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American Fast Food In China Essay

1965 words - 8 pages

Introduction:Global competition is driving changes in organizations throughout the world. Companies are attempting to gain a competitive advantage, which can be provided by international expansion. Deciding whether to enter foreign markets and whether to develop market share in other countries is not the simple issue. Marketing globally is becoming a significant factor for all types of organizations in light of the far-reaching effects of globalization. Doing business globally requires that adaptations be made to reflect cultural and other factors that differ from country to country (Schultz & Kitchen 2000, p. 21). More and more international companies focus their global marketing strategies on the developing countries. This report will discuss the representative American fast food industry such as KFC and McDonald's sets their successful global strategies in China and brings the changes of American fast food culture with Chinese characteristic.Chinese fast food market:The economic reform opened China market to the outside world and improved the standard of living of average Chinese people. In late 1978 china began implementing economic reforms to develop and modernize its economy. These reforms have gradually rebuilt a new system, which is referred as a socialist market economy, by lessening the government's control and encouraging foreign investment. As the result, the economy grew rapidly and among the highest growth in the world. With huge amount of urban population, there exists enormous but unpredictable potential in the fast food industry.Since 1991, the country's consumption of fast food has grown 23.2% annually. It is forecast that Chinese rapid development will continue to fuel demands for fast food and to lead to the growth of the industry (Research and markets: exploring the Chinese markets for fast food 2005, pg. 1). But Chinese consumers had few fast-food choices. Restaurant food was limited to five-star hotels, traditional Chinese restaurants and street-side wonton, pulled noodle and tea-egg vendors. In the last decade, China's rapidly changing lifestyles and eating habits have resulted in a booming fast food industry. Chinese consumers, especially those who live in large urban areas, have accepted Western-style fast-food restaurants that serve fried chickens, hamburgers, french fries and other popular side dishes as a way of life in China (Cee & Theiler 2004). As a result, the popular American food has become a huge success story.Perception changes about Western-style fast food:China's consumption trend is very different than it was just a few years ago. Before the invasion of the U.S. fast food industry, western-style food is portrayed as a luxury food item. They were associated with Western-style restaurants located in or near fancy hotels, consumed only by the most affluent Chinese people (Cee & Theiler 2004). Since fried chickens and hamburgers were basically unknown to most Chinese, many first time customers went...

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