Multinational corporations: To change or not to change? That is the question

Abstract

This paper argues that the adoption of local cultures and values is central to the success of multinational corporations entering into new markets. To support this position, it describes how by persisting with policies informed by experience in the US market rather than adapting to the local market, eBay failed to consolidate its presence in China. By contrast, KFC China has not only adapted to Chinese culture, but has diligently striven to know its customers, tailored its product to local communities and got to know its team well. It has created many new dishes by incorporating local flavours into its standard recipes and has reconfigured its kitchens and restaurants so that its chefs can cook greater varieties of food and patrons can visit with their friends and families for special occasions. Most importantly, after learning about the Chinese culture, KFC China enlisted local farmers and suppliers to supply the necessary food materials. This created a sense of belonging as well as localisation for KFC China and its customers, helping the local company to consistently exceed other KFC subsidiaries in terms of profit.