Introduction
The current globalization and internationalization trends have created new markets for multinational corporations (MNCs) such as Kentucky Fried Chicken (KFC), an American-based fast-food founded in 1952 as a franchise. Nonetheless, market liberalization policies and the free trade flow have seen the franchise expand to the global market beyond the Western nations. The brand is now popular in all the continents, including Africa. Nonetheless, with the current changes in global politics, the brand’s expansion, especially in Brazil, Russia, India, and China, has been affected and influenced by cultural differences. This demands that the brand come up with an effective strategy. Sociocultural factors such as values, customs, and language can influence the brand’s global expansion. Hence, it is imperative that the brand effectively differentiates its products for the target market while also adopting an effective expansionism strategy into the emerging BRICs market.
To begin with, various socio-cultural factors can influence the expansion of KFC into the global market. Cultural values play an important role and can influence the expansion of multinational corporations such as KFC. For instance, when the company moved to the Chinese market, it had to adapt to the collectivist culture of the country and customize its menu to meet the needs of the Chinese market (Bui, 2020). Moreover, since KFC meals are mainly Western, the company has to negotiate the brand identity with the international market. The company has often been forced to adapt the local meals in the regions where it expanded. For instance, in China, KFC had a menu of over 54 items compared to the 29 in the Western market as it introduced local foods (Du, 2022a). The country’s culture and social values significantly influence the expansion of MNCs into the international markets.
The expansion strategies of KFC in the United States and China are different in various ways. The company adopted a standardization approach in the US market, where all the menus were the same as in the international market. On the contrary, in China, the brand differentiated itself, incorporating local food into its diet and changing the meals’ portioning in line with the collectivist Ideals in the Chinese markets (Du, 2022b). The menu adaption to the Chinese market included serving congee during breakfast, Chinese rice and dough sticks, fried noodles, and hoisin soup. Including these Chinese dishes in the KFC menu helped the company bond more with the locals by creating a relationship that acknowledges the Chinese dishes and meals.
KFC and BRICs Nations
The current ongoing conflict between Ukraine and Russia has significantly impacted international business in Russia. The majority of the American brands withdrew from Russia during the inception of the war. The anti-Russian American foreign policies make it difficult for American companies to expand to Russia. Nonetheless, the company can expand in Brazil and India with the least resistance. Brazil has a growing middle class and the eighth-largest economy in the world; hence, it presents a unique market for KFC. Brazil has also, in recent times, presented high economic growth thanks to the social programs that have alleviated poverty and improved the standards of living. The country’s political climate is also conducive for foreign investors (Nogueira, 2020). The environment created in Brazil presents good opportunities to expand the brand into these markets. Despite these benefits, the international players will likely face challenges ranging from language barriers, intricate tax regimes, and the need for local adaptation (Bretas & Alon, 2021). However, using appropriate entrance strategies, including master franchising and developing local partnerships, the brand can successfully expand into the market.
India is another fast-growing economy with the potential for significant expansion of KFC, as small-scale food vendors and stores largely dominate the fast-food market. According to Statista (2024), the Indian quick service restaurant market in India is valued at 17.9 Billion Indian rupees in 2022, a figure that has been forecasted to grow to 431 billion Rupees by 2027. The high performance of the Indian fast-food industry is attributed to the growing exposure to Western food and culture and the growing purchasing power of the population. The other important market is South Africa. The growing middle class and relatively young population exposed to Western culture are important target markets for the brand. The company needs to make an effort to effectively internationalize to the South African market and customize the meals with an African touch to help the locals relate better with the brand.
The current globalization and market liberalization trends have made brands such as KFC become global brands across many nations. Despite different factors, the company has managed to penetrate new markets worldwide. Markets such as China have helped the company emerge as a global player. The company has invested in market research, especially in new markets, enabling it to tailor its product offerings and services to the target markets. This has been earmarked by introducing Chinese meals in the brand menu and including other Chinese meals to help create an identity with the Chinese market. Besides, in the international market, the company has developed products that reflect the culture and social status of the market and economy. These brand characteristics have given the company a competitive advantage over other players in the international market.
Critical Reflection – Coca-Cola in Saudi Arabia
Globally, there are only a handful of markets where Coca-Cola is not the leading soft drink, one of such countries being the Kingdom of Saudi Arabia. While the brand has its supply chain right in the country, it still faces serious competition from Pepsi (The Drum, 2024). The brand has sought to differentiate itself, trigger closeness, and improve sales to overcome this challenge. In the quest to break the blue seal, the company partnered with Amazon Alexa, a popular gadget in the homes of Saudis. The move would see the company leave the traditional advertisement and adopt a more innovative approach to using Artificial intelligence. The partnership turned each home with the device into an interactive activation that allowed individuals to impulsively buy Coke products while creating a new shopping experience for the consumers in the market. The move has seen the brand position itself as innovative and convenient by providing a unique selling proposition using artificial intelligence at the convenience of the customers’ homes.
References
Bretas, V. P. G., & Alon, I. (2021). Franchising in Brazil: Foreign entrants build a presence. Journal of Business Strategy, 42(6), 374–381.
Bui, T. M. (2020). Standardization versus Adaptation Strategy in International Marketing Mix–The case of KFC in Vietnamese market. Master’s Thesis, University of Turku.
Du, Y. (2022a). McDonald’s VS. KFC, Which is More Successful in Marketing in China? 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022), 1121–1126.
Du, Y. (2022b). McDonald’s VS. KFC, Which is More Successful in Marketing in China? 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022), 1121–1126.
Nogueira, M. (2020). Preserving the (right kind of) city: The urban politics of the middle classes in Belo Horizonte, Brazil. Urban Studies, 57(10), 2163–2180.
Statista. (2024). India: Market size of quick service restaurants 2027. Statista. https://www.statista.com/statistics/675387/market-value-of-quick-service-chain-restaurants-in-india/
The Drum. (2024). Coca-Cola explains how it showed Saudi Arabia a new side of its brand. The Drum. https://www.thedrum.com/news/2023/11/30/coca-cola-explains-how-it-showed-saudi-arabia-new-side-its-brand
write