The Sword Wars Between Mcdonald'S And KFC

When the global economy is in recession, Starbucks has closed hundreds of stores around the world.

McDonald's had a good day.

In February 4th, KFC's Chinese "winter in winter" package ended second days ago. The world's largest chain fast food group McDonald's announced in Beijing that its 40% product in China will start a year long profit promotion campaign, with a price drop of over 3, and the price is lower than 10 years ago.

Shi Lesheng, chief executive of McDonald's, said that this is the biggest profit of McDonald's since its entry into the Chinese market.

Kentucky, who has just cut prices, can only watch it with embarrassment.

In order to reduce the national price, as early as last December 9th, McDonald's China made a similar price reduction in three cities of Guangzhou, Shenzhen and Nanjing, and tested the market reaction.

At the end of December, KFC launched the "winter in winter" promotion in the big cities of the country, thanks to the price cut of McDonald's.

Then McDonald's launched a new promotional campaign called "red McDonald's" in January 1st, with the highest discount rate exceeding 20%.

3 months ago, McDonald's launched the 3 price reduction whirlwind more thoroughly than once.

Then, in February 11th, "McDonald's super value store" opened on Taobao online, which promoted Taobao users to compete for notebook computers, mobile phones, MP3, jewelry, dolls, etc., in a promotional way.

McDonald's gimmick of marketing tricks almost Kentucky can not afford to rush.

McDonald's nationwide promotions without precedent may be interpreted as a kind of "revenge" to a certain extent.

In China, people have become accustomed to finding KFC around McDonald's. This kind of fighting seems to be stuck in the yardstick of doing their own things well.

But in early January, Kentucky Fried Chicken China broke the "tacit understanding" in Weihai, Shandong. Its Yisheng Restaurant Group China and Sinopec and the American oil monkey international fast repair international company announced the establishment of the first national Sinopec (market share bar) gas station, Kentucky motor shuttle shuttle restaurant and oil monkey motor fast repair integrated service project, which made McDonald's somewhat unprepared.

As early as 2007, McDonald's opened its first automobile restaurant with Sinopec and hoped to borrow more than 30 thousand petrol stations to surpass its KFC.

When the global economy is in recession, Starbucks has shut down hundreds of stores around the world. The two fast food tigers are no longer more sober than they are now.

{page_break}

Michael and Ken fought the battle, and I was there.

In February 3rd, McDonald's official website of China had announced advertisements for price cuts, but Zhang Xin, a KFC employee, and most of his colleagues, as well as all the consumers, heard some shocking news in the daily newspapers and TV ads of February 4th.

Subsequently, many colleagues received SMS messages from McDonald's on the price reduction of McDonald's.

On the 5 day after the normal operation of the day, Zhang Xin received mail from his headquarters. The mail said: "from the" MCD "(McDonald's abbreviation) is widely publicizing and investing in the power of the media, its head office's attention and attention can be seen, and the activities of MCD may have different effects on KFC.

What's the market reaction to the McDonald's, and back to the headquarters in February 6th?

The mail requires Kentucky restaurant staff to fill out the feedback form according to the contents of the appendix and give feedback in February 9th.

The appendix of the mail lists the address of every KFC restaurant in the area, and asks for each KFC to be labeled near McDonald's in the annex.

Some KFC employees also found that the quality of special products found in some restaurants of McDonald's was somewhat different than that in the past, such as thin wrapping paper, reduced lettuce and so on.

In February 6th, the regional headquarters sent emails again, hoping that the planning commissioner would also buy McDonald's products to observe and taste in the market to see if there were any quality problems.

And asked employees to pay close attention to the dynamic development of McDonald's and the changes in sales of McDonald's and KFC in the first weekend of McDonald's price reduction in from February 7th to 8th.

Zhang Xin and his colleagues immediately took action.

At noon rush hour, they ran to many McDonald's restaurants, counting the number of customers waiting in front of each cash register, counting a restaurant opening several cash registers at the same time, and adjusting the past data comparison.

At that time, McDonald's really thrive, and the less spacious restaurant looks even more crowded.

The KFC restaurant, which has always made customers feel relaxed and relaxed, seems a little cold.

Zhang Xin found that some of KFC's restaurant sales fell by nearly 30%, "McDonald's will rise more."

Zhang Xin said that apart from attracting KFC's original customers, McDonald's may also attract customers from other restaurants.

The price cut of McDonald's is really shocking.

After the price cut, the price of some McDonald's packages decreased from about 24 yuan to 16.5 yuan. At present, the price of KFC sets is still between 23~26 yuan, and consumers choose McDonald's rather than KFC, which can save almost an ordinary lunch.

On the first weekend after the price cut, Zhang Xin and other KFC employees were instructed by headquarters to distribute coupons of "09 spring coupons" and "09 edition of spring ex gratia" in accordance with the coupons issued by different restaurants, and the "3 yuan crispy cone" big glass stickers should be posted in full.

The coupons that can be found everywhere on the Internet are generally only 8.5 to 10 percent off, while McDonald's price cuts are equivalent to 32% off.

The regional headquarters said it was applying to the KFC headquarters in China for a special coupon for special meals during the meal period.

According to information on e-mail and telephone communication, Zhang Xin said that Kentucky Fried Chicken is not eager to make big moves now. They will always observe the market reaction and earnings after McDonald's price reduction.

Only with the unique taste of Kentucky, how many customers can KFC retain, whether customers can accept McDonald's meals that may have changed somewhat, and whether the short-term sales increase can bring long-term benefits are all questions that Zhang Xin and KFC want to answer.

KFC's embarrassment also lies in the fact that the benefits of those who follow up in price reduction are often far less than those of the sponsors.

{page_break}

Well water does not break the river. That is history.

As KFC has learned from China, McDonald's attitude toward China is unprecedented.

McDonald's data released in China showed that McDonald's planned 175 new stores in China in 2009, and 53 new stores in the first month of 2009.

The mainland market will become the largest number of new stores in the global market in 2009, and the number of new outlets will account for 1/5 of new stores worldwide.

In 2009, as a manager of McDonald's restaurant in a two tier city for more than ten years, Ye Jing (alias) saw that the fast food giant was expanding at an unprecedented speed.

Before one year and three months, McDonald's and KFC were evenly matched in the city, and the number was 6. Now the number of McDonald's restaurants has surged to 18, while KFC has only 13.

In 2000, the fifth national census lasted for more than 2 million of the population. The expansion rate of McDonald's was amazing.

Even in the same city, KFC realized that the situation of McDonald's speeding up was through McDonald's coupons. A KFC employee counted the number of stores behind the coupons. Suddenly, the number of restaurants opened in McDonald's had surpassed that of KFC, which made them somewhat uncomfortable.

But this does not seem to be a consistent style of McDonald's.

In 2008, McDonald's opened 145 new stores in China, and in the past 5 years, the total number of McDonald's new stores was 430, with 86 new stores opening every year.

Such caution is the result of McDonald's failing to tailor China's strategy.

In 2002, McDonald's showed its first quarterly loss in 37 years.

From 1987 to 1997, McDonald's branches increased by 50%, and the fastest rate of new branches reached 3 hours a day, but the total sales decreased by 2%.

McDonald's began to slow down its expansion and moved the strategy intact to the Chinese market.

McDonald's opened its first store in Shenzhen in 1990. In the 10 years of 1992~2002 years, it opened an average of 38.3 stores each year, and was ahead of KFC in the Beijing market.

But in the 2002~2004 years' critical 3 years, McDonald's increased 60~70 stores annually, while KFC was struggling to run at the speed of 300 or more per year.

KFC's strategy in China is contrary to McDonald's.

Liu Guodong, a former vice president of Kentucky's Greater China, described in KFC's book in China that in 1997, the Asian financial crisis had a serious impact on KFC's global business.

In order to reduce global profits in the year and the following year, the world's subsidiaries, including China's yum, are all required to cut costs and expatriate personnel.

But after careful analysis of China's market situation, China's Yum management has proposed to headquarters that the best way to solve the problem of extra heavy spending on Yum's expatriates is not to cut corners, but in open source, the best way is to open a new restaurant and to make it faster.

Afterwards, the decision was correct. If there was no Asian economic crisis in 1997, KFC might not be able to shop at that speed.

The subtle differences between the duopoly's China strategy are reflected in the attitude of the executives.

In KFC's profit report, "China" is a noun that has been repeatedly raised.

Novak, President of yum, once said: "setting up shop in China and the world is a prerequisite for Yum to guarantee growth for 10% years."

In the earlier appearance, McDonald's chief executive, Xerox, had to explain that because "without analyzing the financial situation of the Asia Pacific market, there is no way to use data to illustrate the importance of the Chinese market to the global market."

By the end of 2008, the number of Chinese restaurants in KFC was 2300, and McDonald's Chinese restaurants were only about 1100, less than half of KFC.

Although McDonald's has a 24 hour business, its single store turnover is higher than that of KFC, but the huge disparity in the number of restaurants still dwarfs McDonald's.

But around the world, KFC and McDonald's are different.

As of February 3, 2009, the stock price of McDonald's was $58, its market value was $64 billion 400 million, and its earnings per share were $3.76.

Yum group's share price is almost half of McDonald's, and its market value is only 1/5 of McDonald's.

Moreover, in the context of the Dow Jones Industrial Average (market share) fell 33.8% in 2008, McDonald's stock prices remained stable, the highest or even 20%.

But Yum's share price has fallen by 40%, and is still dropping 20%.

The number of restaurants worldwide also shows the strength of McDonald's.

At present, McDonald's has more than 31000 stores in 118 countries and regions in the world, and KFC has more than 11000 stores in 80 countries and regions of the world.

No wonder KFC employees in China will say, "actually, we are not competitors of McDonald's."

Although McDonald's global performance is impressive, its situation in the Chinese market is not optimistic.

Li Guangdou, a famous brand strategy expert and founder of Huasheng Zhi Ye brand marketing organization, told the "digital business age" that he summed up a McDonald's effect, that is, the more depressed the western developed countries, the better the McDonald's performance; and the more prosperous the developing economies, the better the McDonald's performance.

This is because in western developed countries, McDonald's is the most popular "fast food for the poor". Increasing the number of McDonald's shows that the number of unemployed people is rising. In China, such a developing country, McDonald's is a high consumption for the general public, but the economy is depressed, and the people who eat it will decrease.

At present, China's economic situation is obviously better than many western countries, but it is also in the adjustment period, and the consumption field has been widely affected.

White collar Xiao Xu has always been a loyal customer of McDonald's and KFC breakfast. At most, they eat three or four times a week in two fast food restaurants, with a cost of nearly 20 yuan each time.

Her salary has not changed much in the economic downturn, but it is unavoidably influenced by the whole environment and friends. Now she only goes to one or two times a week.

Obviously, McDonald's and KFC have monitored this loss of customers from the end of last year, and they have grasped China's huge market and become their choice under the economic crisis.

{page_break}

Price reduction is only the first shot.

The intention of the price reduction is to maximize the income of a restaurant, and the establishment of a restaurant can enable enterprises to increase revenue and reduce expenditure.

In November 2008, McDonald's opened in 1000th restaurants in China, a car restaurant located in Dongguan, Guangdong.

On the same day, McDonald's chief executive of China, Xerox, sat in China's red sedan chair through the outside dining room of the car restaurant, becoming the first guest to use the restaurant's "speed" system.

Coincidentally, at the end of last year, KFC also used the car restaurant as the 200th restaurant in the Beijing area. The KFC employees who served here no longer wear shirts, but instead turned into red, white and blue handsome jackets, and it seemed that they could feel the American style of KFC.

It is no accident that the duopoly of the fast food industry chooses the automobile restaurant as a landmark store almost simultaneously.

Data show that the average sales of McDonald's drive car restaurants has exceeded the traditional mode of single store, which makes Shi Lesheng feel quite fulfilled.

In September 2005, shortly after the "airborne" China from the US, he closely linked McDonald's China's future and the automobile restaurants.

At this time, the total number of McDonald's restaurants in China has lagged far behind KFC, and Xerox set the car restaurant as one of the core weapons to catch up with rivals.

For this reason, McDonald's had a layout.

In January 2007, China Petrochemical (Limited by Share Ltd) and McDonald's (China) Co., Ltd. jointly announced that the first gas station McDonald's "speed" restaurant was built and put into operation in Beijing, that is, McDonald's self built restaurant at Sinopec gas station, paying a certain fee to Sinopec every year.

In response to the acceleration of McDonald's, KFC is also unwilling to be outdone.

KFC immediately announced its opening ceremony at the opening ceremony of its shuttle restaurant in Nanjing and Wuxi, Jiangsu, and has established a strategic partnership with Metro to develop a shuttle restaurant in China.

At the same time, Han Jilin, chief development officer of the China business division of yum, said that KFC plans to make the shuttle bus restaurant scale to 100 in the next 3 years.

In the past 20 years of competition, Kentucky Fried Chicken and McDonald's have kept the well water free from the river condition despite the constant fighting, but Kentucky Fried Chicken finally became the spoiler of the battle.

In January 2009, KFC, US oil monkey and Sinopec announced cooperation to set up an integrated integrated service project.

This is undoubtedly a heavy blow to McDonald's.

Rong Zhenhuan, chief marketing consultant of win win marketing intelligence management consultancy, told the digital business era that the fast food restaurant is part of McDonald's profit unit, but it can not become a weapon to recover land lost, because KFC has realized that McDonald's wants to expand the Chinese market.

Sinopec's more than 30 thousand national sites are good channel resources, but because McDonald's is a single soldier, it can not reach a exclusive agreement in the negotiations.

When KFC saw that McDonald's got a real benefit, it started sniping, and it joined the US oil monkey international fast repair company, which increased the bargaining power of KFC.

Rong Zhenhuan believes that 2009 must be the beginning of the battle between the two, which depends on who can make use of the channel. The channel is the contact point between customers and restaurants, and it is the most powerful weapon to expand rapidly by leveraging force.

It is understood that, compared with the oil fee, the gas station's food price is very small, and the profit of the convenience supermarket can reach as high as 50%. When the price is convenient and idle, consumption will become a natural behavior.

This is an important reason why McDonald's and KFC value the expansion of gas stations.

No matter how McDonald's and KFC fight in Sinopec's channel, no matter how their price war continues, clown uncle and smiling Colonel have been standing firmly in the position that Chinese fast food and other fast food brands are hard to get high. Their move has a profound impact on the entire Chinese catering industry.

Hours after McDonald's announced its price reduction in February 4th, Chinese fast food brand "real kung fu" also announced the launch of the "17.6 super value package" plan in the whole country, with the highest discount rate reaching 33%.

We are going to experience more than just the war between McDonald's and KFC.