Chinese Business: Foreign Countries Answers Assessment Answer

Business Trajectory of KFC

The crux of the matter is how to evade commercial crises and choose the right business partner for the organization. Everybody faces the veritable question in this respect. This involves that the entrepreneurs should understand the character of the company, its detailed history and the structure of the business. At the same time, one should have the comprehension of the key concepts and the principal decision-makers in the firm (Terpstra et al. 2012).

Kentucky Fried Chicken has been doing a great business in the land of China. However, they have handled risk at the initial stage of entry. The Kentucky Fried Chicken opened a three-storey restaurant and became the leading foreign fast-food outlets that permeated the landscape of People’s Republic of China. The foreign subsidiary spawned huge profits in China, culminating average daily sales of 10,000 yuan (US $ 2,700) (Santoro, 2015).

Business Climate of China (KFC Issue)

In the recent epoch, China represents an attractive nation that stimulates the business of other nations. China throws a gauntlet to the rising economic trends and developments of the recent time. The western countries see China as a potential player in the increasing capitalist space. Nowadays, the experts place china on a higher pedestal, as it manifests strong potentialities. The countries of Europe and United States suffer from a difficult economic terrain. At the other end of the spectrum, the economy of China is growing exponentially (Neelankavil,  2015).  It is believed that the country would surpass United States, in terms of economic development by 2020. At the same time, China has showed the proclivity to remain in the competitive scene for the upcoming decades. In the recent era, China comprehends the nature of global economy and leaps forward.

The population explosion, growing economy and an overt business milieu have helped China to jump into the bandwagon of success. Therefore, the market of China attracts the Western businesses to the hilt (Paul et al. 2015). The industrial situation of China is such that the international countries form a commercial liaison with China. At the same time, the deteriorating plight of the local markets in European companies and US make them to drift their economic concerns to China. The focus is to develop potential market strategies for the International companies. China carves out a unique stature that attracts the foreign countries to engage in collaborative ventures (Shaw 2015).

It is an uphill task for the foreign countries to enter the Chinese market and deliberate on the business strategies. The foreign countries should have the cognizance of the market history of China before barging into the Chinese domain. It is indispensable for the international companies to understand the nature of doing business in China.  The White paper underscores the principal risks and challenges countenanced by the foreign companies in the recent phase. The economy of China witnesses the amalgamation of recent and traditional trends that influence the commercial status of the country (Berry and Wilcox 2015).

With an expanding population and a growing landmass, the economic position of China presents a challenge to the growing global economic space. In fact, China surpasses other Asian markets such as Korea, Japan and Vietnam, in terms of economic development. At the same time, China manifests a competitive economic terrain that helps the companies to extend the horizon of the businesses. Through local understanding, China aims to widen the economic path and incorporates the business elements (Rose-Ackerman 2016).

Cultural Segment of KFC

The intention of KFC to invade the Chinese market is a ‘potential risk’ countered by many obstacles. If anyone goes through the history of China, then one should know that China is ostensibly isolated from the rest of the world. At the same time, China does not imbibe the traits of the Occident. However, KFC is the first international food brand that identifies the customer base and deliberate on the market research. The KFC brand pervaded the Chinese landmass. The country has a deep love for the Kentucky Fried Chicken and other staffs.  The KFC brand started in the year 1987 and deliberated on management strategy and suitable location for the business operation. The KFC functioned from Tiananmen Square in Beijing, China. The perilous threat countered by the KFC in China was the blending of western and eastern culture. The KFC in China had to consider vital points, while doing business in the oriental land. Therefore, KFC had to adopt various steps, while seeing the taste and preference of the Chinese people. Therefore, KFC have to consider many things before leaping forward. Management strategy and execution policies are the main pillars of the business of China.

Locating the FDI Problems for KFC

The choice of KFC to invade the Chinese market is a ‘potential risk’ countered by many obstacles. If anyone goes through the history of China, then one should know that China is ostensibly isolated from the rest of the world. At the same time, China does not imbibe the traits of the Occident. However, KFC is the first international food brand that identifies the customer base and deliberate on the market research. The KFC brand pervaded the Chinese landmass. The country has a deep love for the Kentucky Fried Chicken and other staffs.  The KFC brand started in the year 1987 and deliberated on management strategy and suitable location for the business operation. The KFC functioned from Tiananmen Square in Beijing, China. The perilous threat countered by the KFC in China was the blending of western and eastern culture. The KFC in China had to consider vital points, while doing business in the oriental land. Therefore, KFC had to adopt various steps, while seeing the taste and preference of the Chinese people. Therefore, KFC have to consider many things before leaping forward. Management strategy and execution policies are the main pillars of the business of China.

If anybody wants to purchase goods from China, then he should identify trial ship packages that ensure the accomplishment of the requirements of the goods for a company. It is essential to employ a good local agent that helps to helps to manage the quality of the goods before exporting them to the outside regions.

Acknowledgment of Business Practices for KFC

Kentucky Fried Chicken has been doing a great business in the land of China. However, they have handled risk at the initial stage of entry. The Kentucky Fried Chicken opened a three-storey restaurant and became the leading foreign fast-food outlets that permeated the landscape of People’s Republic of China. The foreign subsidiary spawned huge profits in China, culminating average daily sales of 10,000 yuan (US $ 2,700). The outlet is regarded as an “immediate success” that the KFC officials maintained in the recent chronicle. At the same time, KFC charted out a plan to establish another site in Beijing and an array of stores in various parts of the country. The radical competitors such as McDonald’s and Burger King have adopted an important approach. They believed that China could provide efficient supplies, disciplined labor and effective customer base. The Kentucky Fried Chicken gained adequate experience from their business conducted in the markets of Hong Kong. At the same time, KFC adopted steps to address the crucial issues such as local supply, coordinated market research, royalty payment and tackling labor problems.

Cognizance of Local Laws for Business Activity (KFC Problems)

At the entry point, KFC was confronted with various problems, such as limited market entry options, franchising or licensing, and embarking on partial subsidiary or incorporating joint ventures.  At the other end of the spectrum, KFC had a conventional franchise strategy that helped them to enter new markets. It focused on the moderation and reduction of financial risk that the cultural sensitivity and control maintained. Due to the strict policies of Foreign Direct Investment of China, the market strategy was not feasible for China and the retail giant would have failed from the starting point. The KFC is the leading commercial giant and it countenanced precarious challenges that created problems for its sustenance. It faced problems during the time of entrance in the Chinese markets. It had also faced the Cultural challenge of China and faced problems in tacking the demand of fast food lovers. KFC failed to align their requirements with the corporate relations. The experts believe that the American KFC has set a paradigm in the Chinese market. The rising trends explicate that KFC is doing a great job in the commercial hub. The KRC and McDonalds chart out a new plan for the sustenance of their units in the foreign lands.

Conclusion

To deduce, it would be advisable for the foreign companies to follow certain instructions, while deliberating on the business plans in China. The foreign companies should acknowledge the marketing environment of China, before leaping forward. The business climate of China is different from other countries. Therefore, every foreign company should be aware of the situation.

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