McDonald's: Seeking Anhui in Globalization Anhui Market 2007.6.5 In 1999, McDonald's opened its first restaurant in Hefei. In 8 years, McDonald's expanded to 14 restaurants in 9 cities in Anhui Province. As the business person in charge of the Anhui region, Mou Yonggang, deputy chairman of Anhui McDonald's (Restaurant Foods) Co., Ltd., witnessed and joined hands with McDonald's in Anhui for eight years. Recently, he received an exclusive interview with this reporter on topics such as Anhui's investment environment, McDonald's development in Anhui, and China's experience. Behind the scenes in Anhui behind the scenes Reporter: As far as I know, McDonald's was an early batch of Fortune 500 companies that entered Anhui Province. Can we talk about some of the stations that were settled in Anhui at the time? Yan Yonggang: Anhui McDonald's is a joint venture company, the joint venture company is Anhui Guohe Investment Company, and McDonald's stationed in Anhui has a close relationship with this partner. At that time, there were about 40 to 50 investment teams in Anhui to discuss cooperation in Hong Kong. There were both corporate organizations and government contacts. However, Anhui Guohe Investment Corporation stood out among these dozens of teams. The main reason was that The CEOs of investment companies have a consistent philosophy with McDonald's in terms of management and management. Together with the strong strength of the company itself and a good foreign investment background, the company has finally signed an agreement on the strategic development of McDonald's. McDonald's has also become early. A group of Fortune 500 companies that entered Anhui. Reporter: From what you just said, McDonald's seems to be a key link in choosing partners. Qi Yonggang: Indeed, not only McDonald's, many of the world's top 500 companies choose investment objects, they will put their sense of identity in an important position. Many people have this misconception that the selection of cooperating parties by the top 500 companies will inevitably require strong power, but it is not. The top 500 companies that have a strong presence are even more fancy if you agree with their business philosophy and whether they have a consistent view on management methods. Reporter: In the past few years in Anhui, has the development of McDonald's been smooth? Yan Yonggang: The development of McDonald's in Anhui is quite favorable. Of course, this has to benefit from several aspects. The first is the good government background and business philosophy of the partners; followed by the strong support of the Anhui government, functional departments and the media. Again is a good team. Of course, the scientific and standardized production management process of McDonald's itself is the foundation for the steady development of the company. It can be said that McDonald's in Anhui for eight years has been developed step by step according to our predetermined goals. Instigating the local road in Anhui Reporter: The performance of McDonald's is obvious to all, but one fact that cannot be overlooked is that McDonald's development speed in Anhui and even China as a whole is significantly slower than that of KFC. Yan Yonggang: For KFC, McDonald's has always been the attitude: in a big market like China, in a province like Anhui, only one fast food brand is far from enough. We welcome more brands to participate in the competition. We are not afraid of competition, and McDonald's has always believed that our biggest competition is ourselves. It is always harder to surpass ourselves than to surpass others. From another perspective, the development path of McDonald's and KFC is very different. McDonald's followed the globalization strategy. KFC returned to the international route after fully developing the Chinese market. His degree of Chineseness is very high. What McDonald's demands is that no matter where in the world, what is eaten is a unified taste. Every time he launches a new product, he is very cautious. Therefore, his localization will not be quick with KFC. In addition, in terms of restaurant expansion, McDonald's and KFC also chose different paths. KFC's franchise allowed him to have a large number of franchise stores in a very short period of time; and all McDonald's 14 stores in Anhui were wholly owned by McDonald's. This guarantees a globally harmonized standard for food quality and service. It's not that McDonald's can't join but that the company's requirements for product quality and service lead us to high standards, high specifications, and careful selection of our partners. Reporter: Is localization the focus of McDonald's next work? Yan Yonggang: Next, "localization" will become McDonald's competitive advantage. Anhui McDonald's will accelerate the process of localization in several ways: First, it will cultivate local management talents and strive to localize management teams. The second is corporate management, but also to integrate into some of the local habits, which is the direction we have been trying to manage. The key to localization is the localization of product procurement. Under the premise of ensuring that products fully comply with McDonald's food standards, local procurement is properly implemented. However, the local procurement of McDonald's Anhui has not been realized. We had planned to reach a beef procurement cooperation with a northern city in our province. However, we did not realize it for various reasons. Now, we are still seeking appropriate localized procurement products. What did the Fortune 500 bring? Reporter: McDonald's, as a well-known “foreign” fast food, once purchased local well-known fast food brands in Hong Kong. Has it considered cooperating with local fast food companies in Anhui? Yan Yonggang: “Fragging and fighting alone” is my intuitive experience of the local fast food industry. There isn’t a really fast-paced, fast-food brand. For this reason, McDonald’s is “lonely” and should not be considered in the short term. Work with local fast food brands. However, I also believe that if the province’s fast food brands can keep a solid foothold and continue to learn, they will grow up like a McDonald's, the international fast food giant, from small to large and from strong to weak. The key is the absorption and execution of the advanced concepts of local companies. Reporter: Recently, did McDonald's have new moves in the Anhui market? Yan Yonggang: The McDonald's Nanjing Automobile Restaurant has already opened. Next we will pilot such a fast food restaurant in Anhui. Reporter: As a person in charge of Anhui, a top 500 company, what kind of energy do you think we need most from the top 500 companies for local companies in Anhui? Zhai Yonggang: Really integrated into the operational thinking of foreign companies to discover the limitations of current Chinese entrepreneurial thinking. Some local entrepreneurs in Anhui are no exception. Looking at the global economy, local entrepreneurs must understand two concepts. One is the "Chinese market economy" and the other is the "global market economy." How can the "Chinese market economy" be integrated into the "global market"? Economics, and I am afraid that this mystery must be immersed in order to understand. Foreign companies advocate the creation of wealth through the unification of contradictory values, just as bats live in harmony with angels. In the competition, not for the purpose of defeating opponents, but dancing together, the final result is to win the wealth with the opponent. When Anhui enterprises take the outward-oriented strategy, the first thing to learn is that bats and angels dance together and must not be mutually exclusive.