Pennfoster research assignment Research project number (08063200)

n#l@ PART 2 lndiv¡dual lnfluences on Behavior portunity

Fast in China As U.S. fost{ood choins look toword foreign morkets for growlh, they foce o typicol decision-moking question concerning which fosl-food model to employ obrood. The issue centers oround whether o choin should follow its U.S. model ond offer its core products much l¡ke it does oi home, or olternotively, whether ¡t should odopt its orgo- nizotion ond offerings lo suit the locol Tostes of residents in the host counlry. The onswer to the question conceTn- ing which of these two philosophies is "right" presents o dilemmo to monogers of fost-food orgonizotions in their efforts to expond globolly. Consider two success stories: those of KFC ond McDonold's in Chino.

The f irst cose involves ihe Yum Corporotion. ln I 9BZ, when Yum bronds, the holding compony of KFC ond Pizza l1u|, foced folling revenues in the United Stotes, it storled to investigote the possibility of exponding overseos. Locotion studies of thot time reveoled thot Ch¡no wos o promising morket due to its sheer size ond lorge exponding populotion. By enter- ing lhot morket, Yum reolized thot due to d¡stinct locol toste preferences, the compony needed to odopt its product offerings to locol polotes ond lifesiyles. The menus, therefore, were reconfigured to odd dishes similor to the foods thot mill¡ons of Chinese grob from street-stoll restouronts. Food items such os o bowl of congee (o rice porridge), o drogon twister (o chicken wrop) or o spicy tofu ch¡cken Ttce weTe odded to the usuol fried chicken bucket menu ilems. The compony h¡red Ch¡nese monogers for odvice on food tostes, built portnerships wiih locol componies, ond troined other Ch¡nese to operote the new bronches thot lhe compony conlinued to odd olmosl doily. The com- pony now commonds o 40 percent morket shore of Ch¡no's $28 billion fost-food morket. Storting with iust o single resiouront ¡n 1987, Yum now operotes over 3,300 KFCs ¡n ó50 Chinese cities.McDonolds, on ihe other hond, wh¡ch is o competitor in f ost-food industry

in Ch¡no, holds o 1ó percent morket shore. Unl¡ke KFC's policy of menu odoptotion to suit locol lostes, McDonold's opled to follow the some core slrotegy used in the United Stotes by offering its f omilior menu items. The restouronts' loyout, décor, ond olmosphere olso followed the fomilior formot used ot home. ln this monner, McDonold's fronchises were morketed os sophisticoted venues for legions of increosingly- off luenl ond stotus-conscious Chinese, who seek to emulote the odmired Americon woy of life.

To mointoin this imoge, McDonold's restouronts feolure bright, worm colors olong w¡th soft, comfort- oble seoting within foshionoble interiors. ln odd¡lion, new restouronts feolure drive-lhrus to oppeol to Ch¡- no's increosingly-mobile populotion. Over the next few yeors, McDonold's plons to open o new outlel on on olmosl doily bosis. ln 20 I 3, McDonold's reports hoving opproximoiely 2,OOO reslouronts in Chino.33

The depiclion of fhe fwo compon¡es menlioned above reveols conlrosting coses for globol execulives seeking fo defermine which busi- ness model should be f ollowed in on emerging markef- Should lhe home-bose model be kept intoct, modif ¡ed, or d¡scorded oltogefher? Such o decision is obviously o correlofe between three main f ocfors: the product, lhe host coun- fry, and the manogemenf philosophy. Leorn more oboul KFC and McDonold's by visifing lifp:ll hbr.org/201 I /l I /kfcs-rodicol-opprooch-to- chino/orlpr ond http'//www.reuters.com/qssets/ print?oid=USTREóBEOVJ20l0l 2l 5 Wh¡ch of these lwo olternotive strotegies would you sug- gesl for o fosfÍood company pursuing global expansion ¡n lnd¡a? Similorly, wh¡ch of Íhese lwo stralegies would you suggesl for Compbell Soup ìn Conodo? Supporl your onswers.

effort ancl reward, compared to those who extencl little effoft to acquire the same procluct.Anclefson reportecl similar finclings.3e His conclusions supportecl Carclozo's contention that the mere possession of information about a procluct may lead to a more favorable evaluation of that product, not only beca¡se cus- tomers have greater knowleclge on which to base evaluation but also because