Essay on KFC´s Reputation and Action Plan in China

2977 Words 12 Pages
Main Finding

Sales figure in KFC

The sales in KFC started to drop in fourth quarter 2012. Although the overall sales in 2012 were higher than 2011, the fourth quarter’s sales figure went down by 6% (Matthew B, 2013). From that quarter until October, the sales figure decreased continuously. Although Yum! Brand persistently estimated that the sales figure will increase after the bird flu and still predicts that the sales will go up in fourth quarter 2013, it is unpredictable whether KFC’s sales will be positive or negative. However, the trend shows that the percentage decrease has been reduced gradually, so it seems that the sales value will be recovered gradually as well.

Quarter Percentage growth
2012 third quarter +6
2012 fourth
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However, the popularity of KFC and McDonalds does not arise from the same reason in twentieth century. As more information came into China, people became more insightful, meticulously selecting products for themselves and their children. It means that the popularity of western companies can shift to others whenever the customers feel that the goods and services are not adequate for their family.
Ice cube and Chemical Chicken scandal
There were two sensational scandals about KFC China reported during 2012 and 2013. In December 2012, one of Chinese media revealed that KFC used toxic chemical chicken that might be harmful for the human body (China Daily, 2013). Later in 2013 July, another media has reported that the ice cubes and water used in KFC is 12 times dirtier than toilet water, making customers disappointed again about the quality of food (S. Li, S. Cheng, 2013).

Bird flu
In March 2013, the outbreak of avian influenza was found in China. It was a new flu virus and during the spring term, the WHO reported 44 deaths, which threatened the whole Chinese citizens (CDC 2013). As a result, most of the western fast food restaurant showed sharp decline in the income in China, and the growth in KFC decreased by around 20% in the first quarter.

Analysis and Discussion
SWOT Analysis

SWOT analysis is “a simple yet extremely useful decision-making tool. It is an acronym for Strengths,

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