BUSINESS BOOKSHELF B Y R A N DY K R E I D E R
KFC in China: Secret Recipe for Success By Warren K. Liu (Wiley 2008) China is one of the world’s most competitive markets in many industries and fast food is no different. Consumers in China, especially in its booming coastal cities, have a myriad of choices of where to eat. However, KFC has risen to the top of the industry in the two decades since it opened its first restaurant in China in 1987. By 2005, KFC had become the single largest restaurant chain in China, accounting for 1 percent of the industry total. In KFC in China: Secret Recipe for Success, Warren K. Liu explores the factors that allowed this American food brand to achieve its leading status in a country known for its distinctive cuisine. While Liu attributes part of KFC’s success in China to timing – it was the first well-known Western restaurant brand to make an appearance in China – most of the book focuses on the company’s successful business strategy. According to Liu, that business strategy can be summed up in two words: rapid expansion.
There are many resources KFC needed to sustain its growth, including qualified restaurant management talent, products that met the changing desires of the target customers, and a strategic real estate development capability. Liu explains how KFC attained these resources to gain its competitive advantage in China, as well as how it localized its products to appeal to the Chinese market. Apart from its operational excellence, Liu believes that much of KFC’s success lies in its marketing and product promotion. From discount-based promotion to well-placed advertising campaigns, the chain has enhanced its brand image in China and drawn in droves of customers. In addition, KFC has maintained good relations with China’s news media both at the national and local levels over the years of its expansion, helping to minimize negative press attention at times of adversity. There is much to be learned from KFC’s business strategy, from government relations to public relations, product design and crisis management. In this way, this book becomes a valuable read not only for those in the restaurant industry, but for anybody who is seeking to understand what it takes for a company to be successful in China.
China Entrepreneur:Voices of Experience from 40 Business Pioneers By Juan Antonio Fernandez and Laurie Underwood (Wiley 2009) There are countless perspectives on how to best launch a new venture in China, from targeting the right customers to hiring the right employees. In China Entrepreneur, Professor Juan Antonio Fernandez and journalist Laurie Underwood weave together and interpret in-depth interviews of 40 successful China-based entrepreneurs from 25 countries and provinces around the world in order to capture a diverse viewpoint on China’s business environment. These entrepreneurs share their personal business experiences from China and give advice about how to run a successful business in the world’s fastest-growing economy. The main target audience of China Entrepreneur is businesspeople from around the world who are thinking of launching a start-up business in China. A large portion of the book is therefore devoted to the core issues of getting started: gaining government approval where needed, obtaining a business license and choosing the right Chinese business partner.
But the book also extracts from the interviews some of the management strategies necessary to successfully run a company once it is established. Each section focuses on a different issue: targeting the right customers, human resource challenges, ethics and corruption, and business negotiation. Throughout the book, interviewees share personal anecdotes to explain how their own strategy worked or did not work. Each section also ends with a summary of the main tips that were established by the writers and by the interviewees, providing a quick reference guide to the keys of success for China-based business. China Entrepreneur is unlike most other books because the advice, stories and opinions that form its framework are diverse and streettested, making it an important resource for anyone that is looking to launch a start-up business, expand operations, or simply improve their business in China.
DECEMBER 2009
INSIGHT
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