by David Bell and Mary L. Shelman
Summary.
Reprint: R1111K
Global companies face a crucial question when they enter emerging markets: How far should they go to localize their offerings? Typically they try to sell core products or services pretty much as they’ve been sold in Europe or the United States, with headquarters calling all the shots—and usually with disappointing results.
The authors, both of Harvard Business School, examined why KFC China has been able to find fertile ground in a market that is notoriously challenging for Western fast-food chains. KFC’s executives believed that the dominant logic behind the chain’s growth in the U.S.—a limited menu, small stores, and an emphasis on takeout—wouldn’t produce the kind of success they were looking for in China. KFC China offers important lessons for global executives seeking guidance in determining how much of their existing business model to keep in emerging markets—and how much to throw away.
Global companies face a critical question when they enter emerging markets: How far should they go to localize their offerings? Should they adapt existing products just enough to appeal to consumers in those markets? Or should they rethink the business model from the ground up?
Read more on Emerging markets or related topics Sales and marketing, International business, Travel and tourism industry and Asia
A version of this article appeared in theNovember 2011issue of Harvard Business Review.
Read more on Emerging markets or related topics Sales and marketing, International business, Travel and tourism industry and Asia
