When I first separated from Pepsi, Yum! Global Restaurant Group not only has to make up for the losses caused in the past, but also faces severe challenges: how to build corporate culture? How do three well-known catering brands establish cooperative relations instead of competitive relations? How to establish employees' confidence in the future development of the enterprise? At that time, under the co-chairmanship of Mr. Pearson Andrakk Pearson, former president of PepsiCo Group and the first CEO of Yum! Group, and Mr. * * of Novak David Novak, the company maintained a feasible organizational structure before separation in many aspects, and outlined new development goals for the company in the future.
They have taken a series of bold and brand-new measures: KFC, Pizza Hut and Taco Bell continue their original management, but they should play a coordinating role with each other; Through the package form, the three brands are jointly promoted, and the raw materials are uniformly purchased and distributed by the company to control the balance of funds; For the first time, some chain restaurants owned by the company were transferred to franchise partners, and some of the returned funds were concentrated on the development of new restaurants; Senior managers personally went to the restaurant to motivate employees. At this point, the Group's operating profit margin has increased from 1 1% three years ago to 16%. The chain turnover of 1998 and the first half of 1999 have all increased, and the Group has seen a new prosperity.
China market is one of the fastest growing and most potential markets in Yum's global strategy. Global catering group. China Bai Sheng Restaurant Group is a cooperative development headquarters established in China by an international company under Yum! Global Restaurant Group. Since 1987 opened its first restaurant in China in front of Beijing, KFC has set up 19 limited companies in Beijing, Shanghai, Hangzhou, Qingdao, Nanjing, Guangzhou, Suzhou, Wuxi, Tianjin, Fuzhou, Shenyang, xi, Chengdu, Wuhan, Shenzhen and Harbin? By the end of 2000, more than 400 restaurants had been opened in nearly 80 cities and regions. So far, KFC has become the largest and fastest-growing fast food enterprise in China.
Our reporter and two members of the case discussion group of China MBA website (www.mba.org.cn), with the cooperation of Beijing KFC Co., Ltd., finally completed the writing of this case after more than two months' efforts. When interviewing KFC with catering franchise mode, our deepest feeling is that KFC is an enterprise with clear strategy and can successfully implement this strategy. It is also people-oriented and stable operation. The management theory is the same, but it is quite different in practice. A perfect business strategy, if not implemented well, will eventually become penniless; Only when the appropriate business strategy is determined, supplemented by satisfactory implementation, can the enterprise be in an invincible position and flourish.
As an international catering giant, KFC has many places worthy of discussion and in-depth study, and this case only involves a small part of them. Why did KFC make such a decision? How is KFC implemented? How did it get there? These are the three most concerned issues in this case.
KFC's own strength, long-term strategic objectives and management are highly unified and mutually supportive. In order to develop the fast food industry and franchise industry in China, we should learn from KFC, but at the same time, we should combine its successful experience with the actual situation of our company from our own reality, so as to learn something. Due to the length of the case, this newspaper will publish the contents of the case twice. The contents of this issue are long-term goals, marketing and site selection strategies; The next issue involves franchising, corporate culture, supplier management and employee training? See China Business News on February 27th.
Location strategy
Location is the primary factor of hotel management, so is restaurant chain management. The correct positioning of chain stores is not only the premise of its success, but also the premise and foundation of realizing the standardization, simplification and specialization of chain stores. Therefore, KFC attaches great importance to the location of fast food restaurants. Location decision-making is generally a two-level examination and approval system, with the consent of two committees, one is the local company and the other is the headquarters. Its site selection success rate is almost 100%, which is also one of KFC's core competitiveness.
The location of KFC is selected according to the following steps.
★ Division and Selection of Business Circle
1. Divide the business district
When KFC plans to enter a city, it will first collect information about this area through relevant departments or professional investigation companies. Some materials are free and some materials need to be purchased. After buying all the information, we began to plan the business circle.
Business district planning adopts scoring method. For example, there is a large shopping center in this area. Shopping mall turnover is 6,543,800,000 yuan 1 minute, and 50,000,000 yuan is 5 points. How many points will a bus line and a subway line add? These grading standards are relatively accurate empirical values averaged over the years.
Business districts are divided into several categories by scoring. Take Beijing as an example, there are municipal commercial types (Xidan, Wangfujing, etc. ), district-level business types, fixed-point (target) consumption types, community types, social and business types, tourism types and so on.
Choose a business circle
That is to determine which business circle to pay attention to and what the main goal is. In the selection criteria of business circle, on the one hand, we should consider the market positioning of the restaurant itself, on the other hand, we should consider the stability and maturity of the business circle. The market positioning of restaurants is different, attracting different customers and choosing different business districts.
For example, Malan Lamian Noodles and KFC are two "intersecting" circles with different market positioning and different customer groups. Some people eat KFC and Malan Lamian Noodles, and some people may never eat KFC but Malan Lamian Noodles, and vice versa. The location of Malan Lamian Noodles is certainly different from that of KFC.
The market positioning of KFC and McDonald's is similar, and the customer groups basically overlap, so the choice of business circle is the same. As you can see, some places are on both sides of the same street, one is McDonald's and the other is KFC.
The maturity and stability of the business circle is also very important. For example, the Planning Bureau said that it would open a certain road and set an address, which may become a mature business circle in the future, but KFC must wait until the business circle is mature and stable before entering. For example, how good the benefit of this store will be after three years, which will not help today. Is it necessary to lose money in these three years? It costs millions of dollars for KFC to invest in a store. Of course, it must be a relatively stable principle to ensure a success.
★ Calculation and selection of gas gathering points
1. Determine where the main gathering point of this business circle is.
For example, Xidan in Beijing is a very mature business district, but Xidan can't be a gathering place anywhere. It must be the most important gathering place for guests. The principle of opening a KFC store is: try to open a store in the most crowded place and nearby.
There used to be an old saying that "one step is not as good as three cities". The store address is one step away, and the business may be 30% different. This is related to the moving line of people (the line of people's activities). Someone may come here to turn around, so this place is where guests can't go, not far from an alley, but the business is much worse. All these should be taken into account when choosing the site.
What is the moving route of people, in this area, which direction people will go after getting out of the subway, and so on. These are all sent to pinch rice. Only with a complete set of data can we determine the address accordingly.
For example, the measurement of the previous flow of the store is to record the flow of people passing by in the place where the store plans to open, and measure how many people pass by this place in unit time. In addition to the pedestrian flow on the sidewalk where the location is located, it is necessary to measure the pedestrian flow in the middle of the road and across the road. The people in the middle of the road are just cyclists, not drivers. Whether the traffic crossing the road is counted or not depends on the width of the road. Even if the road is narrow, even if the road width exceeds a certain standard, it is generally an obstacle, and customers can no longer spend, so it is not counted as the traffic across the road.
KFC site selection personnel will input the collected data of people flow into special computer software, and they can calculate how much the investment here can't exceed, and if it exceeds, they can't open a store.
2. When choosing a site, we must consider whether the main mobile lines of people flow will be stopped by competitors.
Because people's loyalty to the brand has not been said, I am tired of eating KFC and watching McDonald's. This doesn't seem to have happened yet. As long as you are in front of me, I am very tired today. Why do I have to walk 100 meters to eat something else? I am in front of you. I won't go forward unless there are too many people here and I can't find a seat.
However, there is a main dynamic line of people flow, and if the gathering point of competitors is better than that of KFC, it will have an impact. It doesn't matter whether they are the same. For example, there is a KFC store at the intersection of Beitaipingzhuang in Beijing. If it goes west 100 meters, it is not appropriate for competitors to open another western-style fast food restaurant, because the main passenger flow comes from the east and is stopped by KFC, and the benefit of opening a store is not good.
3. The choice of gathering place affects the choice of business circle.
The choice of gathering place also affects the choice of business circle. Because whether a business circle has major gathering points is an important symbol of the maturity of this business circle. For example, a new residential area in Beijing has a large number of residents and a high population quality. But according to the survey, we can't find the main gathering point in this area, so we may not open a store at this time. When the community is mature or more mature, we will know that one of them is indeed the main gathering point.
In order to plan the business circle, the development department of KFC has invested a lot of energy. As far as Beijing KFC Company is concerned, the staff of its development department travel around Beijing all the year round, and they are familiar with this place where buildings and roads change greatly every year and local people are easy to get lost. This happens all the time. Beijing KFC received a phone call from a customer and suggested that KFC open a shop there. As soon as the developer hears the address, he can casually say whether the local business environment is suitable for opening a shop. In Beijing, KFC has successfully opened 56 restaurants according to the business circle divided by its own investigation.
long-range objectives
The problem of growth is very important for any company. Any successful enterprise must have a long-term goal to attract outstanding talents to join and contribute to the community. Companies that cannot determine their strategic goals will soon be eliminated.
This is especially true as a franchise enterprise. KFC franchisees certainly join in order to enjoy the good development prospects of KFC. The establishment of long-term goals depends on the examination of the company's external environment, the confirmation of the company's mission, and the expectation of the ability platform needed to complete the company's mission.
In the early 1990s, when Mr. Su, president of KFC China Company, came to China, he explained the long-term goal of KFC to its employees: to make KFC's brand in China the first brand in the catering industry in China and even the most popular brand in the world. During the development of the company, Mr. Su, together with managers at all levels, constantly publicized and expounded this goal. Every new employee of KFC knows this goal on the first day of work. This makes all employees of KFC have a blueprint for the company's development and a * * * vision. Everyone knows what KFC will look like in the future.
★ KFC has the strength to achieve such a long-term goal.
1. Although KFC came to China for the first time, it has enough strength to fully develop the China market and achieve its long-term goals with its years of experience in the expansion and international management of thousands of branches around the world.
2. The long-term goal of KFC is feasible.
This is based on a rigorous analysis of China's society, structure, market and customers. As a mid-range fast food, without a mature business circle, it will not be able to support the passenger flow needed for its daily operation. Therefore, the number of mature business districts in major cities in China in the next few decades will determine the market development potential of KFC. Based on the optimistic estimation of China's economic prospects and development momentum, KFC predicts that it will have a broad development space in China.
In addition, KFC has a very good opportunity to enter the China market. At that time, the catering industry in China, especially the franchised catering industry, was far from mature. As the first international franchise restaurant giant to enter China, as long as it seizes the opportunity to develop hard, it may become the first brand of fast food industry in China.
3. The long-term goal of KFC is consistent with the characteristics of its franchise.
As a franchise industry, KFC is different from many other industries, and it is highly risk-averse. Because once a chain restaurant has established a good corporate image, all chain stores can enjoy the benefits. But correspondingly, once any store has problems, the whole brand will be affected. So its ability to resist risks is very fragile.
KFC tries to explore new markets in China, but since it is a franchise, it must try its best to avoid risks and ensure that the brand will not depreciate due to expansion, which is always a process of brand appreciation. That is, no matter how we expand, we need to operate steadily. The combination of the two is included in KFC's long-term goal of becoming the first brand in China catering industry.
★ After more than ten years of development, KFC has become the largest and fastest-growing fast food enterprise in China; According to the questionnaire survey conducted by the world-renowned AC Nielsen research company in more than 30 cities in China, KFC is widely known in China and deeply loved by consumers. It is recognized as the brand with the most customers, ranking first among the top ten international famous brands. KFC can be said to have a double harvest in market share and word of mouth, which is closely related to the correctness and feasibility of its long-term goal setting.
Today, the catering industry in China has made great progress, international chain catering giants have rushed to China, and the domestic catering industry is also eager to try, while the market potential of the catering industry in China is still great. The long-term goal of KFC becoming the first brand in China catering industry is still applicable, guiding KFC to a new journey.
According to all employees of China KFC, the development of more than 400 stores is only a part of the expected long-term goal, not the final result. Just like a small seedling, after more than ten years of cultivation, it takes root and sprouts, grows leaves, and gradually grows into a big tree, full of vitality and promising future.
If you look back? Mr. Su set this long-term goal when KFC entered China, which is far-sighted. The established long-term goals will directly affect the business planning, talent management, performance management and other aspects of the enterprise. Obviously, KFC's long-term goal also shows that its "localization" strategy is imperative, otherwise it will not be able to meet KFC's shortage of human resources and raw materials in China's rapid growth.
marketing management
★ Standardized service
"CHAMPS" promoted by KFC worldwide? The championship plan is one of the main essences of KFC's successful performance. Its contents are as follows:
c？ Cleanliness keeps the restaurant beautiful and tidy;
h？ Hospitality provides sincere and friendly reception;
Answer? Accurate guarantee accurate supply?
m？ Maintain excellent equipment;
p？ Product quality adhere to high-quality and stable products;
s？ Speed: Pay attention to quick service.
The "Champion Plan" has very detailed operational details, requiring every employee of KFC in every restaurant in the world to strictly implement unified and standardized operations. This is not just a code of conduct, but a strategy of KFC enterprises. It is the crystallization of Kendall's ten years of fast food service management experience.
★ Market positioning
KFC takes family members as its main target consumers. The promotion focuses on young people who are more receptive to foreign cultures and new things, and all food, services and environment are targeted. This is because young people prefer the light dining atmosphere of western-style fast food, hoping to influence the presence of family members of other ages. In addition, KFC has spent a lot of energy on children's customers. There is a children's dining area in the store as a birthday celebration area for children, and colorful decorations catering to children's hobbies are arranged. Toys can also be used as holiday gifts. On the one hand, I hope to cultivate children's habit of eating fast food from snacks, and on the other hand, I hope that through the driving of children, I can attract the whole family to the store to receive warm service. When the child grows up, KFC may become a part of his life.
What KFC has always wanted to create is a happy atmosphere for a family to eat together, emphasizing this added value. This will leave a deep impression on people. They have many fond memories of what happened in KFC. When guests arrive at the restaurant, the first thing they feel is the taste of food. The food is not delicious, no matter how cheap it is. No matter how good the service is and how beautiful the decoration is, the guests will not like it. The market advantage of KFC is the unique taste of its chicken food, which is positioned as "a world-famous chicken cooking expert" and "delicious chicken is cooked in KFC", which is also the biggest difference between KFC and McDonald's. Its fried chicken series products, such as original chicken, spicy chicken wings, crispy chicken leg hamburger, boneless chicken fillet and so on. It is all made by its 60 years of experience in roast chicken. The outer layer is golden and crisp, and the inner layer is tender and juicy. It is widely praised by customers for its unique delicacy. KFC is also constantly strengthening its selling point of "roast chicken expert" in various advertisements.
People in China love to eat chicken, which ranks first among chickens, ducks and fish. Compared with other foreign fast food, chicken products are more suitable for China people's tastes and more easily accepted by China people. This can be seen from the fact that McDonald's quietly broke its unified menu of "beef burgers" in the global market, and launched "Mai Xiang Chicken" and "Chicken Leg Burger" similar to KFC in the China market.
KFC is not satisfied with its current success. Instead, we are constantly using huge human and financial resources to find out what tastes are suitable for China people, what products we like about KFC, why we like KFC and so on. To adjust services, adjust food, and even launch new products.
The so-called "everyone can't adjust", no matter whether it is delicious or not, everyone has their own values. How to prove it? Turn around. Delicious may be that if 100 people come to eat and 80 people think it is delicious, then it can be considered that the positioning has been accepted.
For example, the newly launched "Lotus Fresh Vegetable Soup" is carefully prepared from nutritious raw materials such as vegetables, eggs, mushrooms, skirts and carrots. Adding "Lotus Fresh Vegetable Soup" or other catering foods such as salad, mashed potatoes and glutinous rice to the chicken food, the staple food of KFC, makes the enjoyment of China consumers more complete and more in line with their eating habits. This soup food specially caters to the tastes of consumers in China, and even has a name with China characteristics. It was carefully developed by KFC to meet the needs of consumers in China after investigation and research, and has been popular since it was introduced to the market.
★ Heavy consumers and light consumers
KFC divides consumers into three categories: severe, moderate and mild. Heavy consumers refer to once a week, moderate consumers refer to once a month, and once every six months are considered as light consumers. After investigation, KFC's heavy consumers account for almost 30% ~ 40%. For them, KFC has been in contact with his environment and habits, and has gradually become a part of his life.
For heavy consumers, KFC's marketing strategy is to keep their loyalty and not let them down. These heavy consumers know KFC well because they often patronize it. Even the waiters in KFC are good friends with them. Their only simple way is not to let them down (quality, service attitude).
For light consumers, it is found in the survey that the biggest factor for many people not to go to KFC stores is convenience. This can only be achieved by constantly opening stores.
★ Promotion
Promotion is the most commonly used means for enterprises to promote sales, and the promotion in modern enterprises must be continuous. KFC will continue to introduce more favorable products. Its purpose is to increase turnover, increase the number of transactions and focus on expanding a certain market.
The promotion activities are arranged by the annual plan of the headquarters. Arrange different product promotion activities according to the time. All the branches in China followed suit. There may be some time delay, but the project is a. For example, KFC will promote "pet elves" (children's meals) for a while, and spicy chicken wings for another time.
The management of promotional activities is a meticulous work. It was arranged by the Shanghai headquarters, and even the posters have been printed. Then issue a planning manual to each branch. The rules of the planning manual are very detailed, such as which poster should be posted on the light box in front of the door, which poster should be hung on the ceiling and so on. , KFC branch can also follow suit. Television advertisements are also arranged in a unified way and broadcast in this market at the corresponding time.
★ service
When facing the bottleneck of market competition, we must not harm the interests of consumers. For example, in the process of competition between KFC and its peers, there was a price war. Do you want to respond? Response will sacrifice a lot of profits, but it will also attract many customers, but can your service keep up at this time? Can your products keep up? These are the bottlenecks of development.
Customers are waiting in a long line, and they can't get the products, and even the things they get don't meet KFC's production standards, because there are too many people, and everyone is squeezing for a five-dollar hamburger. As a result, you can't supply it. Do you still want to respond? If you don't do it, someone else will do it and he will take over the business. You don't have customers. It's like you can give a guest a bench or a sofa. What do you want in this process? What are you going to give the guests? There are such challenges every day.
When this choice and bottleneck appear, KFC has a very important principle orientation: the interests and needs of customers. Is to try not to hurt the rights and interests of customers. When it encounters a bottleneck, KFC will definitely change, but more importantly, it will focus on the interests of customers, and thousands of employees will do the right thing together.
It takes time to establish a brand, and great efforts and difficulties are needed to maintain it. Like all other enterprises, KFC certainly wants to make a profit, but attaches more importance to investment. Only by constantly exploring the demand and constantly investing can we get greater benefits. I just want to keep it, and there may be nothing next year.
KFC is in China-
Business Case of "World Famous Chicken Cooking Expert" (2)
Give citizenship
KFC has used franchising as an effective way to expand its business around the world for more than 20 years. KFC started its franchise business in Xi 'an on 1993. At present, KFC has nearly 20 franchised restaurants. In contrast, KFC's rival McDonald's currently has more than 300 branches in Chinese mainland, all of which are direct stores, and none of them are franchisees.
★ Conditions that a franchisor should have.
KFC hopes that franchisees should be real operators in the catering service industry, with professional background and "practice" as the management direction, and can quickly grasp the basic knowledge of the industry and prove that they have the potential to expand and develop in a certain field. The franchisee must also be the owner, responsible for a considerable part of the required shares or funds.
This is also a long-term business cooperation relationship. Because of this, KFC will start cooperation when it is completely satisfied with the franchisee's organization, financial situation and project plan.
★ Franchise mode
At present, the way for KFC to develop franchise stores in China is not to let franchisees pay the franchise fee before opening their own stores, but to let franchisees invest in buying an operating and profitable chain store.
When transferring mature restaurants, franchisees don't have to start from scratch and can quickly integrate into KFC's operating system, thus greatly ensuring the success rate of franchisees. It is the most stable and convenient way for KFC and its franchisees.
Considering the challenge of franchising in big cities, KFC only seeks applicants to join in Chinese mainland, where the non-agricultural population is more than 0/50,000 and less than 400,000, and the annual per capita consumption is more than 6,000 yuan. Of course, not all restaurants in these areas are suitable for joining. But if possible, KFC can give priority to franchisees' suggestions on site selection.
★ initial fee
The new franchisee will be authorized to operate a KFC restaurant, and the admission fee for each restaurant is more than 8 million RMB (excluding the purchase of real estate). The entrance fee is a transfer fee and an investment needed to buy a mature and profitable KFC restaurant. It depends on the investment, turnover and profit of a KFC restaurant. From all angles, this has been carefully evaluated and is in the interest of all parties.
At the beginning of the concession period, an initial concession fee of $35,000 must be paid. Continuing operating expenses include 6% of total sales royalties and 5% of advertising share fees. These rates and fees are set on the current basis and will remain unchanged for ten years after signing the franchise contract.
Franchisees can arrange financing by themselves. According to the survey, successful candidates need to invest most of their shares (> 70%) in this project.
★ Contract contract
The initial term of the franchise agreement is at least ten years. In the future, franchisees must voluntarily engage in KFC franchise for more than ten years.
★ Training
Successful candidates will be required to participate in a 20-week extensive training program, including the following contents: assistant restaurant manager, restaurant manager, how to manage franchised restaurants, special introduction to headquarters, and small company management courses. In the process of training, the expenses of future franchisees are borne by themselves. Franchisees with catering and industry management experience can apply for exemption from certain training.
It can be seen that behind the strict franchise rules is the interest relationship between KFC headquarters and franchise stores. The success of KFC depends on the success of each franchisee. The franchisor must give sufficient support to the franchisee. Only when every franchisee is profitable can the whole franchise system become stronger.
On June 5438+065438+1October 13, 2000, among the five "2000 China Excellent Franchise Brands" recently announced by China Chain Store & Franchise Association, it belongs to KFC of Yum! China! Brands Group is specially recommended as the only foreign-funded international brand.
Supplier management
From the first restaurant to more than 400 restaurants in 59 cities, all the chicken ingredients 100% used by KFC came from China, and in the past ten years, * * * has consumed 6082 1 ton of chicken. The rapid development of KFC has also led to the start and development of various related raw material supply industries. At present, about 85% of food and packaging materials in China are provided by domestic suppliers. Based on the principle of consistent interests and common progress, KFC has established a close strategic partnership with suppliers, from imparting brand-new management concepts to introducing advanced technologies, from active training and testing to actively supporting suppliers.
★ Current situation of KFC suppliers
The 25 chicken suppliers in 27 cities and regions in China are basically the best in the domestic chicken industry. Shandong Zhucheng Foreign Trade Group Co., Ltd., which has cooperated with KFC for five years, is the largest county-level foreign trade group company in China, and has established production and marketing links with 70% local farmers. The large-scale operation of Liaoning Dacheng Agriculture and Animal Husbandry Industry Co., Ltd. has solved the employment and income problems for 80% local farmers. At present, KFC's chicken orders account for 80% and 60% of Dashiqiao Factory and Battery Factory respectively.
★ Promote the localization of foreign suppliers
KFC is a business partner of Chia Tai Group, Nestle, Pepsi and other internationally renowned enterprises. These companies set up large factories in China, which further promoted the economic development of China in terms of investment, employment and technology transfer. At the same time, in order to establish long-term relations with suppliers, KFC has been actively encouraging foreign suppliers who have not yet entered China to set up factories in China. For example, Lambweston of the United States has invested heavily in agricultural production in China to develop methods to increase the yield of potatoes and corn; Henny Penny, who provides fried chicken pots for KFC, will develop a professional equipment assembly factory in southern China at the end of 1998. In the past two years, KFC has promoted the localization of 17 products that used to rely on imports. At present, about 85% of food and packaging materials in China are provided by domestic suppliers. In the next five years, KFC hopes to reach 65,438+0,000% of its raw materials from China as soon as possible.
★ Evaluate the star rating system of suppliers.
KFC suppliers often say: "Manufacturers who have been evaluated by KFC's star system can easily pass the national ISO9002 quality certification." Star rating system is a global evaluation system for supplier management, which has been fully implemented in China since 1996. The evaluation system can help suppliers to improve product quality scientifically, strictly, objectively and fairly from five aspects, and has been regarded as a great welfare by suppliers all over the country since its implementation.
Five aspects of star system evaluation are:
Quality: Evaluate suppliers' ability to provide safe, stable and high-quality products;
Technology: evaluate the level of suppliers in technical improvement and research ability;
Finance: evaluate the financial status and support ability of suppliers;
Reliability: evaluate the supplier's integrity and supply reliability;
Communication: evaluate the communication system and ability between suppliers and Yum!
The evaluation content involved in the five aspects is very detailed and highly operable: for example, whether the supplier equipped with metal detectors checks whether the machine runs normally every hour, and there are on-site records showing that he has done it; Whether the diameter, height and even hole size of the bread meet the standards required by KFC; Does the supplier have a written system and fixed pipeline to communicate with customers? Every three months to six months