Summary of Key Points
After switching from Procter & Gamble to KFC, Su Jingxi achieved remarkable success by leveraging full authorization from headquarters, accurate predictions about the booming Chinese economy, recruiting core talents from McDonald's, adopting a rapid expansion strategy, and creating products that resonated with local consumers. As a result, KFC surpassed its competitor in terms of store numbers (over 5,000 vs 2,300 in 2015) and revenue (30 billion vs 10 billion), becoming nearly 40% of PepsiCo's global profits. This transformation made KFC a more successful brand in China than it is in the United States.
Detailed Analysis
#### 1. Obtaining Full Authorization from Headquarters: A Rare Level of Authority in Multinational Companies
The first key to Su Jingxi's success was his freedom to make decisions as he saw fit. At that time, KFC was part of the PepsiCo group, which did not have extensive experience in the food service industry and thus granted Su Jingxi almost complete autonomy. He stated, "No other regional manager in China has been given such extensive authority." This difference is crucial compared to McDonald's, which operates under a rigid global system with uniform standards for products and services across all locations.
#### 2. Anticipating the Chinese Economic Boom: Prompt Expansion Following Deng Xiaoping's Southern Tour
In 1992, Su Jingxi recognized the potential for rapid economic growth in China after Deng Xiaoping's southern tour. Previously, KFC only opened one or two new stores annually in Beijing and Shanghai. Upon hearing about the tour, he realized that the focus of the fast-food industry would shift to China and began expanding aggressively. His sensitivity stemmed from his experience with Taiwan's high-growth economy in the 1960s and 1970s, which taught him to interpret policy signals effectively. Meanwhile, PepsiCo headquarters in the United States was still slow to respond, while Su Jingxi already started accepting invitations from local economic development committees to explore potential expansion opportunities.
#### 3. Recruiting Talent with Chinese Expertise: Leveraging Internal Competitors
To expand efficiently, Su Jingxi focused on hiring professionals with a deep understanding of the Chinese market, particularly those from McDonald's in Taiwan. He believed that Taiwanese employees, being more familiar with local consumer preferences, would be better suited for managing KFC in China. For example, he recruited Lu Suiwen, a key figure from McDonald's in Taiwan, who later became the company's marketing director. Su Jingxi argued that as long as someone understood the customer base, they could quickly acquire the necessary skills.
#### 4. A Rapid Expansion Strategy: Securing Key Markets First, Then Improving
Su Jingxi adopted a "rabbit farming" approach, simultaneously opening stores in multiple cities, focusing on developed areas like Suzhou and Wuxi. This strategy allowed KFC to secure advantageous locations before McDonald's could enter. To accelerate expansion, he granted regional managers significant autonomy, allowing them to make decisions regarding recruitment, procurement, and opening new stores without needing approval from higher-ups. Three years later, when the initial expansion was complete, a Chinese headquarters was established to centralize key functions.
#### 5. Product Innovation: Creating Products That Appeal to Chinese Consumers
Product innovation was crucial for KFC's success over McDonald's. Su Jingxi insisted on releasing new products monthly and developed dishes that catered to Chinese tastes, such as the "Old Beijing Chicken Roll" (inspired by Peking duck) and "Tender Beef Wraps." He personally named many of these products, like "Powerful Chicken Nuggets" and "Connected Meat and Bones." In contrast, McDonald's continued to rely on its traditional American menu with little innovation. Su Jingxi believed that failing to introduce new products monthly would lead to market obsolescence—a strategy later adopted by other food brands like Luckin Tea and NaiXue.
Conclusion
Su Jingxi's success can be attributed to his ability to seize Chinese opportunities, adapt strategies locally, and empower his team with the necessary authority. He did not simply apply American models but transformed KFC into a brand that resonated with Chinese consumers. This approach is essential for multinational companies seeking success in the Chinese market—rather than imposing global standards, it's important to let local conditions drive business decisions. The details outlined in his autobiography, "The Right Path 2," provide valuable insights for companies looking to establish a strong presence in China.