56 | theceomagazine.com
In Western countries, staples that normally
complement a Big Mac or Zinger Burger
would include items such as French fries,
coleslaw or mashed potato. But in Hong
Kong and pretty much the rest of Asia, the
main staple food is rice. “Years ago, my
predecessors at KFC tested out rice to go
with chicken,” says Alan. “It turns out it
complements it very well and is common,
not just in Hong Kong but in KFCs all
across Asia – like in Vietnam, the Philippines
and Malaysia.”
Further, KFC introduced a breakfast
menu that currently accounts for around
10 per cent of the Hong Kong and Macau
business. Part of the reason behind the
decision, according to Alan, was due to the
ease in being able to tie in rice and chicken
with breakfast as a whole. The breakfast
menu consists of two main categories. On
one side are the chicken hamburgers, while
on the other side are the entrees, such as
scrambled eggs, toast and a piece of chicken.
“When you look at our menu, we serve
entrees, we serve hamburgers, but
predominantly most of the menu items are
entrees with chicken fillet and a hamburger
with a chicken patty,” Alan says.
As well as making sure the menu was
tailored to Hong Kong tastebuds, another key
factor behind KFC’s turnaround was ensuring
that its pricing remained competitive. “When
I first came to KFC, it was way too
expensive compared with McDonald’s. KFC
products were 15 per cent more expensive
than those of McDonald’s, even though, from
the customer’s point of view, McDonald’s and
KFC are essentially the same.”
But Alan didn’t immediately reduce the
prices of all KFC products. Rather, he put a
hold on any future price increases to make
sure that all of its competitors caught up.
“Right now, I can say KFC is at least on par
when it comes to menu pricing. Some of the
items on the menu are even cheaper than
those of McDonald’s,” he says. In three years,
he was able to practically close the price gap
between KFC and its main competitor.
In addition, there was also a complete
overhaul of KFC’s operations. That included
finding the right people as well as “letting go
of some really bad people” in order to boost
morale. But in an organisation with around
3,000 employees, properly engaging with
all of them face to face would be next to
impossible. Alan needed to adjust his
approach. Instead of spending one-on-one
time with all employees, he narrowed his
one-on-one engagement to just the full-time
employees. “2,500 of them are part-time
students and housewives, while 500 of them
are full-time,” he explains.
The more personal, individualised
approach also applied to suppliers: people like
PepsiCo General Manager for Foods and
Beverages in Hong Kong, Simon Wong,
whom Alan has known for the seven years
since he joined KFC. Then there is Oriental
Engineering, a family-owned business run by
two brothers whom Alan has known for
25 years, from all the way back in their
McDonald’s days. They now supply the
soft-serve ice-cream machines and are
developing new ideas for soft-serve for KFC.
Part of treating suppliers as friends is
making sure they also make money out of
the business relationship, something that Alan
says he learned from McDonald’s founder,
Ray Kroc. “One of Kroc’s biggest concepts
that struck me was that, in managing the
supply relationship, he always made sure the
supplier made money first before he got his,”
he explains. »In early 2017, KFC Hong Kong
released the ‘Chizza’, a pizza consisting
of a fried-chicken crust with ham,
pineapple, mozzarella, tomatoes and
cheese sauce as toppings.