese region. I think KFC was able to grow in population much quicker because of joining more in the community and even changing their name to fit with what China wanted. In the future, I think they will continue to grow, and more companies will find their way to enter the Chinese culture and possibly out populate KFC and McDonald’s by learning from their mistakes and putting it to making their companies better.