Entry mode:

KFC:
KFC has expanded its operations internationally using 3 completely different modes of
entry: franchising, joint ventures and full ownership. In addition, it is currently trying to
expand its global presence even more by reaching alternative agreements with other
companies, with the objective of creating powerful partnerships that can expose the KFC
brand to a wider market.
Franchise
The first one, franchising, has been by far the most common one, with approximately two
thirds of global KFCs having this structure, due to its numerous advantages for a fast
food business model as KFC. Mainly, because it allows well trained and experienced
entrepreneurs from local communities to manage the daily operations of the restaurant
and saves plenty of upfront costs and uncertainty for the company. It has been the most
desired option for those countries where the proper decision was to implement a
relatively small menu and with an already established culture and knowledge of the
franchise model. This includes the United Kingdom, the European Union region, Canada,
South Africa and Russia, among many others. However, when the company took the
decision to internationalize to other parts of the globe, such as China or Kenya, it had to
implement alternative entry modes to successfully adapt to the new challenges.
Full ownership
China is probably one of the most clear examples of this adaptation. The cultural and
economic environment was so different that the company really wanted to have full
control of their restaurants there, with the objective of actively monitoring their
performance and making the necessary adjustments as fast as possible. In other words, it
was willing to fully own all the restaurants with the aim of controlling all the aspects of
operations. Thanks to this strategy, they have been able to adapt not only their menu
offerings to the Chinese culture (with a broader range of products and specific products
for the desired flavours of the region), but also they have been able to adapt the
decoration and the structure. As previously mentioned, the goal was to make the
restaurants more appealing to the Chinese preference of having dinner at the restaurant
rather than taking it away and eating the food at home, as it is more commonly done in
the United States. Currently, more than 90% of KFCs in China are owned by the
company. Nonetheless, it is important to mention that this was not their first approach
when entering the Chinese market. At the time they were expanding to this region, there
existed higher restrictions that limited the presence of foreign firms in China, and the
alternative taken was to expand with Joint Ventures. They were able to recover full
ownership of their restaurants only after those restrictions were relaxed and China opened
progressively to international markets
Joint Venture
Finally, the last mode of entry that the company undertook is Joint Ventures. It was
mostly used in African countries such as Kenya and Uganda, where KFC found optimal
to reach agreements with already established players in the local region with much higher
experience to create positive synergies and split investment risks in half. Other markets
chosen for Joint Ventures were Japan and Hong Kong, having similar constraints as the
ones China presented when entering the market for the first time.
Expanding through alternative partnerships
Furthermore, KFC has recently found other ways to enter international markets indirectly
without having to physically open new restaurants. This is the case for some of its
recently-born partnerships, such as the one with Cooler Master. It is a computer
components manufacturer that will use KFC’s brand name to create the first computer
console that uses its own heat generated to keep chicken from a chamber hot. This
partnership will cause KFC’s brand name to be present in every country where Cooler
Master has stores and will create an alternative international source of revenue. Other
important partnerships include the one with Hyundai to create cooking robots and its
agreement with Beyond Meat to sell synthetic meat suitable for vegans.
Jollibee:
Acquisition and Strategic Partnerships
Unlike KFC, which primarily uses franchising, Jollibee has often opted for acquisitions
and strategic partnerships as part of its global expansion strategy. This approach has
allowed Jollibee to quickly gain a foothold in new markets by leveraging the existing
infrastructure, brand recognition, and customer loyalty of local businesses. For instance,
Jollibee Foods Corporation (JFC) acquired Smashburger in the United States and The
Coffee Bean & Tea Leaf, signaling its intent to diversify its portfolio and penetrate
markets with established brands.
Master Franchising and Joint Ventures
In addition to acquisitions, Jollibee also employs franchising, specifically master
franchising, and enters into joint ventures to expand its international presence. This
strategy involves partnering with a local entity that can manage the franchising within a
specific territory, thus mitigating risks associated with market entry and operational
execution. Joint ventures have been particularly effective in markets where local
knowledge and expertise are crucial for navigating the business landscape, regulatory
compliance, and consumer preferences.
Localization and Adaptation
A critical element of Jollibee's success is its commitment to localization and adaptation.
While Jollibee retains its core Filipino-inspired menu items that appeal to the Filipino
diaspora worldwide, it also adapts its menu and marketing strategies to suit local tastes
and preferences in each new market. This approach has allowed Jollibee to not only cater
to the nostalgic preferences of expatriates but also to appeal to the local palate, thereby
broadening its customer base.
For example, in Vietnam, Jollibee has tailored its offerings to include items that appeal to
local tastes, alongside its signature dishes. The company's flexibility in menu planning
and marketing campaigns demonstrates an understanding of the cultural nuances and
consumer behavior in each market it enters.