Burger King had a hard time setting up shop in China, but seems finally to be able to get the country. China consultant Helen Wang explains on her weblog a few of the mistakes the US chain made, and what we can learn from it. One lesson: work from China, not Singapore.
When it first entered China in 2005, Burger King hired former McDonald’s president of greater China Peter Tan as senior vice president and president of Asia Pacific. This was a good choice as Tan has extensive experience growing McDonald’s to over 1,000 restaurants. However, there was one problem: Tan was based in Singapore. Headquartering the China operation in Singapore was a mistake that could be detrimental to Burger King’s China strategy. As the time of this writing, Tan is no longer with Burger King. His position has been replaced by Elías Díaz Sesé, who is responsible for all operating decisions and the overall growth strategy for the Asia Pacific region.
China is an extremely complex market with diverse conditions. One thing companies must absolutely avoid is to run the China operation from outside of China. You can’t even run the China operation in Hong Kong or Macau. The management team must be on the ground to understand local customers and the fast-changing business landscape. When Sam Su was hired by Yum! Brands as the president of its Asia Pacific operation, he voluntarily demoted himself to be the president of China. Su understood that the China market needs special focused attention. The result was exponential growth of Yum! in China.
Getting things right in China can be tough. The China Weekly Hangout looked over a set of foreign firms that failed in China with Andrew Hupert, Richard Brubaker and Fons Tuinstra on January 30, 2013.