Originally Posted by moondog

-McD's chose a slow and methodical approach to localization (in order to maintain a product consistent with its locations in other countries), which entailed a high cost structure during its first ~7 years in country
I wasn't around, but have been told that we did more of a shotgun approach to setting up MCD in China. The way it was described, it would be like opening a store in LA, then NYC, then Chicago, etc. On top of that, we had the same sort of issues that anyone has when you have a joint venture with governmental influence (i.e. overpaying for land that is owned by your JV's wife's sister's cousin. Operationally everything was fine, but the stuff on the administrative side caused some issues. A lot of the non-performing stores were closed so we could focus on the ones that had potential.

-But, once they had all their ducks in order, they owned their supply chains Wal Mart style, and saw sharp rises in profitability
Maybe it's just semantics here, but MCD doesn't "own" the supply chain. We control it from a QA perspective and help manage pricing, but in the end, all stores (including the stores owned by MCD Corporate) buy their supplies directly from the suppler (via a distribution company). Also, it took us close to 20 years to get profitable in China. Despite what people think, it's not quite as easy as dropping in a store and making sales.

-Regarding BK, of course they should not be regarded as competition for McD/KFC; they have around ~30 stores, total
I meant worldwide, which is essentially the same story 8000 vs 32000