KFC in China: Secret Recipe for Success

by Warren Liu

Ranked #5 in INSEAD’s Top Ten Knowledge Articles for Q2 2009 This book examines the major contributing factors which catapulted KFC to the top of the Chinese restaurant service industry in less than two decades. It focuses on KFC China's competitive differentiators, and how they jelled in support of a coherent business strategy, and of each other. The successful execution of KFC China's business strategy has since been rewarded with an unlikely industry leadership position in growth, profitability, market share, and brand recognition in the world's fastest growing economy.

Genres: China, Business

200 pages, Paperback

First published September 26, 2008

Reviews

[Lee · Rating 1 out of 5]

It turns out that, even if you have a degree from Harvard, you may not necessarily be able to write a book in English, particularly if you can't speak English.

This book may have, at some point, had potential, but it was so riddled with ununderstandable sentences that it becomes inaccessible. Also, most of the parts that could have been interesting were actually muddled with irrelevant personal anecdotes.

The story of KFC rise in China is interesting, unfortunately this book doesn't tell it.

[Shannon · Rating 5 out of 5]

Slos

[Alex · Rating 3 out of 5]

im so locked in rn this is the summer reading comeback (my portfolio is once again losing money)

[Jerel Bonner]

It was a cool rainy night in China, and a couple of Toastmaster members and myself were discussing the news story that YUM! Brands had just purchased Little Sheep Hotpot restaurants. As I finished reading "KFC in China" the reason behind this transaction became very clear 'Growth Rate'. For YUM! to meet its target growth rate of 22% per year and with a base of already 3,300 KFC locations, then they would have to open 726 new sites a year. That's two restaurants per day. Without buying new brands this goal is a challenge.

"KFC in China' gives a 20,000 meter view of how YUM!s flagship brand became the largest QSR chain in the largest consumer market. KFC is even larger than McDonald's in China. Written by Warren Liu, a former VP of YUM!s China executive committee, he takes the reader inside the company's operations to understand the challenges KFC conquered on it's road to becoming number one.

KFC was the first QSR to enter the China market back in 1987. Mr. Liu informs the reader about the key decision's KFC made at each of it’s growth phases. He writes about the key business strategies that led to the decision without giving away the 'secret recipe'.

This book focuses on 10 critical success factors. From those 10, I gained the most value from his sections on a) creating the right team at all levels of the organization especially leadership, b) supply chain, c) operational development, and finally d) localization and globalization.

While Mr Liu does not give any specific actionable items to practice, his stories and case studies are good lessons to help a company expand into the China market. Many of the examples he writes about are common practices, and the gem of this book is that these business principals do lead to success no matter what the culture of the local team.

Overall, this book is another tool that can support an executive or company prepare for the China market. Finally, if you are YUM! shareholder, this book gives a good prediction that KFC's profits in China will continue to be 'finger licking good'.

[D · Rating 3 out of 5]

KFC in China is a very general overview of how KFC became the most sucessful fast food chain in China. Warren Liu was a vice president at KFC China and an active particpant in KFC's development there. For someone not familar with the fast food industry, it was interesting to learn a little bit about how global fast food chains work and are organized. Despite spending a lot of time emphazing how operating in China is different then anywhere else and requires a unique approach, Liu doesn't provide much insight into doing business there(unless you work for McDonalds).

The surprising thing is that despite having an author so intimately involved in KFC's growth the book almost never goes past basic generalities. For example, the author mentions how KFC struggled to get Chinese join-venture partners to agree to fast growth strategy and that eventually KFC convinced them to agree to high speed growth. There is no discussion of the specific objections or how KFC negotiated with their joint-venture partners. The book is pleasent, interesting and occasionally insightful but it is also frustrating to have an author who could add so much spice serve up something so bland.

[Luise · Rating 4 out of 5]

It's quite the interesting overview book to understand the concept of KFC in China better. Also it is okay for people not as familiar with businesses. I would not recommend the book to someone who is researching for a related project, as it doesn't go in that much detail. If you, as I was are totally new to the whole "Business", how it works, important concepts. It will be better to first look up some key concepts, so that you're not spending half of the time on Wikipedia trying to figure out the meaning.

[antonio · Rating 5 out of 5]

If interested in China, you will have wondered why KFC managed to do so well... This book solves this! I loved to see that indeed a big part of it was localization, and adapting to the environment. Loved to learn about CHAMPS (makes me think of some processes we implemented at our factory). Loved all the detail about suppliers, setting up local supp chain, the differences with Mc Donalds strategy etc... Finally, loved the little stories and references about China. I am a bit biased but I would say this is a 10 for China lovers, and an 8.5 for anyone interested in Business!

[Emmanuel · Rating 3 out of 5]

Thorough review and analysis of their initial plan and progress.

[Shawn · Rating 3 out of 5]

Like the book and what it lays out. A little to general for my background. Probably a really good book for a China newcomer.