American Chains Famous for Quality in China

American Chains Famous for Quality in China

March 30, 2018

Why are American chains like Pizza Hut, Starbucks and McDonald’s experiencing fast growth and strong success in China?

Three key reasons: Strategic adaptations to the Chinese market and tastes, careful location planning, and adaptation to local cultural preferences in product and service design.

The Chinese have a great desire for goods and services they can trust.  Although some Chinese competitors have entered the market with copycat fast food offerings, many Chinese still want the authenticity, consistency, and high quality of well-known Western brands.

This post is based on the Eater article, Why China Loves American Chain Restaurants So Much, by Clarissa Wei, March 20, 2018. Image source: Ingram Publishing.

Discussion Questions

1. How do the operations strategies of Pizza Hut differ in China versus in the United States?

Guidance: Whereas Pizza Hut is a relatively less expensive, casual, fast food eatery in the United States, in China it’s an upscale, date-night spot that often requires reservations. Thus, a focus on high quality and service is important in China, whereas in the U.S. the strategy is more focused on short processing time and low cost.  This is true, interestingly, even though the standard of living and Continue reading

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FedEx and Overnight Success

FedEx and Overnight Success

March 19, 2018

Fred Smith, founder of FedEx, developed his now-ubiquitous hub-and-spoke distribution design based on a college term paper, and his experiences in Vietnam.

Mr. Smith understood the need for overnight guaranteed delivery of inventory as well as the intangible customer relief of having a valuable package safely arrive.  The brand’s image is based on that guarantee.

Logistics design is the heart of the FedEx empire. With Amazon entering the shipping business, how long before the empire will be under siege?

This post is based on the Ad Week article, How FedEx’s Founder Revolutionized Shipping With a Mediocre College Term Paper, by Robert Klara, March 13, 2018. Image source: Shutterstock / Lightspring.

Discussion Questions

1. Describe the hub-and-spoke supply chain network that FedEx pioneered.

Guidance: Students should review logistics, transportation, and location material.  It may be helpful for students to research FedEx to find all the “hubs”.  This could lead to a discussion of the utility of the center-of-gravity method to determine the next “hub”.

2. Identify the service package that FedEx created.

Guidance: Students should review service packages, service blueprint, service-profit chain.  They should easily identify the tangible aspects of the service package, Continue reading

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