UNIT 3
The Yum! Brands owned Kentucky Fried Chicken has experienced difficulties in China this past January with sales dropping by a full 41%. This news comes following a Chinese media expose on one of KFC's Chinese suppliers. Chinese Investigators found that chickens coming from KFC's Chinese suppliers are stuffed with excessive quantities of Antibiotics. With 889 stores in China, this sales drop is a serious dent in Yum! Brands' profits. Chinese customers are much more easily moved to avoid unhealthy foods and are more motivated to stop eating at an establishment while their personal health may be at risk. Yum! Brands has stated that they will not be leaving the market but that they do not know how long they will take to recover.
Yum! Brands has made a critical mistake in their expansion into the Chinese market. Culturally, the Chinese are significantly more health-conscious and less trusting of overseas brands. Yum! expanded into China without adequately ensuring the quality control of their suppliers. Scandal is common with KFC in America, however in America, scandal is significantly less damaging. When moving into a new market, a company should always ensure they are creating a positive first impression. Before a brand is solidified within a new market, scandal can be truly destructive.
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