Case: Why McDonald's and KFC are always opened next to each other
| First, let me tell you a story: There was a pair of brothers who sold tofu. They each opened a tofu shop on adjacent roads. However, the tofu sold by the younger brother was soft and crispy, while the tofu sold by the older brother was hard and full. At first, people all wanted to eat the tofu from the younger brother's shop, but later they found that the soft tofu became boring after eating for a long time, so the older brother's shop began to prosper, and later the number of customers going to the two shops gradually reached a balance point (of course, customers are also willing to buy tofu here, after all, there is more choice). The relationship between McDonald's and KFC should also be considered to be this kind of relationship, which is both competitive and win-win. Business district theory - it seems competitive but the sales volume is not low. The theory here is a business district theory. If McDonald's, KFC and Burger King are opened next to each other on the same street, they will form a small business district for fast food. The public tends to be more sensitive to the question "where is food?" but less concerned about the question "where is McDonald's/KFC?" The small business district where these three people coexist happens to give the public the impression that "We sell food here, and there are many stores selling food! Come and buy some!" So when the public wants to find food, the first thing they think of is that street and that there are n stores on that street. Not only will this not create competition between each other and reduce the sales of the rival, but it will make the sales of both of them exceed the sales of their own stores. If you open a single store, customers will often worry about whether there will be no seats, whether there will be a long queue, whether it will be closed today, etc.; compared with n stores over there, customers will always think that there is a store over there anyway, there will always be a model that suits me - go there. So, generally speaking, McDonald's and KFC are opened together to form a small business district. Dividing business districts - determining types through scoring McDonald's and KFC are always opened together, first of all because they have "similar views" on the division of business districts. Let’s take KFC as an example to look at the strict site selection process for this type of Western fast food restaurant. The most important division is the business district. When KFC plans to enter a city, it will collect information about the area through its own site selection decision-making team. Some information is free, and some information requires payment. After buying all the information, I started planning the business district. The business district planning adopts a scoring method. For example, if there is a large shopping mall in this area, one point will be calculated if the mall’s turnover is 10 million yuan, and 5 points will be calculated if the turnover is 50 million yuan. If there is a bus line, additional points will be added, and if there is a subway line, additional points will be added. These scoring standards are relatively accurate empirical values averaged over many years. Business districts are divided into several major categories through scoring. Taking Beijing as an example, there are city-level commercial types (Xidan, Wangfujing, etc.), district-level commercial types, fixed-point (target) consumption types, community types, community-business dual-use types, and tourism types. Choosing a business district - ensuring a successful store opening Choosing a business district means determining which business district to focus on opening a store and what the main goals are. When choosing a business district, one must consider the restaurant’s own market positioning on the one hand, and the stability and maturity of the business district on the other. Restaurants have different market positioning, attract different customer groups, and therefore have different choices of business districts. For example, Malan Ramen and KFC have different market positioning and different customer groups. They are two "intersecting" circles. Some people eat both KFC and Malan Ramen, while some people may never eat KFC and only eat Malan Ramen, and vice versa. The location of Malan Ramen is of course different from that of KFC. KFC and McDonald's have similar market positioning and basically overlap in customer base, so their choice of business districts is also the same. The maturity and stability of the business district are also very important. For example, the Planning Bureau says that a certain road is to be opened and an address is to be set up in a certain place. In the future, this place may become a mature business district, but KFC must wait until the business district is mature and stable before entering. If it is said that this store will be very profitable in three years, but it is of no help now, will it suffer losses in the next three years? It costs several million to open a KFC store. Of course, they don’t want to take such a risk. They must follow a more prudent approach to ensure that every store they open is a success. Collect data - conduct strict customer gathering point calculation. What is customer gathering point calculation? For example, Xidan in Beijing is a very mature business district, but it is impossible for every location in Xidan to be a customer gathering point. There must be the most important location where customers gather. KFC’s principle for opening stores is to strive to open stores in or near the most crowded places. There is an old saying in the past that "one step can lead to three markets". A single mistake in the store address could mean a 30% difference in sales. This is related to the flow of people (the route of human activities). Someone may walk here and turn, then this place is a place that customers cannot reach. It may be just a small alley, but the business is much worse. These should be taken into consideration when selecting a site. What is the flow of people like? In this area, people are sent to time and measure the direction in which people walk after getting out of the subway, etc. Only after a complete set of data is obtained can the address be determined. For example, to measure the flow of people in front of a store, a meter is used to record the flow of people passing by at the location where the store is planned to be opened, and to calculate how many people pass by that location per unit time. In addition to the flow of people on the sidewalk where the location is located, the flow of people in the middle of the road and across the road must also be measured. Only cyclists are counted in the middle of the road, not cars. Whether the flow of people on the opposite side of the road is counted depends on the width of the road. If the road is narrow, it is counted. If the road width exceeds a certain standard, it is generally a barrier, and customers are unlikely to come over to consume, so it is not counted as the flow of people on the opposite side. KFC site selection personnel input the collected traffic data into special computer software, which can then calculate how much the investment amount in this location cannot exceed, and if it exceeds this amount, the store cannot be opened. Planning business districts - using gathering points to measure maturity The choice of gathering points also affects the choice of business districts. Because whether a business district has a major gathering point for customers is an important indicator of the maturity of the business district. For example, there is a new residential community in Beijing with a large population and high quality of population. However, according to surveys, it is difficult to find the main gathering point for customers in the community. In this case, the store may not be opened first. The store will be opened only when the community is mature or relatively mature and it is known that a certain place in the community is indeed the main gathering point for customers. In order to plan the business district well, KFC development department has invested tremendous efforts. Take KFC Beijing as an example. Its development department staff travels to every corner of Beijing all year round and is familiar with this place where the buildings and roads change greatly every year and where locals can easily get lost. This happens often. For example, Beijing KFC receives a call from a customer who suggests setting up a KFC outlet in his area. Once the developer hears the address, he can easily tell the characteristics of the local business environment and whether it is suitable for opening a store. KFC and McDonald's have similar market positioning and their customer base basically overlap, so we often see McDonald's on one side of a street and KFC on the other side. This is the follow-up strategy adopted by both parties. Because McDonald's has done a lot of detailed market research before choosing a store location, opening a store next to it can not only save time and energy in inspecting the site, but also save a lot of site selection costs. Conversely, McDonald's will follow KFC by making the same considerations when choosing a location. Therefore, it is not surprising to see McDonald's and KFC on the same street. Opinion and comment: To a large extent, peers have actually formed a community of interests. Therefore, it is necessary to safeguard the legitimate interests of peers and compete with opponents through legitimate means. Instead of eliminating competition among competitors, we should move towards "co-competition" and use our competitors' resources for our own benefit. Only healthy competition can make the market bigger and achieve common development. Cooperative competition does not mean the elimination of competition. It just prompts new adjustments in the relationship between enterprises from the perspective of the enterprise's own development and the optimal allocation of social resources, from simple life-and-death confrontation and competition to win-win cooperation. This is what we usually call "coopetition." "Every inch has its own strengths and every foot has its own weaknesses." Every company has its own strengths and weaknesses. The days of "there can't be two tigers in one mountain" are gone forever. When we can no longer dominate the world, please choose to work together with our opponents, just like McDonald's and KFC. We can improve each other's strength in the competition, widen the gap with other opponents, and enable both sides to gain the upper hand in the competitive landscape. From a broader perspective, the business world should actually be more of a win-win culture. Only by working together to make the pie bigger can we achieve a win-win situation for all. Small success depends on friends, big success depends on opponents. |
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