Word: kfc
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Dates: during 2000-2009
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...People's Republic is proving to be the perfect antidote for sluggish growth in the company's principal American market, where the fast-food business is as saturated as deep-fryer fat. Yum has 5,500 KFC outlets in the U.S., and through most of 2003 those outlets that have been open for more than a year were reporting negative sales growth due to intense competition and consumers who are trying to cut down on fried foods. Among the company's Stateside woes, says Lehman Bros. analyst Mitchell Speiser, "service times are slow and the food isn't seen...
...China, where there are more than 900 KFC restaurants and at least one new branch opening every other day, the outlook is much sunnier. The mainland now constitutes about 15% of Yum's operating profits ($273 million in the third quarter of 2003) and accounts for approximately 40% of its international business, according to Speiser. And because China's population is about five times that of the U.S., the company figures this is just the corporate equivalent of an appetizer. "There should be tens of thousands of KFCs, Pizza Huts and Taco Bell Grandes here," says...
...Part of KFC's triumph can be attributed to its first-mover advantage. The company's initial outlet opened in Beijing within sight of Chairman Mao's mausoleum in Tiananmen Square in 1987, a time when many Chinese still wore blue Mao suits and refrigerators were transported by tricycles. There were no fast- food restaurants anywhere on the mainland. (McDonald's debuted in Shenzhen in 1990 and came to Beijing in 1992.) The company made some early missteps: for example, KFC's advertising slogan "finger-lickin' good" was mistranslated into Chinese characters that meant "eat your fingers off." But China...
...same time, KFC had something other than the novelty factor going for it?the main item on the menu was familiar to Chinese. "You don't have to be a genius to sell chicken in China," says Jim Bryant, who brought Subway sandwich shops to China. But Novak, the Yum CEO, says success wasn't quite that simple. Over the years, "we stayed in touch with consumers' needs," he says, adding that KFC did a better job of "staying relevant" in China than it did in the U.S. Though KFC still offers its mainstay "original recipe" fried chicken, the company...
...secret of Yum's strategy, though, is not just what dishes it sells but its understanding of China's increasingly affluent consumers. Last year KFC opened the country's first drive-through restaurant in Beijing, astutely recognizing the opportunity presented by the mainland's increasing car culture. Pizza Hut now offers a delivery service to capitalize on an emerging generation of Chinese yuppies who want to watch a DVD or play a video game while eating supper on the couch. And Yum does a good job attracting children?potential customers for life?to its stores. To win their affection...