Business of Zhending Chicken

This noon, we went to our favorite restaurant Zhengding Chicken (振鼎鸡) for lunch. It is famous for its chicken. It is a successful business, just like KFC for fried chicken.

Zhending Chicken meets the need of local market precisely, because people are very sensitive about cost and the value. They have some rules in their restaurant I feel strange.

Close The Business at Rush Hours

I remember the store at Tianlin closes at 6:00 PM. Many times we rushed to the store only to find out the store is closed. A server stands at the door and politely tell us: All chicken sold out.

It is the very few restaurant that I would keep my finger crossed on the way to there, hoping I can get permission to enter the store, for chickens.

Cold Coke or Not?

The price for cold coke and normal temperature coke are different. You have to pay 0.2 RMB more for the coke to be cold.

People clearly see the value that the coke is sold at a very low margin, that they cannot aford to pay for the refragerator to cold it.

Take out or sit in

The price for the chicken are cheaper if you take out. It is quite reasonable in Shanghai.

Estimated Price Only

When you order, say, one chicken, the server will charge you based on their estimation. The precise amount will come only after they choosed the chicken, weight it and calculated based on the weight.

Devils are in Details

Everything in Zhending Chicken pointed to the cost-saving direction. It is very cheap to have lunch in their restaurants compared to many local chicken stores. This is quite unique. I believe to do business in China, when we study MBA programs, we need to learn more from the practical local restaurants on how they control their cost and strike for operational excellency.

P.S. Long Google Search String

Today, I found someone reached my website using this long Google search string. I Fule U.

(intitle:blog | inurl:blog) unix | linux system=administrator | systems=administrator | system=administration | systems=administration network | networking | network=engineer -~jobs -~papers

15 Comments

  1. People clearly see the value that the coke is sold at a very low margin, that they cannot aford to pay for the refragerator to cold it.

    ‘refragerator’ you means ‘refrigerator’

  2. Maybe you will be interested in this book:

    Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

  3. Zhending Chicken is my favorite too. They have very good food. Highly recommended!

  4. Hi Wang Jianshuo,

    Maybe I have an idea for your typo-problem. :-p

    It doesn’t bother me at all, but maybe it can stop all the people who always comment on your typos. ;-)

    1. First of all get Firefox –> http://www.mozilla.com/firefox/

    2. Install SpellBound –> http://spellbound.sourceforge.net/install

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    There you go! Easy to use Spellchecker in every Form-input ;-)

    Unfortunately it doesn’t have grammar checking yet. :-p

    Hope it helps!

    matsch

    P.S.: I am not using it right now, so stop searchin for my typos….

  5. Zhendin chicken may be able to save a few money by setting up these strange rules. However, I don’t think these rules or tricks are the key to make any business into a truly successful business operation. The best case study is McDonald rather than Zhending. The key to success is standardization and simplification of their operation, such as, producing the same Big Mac no matter where you go in the world. Standardization and simplification of operation makes them able to replicate their model easily throughout the world. More importantly, standardization and simplification make training almost hassle-free.

    Ultimately these philosophy proves extremely scalable for a global operation and ultimately this scalable model provides the excellency in cost-saving.

    However, the strange rules that Zhending are practicing may sound wise for cost-saving, but they are ultimately unfriendly to customers. And it could backfire if competition comes along. This aspect is not the worst. The worst is these rules’ lack of scalability in terms of replicating its business operation, and it could also cause a nightmare in training and maintenance by distracting the management’s focus from providing the ultimate in customer service. All of these strange rules simply created a culture in their store for cutting corners to boost profit.

    No, this is absolutely not what a MBA should learn. Rather, their practice is what an MBA should learn as an anti-tutorial to avoid.

  6. Zhengding Chicken always slices the chicken into very thin pieces, and I have to keep telling them thicker & thicker every time. Isn’t it easier to slice thicker? I guess they just wanna increase the pieces/cost, another way to promote their value? Not sure, maybe the secret lies in the best size for sauce. Anyway, Zhengding Chicken is a good place for your bucks.

  7. you are not afraid bird flu?

    shirley

  8. Regarding McDonalds, it depends where your values are. If you’re only value is to make big bucks, it’s okay to push the standardization process to its limits. But if you are looking for something else (like for instance, guarantee that you offer fresh food, or that the food is not prepared by a robot-like humanoid), maybe you don’t want to do so. And what is more unfriendly to the customer: tell him that there is no food left, or sell a quickly unfrozen tasteless item?

  9. Where is this Zhending Chicken located? I must visit the next time I visit Shanghai.

    Please the the address.

    Thanks!

  10. The difference between a big business and a small business lies in how easy it is to grow and manage. Standardization of operation procedures facilitates such efficiency. Lack of standardization definitely hampers the business’ ability to expand. Adding rules that requires double weighting of chicken, for instance, definitely add to the unnecessary complexity of operating the business. It may work for a while in a country with cheap labor, like in China. But this complexity of rules wouldn’t be able to scale for the growth of the business. Any MBA students must be very aware of this. What works for a small business doesn’t necessarily work for a big business.

    Besides, standardization and streamlining of business operation doesn’t have to come at a cost of losing customer touch and product qualities. Business can be streamlined at the same time of achieving Quality of Service. These 2 goals don’t conflict at all.

    Every MBA student must know that cost saving from streamlining and standardization of business model far outweigh the cost saving from cutting corners by charging 0.2 cent extra to sell freezed drink. McDonald or Starbucks Coffee can be successful exactly because of this standardization, not by endorsing such ugly policy of closing down the store early. If Zhending continues these policy, they can still be a good business, but they will never become a great business.

  11. Zhending Chicken, a restaurant I have visited before, seems to have archaic rules left over from the 80’s or even earlier, in the communist years, such as using inefficient order-taking and delivery-processes (ex: The waitress actually wrote our orders on a Piece of Paper, with a PENCIL or something! Took at least 20 seconds of my time…).

    You could say it is cost-cutting efficiency, but to me it just seems like people only thought about reducing costs and nothing about PROFIT or CUSTOMER Service. Who wants customers anyway who are trying to save a few Jiao?? You need to SUPERSIZE them and get them to buy a Chicken Set Including Cold Coke for a special price…

    What’s the point of having a reputation for great-tasting chicken if your business doesn’t make any money? KFC is winning in the marketplace in terms of profitability because of standardization and scalability. Great taste is only a part of the equation, and I suggest you eat your Zhending now before they are gone…. Once the landlord of their building realizes they could be making much more money leasing to a KFC, it’s game over. And if Zhending actually owns its own location, I’ll bet you a Half-Chicken with Garlic Sauce that they have a terrible ROA.

  12. Hi there, I also found a great little woman’s fashion boutique in Shanghai, named AMBER at 141-6 Changle Road, near Ruijin Road. It had a groovy purple entrance. Staff were very helpful and they had their own labels and other famous ones. It was not far from the new Jin Jiang Htel where we stayed. Sandra

  13. Zhending Chicken… how interesting.

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  15. What’s the point of having a reputation for great-tasting chicken if your business doesn’t make any money? KFC is winning in the marketplace in terms of profitability because of standardization and scalability. Great taste is only a part of the equation, and I suggest you eat your Zhending now before they are gone…. Once the landlord of their building realizes they could be making much more money leasing to a KFC, it’s game over.

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