What Are the Benefits and Drawbacks of KFC's Early Entry

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The Answer is Benefits
As a pioneering company entering Myanmar, KFC could gain first-mover advantages:
1. As the first global brand, KFC may attract a sizable group of customers and gain brand reputation. It has achieved similar brand recognition with McDonald's in China and Vietnam.
2. KFC may potentially build sales volume faster than later entrants, leading to cost advantages based on economies of scale and learning benefits. Thanks to its early entry, KFC's operations in China are much bigger than McDonald's.
3. Early movers may get priority access to local resources, such as scarce materials, distribution channels, infrastructure, and government support. As the first American restaurant in China and Vietnam, KFC enjoyed favorable public attention.
4. Once KFC developed its market power, the company could shape industry structure and preempt rivals.
Drawbacks
However, there are also disadvantages associated with early entry:
1. When entering a newly opened country, early movers often suffer from environment uncertainty.
2. Due to unfamiliarity with the foreign market, early movers must bear the pioneering costs (e.g., educating customers, adapting products, mistakes and failures).
3. Early movers may create learning opportunities for later entrants. For instance, McDonald's could learn from KFC's successes and mistakes and improve their own entry strategy.

What Are the Benefits and Drawbacks of KFC's Early Entry

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What Are the Benefits and Drawbacks of KFC's Early Entry

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Correct Answer:
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