International Business Administration Comparative Study of McDonald's and Kentucky Fried Chicken (KFC Field of Study Social Sciences,

Business and Administration Degree Programme Degree Programme in International Business Author(s) Wei Hu & uanyuan !ie "itle of "hesis #om$arati%e Study of &cDonald's and (entuc)y Fried #hic)en ((F#) de%elo$ment in #hina Date *+,-.,*-/0 Pages1A$$endices 203* Su$er%isor(s) 4ari 5iemel6 &Hei))i 7i)italo #lient 8rgani9ation1Partners &cDonald's #or$oration & (entuc)y Fried #hic)en #or$oration A:stract &cDonald's and (F# are t;o international fast food restaurants, "hey :oth e<$ended their :usinesses in glo:al scale, It is o:%ious that &cDonald sur$assed (F# in terms of sales and fame in international le%el, Ho;e%er, in #hina, (F# $erforms :etter than &cDonald's, "he aim of this study is to find out ho; these t;o com$anies de%elo$ed differently in #hinese mar)et, By ma)ing a com$arati%e study of &cDonald's and (F#, different o$eration and

com$etiti%e strategy theory ;ill :e integrated ;ith their de%elo$ment situation, =esearch is made :ased on strategy theory, Internet sources and inter%ie;s, "he thesis is started ;ith general information, #hinese fast food industrial situation introduction and thesis structure, After ha%ing introduced the t;o com$anies :ac)ground, ;e illustrated strategy theory as thesis theoretical :asis, 5e<t, :y com$aring &cDonald>s and (F#>s core com$etiti%e $o;er, ;e analy9ed the main difference and some similarities com$rehensi%ely of &cDonald>s and (F#>s :usiness and com$etition strategy, In research finding cha$ter, ;e introduced ?ualitati%e finding, it is the main research method ;e ha%e used, "he thesis is ended in conclusion, after main finding, recommendation ;ill :e gi%en to other international fast food restaurants and suggestions ;ill :e gi%en for further research, (ey;ords #om$arati%e study, :usiness strategy, com$etiti%e strategy, fast food de%elo$ment 0

#85"@5"S / I5"=8DA#"I85 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 2 /,/ "he :ac)ground of #hinese fastBfood de%elo$ment ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 2 /,* =esearch Introduction ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, C /,0 "hesis structure ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, + * #AS@ #8&PA5 I5"=8DA#"I85 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /*,/ "he :ac)ground of &cDonald>s ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /*,* "he :ac)ground of (F# ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, // 0 =@S@A=#H P=8#@SS A5D &@"=H8DS ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /0 0,/ =esearch o:Decti%e ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /0 0,* =esearch methodology ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /0 0,0 Eualitati%e findings ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /.

0,. "hesis analysis methods ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /2 0,.,/ #ase study method ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /2 0,.,* #om$arati%e study method ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /2 0,2 Inter%ie; findings ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /2 0,2,/ Inter%ie; ;ith managers ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /2 0,2,* Inter%ie; ;ith customers ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /F . A5 8G@=GI@W AB8A" BASI5@SS S"=A"@H ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /+ .,/ What is the :usiness strategy ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /+ .,* Aims and $rocedures of :usiness strategy ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, /I .,0 #om$etiti%e strategy ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, *2 #8&PA=IS85 8F &A#D85A7D>S A5D (F# BASI5@SS S"=A"@H ,,,,,,,,,,,,,,,, *0 2,/

#om$arison of &cDonald>s and (F# core com$etiti%eness ,,,,,,,,,,,,,,,,,,,,,,,, *0 2,* #om$arison of &cDonald>s and (F# o$eration strategyBBBHro;th strategy ,, *2 2,*,/ #om$arison of &cDonald>s and (F# chainBstore o$erations model ,,, *2 2,*,* #om$arison of &cDonald>s and (F# o$erations area ,,,,,,,,,,,,,,,,,,,,,,, *I 2,0 #om$arison of &cDonald>s and (F# com$etiti%e strategy ,,,,,,,,,,,,,,,,,,,,,,,,,, 0/ 2,0,/ #om$arison of &cDonald>s and (F# cost leadershi$ strategy ,,,,,,,,,,, 0/ 2,0,* #om$arison of &cDonald>s and (F#>s differentiation strategy ,,,,,,,,,,, 00 F #85#7ASI85 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, .. F,/ &ain findings ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, .. F,* =ecommendation for international fastBfood com$anies ,,,,,,,,,,,,,,,,,,,,,,,,,,,,, .F F,0 Suggestions for further research ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, .C =@F@=@5#@S ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, .+ .

APP@5D@! / Inter%ie; ;ith customers ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 2. APP@5D@! * Inter%ie; ;ith managers ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 22 2

I5"=8DA#"I85 As t;o of the ;orld's largest fastBfood giants, &cDonald's and (entuc)y Fried chic)en ((F#) are :oth from the Anited States, Hu Wei and !ie uanyuan ;ere sur$rised to find that there ;as no (F# in Finland, although (F# can :e seen e%ery;here in #hina, In addition, they ha%e a different ;ay of de%elo$ment, Due to this situation, ;e ;ant to find out ho; these t;o com$anies de%elo$ed differently in #hinese mar)et, Hu Wei and !ie uanyuan ;rote this thesis, Hu Wei ;as mainly res$onsi:le for ?uestion introduction, methodology and (F# $arts, !ie uanyuan ;as mainly res$onsi:le for theoretical :asis, thesis analysis methods and &cDonald>s $arts, /,/ "he :ac)ground of #hinese fastBfood de%elo$ment "he fast food industry in #hina started late in A$ril /I+C, the (F# fastBfood chain store entered BeiDing, and o$ened a $relude to the fast de%elo$ment of modern #hinese fast food, "he #hinese fast food industry in the conte<t of H5P in the /II-s of the last century ha%ing an yearBonByear gro;th of /-J had a ra$id gro;th to u$ to a *-J annual gro;th rate ;ith an industry $rofit margin al;ays u$ to /-JB*-J, so as to gradually :ecome an im$ortant force in su$$ort of sustaina:le de%elo$ment in the food and :e%erage industry and a ne; economic gro;th $oint, In the end of /IIF,

#hina had a:out +-- $rofessional fastBfood com$anies, nearly .-- thousand fastfood stores and the annual turno%er of the fastBfood industry reached .- :illion uan, accounting for a:out /12 of the total food and :e%erage industry, In /III, the national fastBfood enter$rises stores constituted o%er +-- thousand, the fastBfood industry turno%er reached C2 :illion uan, accounting for /10 of the total food, and the :e%erage industry and its turno%er o%er the $re%ious year had an increase of *-J, ;hich ;as CJ higher than the a%erage increase of the food and :e%erage industry, (!iao *--2) At /III, the de%elo$ment and social needs of the fast food industry in #hina ;ere not ?uite com$ati:le, mainly re$resented in the slo; de%elo$ment of #hinese fast food %arieties, :ac);ard $roduction technology, lo; industriali9ation and organi9ationK the de%elo$ment of #hinese fast food :usiness ;as still in the stage of learning, imitating and e<$erience accumulating It had not yet formed its system and scale, (!iao *--2) F Since the :eginning of the */st century, #hina's fast food industry has made a sustained and ra$id de%elo$ment, According to the research, the annual turno%er of the fast food industry in #hina has :een more than *-- :illion uan after *---, chain stores ha%e e<ceeded / million, and the ra$id de%elo$ment has reached a gro;th rate of *-J $er annum, In *--., #hina's fast food industry had formed its :asic system and scale and its :asic sha$e of the consumer mar)et and su$$ly mar)et ;ith :oundless %igour and %itality, among ;hich, ;ith the strong momentum of the de%elo$ment of WesternBstyle fast food, &cDonald's and (entuc)y Fried #hic)en fast

food had led the #hinese mar)et, In contrast, the #hinese fast food :usiness had to further im$ro%e their com$etiti%eness, According to a &inistry of #ommerce research the fastBfood mar)et share in Huangdong $ro%ince ;as as high as I-J, ;hile the share thereof in the relati%ely de%elo$ed coastal $ro%inces such as 4iangsu, Shanghai, 7iaoning, BeiDing, LheDiang and Shandong ;as more than 2-J, (!iao, *--2) In addition, #hinese fast food industry had also made a ra$id de%elo$ment as a result of strong mar)et demand and attracti%e :usiness $rofits, In early 5o%em:er *--F, the fastBfood restaurant from Huangdong $ro%ince, =eal (ung Fu (BeiDing 5e; World) Hlo:al #hinese Dining #hain Store, officially o$ened a store in the ca$ital city, ;hich ;as the si<th store in BeiDing of this fast food chain enter$rise that $re%iously focused on the southern mar)et, &r, #ai Da:iao, $resident of the =eal (ung Fu, announced that M=eal (ung Fu ;ould o$en 02 stores in BeiDing in *--+ and ha%e u$ to /,--stores across the country in *-/-,M "he de%elo$ment of #hinese fast food enter$rises is ra$id as these e<am$le sho;, "he country's macroeconomic $olicy also $romotes the ra$id de%elo$ment of #hinese fast food, Premier Wen 4ia:ao signed in Fe:ruary *--C the State #ouncil 8rder 5o, .+2, ;hich announced that the Administration of #ommercial Franchise 8rdinance should come into force on &ay /, *--C, ;hen the concession retail enter$rises, es$ecially fast food enter$rises, ;ould face a maDor reshuffle, Franchisee o$erations ;ould :ecome the mainstream model of the fast food industry and its de%elo$ment $ros$ects ;ould :e :etter, (!iao *--2) With the :ooming #hinese economy, ;hen the fastBfood mar)et demand is further increased, together ;ith the aggressi%e com$etition from &cDonald's and (F#,

#hinese fast food industry faced :oth more o$$ortunities and challenges, Ho; could #hinese fast food gras$ mar)et trends and continue to gro; in the futureN "hrough a com$arati%e study of the :usiness strategy and com$etiti%e strategy of :oth &cDonald's and (F#, there comes a lot of e<$erience that could :e learned and a$$lied :y #hinese fast food, #hinese fast food :usiness also can ma)e use of its C com$arati%e ad%antages and continue to con%ert them to com$etiti%e ones, so as to ma)e effecti%e defence against &cDonald's and (F#>s com$etitor in the future de%elo$ment and change their leading roles in #hina's fast food industry, (!iao *--2) /,* =esearch Introduction With the de%elo$ing of li%ing standards, fast food is increasingly :eing acce$ted in $eo$le>s li%es, It has :ecome an integral $art of the daily food, In recent years, the rise and de%elo$ment of the fast food industries ha%e :ecome a %ery interesting $henomena in the #hinese mar)et, &cDonald's and (F# ha%e sales mode ;ith a good ?uality, e<cellent ser%ices and a clean en%ironment to attract customers, &cDonald's is ran)ed at the to$ of the fast food industries ;ith o%er 00,--- outlets, ;hereas (F# only has //,--- outlets in +- countries, ran)ing at Cth in the ;orld, "he information of &cDonald's and (F# ;ill follo; the "a:le /, (Wi)i$edia *-/*) "AB7@ /O &cDonald>s and (entuc)y Fried #hic)en information (Wi)i$edia *-/*) #om$any nameO &cDonald>s (entuc)y Fried #hic)en (F(#) "y$eO Pu:lic Su:sidiary Head?uartersO 8a) Broo), Illinois, A,S, 7ouis%ille, (entuc)y, A,S, 5um:er of locationsO 00,---3 ;orld;ide, C--3#hina //,---3;orld;ide, /2--3#hina

ProductsO Fast food (ham:urgers, chic)en, French fries, soft drin)s, coffee, mil)sha)es, salads, desserts, :rea)fast) Fried chic)en, grilled chic)en, related Southern foods and Asian foods, We:siteO htt$O11;;;,a:outmcdonalds,com1 mcd,html ;;;,(F#,com According to our research, (F#'s sales, store num:er, re$utation e<ceed that of &cDonald's in the #hinese mar)et, Both of us ;ant to understand ho; these t;o com$anies de%elo$ed differently in #hinese mar)et, , Due to differences in strategy, ;e thin) that ;e should $roceed from the angle of de%elo$ment strategy to study, At $resent, #hinese and foreign fastBfood entre$reneurs are all concerned a:out &cDonald's and (F#>s de%elo$ment in the #hinese mar)et and they secretly :egan to follo; them in a #hinese fastBfood mar)et, We use the method of com$arati%e study on the de%elo$ment strategy of &cDonald's and (F# to get more useful strategies that can hel$ #hinese and foreign enter$rises in this area, (!iao *--2) + In addition, our choice to use this su:Dect is :ased on :oth multinational fast food com$anies and #hinese fast food, We can study ho; (F# uses the resource ad%antages and disad%antages to e<$and :usiness in #hina, and ho; to im$lement

the strategy of locali9ation in this :ig mar)et, #om$ared ;ith &cDonald>s in #hina, (F# has gained the com$etiti%e ad%antage o:%iously so far, So it lets us ha%e the curiosity and interest to;ards them, At the same time, #hina is a gro;ing a su$er fastBfood mar)et in the */st century, (!iao *--2) 8n the one hand, due to the slo; gro;th of the national economy in recent years, the Anited States domestic mar)et has :een saturated :y fastBfood industries, 8n the other hand, since #hina>s W"8 entry, the #hinese household electrical a$$liances industry, as ;ell as other industries, is facing the reality of a glo:ali9ing ;orld economy and multiBglo:al challenges, such as the en%ironmental challenge, the com$etiti%e challenge, the colla:orati%e challenge, the organi9ational challenge, the ;orld;ide learning challenge and the management challenge, "o &cDonald's and (F#, #hina has an a:undant mar)et ;ith threats and o$$ortunities, "hey need to choose the suita:le strategies to use it, Ho;e%er, #hina needs their inter%ention ;hich can :ring ad%anced management e<$erience, #hinese fast food also needs to learn more a:out their successful e<$erience to gro;, (!iao *--2) /,0 "hesis structure "he thesis has si< $arts, "he first $art ;ill introduce the thesis structure and the #hinese fastBfood restaurant de%elo$ment, "he second $art ;ill $resent the :ac)ground of case com$anies, "he third $art ;ill re%ie; :usiness strategy theories and comment the relati%e essays, "he fourth $art ;ill use utili9ation strategy, the strategic analysis, and the dee$er strategic le%el correlation theories to analy9e the reasons, :y com$aring &cDonald>s and (F#>s core com$etiti%e $o;er, to analy9e the main difference and some similarities com$rehensi%ely of &cDonald>s and (F#>s

management and com$etition strategy, "he fifth $art ;ill e<$lain the main research o:Decti%e and methods after ela:orating the research>s :ac)ground, Finally, ;e ;ill ma)e a conclusion on this thesis and offer some suggestions for further research, "he thesis structure ;ill follo; the structure of Figure /, I FIHA=@ /, "he structure of thesis (:y our o;n) /* #AS@ #8&PA5 I5"=8DA#"I85 *,/ "he :ac)ground of &cDonald>s &cDonald>s head?uarters is located in 8a) Broo), Illinois, Anited State, It is the largest chain of ham:urger fast food restaurant in the ;orld, "he com$any logo is &cDonald>s ;ith a :ig yello; P&M, Image / sho;s that, =ichard and &aurice &cDonald started the first &cDonald's store from /I2-s in the AS, and it $rimarily sells ham:urgers, French fries, dessert, and salads, In /I22, ;hen the first &cDonald's restaurant ;as founded in the Anited States, there ;as not much %ariety on its menu, :ut they offered food su$$ly ;ith high ?uality, lo; cost and good en%ironment, By /I+0, there ;ere more than F,--- domestic :ranches, In /IFC, &cDonald's o$ened its first o%erseas :ranch in #anada, By /I+2, its total a:road sales accounted for a:out *- $er cent of its domestic :usiness, @%ery day there are more than /+ million $eo$le coming to &cDonald's in more than .- countries, 5o;adays &cDonald's has more than 0,.--- locations ;orld;ide ;ith a re%enue of *C,2F :illion AS dollars, "a:le * $resents the :rief :ac)ground of &cDonald>s, (&cDonald>s *-/0:)

"AB7@ *, "he :rief :ac)ground of &cDonald>s (&cDonald's *-/0:) "he name of &cDonald>s (@nglish name) &cDonald>s "he name of &cDonald>s (#hinese name) Head?uarters location America @sta:lishment timeO /I2. Business fieldO WesternBstyle fast food, desserts #om$any sloganO I>m lo%in> it "he num:er of em$loyeesO /,+--,--- (*-/0) "he stores in #hinaO /.-- (*-/*) // I&AH@ /, &cDonald>s logo image (5e; Age Hathering *-/0) In /II-, &cDonald's o$ened its first restaurant in Shen9hen, #hina, "here ;ere countless $eo$le ;ho ;ent to their o$ening day, Su:se?uently, in A$ril /II* they o$ened the ;orld's largest &cDonald's restaurant in BeiDing, =ight no; there are more than /,.-- &cDonald>s stores in #hina, (Bai)e *-/*a) *,* "he :ac)ground of (F# "ogether ;ith Pi99a Hut and "aco Bell, (F# ((entuc)y Fried #hic)en) :elong to umQ Brands Inc, umQ #om$any is the ;orld's largest restaurant com$any in terms of system units, (F# #or$oration>s head?uarters is located in 7ouis%ille, (entuc)y, Anited States, It is the ;orld's largest fried chic)en chain restaurant, measured :y salesK it is the second largest restaurant chain after &cDonald's, &ore than //,--um restaurants ha%e :een o$ened in a:out +- countries, #olonel Harland Sanders founded it in /I2* :y selling fried chic)en, His )indly grand$a face also :ecame (F#

logo, Image * sho;s that, "oday (F# mainly sell fried chic)en, ham:urgers, French fries, soft drin)s and other WesternBstyle fast food, It has a:out /+,--- locations ;ith a re%enue of /2 :illion AS dollars, "a:le 0 as follo; $resents :ac)ground information on (F# ( um *-/0) "AB7@ 0, "he :rief :ac)ground of (F# ( um *-/0) "he name of the com$any (@nglish name) (entuc)y Fried #hic)en ((F#) "he name of the com$any (#hinese name) Head?uarters locations America @sta:lishment timeO /I2* Business fieldO WesternBstyle fast food #om$any sloganO We Do #hic)en =ight "he num:er of em$loyeesO +.---"he stores in #hina &ore than 0--- (*-/*) /* I&AH@ *, (F# logo image (@atcoo)dream *-/*) (F# started in its first location in #hina on /*th 5o%em:er /I+C in BeiDing, the ca$ital of #hina, ;hich has rich history and di%ersity food culture, 8n +th 8cto:er /II-, &cDonald>s entered Shen9hen as its first location in the #hinese mar)et, As a south east coast line city, Shen9hen is full of fresh ne; things ;ith a curious attitude, Since then they :oth started their de%elo$ment historify in a country ;ith a ;ide %ariety of food culture and eating ha:its, (Bai)e *-/*:) /0 0 =@S@A=#H P=8#@SS A5D &@"=H8DS

0,/ =esearch o:Decti%e "he o:Decti%e of this study is to ans;er the main ?uestionO ;hat )inds of :usiness strategies lead to this different situation :et;een &cDonald's and (F# in #hina mar)etN "he research should conse?uently ma)e the t;o com$anies to :e a:le to reach a conclusion onO R &cDonald>s :usiness strategy in the #hinese mar)et R (F#>s :usiness strategy in the #hinese mar)et R If the international fast food industries ;ant to enter into the fastBfood mar)et, ;hat )ind of the mar)et strategy should :e usedN 0,* =esearch methodology In this thesis, the research used ?ualitati%e research method and also use some theories to analy9e ;hat )inds of reasons led to the difference, "he theoretical $art includes information gathered from literature and Internet dealing ;ith :usiness strategy, "he large amounts of necessary data and information ;ere collected from the Internet, "his thesis ;ill descri:e the current de%elo$ment of &cDonald's and (F# in #hina, and also use theories and realities to e<$lain the reasons for their $erformances in #hina, 8n one hand, ;e ;ill analy9e the strategies of :oth com$anies from the $ers$ecti%e of :usiness strategyK on the other hand, ;e ;ill analyse reasons from the $ers$ecti%e of com$etition strategy, In addition, the research contained $ersonal inter%ie;s, "here ;ere a lot of $artici$ants' o:ser%ations that the managers and customers in the #hinese mar)et )no; the goal of our research, "a:le + sho;s the information of $artici$ants> inter%ie;s (customers & managers), For our ?uestionnaires, ;e only as)ed them at

most 2 ?uestions, /. "AB7@ +, "he information of customer Inter%ie; and manager inter%ie; #ustomer Inter%ie; &anager Inter%ie; R AddressesO city centre of Shanghai & one )indergarten school & one senior a$artment (near &cDonald>s and (F# stores) R #ategories of #ustomersO #hildren (-B/*), outh (/0B0-), Adult (0/B2.), @lder (223) R 5um:ers of categoriesO #hildren (/-), outh (/-), Adult (/-), @lder (/-), R AddressesO (F# manager office & &cDonald>s manager office (Shanghai, #hina) R 7e%el of &anagerO middle le%el managers R 5um:ers of categoriesO (F# (/), &cDonald>s (/) ou ;ill find the ?uestionnaire at

A$$endi< / ou ;ill find the ?uestionnaire at A$$endi< * Ho;e%er, the study included $rimary and secondary data, "he $rimary data ;as collected ;ith ?ualitati%e methods :y inter%ie;ing the customers and managers, "he secondary data ;as from :oo)s, Internet, and course materials ;ith some rele%ant information, 0,0 Eualitati%e findings "he thesis used ?ualitati%e method to do the research, In addition, ;e also inter%ie; the customers and managers to get their rele%ant feed:ac), As to the definition of ?ualitati%e research, this $art of this thesis ;ill em$loy #ress;ell>s definition as follo;sO Qualitative research is an inquiry process of understanding based on distinct methodological traditions of inquiry that explore a social or human problem. The researcher builds a complex, holistic picture, analyses words, reports detailed views of informants, and conducts the study in a natural setting. (#res;ell, /II.) "hrough ?ualitati%e analysis, ;e found that there are se%eral reasons that leat to the different $erformance :et;een (F# and &cDonald>s, /2 /, "he difference of mar)eting $ositioningO As the $age ** of the thesis, you ;ill see the different ser%ice mode, (F# used #HA&PS mode that includes cleanliness, hos$itality, accuracy, maintenance, $roduct ?uality,

and s$eed, &cDonald>s used ES#G mode that includes ?uality, ser%ices, cleanliness and %alue, #HA&PS mode and ES#G mode ;ill :e e<$lained at $age .0 and .., *, "he difference of mar)eting strategiesO &cDonald>s $ro%ides a li%ely young dining en%ironment, (F# offers a ;arm family dining atmos$here, 0, "he difference of em$loyee>s managementO (F# $refer to use locali9ation training, ;hile &cDonald>s ;ould li)e to use di%ersification mode to manage their em$loyees, 0,. "hesis analysis methods 0,.,/ #ase study method Doing collecting related information ;ould descri:e the de%elo$ment situations of (F# and &cDonald's in #hina res$ecti%ely, "o re%eal and e<$lain the dramatic difference of the t;o com$anies> de%elo$ment in #hina, ;e ;ill integrate the theory ;ith $ractical information, 0,.,* #om$arati%e study method By ma)ing the inter%ie;s and collecting the information, the similarities and differences ;ill :e found out :et;een the t;o com$anies, In order to e<$lain that (F# has a dominant $osition in #hina, ;e focused on the com$arison of the different sides, #om$aring the different strategies, it ;ill e<$lain the difference in de%elo$ment, &ainly, the t;o com$anies ;ill :e com$ared from t;o $ers$ecti%esK one is the strategic :usiness $ers$ecti%e, the other one is the com$etition strategy $ers$ecti%e, 0,2 Inter%ie; findings Inter%ie;s ;ere started %ery successful, "hey ;ill :e found at A$$endi< / and *,

0,2,/ Inter%ie; ;ith managers /F In order to understand the real $erformance of &cDonald>s and (F# in #hina, ;e made the t;o inter%ie;s ;ith the managers of &cDonald>s and (F# in Shanghai, #hina, FaceBtoBface meeting made the inter%ie;s, Because of the limit time, ;e only as)ed them t;o ?uestions, ;hich too) totally /2 minutes, "he manager inter%ie; ?uestionnaire ;ill :e $ut in A$$endi< /, R &anager of (F#>sO Due to the great $otential #hinese mar)et, um grou$ o$erating WesternBstyle dining is sei9ing the #hinese mar)et in recent years, (F# added a lot of #hina's characteristics into them, for e<am$le many of its $roducts are integrated into the #hinese taste, For the future de%elo$ment of (F#, manager said that due to the gro;ing num:er of WesternBstyle fast food in #hina, (F# is also facing many com$etitors, for e<am$le, Anited States 4ohn Burgers, (F# is still mainly focus on locali9ation style for #hina mar)et, R &anager of &cDonald>sO In recent years, &cDonald's :egan ;or)ing ;ith some local meat $roduction and $rocessing com$anies, &cDonald's also made de%elo$ment of healthy fast food to customers, &cDonald's is $lanning to increase its in%estment in #hina in the future ;hich mainly for ne; restaurants and e<isting restaurant u$grades and e<tensions, Both of them are %ery satisfied ;ith their $erformances in #hina, and in the future all of them ;ant to occu$y much more fast food mar)et in #hina, (F# ;ill still using locali9ation strategy for #hina mar)et, And com$are ;ith (F#, &cDonald>s ;ill still using glo:al standard ;ay for #hina mar)et,

0,2,* Inter%ie; ;ith customers According to the re?uirements of thesis, the authors did the customers ?uestionnaire in Shanghai, #hina, In%estigation of $o$ulation can :e di%ided into three categories ;hich include old $eo$le, young $eo$le and children, "he research ;as set at city center of Shanghai, one )indergarten school and one senior a$artment, #ustomer ?uestionnaire ;ill :e $ut in A$$endi< *, R 8ld $eo$leO "hey $refer (F# to &cDonald>s, #om$ared ;ith &cDonald>s, (F# $ro%ides #hinese :rea)fast and #hinese day meal, "o the old $eo$le, they lo%e #hinese style fast food much more that ty$ical @ast fast food, /C R oung $eo$leO "hey li)e &cDonald>s, :ecause &cDonald's $ro%ides delicious coffee, and free net;or) ser%ices, And in addition, &cDonald's also sell $erennial student discount card, R #hildrenO "hey lo%e (F#, #hildren thin) that (F# toys are more fun than &cDonald>s, "he fast food of &cDonald>s is s$icier for child, "hrough inter%ie;s, the authors found that most old $eo$le choose (F# restaurant :ecause of their good ser%ices and $atient attitude, Ho;e%er, the free Internet ser%ices, ;hich are $ro%ided :y &cDonald>s, also attract a lot of young $eo$le, /+ . A5 8G@=GI@W AB8A" BASI5@SS S"=A"@H .,/ What is the :usiness strategy We ha%e used :usiness strategy related theories as our thesis theoretical :asis, "he ;ord SstrategyS ;as originally a military term that referred to the commander using

certain strategies to ;in the fight against the enemy, In many dictionaries, ;hen loo)ing u$ strategy, it ;ill not :e se$arated from the military strategy, ;hich is usually defined as the Sart of ;arS, Defining strategy from this angle, strategic connotation e%ol%ed into a series of strategic means to defeat the considera:le strength or stronger o$$onent, According to the theory of Henry &int9:erg, $eo$le ma)ing :usiness acti%ities under different occasions in different ;ays has gi%en us different connotations of strategy, It means that $eo$le can acce$t a %ariety of strategies definitions, Based on this %ie;, Henry &int9:erg $ro$osed strategy is defined :y the fi%e s$ecifications, "he fi%e definitions from different angles e<$lain the conce$t of strategy as sho;n in Figure *, (#hina:ai)e *-//) "hese areO FIHA=@ *, &int9:erg>s 2P strategy theory /I Plan, $loy, $attern, $osition, and $ers$ecti%e constitute the S2PS of the strategy, &int9:erg thought that strategy is the definition of a conce$t, ;hich em$hasi9ed a:straction of strategy, 4ust li)e mem:ers of an organi9ation $ossess the same %alues culture and ideals, strategic conce$t is shared ;hen similar e<$ectations and :eha%ior of organi9ation mem:ers are formed, "herefore, in order to study, an organi9ation's strategy, it is necessary to understand ho; the e<$ectations of the organi9ation are shared among its mem:ers, (#hina:ai)e *-//) .,* Aims and $rocedures of :usiness strategy According to Alfred D,#handler, 4r>s definition of strategy, the strategy ma)ing is to set a clear longBterm goals and shortBterm goals o:Decti%es ;ith de%elo$ing an action $lan and allocating necessary resources to achie%e the target, "his is mainly

em$hasi9ed :y three com$onents of the strategyO setting target, ta)ing action and de$loying resources, Factors affecting strategy includes t;o as$ects, the e<ternal en%ironment and internal en%ironment, As e<ternal constraints on the com$any>s actions, e<ternal en%ironment affects com$any's choice, @%en in the same industry en%ironment, it may means differences to different com$anies, It may mean an o$$ortunity or a threat :ecause of com$anies $ossesses deferent resources and management ca$a:ilities, (Alfred D,#handler, 4r, /IFI) "herefore, it is necessary to e%aluate the internal en%ironment of a com$any ;ith these ?uestions, for e<am$le, l Which s)ills do com$any>s em$loyees ha%eN l What )ind of resources does com$any ha%eN l What are the com$any>s organi9ational %aluesN l Ho; is the com$any's financial situationN By as)ing these )inds of ?uestions, it is easy to ha%e a clear assessment of the com$any's internal resources, strengths and ;ea)nesses, Here is a lo; chart figure 0 to e<$lain it, *FIHA=@ 0, Process of )ey strategy deciding .,0 #om$etiti%e strategy According to &ichael Porter's com$etiti%e strategy theory, generally, com$anies choose a strategy that :rings com$etiti%e ad%antages, "hese ad%antages are :ased on either a lo;er cost than com$etitors or a significant difference from the com$etitors, #om$etition strategy consists of the follo;ing three strategiesO cost leadershi$ strategy, differentiation strategy and focus strategy, "he follo;ing figure .

sho;s the three )inds of strategies, (Porter, &,@, /II+) */ FIHA=@ ., &ichael Porter's com$etiti%e strategy theory .,. Four strategy le%els H T Igor Ansoff is the originator of strategic management, He :elie%es that rather than a com$any>s strategic $lan, strategy has more em$hasis on internal strategic ca$a:ility, According to him, Schendel and Hofer created a ne; theory a:out strategy le%el, "here are four strategy le%els, functions le%el, o$erational le%el, com$any le%el and enter$rise le%el, (#hang<iang *--F) We thin) that it is hard to distinguish the strategy on a cor$orate and :usiness le%elK therefore, it is referred to as the cor$orate strategy, So ;e can easily to understand them from three le%els of hierarchy, ;hich include the com$any's strategy, :usiness strategies, and functional strategy, As sho;n in the gra$h :elo;, in general, the com$any's strategy focuses on t;o issuesO R What )ind of things :usinesses should doN It in%ol%es ho; to determine the nature and $ur$ose of the enter$rise and ho; to select the sco$e and focus of acti%ities of the enter$rise, 8:%iously, this is the fundamental :usiness sur%i%al and :usiness de%elo$ment issues, R Ho; to de%elo$ the :usiness tradeN &ain concern is ho; to decide on the esta:lishment of the %arious strategic units, o:Decti%es and the allocation of resources, ** #or$orate strategy is also )no;n as :usiness strategy, Business strategy is the

com$any's strategy, ;hich is $articularly under the common cor$orate mission $remises, According to the o$$ortunities and challenges, it needs to ma)e suita:le strategic decisions, A :usiness de$artment generally has its o;n functions units, ;hich can im$lement :usiness strategy effecti%ely, And :usiness strategy also needs to :e factored into their res$ecti%e functions de$artments, Functions de$artments can also :e understood as a strategy for the e<ecuti%e :ranches, Ho;e%er, :usiness strategies and functional strategy are )no;n as a com$etiti%e strategy, Figure 2 states four strategy le%els during the :usiness,(&ar)etingI/ *-/-) FIHA=@ 2, Four strategy le%els *0 2 #8&PA=IS85 8F &A#D85A7D>S A5D (F# BASI5@SS S"=A"@H 2,/ #om$arison of &cDonald>s and (F# core com$etiti%eness &cDonald>s and (F# regard each other as a strong com$etitor in the fast food industry, When starting from the moment of entering the #hinese mar)et, they ha%e :een %ying for the mar)et leadershi$ in #hina, Both of them are sur$risingly similar in many areas ;hich including the ser%ice, standardi9ation, organi9ation>s mission and restaurant atmos$here, Ho;e%er, according to the results of the analysis in cha$ter ., ;e can see the :usiness $erformance of (F# is :etter than the &cDonald>s in #hina, ;hy is thatN "he differences in organi9ational $erformance are due to the differences in their strategies and com$etiti%eness as$ects, In #hina, (F# is :etter than the &cDonald>s in the de%elo$ment strategies, (Lhidao *--F) A do9en years of de%elo$ment in #hina, their continuous integration and effecti%e use of limited resources and ca$acity in the #hinese mar)et, And they also formed a )ind

of uni?ue a:ilities ;hich are hard to co$y from each other in :usiness, "hese a:ilities are their core com$etiti%eness, Both of them ha%e one or more :usinesses that can achie%e firstBclass le%el, in addition, they ha%e clear ad%antages in the field of com$etition, "hey are all the foundation of com$etiti%e ad%antage for &cDonald>s and (F# in the longBterm, (Wen)u *-//a) 5o matter ho; large an enter$rise is, they ;ill :e influenced :y its resource and ca$acity, =esources are di%ided into $hysical, human, financial, o$erational and intangi:le resourcesK ca$acities are the characteristics shared :y com$etitors of the same industries, ;hich are usually de%elo$ed :y the internBenter$rise, or outside of the enter$rise, &cDonald>s culti%ate their core com$etiti%eness :y the continued integration of uni?ue resources and effecti%e ca$acities, #oncrete e<$ression is as follo;sO R "he integration of intangi:le resourcesO As the ;e:site named Social Brand Galue stated, the *-/-Bto$ /-- most %alua:le :rands in the ;orld sho;ed that &cDonald's has :ecome one of the ;orld's most %alua:le restaurants :rand, It ;as ran)ing 5o, F of the *-/-Bto$ /--, With a high internet $enetration and a fast information transfer, &cDonald's in #hina relies on its :rand strength of its $arent com$any, e%en though $eo$le ;ho ha%en>t :een to &cDonald's still )no; its re$utation, &cDonald's has an e<cellent :rand recogni9ed *. degreeK Basically, the :rand of &cDonald>s recogni9ed for e<cellence, (Social Brand Galue *-/-) R "he integration of human resourcesO

&cDonald's managers ha%e s$ecial incenti%e training at the Ani%ersity of Ham:urg, ;hich are &cDonald>s uni?ue ca$a:ilities com$ared ;ith (F#, (&cDonald>s *-/*) "hrough the information from (F# annual re$ort, its core com$etence is integration of o$erational resources, "heir franchising model can :e descri:ed as good one ;ith strong #hinese characteristics, (F#>s uni?ue method of is Pnot starting from scratchM ;on the interests of #hinese in%estors to Doin them, At the first time, (F# has :een determined to do the domestic $roducts for #hinese customers, and made a /-- $er cent locali9ation of ra; materials, (Bloom:erg *-//) Ho;e%er, there is some similar com$etiti%eness Bet;een &cDonald>s and (F#, :ut :oth of them ha%e a uni?ue a:ility that distinguishes them from normal fast food :usinesses in #hina, For e<am$le, the standardi9ation of their research and de%elo$ment are commenda:le, In order to ensure a consistent taste of foods on a glo:al scale, the $rocedures of the com$anies re?uire detailed de%elo$ment to then get the conclusion from the a$$ro$riate ?uantitati%e criteria, According to understanding, standardi9ation is their core )no;ledge, Actually, there are also a lot of similar restaurant location in #hina, for e<am$le, there must :e one (F# restaurant near one &cDonald>s, &cDonald>s $refer to choose the city center as their main locations in #hina, ;hile (F# $refer to choose sho$$ing malls as their main locations, "a:le . ;ill $resent the com$arison :et;een their core com$eti%eness in #hina, (Doc++ *-/*c)

"AB7@ ., "he com$arison :et;een &cDonald>s and (F#>s core com$eti%eness in 2,* #om$arison of &cDonald>s and (F# o$eration strategyBBBHro;th strategy &cDonald's and (F#'s gro;th as characteri9ed is $resented :y some ?uantitati%e indicators in the $re%ious cha$ter, such as gro;th of sales re%enue, num:er of restaurants and the num:er of em$loyment, ;hich can :e seen as :oth of them ;ant to e<$and the organi9ation's scale, "he strategy of &cDonald's and (entuc)y Fried chic)en is :asically gro;th strategy in #hina, Hro;th strategy can :e achie%ed through direct gro;th, %ertical integration, and hori9ontal integration to achie%e, S$ecific strategic de%elo$ment includes mergers, ac?uisitions, $artnershi$s, franchising, strategic alliances, and so on, (Strat, &gmt, 4,) (F# and &cDonald's ha%e ta)en a direct e<$ansion of gro;th, :ut the first &cDonald's children's clothing stores called &c(ids o$ening in Shanghai, #hina in *--. mar)ed the adDustment of &cDonald's :usiness strategy, it means that the com$any is see)ing effecti%e gro;th through di%ersification, In addition, there are also differentiations on dri%eBthrough restaurants, (Brand=e$u:lic *--.) 2,*,/ #om$arison of &cDonald>s and (F# chainBstore o$erations model Both (F# and &cDonald>s im$lementM regular salesM and Mfranchising salesM on the management mode to achie%e $rofita:le gro;th, Asing the direct sales, the com$any may :e control shares a:solutely, or there may also :e a $artnershi$ ;ith others, Ander this mode of o$eration, the com$any ;ill $ay the high u$Bfront costs in relation to the latter income $art, and also the cost ;ill :e e<$ended at one time, "he longtime ga$ ;ill ha%e an im$act for the ca$ital chain of the entire com$anyK ho;e%er, using the franchising sales, although it increases the costs of control and

management to the com$any's stores, the u$front initial fee to su$$lement the cash flo;s of the com$any ;ill ma)e the cash flo; of the com$any smoothly as a ;hole, (Ali:a:a *-/*) Since /II0, (F# :egan franchising in !I>A5, #hina, In /II+, it issued the ne; franchising $olicy called Pnot starting from scratchM, By the end of *--F, (F# has I2J regular sales stores in #hina, and only 2J franchises stores, (Study mode *-//) #om$ared ;ith (F#, &cDonald>s officially introduced into a franchising :usiness model in #hina, &cDonald's has more than C-- restaurants in #hina, most *F restaurants are Doint %entures ;ith local #hinese firms accounted for 2-J o$eration modes, contractual Doint %enture and ;holly foreignBo;ned enter$rises, and only a fe; stores are franchise, (Wi)i$edia *-/-) 2,*,/,/ Sta:ility of &cDonald>s franchise mode !" #McDonald$s is not %ust a restaurant&" "his sentence not only accurately co%ers :usiness $hiloso$hy of &cDonald's, :ut also reflects franchise conce$t of &cDonald's, &cDonald's is not Dust a restaurant for sale, and as ;ell as the conce$t of cor$orate culture, Initially, &cDonald's franchise can :e a ne; store, or it can :e an old one, "he in%estment costs for ne; stores and old sho$s are different, In the medium of *--., &cDonald>s o$ened a regular chain first, and then con%erted them to franchised outlets, "hat franchise can use de$reciation e?ui$mentK sho$s, furniture and decoration, and the Doined costs are corres$ondingly reduced, &cDonald's franchisee is a longBterm $artnershi$ that the franchise agreement for a $eriod of *- years, (Wen)u *-//a)

'" McDonald$s franchise mode &cDonald's #or$oration is one of the most successful franchises in the ;orldK it creates a uni?ue franchise modelO the com$any ;ill :uy or rent the sho$s, and then su:leases it to the franchisee, "hese real estates are the im$ortant $ro$erty of &cDonald>s, ;hile rental income of these sho$s also accounted for a significant $ro$ortion of the income, "he follo;ing ta:le 2 ;ill :e a %ery good descri$tion of the &cDonald>s franchise mode, (Wen)u *-//a) "AB7@ 2, &cDonald>s franchise mode (Wen)u *-//a) 7ocation selection *. $ro%inces in north, central and south of the #hina In%estment Initial fee must :e nonB:orro;ed fundsK com$any or $artners to Doin forms are not :e allo;ed, As funds are not enough, &cDonald>s firm allo;s you to rend the facilities, :ut you need to :uy these de%ices ;ithin 0 years *C "raining /* ;ee)s training, 8ffer the staff training at the Ani%ersity of Ham:urg for the franchise, It also $ro%ides management consulting, ad%ertising and other ser%ices, (" )he features of McDonald$s stores selection &cDonald>s e<$ands their scale though the chain of :usiness, ho;e%er, the first ste$ in achie%ing this o:Decti%e is through com$rehensi%e mar)et information and the location of the e%aluation criteria to select suita:le store locations, It ;ill ma)e the

stores more standardi9ed and more sim$listic at head?uarters management, "he $referred terms of &cDonald>s :usiness success is selecting good location, &cDonald's ;ill not s$end huge in%estment to de%elo$ the ne; mar)ets, :ut rather to search for their o;n mar)et all o%er the ;orld, So mostly, they choose fully co$y sho$ store locations as $ossi:le, With a %i%id meta$hor, they are not tailored to each $erson, :ut they are loo)ing for $eo$le ;ho are suita:le for their clothes, (Wen)u *-/*c) 2,*,/,* "he dou:le ;in of (F#>s $rofessional franchises !" #Do not start from scratch& "he idea called PDo not start from scratchM is a s$ecial $oint of franchise of (F# in #hina, "his refers to starting a resale of $rofita:le and so$histicated restaurants, ;hich are sold to franchisees, Franchisees are not re?uired to start from scratch so that ;ill a%oid choosing a $lace or setting u$ a sho$ on their o;n, such as recruiting, training and managing $eo$le as a result of the ;or), "he franchisees ;ill greatly reduce the ris) of in%estment and also im$ro%e the chances of success, =ecently franchise of (F# is a mature restaurant in the form of transfer, 4oining (F# is also a longBterm coo$erati%e relationshi$K the first $eriod of coo$eration ;ill :e continued at least ten years for franchising agreements, Franchisee must %oluntarily ;or) on (F# franchise more than a decade, (Wen)u *-//:) '" KFC franchise mode 5e; franchise o$erators ;ill :e authori9ed to run a mature (F# restaurant, ;hich had already :egun to $rofit at least for a year, Purchase charge for each restaurant's ;ill :e calculated according to the s$ecifics of the restaurant, ;hich includes all the

*+ decoration, e?ui$ment, $rofit, and transfer of em$loyees e<ce$t from the $urchase of immo%a:le $ro$erty, "a:le F e<$lains (F#>s franchise mode, (Wen)u *-//:) "AB7@ F, (F#>s franchise mode (Wen)u *-//:) , (" *i+h commercial plannin+ in KFC Site success is one of (F#>s core com$etiti%eness, "hrough the research on Internet, (F# has a thorough $lanning, Firstly, the selection and di%ision of location ;ill consider their o;n sta:ility and maturity of mar)et $ositioning and :usiness circles, Secondly, (F# ;ill research the stream of $eo$le in the areas and ma)e sure com$etitors ;ill not interce$t their customers, (Doc++ *-/*a) ," Brand helpin+ and promise keepin+ (F# is one of the um Hrou$'s :rands, 8n the management mode of chain, yum introduced Pi99a Hut and their other restaurant :rands to enter the #hinese mar)et ;ith the similar sales, finance, su$$lyBchain and other strategies, "hrough multiB:rand synergies, it enhances the com$etiti%e ad%antage of (F#, and also integrates the su$$ly chain, "hey are full use of the facilities in #hina is a :ig agricultural to guarantee the ma<imum $rofit of (F#, (Wen)u *-//a) *I 2,*,/,0 (F# and &cDonald>s strategies summary Since /II0, (F# firstly im$ro%ed franchise mode into #hina, and then esta:lished a$$ro$riate organi9ations for the res$onse of ra$id decision, "hus (F# started strategy named accelerated, Because of the de%elo$ment of (F#, &cDonald>s also

:egun their strategy on #hinese mar)et, In *--2, &cDonald's o$ened u$ franchise mode at more than 0- cities, In addition, (F# used the #hinese characteristics :usiness mode into (F# restaurants of #hina, After the initial fee $aid, the franchisee found that there is not $rofitK (F# ;ill :e res$onsi:le for the losses, If the store is ;or)ing ;ell, according to the agreement ;hich is signed :efore, (F# ;ill :uy this store ;ith / or * times of the $rice after t;o or three years, So it means that the normal franchises sho$ may :ecome a Doint %enture sho$, and then a Doint %enture sho$ may :ecome (F# o;n sho$, &ostly this is more li)e #hinese in%estment style :ecause of 9ero ris), It states that &cDonald>s ;ill earn higher $rofits from the follo;ing o$erations, But (F#>s P#hinese characteristicsM mode is clearly more suita:le for the #hinese mar)et, (!inhuanet *--.) Actually, &cDonald>s decisionBma)ing systems are slo;er than (F#>s on the longterm organi9ation, And &cDonald>s often $aranoid in Sthe $rice is rightS conser%ati%e $rinci$les ;hen choose the locations, "hey all greatly affected its mar)et e<$ansion in #hina, 8n the contrary, (F# has more ad%enturous inno%ation s$rit, It leads to (F# ;ill get a good location faster than &cDonald>s, (5e;s *--F) 2,*,* #om$arison of &cDonald>s and (F# o$erations area &c(ids is clothing :rand, ;hich ;as founded in /I+C :y &cDonald's #or$oration, In *--. &c(ids clothing toys :rand, o;ned :y &cDonald's announced that the first &c(ids stores o$ened in Shanghai in the same year, A$art from its o$eration ;ith the &cDonald's restaurant, it has its o;n stores, $roduction and sales outsourcing model, &cDonald's introduced a :rand e<tension strategy in order to change the t;o fastfood giants o%er the year>s com$ara:le :usiness de%elo$mentK they are %ery closely

in #hina, In terms of :usiness di%ersification, &cDonald>s is faster than (F#, (Bahaudin, H, &, & Bina, P,) 2,*,*,/ Brand e<tension strategy adDustment for &cDonald>s #urrently, it has fiercely com$etiti%e in #hinese fastBfood industry area, 5o;adays, (F# already has increasing ?uantities of fastBfood restaurants in #hinese mar)et 0;hich is much more than &cDonald 's, (entuc)y Fried chic)en's strong offensi%e has $osed a great threat to &cDonald>s, From year *--. to *-/-, &cDonald's use of the e<isting resources to enter the children>s clothes mar)et in #hin, "hey started :rand e<tension and di%ersification so that can achie%e good $erformances, Basically, &cDonald>s $ositi%e to face $ro:lems so that can a%oid ris)s, And then they use multiBangle management to im$ro%e mar)et share, &cDonald's de%elo$ed from a single food to the children's clothing, "his method of multiBangle management ;ill undou:tedly enhance their $roduct's mar)et share in #hina, In addition, &cDonald's o$ened the S&c)idsS sho$ to a%oid direct com$etition ;ith (F# restaurants, its intention ;as to ado$t a ne; a$$roach and ta)e full ad%antage of their :rand to lin) ;ith their consumers more closely, It means that their $roducts are uniform in the same :rand, ;ith the same logo and design conce$t, thus its higher :usiness o:Decti%es, (Bahaudin, H, &, & Bina, P,) 2,*,*,* &cDonald>s Di%ersification, (F#>s S$eciali9ation Ander the doctrine of :rand $ositioning and e<tended, :randed ;ith the influence of the $arent :rand ma)es it easy for the consumer at the time of initial contact ;ith cause for concern, "hat is easy to create %isi:ility and a;areness, :ut it's hard to

esta:lish $references and re$utation, &cDonald's is a ser%ice organi9ation, ;hich $ro%ides fast food chain, Its :rand identity system is not only its trademar), it includes the standardi9ation of ser%ices, s$ecific dining en%ironment and atmos$heres, as ;ell as traditional food, and li)e their slogan S&cDonald's is not only a restaurant,S &c)ids is a series of children's $roducts that is totally different from &cDonald>s restaurant, @%en &c)ids and &cDonald's ha%e the S:loodS relation, it can get more attention at the :eginning of the :usiness and gain access on the channel's success, :ut :ecause of the :rand, they ha%e great sales resistance at final, "herefore, &cDonald's su$$ort ;as %ery limited for &c)ids, after three years, it has $ro%ed that &c(ids had not, as e<$ected, creating huge $rofits for &cDonald>s, :ut it dro;ned in the children's clothing mar)et in #hina, "heir o$eration ;ere fail to ser%e the &cDonald's de%elo$ment strategy, It $resents that &cDonald's did the di%ersification in the ;rong direction, and it lost its ;ay on the :rand, (Bahaudin, H, &, & Bina, P,) Different from &cDonald>s, (F# is more sensi:ly recogni9ing that di%ersification may result in difficulty increases on human, financial, material resources, and management, So :rand e<tension has not :een started, (F# al;ays adhere to the $rofessionali9ation of management, technology, $roduct and ser%ice differentiation 0/ and mar)et recognition of s$eciali9ation, (F# is seriously $ay attention on the study of the de%elo$ment $ros$ects of the industry, so as to ma)e a :etter $lan for their de%elo$ment strategy, (Huide *--F) 2,0 #om$arison of &cDonald>s and (F# com$etiti%e strategy #om$etition strategyO cost leadershi$ strategy, differentiation strategy, and focus

strategy, Briefly, ;e ;ould li)e to introduce the three com$etition strategies res$ecti%ely, "he organi9ation finds ;ays to cut cost and try to :ecome the industrial lo;Bcost $roducer, "his strategy is )no;n as cost leadershi$ strategy, When organi9ations maintain the manufacturing cost at lo;est $ossi:le le%el, they acti%ely see) a high efficiency in the $roduction, mar)eting and other o$erational areas, "hrough their o;n inno%ati%e design, the technology's $otential a:ility or outstanding :rand image, enter$rise tries to $ro%ide distincti%e $roducts and uni?ue ser%ice, "he com$any ma)es itself different from com$etitorsK this strategy is called differentiation strategy, Porter>s theory mentioned that those t;o com$etiti%e strategies see) com$etiti%e ad%antage in the :road mar)etK ho;e%er, focus strategy is focused on see)ing cost ad%antages (cost leading centrali9ed) or differentiated ad%antages (differences centrali9ed) in a narro; mar)et, "he $ur$ose of focus strategy is de%elo$ing narro; mar)et segment or customer grou$, rather than trying to ser%e the :road mar)et, An enter$rise can use mi<ed strategy, Asing the mi<ed strategy means that a com$any ;hich has a cost that lo;er than the industrial a%erage le%el can sell $roducts or ser%ices on a differentiated :asis, "he effects of inno%ation or scale economies ena:le enter$rises to use mi<ed strategy successfully, &cDonald's and (F# are increasing the scale of :usiness and de%elo$ment in #hina, "hey ha%e using mi<ed com$etition strategy in #hina, and that is to use cost leadershi$ strategy and differentiation strategy, "hey are see)ing a com$etiti%e ad%antage in the #hinese mar)et as a ;hole, so that they ha%e not use focus strategy, (Porter, &,@, /II+) 2,0,/ #om$arison of &cDonald>s and (F# cost leadershi$ strategy

In order to sho; that the )ey of using cost leadershi$ strategy is to gain more $rofits and com$ete ;ith ri%als effecti%ely, here is figure F to ma)e a com$arison for the effect of using a cost leadershi$ strategy and not using this strategy at same $rice le%el, 0* FIHA=@ F, #ost 7eadershi$ Strategy From figure F, ;e can easily see that a com$any :y using cost leadershi$ strategy could has lo;er cost and high $rofit assuming they ha%e same $rice ;ith com$etitors in the mar)et, A lot of factors could affect the cost of doing :usiness, =esources &cDonald's and (F# in%ested are costBeffecti%e, thus they ensured the standardi9ation of their :asic $roducts and ser%ices nation;ide, 8:taining e<$erience cur%e effect is another im$ortant factor if com$anies ;ant to gain cost leadershi$ strategy ad%antages, According to Peter &arsh, e<$erience cur%e effect means that a %alue acti%ities ;ith the learning result in their efficiency increase, accumulated o%er time its cost ;ill decrease, Practicing and learning o%er time could reduce the cost of the mechanism, including the im$ro%ement of the la:our efficiency, im$ro%ed asset utili9ation and ra; materials suita:ility for the $roduction $rocess, As glo:al fastBfood industry's :ig :rands, &cDonald's and (F# ha%e e<tensi%e e<$erience in the #hina mar)et, "herefore, from a strategic $oint of %ie;, the main factors affecting the cost of doing :usiness are economies of scale and cost of material $urchasing $rice, (&arsh, P, *-/*) "he costs of %alue acti%ities are often su:Dect to economies of scale, @conomies of

scale $roduced in the ca$a:ility of a greater range of acti%ities in a different manner and higher efficiency, It means that economies of scale could allocate the cost in 00 greater sales, &cDonald's and (F# $rimarily use direct sales stores and franchise stores as e<$ansion mode in #hinaK es$ecially the franchise mode is more ra$idly e<$and the scale, From a longBterm $ers$ecti%e, (entuc)y and &cDonald's are a:le to achie%e economies of scale, (&arsh, P, *-/*) For the $urchase cost, &cDonald's and (F# res$ecti%ely unified $rocurement and distri:ution as su$$ly chain management in order to ha%e lo;er cost, When it comes to $rocurement and su$$ly of the $roduct, &cDonald's inclined to allo; American enter$rises to $ro%ide sources, ;hile (F# is trend to cor$orate ;ith #hina's domestic su$$lier, &oreo%er, for e<am$le, (F# is sharing su$$ly chain ;ith Pi99a Hut, ;hich creates the su$$ly chain colla:orati%e sharing effect, It decreases the cost also, In one ;ord, (F# $erformed slightly :etter control of $roduct costs, (#hina @conomics *--F) In $ricing as$ects, &cDonald's and (F# set same $rice le%el for similar $roducts for a long time, Ho;e%er, started from 4une in *--0, due to &cDonald's glo:al $erformance decline and cost control $ressures, it started to decrease the $rice ;ithin ten $roducts, &ean;hile, (F# has :een :ased on reasona:le $rofit as $ricing, (Finance Sina *--F) In short, the economic scale of (F# in #hina is greater than &cDonald's ;ith minor difference in cost control, "he differences of com$etiti%e strategy is not mainly reflected in cost leadershi$ strategy, :ut is reflected in the differentiation strategy,

2,0,* #om$arison of &cDonald>s and (F#>s differentiation strategy 2,0,*,/ Product Strategy 8n the menu of (F# and &cDonald's, :oth of them ha%e standardi9ation and unification main $roduct in #hina and ;orld;ide, Ho;e%er, from $roduct inno%ation and uni?ueness $oints of %ie;, there is a great difference :et;een (F# and &cDonald's, (F# has s$aring no effort to meet the different needs of #hinese consumers, Started from the :eginning of #hinese :usiness, it determined to :uild a :rand for the #hinese $eo$le to fit their o;n needs, (Winshang *--C) 0. "o ensure the e<ecution of the ideas and direction of the ;or), in *--- (F# has in%ited more than .- national food nutrition e<$erts and set u$ #hinese (F# Food Health Ad%isory #ommittee, "hey studied ho; to ada$t to #hinese tastes, diet, eating ha:its and consum$tion characteristics, "hey de%elo$ed di%ersified $roducts to meet different re?uirement of customer grou$s, In *--., the inno%ation and locali9ation strategy (F# $roducts :ro)e the :oundaries of Western fast food and #hinese fast food and got into ne; consumer mar)et, "here are more than 0- ty$e of ne; $roduct launched in #hinese mar)et, among ;hich at least half of ;ith #hinese characteristics, (Info Food Hc0F- *--F) "here are many $roducts that are es$ecially de%elo$ed according to #hinese taste, for e<am$le, hi:iscus fresh %egeta:le sou$, mushrooms and chic)en $orridge, traditional BeiDing chic)en roll, Sichuan s$icy ham:urger and so on, "he locali9ed $roducts are ins$ired :y #hinese cuisineK ho;e%er, they are ser%ed in a fast food ;ay

;ith reasona:le $rice and good timing, Image 0 is a ty$e of lunch that (F# ser%es, (Stnn *--F) I&AH@ 0O (F# 7unch Poster ((F# *-/0) At the same time, there are ham:urgers, fried chi$s and cola a%aila:le, Within the range of the Huangdong $ro%ince, in *--. summer, a traditional her:al tea called WanglaoDi ;as ser%ed officially in (F#, It is the first time that (F# directly transited from im$ro%ed $roducts to the introduction of a com$letely local $roduct, In addition to the dee$ening of locali9ation strategy in #hina, (F# is no; studying regional consumer $references, "hey are im$lement regional locali9ation strategy, "his is :ased on the fact that #hina is country ;ith :ig geogra$hy scale and %erified food 02 $references, In short, (F# no; is at the to$ s$ot of fast food industry in #hina, ;hich is largely due to its locali9ation :usiness strategy, (&edia/F0 *--.) For a long time, &cDonald's is mainly ser%ing ham:urger and :eef :ased $roducts, ;hich is more suita:le for the @uro$ean and American $eo$le, After entering the #hinese mar)et, &cDonald's may ta)e into account t;o considerations, 8ne is that the secret of fast food longBterm sur%i%al lies in the standardi9ation and continuity of $roduct su$$ly e%ery;here, Another is that it re?uires large cost in$uts to de%elo$ ne; $roducts, "hus, they ha%e not changed their menu for long, (4ctrans *-/*) 7ater on, they ha%e chic)en $roducts to meet the mar)et needs, Asually chic)en is chea$er than :eef as the results the cost of ra; material decrease, Also, as a general conce$tion, chic)en is healthier than :eef and #hinese $eo$le are fond of chic)en meat, &cDonald's declared that it ;ould not change the menu in #hina and al;ays

adhere to its o;n characteristics :urgers, ;hich are Dust li)e the slogan, I am lo%in it, "his ;as regarded as a strong style of &cDonald's, "hese are &cDonald's $roduct standardi9ation em:odied, ("iannong *-/*) Ho;e%er, ;hen faced the fast e<$ansion of (F#, &cDonald's has finally changed the stu::orn tem$er in *--., "here are #hinese style scram:led eggs and $anca)es a%aila:le in :rea)fast menu, ;hich are ;elcomed :y lot of customers, "his is the first time that &cDonald's first introduced locali9ed $roduct in #hina, Although &cDonald's insist on standardi9ation in $roducts and ser%ices, it made some adDustments on the $roduct in #hina, :ut the strength and :readth of its $roduct locali9ation is far :ehind (F#, "oday, &cDonald's glo:al standardi9ation conce$t is still not reduced, Image . is one of &cDonald's lunch $roduct, (4ctrans *-/*) I&AH@ .O &cDonald's 7unch Poster (&cDonald's *-/0) 0F In #hinese mar)et, (F# introduced of /,2 ne; $roducts a%eragely e%ery month, ;hile &cDonald's made slight changes to :urgers, When &cDonald's insists on the glo:al fast food standardi9ation, (F# launches local $roducts ;ith di%ersified characters, Product locali9ation is a )ey strategy of (F#>s fast de%elo$ment in #hina, Precisely :ecause they treat locali9ed management in different attitudes, they ha%e a different de%elo$ $aths, "y$ically, (F#'s success locali9ation in #hina is regarded as a classic case of international :usiness, (Ser%ice8cn *--+) 5.3.2.1.1 Interview As ;e can conclude from $re%ious descri$tion, (F# has a menu filled ;ith #hinese locali9ed food as a strategy to attract customers, mean;hile, &cDonald's has almost

same menu as international one, In the inter%ie;, customers are fond of (F# food %ery much, :ecause it is close to #hinese taste ;ith %erified choices, Also, some customers li)e &cDonald's as ;ell, Ho;e%er, customers are more $refer to go to (F# for the reason that (F# $ro%ide #hinese taste food, ham:urger and fried chi$s at same time, &anager in (F# also $ride that they ha%e a ;ide range of menu choices ;ith ;hich they could satisfy customers ;ell, 2,0,*,* "arget mar)et strategy As to the fast food industry, the most commonly used mar)et segmentation method is :ased on demogra$hic factor, ;hile the other factors such as regional factorK customer $sychological factor and consumer :eha%iour factor are less used, For demogra$hic %aria:les, WesternBstyle fastBfood industry ta)es age as a consideration of mar)et segmentation %aria:les, In *--F, :efore changing mar)eting strategy, &cDonald's had al;ays :een focusing on childBcantered families, and also ta)ing account of young men and ;omen and young $arents, @ach &cDonald's restaurant had a set $lay area for children, including small slides, :loc)s, etc, #hildren ;ould get their s$ecial :irthday :lessings and gifts ;hen they %isited the restaurant on their :irthdays, In addition, many &cDonald's restaurants regularly made their female em$loyees arrange dancing acti%ities for children, (Doc++ *-/*:) All the a:o%e acti%ities are not only %ery fond of children, :ut also ?uite $o$ular ;ith their $arents, After changing mar)eting strategy, &cDonald's has oriented her target mar)et to young $eo$leO . U 0- yearBold male and female, Based on the a$$eal of 0C young and li%eliness, &cDonald's e<$ect to $ro%ide a rela<ing and $leasant dining

en%ironment for young $eo$le, By a series of ad%ertising and $romotional acti%ities in sho$s, &cDonald's dee$ly sei9es the s$ortsBli)e and romantic minds of young $eo$le and stimulates their consuming desire in &cDonald>s, "his is to attract the target customers from %alue le%el and get recogni9ed :y them, "a)e the Big &ac for e<am$leK it successfully attracted a large num:er of young consumers :y the endorsement of 5BA su$erstar ao &ing and issuing colour ;rist:ands, While (F# is $ositioning on the family mem:ers consuming, ma)ing young men and ;omen dri%e the consum$tion of their children and $arents, In order to attract customers of all ages, including many elderly, (F# $ro%ides a ;arm and family reunionBli)e dining atmos$here and the di%ersified and locali9edBfla%oured $roducts, (Doc++ *-/*c) A fe; years ago, (F# introduced the family $ac)age, :ig enough for a /0Bmem:er family, Besides, different ;ith &cDonald's %igorous and dynamic ad%ertising, entertainment and s$ort stars> endorsement, (F#'s image ;ith its sim$le, su:tle style, al;ays em:odies the ;armth, lo%e and its Pfamily mem:ers consumingM mar)et conce$t, (Doc++ *-/*c) Ander the influence of different target mar)ets, &cDonald's and (F# %ary in the $roducts, $romotion and e%en the decoration style %ery much, Before transform, it raised the cost of decoration and $ersonnel ;hen &cDonald's ;anted to dri%e the $urchasing $o;er :y children>s nonB$urchasing $o;er, After the transform, it seems li)e :oth &cDonald's and (F# are sharing the same target mar)et to young men and ;omen, :ut there is a su:stantial difference in :et;een, &cDonald's ad%ocates young $assion, ;hile (F# ad%ertises the ;armth of the family and further e<$ands the target mar)et to the elderly consumer grou$ ;ith the ad%antages of locali9ation

and di%ersification, So ;ith its ad%antage in target mar)et $ositioning, (F# occu$ies a fa%oura:le mar)et $osition, (Doc++ *-/*:) 5.3.2.2.1 Interview Due to the different target mar)et strategies, (F# managers in #hina $ay more attention on family and the elderly consumer grou$s, #om$ared ;ith &cDonald>s, managers in #hina focus on youth mar)ets, "he customers in the inter%ie;, most of the old $eo$le and families choose to (F#, and young $eo$le ;ould li)e to go to &cDonald's, outh $refer to go &cDonald>s :ecause of free WiBFi and li%ely en%ironment, @lder and families li)e ;armer en%ironment, "hese are the results of different target mar)et strategy,(Inter%ie;) 0+ 2,0,*,0 Brand strategy As com$anies increasingly focus on :rand image $ersonali9ation, today, ;e ha%e %ery different im$ressions of :rand image :et;een (F# and &cDonald's, (F# $aid more attention to the $sychological feelings of the #hinese consumers, It focuses on s$read the conce$t that integrating into #hinese life, changing for #hina and creating ne; fast food $roducts, (#yDm*+ *--I) For :rand :uilding, (F# has o:%ious characteristics of #hinese culture in details, In *--F, (F# restaurants in #hina used the ne; logo and decorating idea, It has not only eyeBcatching logo :oard at each restaurant door, :ut also %isual elements on restaurant design, ad%ertising, food $ac)aging, staff uniforms and $u:lic su$$lies, @%en, (F# grandfather $ut on #hinese costumes to ;elcome customers at #hinese 5e; ear time, (F# changed its logo, ;hich made a good foundation for :rand

communication and mar)eting cam$aign, #ustomers are attracted :y no%elty, Immuta:le things li)ely to cause %isual fatigue and una:le to stimulate the senses, therefore naturally cannot :ecome a focal $oint, (F#'s ad%ertisement on "G is full of #hinese atmos$here too, (F# is good at gathering the attention of the $u:lic and the focus of attention of a society, during ;hich it e<$resses its strategic intent of the :rand as ;ell as su$$orting tactical, "he $resident of umQ Brand Su 4ingshi said that since entering #hina in /I+C, (F# has :een adhering to the conce$t that :uild a #hinese :rand for the #hinese $eo$le and s$are no efforts for it, Ins$ired :y this conce$t, (F# continuously ;or) for narro;ing the ga$ ;ith #hinese consumer and :uilding #hina :rand according to local taste, It is easy to conclude that (F# focus on locali9ation of :rand image, (#yDm*+ *--I) #om$ared to (F#, in *--0, &cDonald's launched :rand reDu%enation and remodelling mo%ement, It attracted younger consumer grou$s :y using slogan I am lo%in it, It is a life attitude ;ith definition of asserti%e and free, &cDonald's re:randing is successful ;ith creati%e e<$ression of :rand idea, It inDected ne; meaning to &cDonald's :rand and culture, Ho;e%er, But this re:randing ;as launched under the adDustment of &cDonald's glo:al :rand image, rather than es$ecially for #hinese mar)et, &cDonald insisted that the standardi9ation and uniformity of its o;n image in any location, In order to create a ;arm en%ironment, there is a golden & letter ;ith red :ac)ground in restaurant design, "he uniform of &cDonald's cartoon character is glo:al unity, did not do as the =omans do, From this ;e can )no; that &cDonald's im$lemented glo:ali9ation strategy of the :rand image :uilding, (Stnn *--F) 0I

5.3.2.3.1 Interview In the inter%ie;, middle age customers are more $refer (F# ad%ertisement :ecause it gi%es them a feeling of family ;arm and ha$$iness among family mem:ers, outh customers $ays more attention to &cDonald's ad%ertisement, they are attracted :y the uni?ue style and deBsign in &cDonald's ad%ertisement, So that ;e can say, they :oth achie%ed success in :rand strategyK they ha%e caught their target mar)et attentions, (Inter%ie;) 2,0,*,. "alent strategy (F# has /--J local talentK they are not only the $rimary em$loyees, :ut also the senior managers, From the first restaurant in #hina until no;, (F# is $ractice locali9ation of human resources strategies, "hey mainly $ay attention on training, $romoting and em$loying the local em$loyees so that can $lay %ery ;ell ;ith their familiar characteristics of the $olicy en%ironment and mar)et ad%antage, "he senior managers, such as S8$erations &anagerS, SArea &anagerS and S=estaurant &anagerS, ;ho are all from #hina ;ill :e directly res$onsi:le for restaurant o$erations, 7ocali9ation management $ersonnel can gain a :etter understanding of local needs and ;ants, and they ;ill use %ery good )no;ledge of local consumer consum$tion $sychology and consum$tion ha:its in the #hinese mar)et, In order to :etter carry out the successful im$lementation of the strategy of talent locali9ation, (F# creati%e came u$ ;ith the training structure ;ith #hinese characteristics of dou:le unit settingsO "raining De$artment and Human =esources De$artment, "he o$erations training manager of um firm named #hen a?ing descri:ed that (F# ma)e the "raining De$artment a$art from the Human =esources De$artment, "his

action is not common in other ;orld;ide su:sidiaries, She said that the #hinese mar)ets need to use this s$ecial strategy, It means that (F# has a :ig determination on using local talent, (Bi9 /F0) Different from (F#, most general managers of &cDonald>s are from #hina, ho;e%er senior e<ecuti%es of &cDonald's head?uarters are not fully locali9ed, Ho;e%er, the di%ersity of talent is a hallmar) of the &cDonald 's, @m$loyees of &cDonald>s are from different de$artments, For e<am$le, the staff graduating from catering school only accounts for the 0-J of, and .-J of em$loyees are :usinessmen, engineers, agronomists and so on, &cDonald's com:ination of talents is a familyBstyle, ou ;ill also find the older $eo$le in the &cDonald's, and they can tell much more e<$erience to the young em$loyees, ;hile the young $eo$le ;ill also :ring much more fresh .energy to the old em$loyees, At the same time, &cDonald's do not em$loy the genius, :ecause they thin) genius ;ill lea%e on the longBterm, If $eo$le ;ant to :e the success in the &cDonald's, they ha%e to start from scratch, such as ma)ing fry chi$s, ham:urgers and other :asic ser%ices, "his is the only ;ay to get success in &cDonald>s, (Finance *-//) 5.3.2.4.1 Interview "alent strategy is :ound to affect the future de%elo$ment of the enter$rises, "he manager of (F# said that ;here the enter$rise de%elo$ment is, ;here the em$loyees ;e ;ould use, It ;ill :e more integrated into the local mar)et, But &cDonald>s $refer to :elie%e em$loyee di%ersity, ;here%er they come from, &cDonald>s ;ill train them together, "hat>s ;hy (F# is more locali9ation and &cDonald>s is more di%ersification,

(Inter%ie;) 2,0,*,2 Su$$lier &anagement Strategy When com$ared their su$$ly mode, &cDonald's has tendency to get su$$ly from international enter$rises, ;hile (F# is more in lo%e ;ith the local #hinese su$$lier, (F# $urchases ra; material from #hinese domestic su$$lier mainly, ;ithin ;hich, /--J chic)en are from domestic mar)et, (F#'s ra$id de%elo$ment also led the industry starting ;ith the de%elo$ment of all )inds of related ra; material su$$ly, (F# $ersists in the $rinci$le of common $rogress ;ith its su$$liers, (F# hel$s su$$liers teach a ne; management methods and ad%anced technology, (F# su$$orts su$$liers ;ith acti%e training test, @%ery three or si< months, (F# assesses the su$$liers, "he %olume :usiness in ne<t $eriod ;ill :e determined :y the assessment results, "hus, they formed a close relationshi$ ;ith su$$liers as strategic $artners, It is mainly reflected in t;o as$ects, Firstly, the economic scale of (F# gro;s to larger com$any, Secondly, (F# tried to ma)e a:road su$$liers locali9ed, (F# has :een acti%ely encouraging foreign su$$liers to set u$ factories in #hina, (Info #hina Ali:a:a *--I) "he :asic $hiloso$hy &cDonald's $rocurement is to form a mutual %irtuous circle ;ith su$$liers, According to &cDonald's $rocurement %alues and com$any culture, they ha%e :uilt a dou:leB;in $rocurement relationshi$, &cDonald's is more ;illing to cor$orate ;ith glo:al su$$lied, In their $oints of %ie;, this cor$oration is :een :uilds on trust to reduce the cost of ris), &cDonald's $refers to :e the shareholder of its ./ su$$liers :ased on t;o reasons, Firstly, it ensures :etter control of ris) factors such

as food security and inflation, Secondly, they could ta)e the material cost under control, &cDonald's hel$ its su$$liers to o%ercome difficulties :y $laying role of the manager of the su$$liers, "here are four $arts included in the %alue :ehind the &cDonald's su$$ly chain management, "hey are inde$endence, $artnershi$, shared %alues and system $riority res$ecti%ely, "he goal of &cDonald's su$$ly chain management is to $ossess longBterm com$etiti%e ad%antage rather than shortBterm $rofit, "he longBterm goal consists of four as$ects, "hey are inno%ationK safe assured su$$ly, ?uality and total cost res$ecti%ely, &cDonald's set glo:ally uniform $roduct ?uality s$ecification and re?uirements, @ach su$$lier $roduction and trans$ort lin)s ;ill :e com$leted in accordance ;ith the re?uirements of &cDonald's, (#anyin/F+ *-/*) 5.3.2.5.1 Interview (F# su$$lier management is constantly integrating su$$liers to esta:lish a strategic $artnershi$ and de%elo$ together, &cDonald's su$$lier management maintains more inde$endence and continues to culti%ate a loyal su$$lier relationshi$, 2,0,*,F "he summary of com$arison of (F# and &cDonald>s differentiation strategy We ha%e made a summary com$arison of (F# and &cDonald>s differentiation strategyK the authors can conclude that in ta:le C as :elo;, "he differences of :usiness strategy :et;een (F# and &cDonald's in #hina intended to :e clearO 7ocali9ation of (F# through multidimensional $olicies to catering #hinese consumers to achie%e to :e ;inner of the fast food industry in #hinaK the ideas of &cDonald's standardi9ation and glo:ali9ation to ensure high uniformity and high ?uality to maintain their good image, "he standardi9ed $roduction of &cDonald>s

sho;s a constant taste, ser%ice and Anited States cultures for the #hinese customers, Both of their aims are %ery clear, "hey are all e<$ected to :uild their o;n :rand loyalty and to e<$and mar)et share in #hina :y their differentiation strategy, But (F# has ca$tured #hinese taste so that (F# achie%ed the mar)et leading $osition in recently years in #hina, "hrough the $re%ious analysis, it sho;s that there is a difference on the :usiness strategy and com$etiti%e strategy :et;een &cDonald's and (F#, Ho;e%er, they ha%e many similarities that mainly reflected in the core ser%ice of standards and consistency, It is also ;hy ;e intuiti%ely feel that there is not much difference :et;een them, &cDonald's ser%ice $hiloso$hy is ES#G as follo;ing figure C O(#anyin/F+ *-//) R EualityO Accurately selected ra; materialsK "ime is the money, R Ser%iceO /--J customer satisfactionK "he ser%ice re?uest is to facilitate fast, friendly, attenti%eK R #leannessO Ser%e the customers safely meals #lean for stores R GalueO Anderstand customers ' needs and ;ants Pro%ide nutrition $roducts (F# ser%ice $hiloso$hy is #HA&PS as follo;ing figure +O (#hina&BA *-//) R #leanlinessO #lean for stores R Hos$italityO 8ffer the sincere and friendly ser%ices R AccuracyO @nsure accurate su$$ly

R &aintenanceO &aintain the good e?ui$ment R Product EualityO Insist on high ?uality and sta:ility of $roducts R S$eedO fast ser%ice .0 FIHA=@ C, &acdonald>s Ser%ice Philoso$hy MES#GM FIHA=@ +, (F# ser%ice $hiloso$hy M#HA&PSM cham$ion $lan .. F #85#7ASI85 F,/ &ain findings In #hina mar)et, &cDonald's and (F# ma)e continuous de%elo$ment and achie%ed great success, Ho;e%er, on the contrary to their $erformances in the glo:al mar)et, in this )ey mar)et (F# sur$asses &cDonald's in terms of s$eed, ?uality, $erformance and re$utation, "he main reasons are that (F# em$hasi9es on ho; to integrate into the #hinese mar)et and ;or) out a de%elo$ment strategy ;ith strong #hinese characteristics, In short, (F# gained a com$etiti%e ad%antage o%er &cDonald's, It mainly reflected in these t;o as$ectsO l In the as$ect of :usiness strategy of gro;th /) Based on dou:le ;in strategy, (F#'s :usiness scale e<$ended ra$idly, "he ;ay of cor$oration is in line ;ith the in%estment $sychology of the #hinese $eo$le, At the same time, &cDonald's is mainly see)ing sta:ility, *) &cDonald's too) the :rand e<tension di%ersified :usiness strategy adDustment, ho;e%er, it is not ended in the success, l In the as$ect of com$etiti%e strategy of gro;th

/) (F# has larger scale of :usiness in #hina, (F# $urchased ra; material ;ith almost /--J locali9ation, (F# has a cost ad%antage com$ared to &cDonald's, *) (F# has dee$er locali9ed $roduct than &cDonald's, 0) "here are small differences in target mar)et $ositioning :et;een (F# and &cDonald's, (F# lead &cDonald's in many as$ects, .) (F# $ays a lot of attention to :rand :uilding locali9ation, 2) (F# de%elo$s locali9ed highBle%el management $ersonnel in order to ma)e :etter com$any's strategic adDustment, &cDonald's $ersonnel di%ersification is reflected in em$loying senior staff from the head office, F) In su$$lier management, &cDonald's inde$endent s$irit ad%ocated :y the Anited StatesK (F# integrated into the culture of the #hinese $eo$le ;ay of doing :usiness, reflecting the Slo%e and loyaltyS in #hinese culture, During our study, ;e ha%e noticed that e%en though (F# and &cDonald's regard each other as the :iggest ri%al in #hina mar)et, :ut they did not they did not com$letely assimilated, "here is no in a %icious $rice com$etition :et;een .2 &cDonald's and (F# eitherK on the contrary, they continue to im$ro%e core com$etiti%eness in the fierce com$etition to o:tain a dou:le ;in situation, .F F,* =ecommendation for international fastBfood com$anies "hrough a com$arati%e study of &cDonald's and (F# de%elo$ment in #hina focused on :usiness and com$etiti%e strategy, ;e ;ould li)e to ha%e some suggestions for

other a:road fast food restaurant if they desire to e<$and their :usiness in #hinese mar)et, l Business strategyO /, =unning more outlets is main ;ay at this stage, *, "he franchise chain ;ill :e an ine%ita:le road to :usiness e<$ansion, l #om$etiti%e strategyO /, Pro%iding featured ser%ice and health $roducts, *, Achie%ing standardi9ation in each $rocess and areas of ser%ice, 0, @sta:lishing a :rand image that $enetrates into the essence of e%ery detail, ., Setting target mar)et ;ith clear $ersonali9ed $ositioning, .C F,0 Suggestions for further research Authors gain the dri%ing factors for #hinese mar)et o$erating result difference of :oth com$anies :y com$aring :et;een &cDonald's and (F# from a strategic $oint of %ie;, thin)s a:out the strategic issues for the future de%elo$ment of #hinese fast food, Ho;e%er, due to the limitations of time and a:ility, the author is not a:le to ma)e this thesis %ery com$rehensi%e in ;hich only in%ol%ed some :asic as$ects, Although authors collects a lot of information a:out these t;o com$anies, some of ;hich is related ;ith the com$any's strategy, highBle%el attention and guidance of the t;o com$anies is needed, Anfortunately, :ecause of ca$acity constraints, authors cannot get the enough su$$orts, "herefore, authors a$$lied the learned )no;ledge of strategic management to the strategic com$arati%e study of the t;o com$anies, :ut it

is still in the $reliminary stage, For further research, ;e ;ould li)e to recommend doing more ?uantitati%e research to ha%e a clear %ie; of their differences in num:ers,