Assignment

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Integration of Global and Local Companies

Integration of Global and Local Companies

The demographics of the U.S. global company as well as the demographics of the local company you have chosen

KFC targets upper and middle-class individuals and families and prices its products for each segment. Most of the customers of KFC are African American, followed by Hispanics, Caucasians and then Asians. Most of the individuals are 55-64 years of age, followed by over 65-year-olds, 45-54-year-olds, under 24-year-olds, 35-44-year-olds, and 25-34-year-olds consecutively (Cappellini et al., 2019). For the local Indian market, KFC divides its market on the demographics including an income of Rs 10,000 and above, both genders, and ages between six and sixty-five years.

The geographic location of the local company

KFC CONNAUGHT PLACE

No A12, Inner Circle

Connaught Place

New Delhi – 110001

India

The organizational structure of the local company and of the global company

The company is centralized in India and all the decisions are documented before being availed to the upper level of the organization. There is, however, minimal to no level of involvement at the lower level (Mathur, 2016). All the heads of departments are required to agree with a major decision to pass and its contents to be brought to fruition. This includes decisions on the opening of new branches.

For the global company, KFC was bought by PepsiCo which became its parent company. The parent company did this to grow its segment for fast food restaurants. It also runs Pizza Hut and Taco Bell. The management style of the group and its corporate culture are distinguished from the culture of KFC before the acquisition. In prior times, the owners of the company let the restaurants run themselves and allowed for flexibility. PepsiCo employs consumer product orientation as it realized the similarities between marketing snack foods and soft drinks with marketing fast food (GÜNEŞ, 2018). The company took on the divestment of units that were envisaged as non-compatible and undertook organization along with restaurant, snack foods, and soft drinks product lines.

KFC’s strategy is now improving its operating efficiencies. This can be directly impactful to the company’s operating profits. During the period around the PepsiCo acquisition, the company sought to increase efficiency and eliminate overhead costs (Cappellini et al., 2019). This reorganization took part in the United States and entailed the revision of the company’s operating standards and training programs for its staff.

Part II: Consider that your choice of global company has blended with the local company, identify the following about your “blended company”: what were the original value of the global company as well as what were the original values associated with the local company. List the values they now share.

In glocalization, products are marketed globally and customized to adapt to local laws and customs and to fit or adjust to the preferences of consumers. The glocalization of a product means that increased interest is given to the product by consumers (Mathur, 2016). Regardless of whether the product is universal in that it can be used by anyone, its localization turns it into a product that has more utility for the context, the needs of the individual and the individual.

The values shared by the local and global companies include the following.

Employee loyalty as seen in tradition. The culture of the company was built on a laid-back way of management. Before the company’s acquisition, the employees could be helped with other non-income needs, get a pension and enjoy good benefits (GÜNEŞ, 2018). This means that the management of the local and global company employs a personal touch kind of leadership which can be very effective in cultivating employee loyalty.

The improvement of operating efficiencies. The company sought to reduce operating costs that directly impact operating profit and reduce overhead costs to improve operating inefficiencies. Strong competition in the United States means that fast food restaurants are discouraged from raising their prices to increase profit. Numerous chains including KFC seeks to increase their profits by improving their operating efficiencies (Baker, 2016). This can also be done through continual product quality, friendly and fast service, cleaner restaurants and improved customer service which are values both the local and global companies share.

Part III: What were two important marketing strategies of the original global company?

Briefly describe these. What were the two important marketing strategies associated with the local company? Briefly describe these. Now, in terms of the blended company, describe two marketing strategies that are in place.

The company’s secret recipe. The company brand and its secret recipe have been a huge boost to its advertising and have allowed the company to present itself as a unique fast food restaurant. The company was one of the first restaurant chain businesses in the fast-food market. The company envisaged its secret recipe as part of its marketing strategy and as a home replacement strategy. This can be seen in the local Indian market where the company offers more spicy chicken to entice the Indian palette. Such chicken is only available in India making the company’s secret recipe a selling point for both the company and its geographical location (Mathur, 2016). The same can be said of its name Kentucky Fried Chicken.

Brand reputation and name recognition. The company’s early entry into the fast-food industry sixty-six years ago allowed it to have a strong foothold in the industry and to establish and develop a strengthened brand name recognition. The company was founded by Colonel Sanders, a very recognizable figure internationally and in the United States, as seen in the company’s logo (GÜNEŞ, 2018). Numerous surveys have recognized the effectiveness of the logo in enhancing the image of the brand, something that many logos fall short of achieving.

The company employs a global marketing approach and strategy that employs numerous constants as follows. The company’s advertisement figure is always Colonel Sanders and the restaurant chain markets its specialty as fried chicken. These constants are heavily carried out as part of the strategy in the U.S. However, in other markets, the company approaches these foreign markets differently and uses a unique strategy for each location that is based on the preferences, tastes and values of consumers there (Mathur, 2016). The response of the company to these varied values based on local culture cements the company as a leader in glocalization. Examples of this include the following. A large part of the Indian population, about thirty-one percent, do not consume various types of meat out of their religious beliefs. As such, the company translates this local value to marketing vegetarian options in bigger volumes as compared to the UK or US. In KFC New Delhi, for instance, the menus entail items such as the Chana Snacker and Thali that are made from chickpeas and vegetables (Cappellini et al., 2019). The company also gives the colonel a different look in places where the white suit may not relate to the dressing conventions of that location. The change in dressing represents local values as does menu tweaks, as per local consumer values.

Part IV: Identify one brand associated with the original global company and one brand with the local company. In the blended company, which of these brands has survived and why? Explain.

A brand associated with the original company is PepsiCo’s acquisition, Taco Bell. The parent company used similar promotional strategies that it employed in the marketing of snack foods and soft drinks. By the time it was acquiring KFC, it had already dominated half of the fastest-growing and largest segment in the fast-food industry. PepsiCo and its subsidiaries survived. However, KFC had been sold to Heublein, Inc. that took it to its IPO, but the company could not weather being in the fast-food industry and sold the chain to PepsiCo (Mathur, 2016).

A brand associated with the Indian local company is KFC Yum restaurants where under the global chain the company introduced the product Krushers, as part of its Indian cold beverages segment. Krushers has been altered ever since to suit the taste buds of locals in India.

The success of these companies when it comes to glocalization can be tied to high sensitivity to local consumer habits, social and cultural norms, requirements and tastes (Baker, 2016). It is also complemented by having exceptional partners on-ground including governments, human resources, finance, supply chains, marketing, logistics, and media.

Part V: Metrics are very important. Briefly describe how you would evaluate the blended company compared to the original global company and the local company before blending. In other words, what metrics would you use to decide if the blending of these two companies has been successful?

Studies indicate that companies that are successful in cross-cultural market leadership are ones that combine emotional and general intelligence IQs. They also utilize cultural intelligence IQ to provide contextually appropriate products to the customers. Examples include new generation, strategic and high order abilities that distinguish companies with a single-dimension mindset to those who act as global citizens.

The metrics to decide on the success of the local and global companies include the following. The achievement of the following objectives. Consistency in the provision of high-quality products. Friendlier and faster service. Maintaining clean and hygienic restaurants. Improvements in customer service. Increases in operational efficiencies. Lastly, the reduction of operational and overhead costs. Other metrics include the following. The improvement of menu selections of different locations. Consistent promotion of a healthier image through the inculcation of vegetarian menu items (Grigorescu, 2017). Expansion of the franchise to other global locations. Expansion into international operations to provide increases in profit growth percentages and increases in overall sales growth percentages. Lastly, the resolution of franchise issues in all markets, local and global.

The brand spent a lot of time trying to get the attention of local Indian consumers. It was the first multinational fast-food corporation to open its doors in India. It, however, failed in its first years as its products were not aligned with the tastes and preferences of consumers there. Eventually, it became a popular brand and later realize the need for inclusion of vegetarian menu items for individuals who could not consume various types of meats due to religious reasons (Baker, 2016). This recognition of what the consumer needs and wants are crucial as a metric for success in the fast-food chain industry.

Part VI: Provide a brief analysis and an example of human perspective theory. Why do you think this is important in terms of glocalization?

The human perspective theory says that individuals achieve their full potential through the movement to self-actualization from basic needs. Experts try to investigate the lives of other people as the subjects of this observation would see themselves. This includes a tendency to be optimistic in their perspective towards human nature. Moreover, there is a focus on the ability of individuals to achieve their full potential, to control the biological urges and to think rationally and consciously. This perspective is important for companies that wish to undertake glocalization as it allows for an in-depth understanding of the culture and norms of local and global markets. This allows them to offer the right products in the right locations at the right prices (Mathur, 2016). An example is KFC’s move to alter the dressing of its logo to allow for cultural relations with the dressing conventions of local people. This shows the company intends to see themselves in the eyes of local customers.

Part VII: Analyze in your own words these terms: particularism versus universalism.

Identify how they are different and provide an example.

Particularism is the belief that the application of practices and ideas is dictated by circumstances. On the other hand, universalism is the belief that practices, and ideas can be applied in all locations without the need to be modified. Cultures with strengthened particularism place a strong emphasis on personal relationships and perceive reality more subjectively. For a business to be successfully glocalized, it needs to employ more of particularism to allow for a personal touch in its product and service offerings (Grigorescu, 2017). A good example is Veg Zinger menu offerings of KFC India for vegetarian customers.

References

Baker, P., & Friel, S. (2016). Food systems transformations, ultra-processed food markets and the nutrition transition in Asia. Globalization and health, 12(1), 80. Retrieved from https://link.springer.com/article/10.1186/s12992-016-0223-3

Cappellini, B., Hosany, S., Yen, D. A., & Yu, Q. (2019). Away from home: How young Chinese consumers travel with global brands? Journal of Retailing and Consumer Services, 46, 87-94. Retrieved from https://kar.kent.ac.uk/67584/7/JJRC_2017Away%20from%20home(1).pdf

Grigorescu, A., & Zaif, A. (2017). The concept of glocalization and its incorporation in global brands’ marketing strategies. International Journal of Business and Management Invention, 6(1), 70-74. Retrieved from http://www.academia.edu/download/61339541/art_China20191126-34997-4gvhhy.pdf

GÜNEŞ, S. (2018). Globalization and Industrial Design: Harmony or Conflict? Online Journal of Art and Design, 6(4). Retrieved from http://adjournal.net/articles/64/647.pdf

Mathur, S., & Patodiya, P. K. (2016). Global perspective of fast food consumption: a systematic literature review. Indian Journal of Management Science, 6(2), 46. Retrieved from https://pdfs.semanticscholar.org/6a95/16db606247e1827513fe7319480f2e1184d4.pdf