Strategic Approaches of KFC and McDonald's in China and India

This report analyzes the expansion strategies of KFC and McDonald's in China and India, focusing on consumer behavior and market entry. It begins by examining KFC's and McDonald's differing approaches to entering the Chinese market, with KFC initially using joint ventures with local firms due to government regulations, later transitioning to a chain model. McDonald's, on the other hand, entered China in 1992, capitalizing on the country's openness to Western culture. The report then suggests a joint venture strategy for expanding in India, emphasizing the importance of understanding Indian culture and adapting to local preferences, as demonstrated by Burger King's success. It highlights the advantages of joint ventures, such as cultural understanding, reduced marketing costs, and access to local market expertise, while also considering India's infrastructure and the preferences of its diverse population, including the vegetarian segment. The conclusion summarizes the key strategies of both companies and recommends the joint venture approach for successful business expansion.

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Table of Contents
Introduction...............................................................................................................3
Strategic approaches of KFC and McDonald’s.........................................................4
Strategy for expanding company into India..............................................................4
Conclusion.................................................................................................................5
References.................................................................................................................6

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Introduction
Kentucky Fried Chicken is the restaurant of American fast food, which is
headquartered in Louisville Kentucky. The specialization of the company is in the
fried chicken and considered the World second- leading chain of restaurant
(ANNUAL REPORT, 2018). The other is Mc Donald’s was established in the year
1940, it is the world’s largest chain of restaurant by profits which is $21.025
billion serves more than sixty nine million consumers on daily basis in 2018. In
this report the dissimilar approaches of KFC and McDonald’s to expanding their
business in China is examined and further efficient strategy which other company
can adopt to expand in India is suggested (McDoanlds Annual reports, 2018).
Strategic approaches of KFC and McDonald’s
KFC entrance into the market of China was done by the mode of joint
ventures through the Chinese local firms in the year 1987. The China governments
select KFC, its major combined partner in the first case of entry. Thus KFC, enter
in country of China through the joint venture with Department of Government. The
company also came into joint venture with few more firms, which is local to
enlarge and grasp the market of local Chinese (Oliveira & Schneider, 2015). The
major purpose to select this approach for expanding in China was made because

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the China was affected through the severe regulations of the government, which
was presented at that moment. Further, the company ends the policy of expanding
business through the joint ventures. KFC developed chain model and made it is a
best means of making entrance in China and bought out all firms of local partner.
On the other hand, McDonald’s expand business in the year 1992, by opening its
restaurant in Beijing, the restaurant offer products to more than forty thousand
consumers. The restaurant turns out to be the Chinese visitor’s landmark because
through this they can experience the actual food of Americans. Further, rapidly
McDonald develops the business in China’s mainland, because in 1992 country
was introducing China, the market of western and was ready to take up and the
lifestyle of western (Shah & Mujtaba, 2016). The Chief Executive Officer of
McDonald’s takes this as a high opportunity as well as by the ending of the
century; it opened up more than six hundred restaurants in China.
Strategy for expanding company into India
The efficient strategy for expanding the business in India is joint venture; the
joint venture is a strategy where two parties join, with the common objective and
shares profit mutually (Shishido, Fukuda, & Umetani, 2015). This strategy is
effective because through making the joint ventures with the local companies, the
company can understand the culture, value and beliefs of the Indians because

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Indians usually buy the products according to their culture and customs. Further
from the direct questioning, it finds that joint venture strategy would be better for
the company to expand in India because liberalization of the Indian reduces the
rules and regulations, which, helps the shareholders to easily make investment in
the Indian market. The joint venture can be successful for the company because the
standard age of about 17% of the population in India is 26.7, which is young and
youths are usually more attracted towards the fast food, this helps the company to
make innovative strategies in the burger to attract young generation. As, the same
strategy adopted by the Burger king who came in the partnership with the group of
Ever stone in India and make BK veggie product, which enlarges the sales of
company up to 69%. The majority of the population is middle class, which is one
billion for them company can keep the price of the product low (Boje, Haley, &
Saylors, 2015). India broaden huge infrastructure and considered the second world
biggest network of road that is 3.34mn Kilometer and also the 2nd biggest network
of rail as well as thirteen main ports with the eleven airports of International, which
supports the company in easily expanding the business in India with joint ventures
(Ramesh, Grover, & Dasgupta, 2019). The Indian people like to eat spicy food,
they mainly include ginger, cardamom, turmeric, cinnamon in their foods; however
most the Indians avoid eating beef that is out of total population 40% of the
population are vegetarian, through joint venture with local company, companies

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can understand better about use of these ingredients while making vegetarian
product to target the vegetarians. It also gives the exact information about the
market, because the local company is already aware about the business
environment. Through the joint venture, the expansion is made faster and reduces
the cost of marketing if the local company is already well- established; further, the
company can use funds to invest in research and development.
Conclusion
From the above, it concludes that both KFC and McDonald’s is world’s top
restaurant chain. The companies applied different strategy to expand the business
in China like KFC expands through the joint venture in 1987 and McDonald
opened the first restaurant in the year 1992, further expands in main location
China. For expanding the business in India, Joint venture strategy is considered
best and leads to success, however many companies like Burger King, Starbucks
also adopted this strategy to expand in India.
References
ANNUAL REPORT. (2018). Retrieved 7 24, 2019, from
http://member.afraccess.com/media?id=CMN://2A1093136&filename=20180726/
CKF_02002462.pdf

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Boje, D. M., Haley, U. C., & Saylors, R. (2015). Antenarratives of organizational
change: The microstoria of Burger King’s storytelling in space, time and strategic
context. human relations , 69 (2).
McDoanlds Annual reports. (2018). Retrieved 7 24, 2019, from mcdonalds:
https://corporate.mcdonalds.com/corpmcd/investors-relations/financial-
information/annual-reports.html
Oliveira, G. d., & Schneider, M. (2015). The politics of flexing soybeans: China,
Brazil and global agroindustrial restructuring. The Journal of Peasant Studies , 43
(1).
Ramesh, M. A., Grover, P., & Dasgupta, S. (2019). Start-up Marketing Strategies
in India. Bingley: Emerald Group Publishing.
Shah, S., & Mujtaba, B. G. (2016). Contemplations for Opening the First
McDonald’s Restaurant Franchise in the IT Capital of India’s Bangalore.
International Journal of Marketing Practices , 3 (2).
Shishido, Z., Fukuda, M., & Umetani, M. (2015). Joint Venture Strategies: Design,
Bargaining, and the Law. Cheltenham: Edward Elgar Publishing.