Technology As Innovator

Until this entry is written, the list of international fast-food franchises in Vietnam has included: KFC, Korean Lotteria, Philippino Jollibee, Pizza Inn (a Korean company brings this American franchise to Vietnam). Café and soft-drinks category consists of Australian Gloria Jean’s, San Francisco Bud’s Ice-cream, Australian Baskin Robbins (no longer in Vietnam)

It’s a surprise McDonald hasn’t expanded their market to Vietnam yet though they’ve been to Vietnam’s neighbors Singapore, Thailand and China.

To my observations, there are a couple of possible reasons:

1. The herd of cattle in Vietnam is not sufficient for a sustainable supply.
2. In Vietnam, fried chicken is more desirable than hamburger. Even when major focus of Lotteria is hamburger, their chicken sales figure is higher.
3. One McDonald’s strength is its price (as compared to Burger King and other competitors in the US) while fast-food is still fine-dining in Vietnam.
4. McDonald’s strategy is to invest in real estate alongside their fast-food product. They buy the land and build their store on it rather than rent the place. After a few years if one store doesn’t sell so well the place can be sold and the increased value of land still make it profitable to. In 2008, one house at the corner in the central of Ho Chi Minh City costs at least 2 million dollars. Investment seems way to high.

What is your opinion? Is there other reason you have thought of? Or would like to see McDonald in Vietnam?