Panda Express: How The World’s Largest Chinese Fast Food Chain Is Made?
Panda Express: How The World’s Largest Chinese Fast Food Chain Is Made? Do you know which is the world’s largest Chinese fast-food chain?
Do you know which is the world’s largest Chinese fast-food chain? Real Kung Fu? Is everyone happy? Neither, but a Panda Express called. Panda Express founder Cheng Zhengchang, ancestry Yangzhou, Jiangsu Province, followed his parents to Taiwan in 1953. Then went to the United States.
Cheng Zhengchang excelled in his studies, earning a bachelor’s degree in mathematics in 1970 and then a master’s degree in 1972. At the same time, he also met his wife, Peggy Chiang, the love of his life, in school. Mrs. Chiang also received her Ph.D. in electrical engineering in the same year. With 802 chains in the U.S. alone, the chain has long exceeded 2,000 stores worldwide, and annual revenues have reached 20.3 billion yuan! Currently, Panda Express is also opening three new stores almost every week, far outpacing the rate of opening of local fast food giant Burger King. So how did it do it?
Opening a restaurant was an essential means of survival for early Chinese in the U.S. Even today, the first generation of immigrants to the U.S. from Fujian and Guangdong still use opening a restaurant as the primary economic means of primitive accumulation.
In the last decade, however, Chinese restaurants have increased in the U.S.
Some data show that about 28,000 Chinese restaurants are in the U.S., comparable to the number of McDonald’s restaurants worldwide. This can also be felt in the hit U.S. series “The Big Bang Theory,” in which the main characters eat Chinese meals almost every week.
Cheng Zhengchang started his restaurant business in the U.S. in 1973. He initially targeted Americans, unlike the Chinese restaurants in Chinatown and the Chinese District. After all, he said, Chinese people in the United States are a minority, and doing business with Americans is the only way to make the company bigger. After opening two Jufeng Yuan restaurants, Panda Express opened its first restaurant in a California mall in 1983, growing to nine in 1985 and 254 in 1997, with revenues of $178 million. From this point on, Panda set its goal to become a billion-dollar company. 2010 saw Panda reach its goal of $1.069 billion in sales.
Like many Chinese restaurants, Panda Express is run by a husband and wife team, notably Zhengchang Cheng and Peggy Chiang, one with a master’s degree in mathematics and the other with a Ph.D. in electrical engineering. More importantly, Panda’s business management is very different from that of Chinese restaurants in Chinatown and even from other fast food brands of the same period.
His wife, Peggy Chiang, joined the family business in 1982. Her previous schooling and work experience made her conscious of planning and efficiency. “As an engineer, it was clear to me that we needed a system that would make ordering easier and give us a better idea of what our customers liked.” The addition of Peggy Chiang made Panda’s planning and management more systematic.
She designed a software system that automatically tracks the chain’s inventory and allows for the automatic purchase of additional ingredients. She refined the system, naming it “Panda Automatic Workstation” and applying for a patent. In the 1980s, Panda was one of the first restaurants in the United States to use computerized management and the only Chinese restaurant to use an automated management system.
With the professional management experience of American restaurants and accelerating its expansion in the United States, Panda Express hired Don McComas, a management expert, to be the company’s president in 1992.
Fully responsible for the chain promotion project of Panda Express, breaking the situation that the company’s management was exclusive of Chinese descent for the first time.
Later, Cheng also brought in Joseph Micatrotto, president of the Chi-Chi chain, and Russell Bendel, former chief executive of El Torito, to serve as president and general manager. This talent program has effectively accelerated the pace of Panda Express’ growth.
Panda Express has grown without debt, with only one recorded loan of $500,000 in 1983. “After forty years of catering, we have not taken a single penny from investors.” From the restaurant business, Cheng Zhengchang, every store opened to win first, then use the profits to develop. In the beginning, $300,000 to $500,000 to invest in a store, usually within three years, to recover the investment.
The learning of the menu
Chinese cuisine varies greatly from one cuisine to another, with abundant raw materials and a wide variety of dishes, so Cheng Zhengchang believes that the most important thing to do in Chinese fast food chains is to solve the contradiction between maintaining the characteristics of Chinese food and standardization. Considering the store size, logistics costs, and the menu’s simplicity, Panda Catering chose to “make fewer dishes.”
Panda Express focuses on Beijing and Sichuan cuisine. The orange chicken is one of its most popular dishes. It has a sweet and sour taste and spicy flavor, accounting for about 30% of sales. Panda Express has only a dozen essential dishes. In addition to the particular varieties reserved throughout the year, it also innovates 2 types every month to keep customers fresh. The menu design is also simple, with ingredients and cooking methods indicated, so customers can order at a glance without wasting time.
The small number of varieties also allows Panda Dining to take an on-site, hand-made approach, where it stirs-fries the dishes on a traditional Chinese open fire to maintain the original taste and character of the container. After the chef has finished stir-frying the words, they are placed on plates on the table to keep them warm and sold. The quantity of each dish is not large and is stir-fried after it is sold out. Cheng Zhengchang said that considering the characteristics of fast food, they gave up some time-consuming cooking methods, such as stewpot and sashimi. In addition, they make a uniform compound seasoning and sauce to achieve uniformity of flavor.
Panda Express also standardizes the handling of raw materials, leaving the cleaning, cutting, and transporting of food to suppliers, which also reduces the pressure and size of the kitchen. Panda Express supplies only two types of meat, chicken and beef, which significantly facilitates unified stocking and ensures that each outlet can provide the freshest products. Cheng Zhengchang believes that the streamlined menu is crucial in ensuring quality and controlling costs.
Focus on community
Panda Express has been expanding at an accelerated pace in the last two years. It is based in California in the western U.S.
The Western market is more fully developed. Stephen Blum, vice president of real estate, said they have focused on the east side for the past two years and are heavy on the community and family market. One of their strengths, he said, is that people know what Chinese food is, and that’s something people are familiar with.
Panda Express is mostly directly owned and operated. As the number of locations continues to grow, Panda Express has expanded from malls to all kinds of places, from supermarkets, airports, universities, office buildings, and casinos to libraries. Along with the accelerated growth, the number of stand-alone stores on the street has also started to increase. Two of the most notable Panda Express locations in recent years are in the public library in downtown Los Angeles on the West Coast and in the financial stock market on Wall Street in Manhattan, New York.
Cheng Zhengchang believes a diversified corporate strategy is necessary for Chinese food’s dynamic and competitive market environment. In addition to Panda Express, Panda Restaurant Group operates the full-service restaurant Jufeng Yuan and the Japanese restaurant Hibachi-San. The fast-casual format homestyle restaurant Double Double Panda, the Kitchen Garden restaurant, and the Bookends Cafe restaurant.
Getting a head start is necessary. Our decision to do a Japanese restaurant in 1992 was a defensive strategy to prevent Japanese restaurants from serving the same Chinese cuisine as Panda Express.
Panda Express is more cautious for multinational operations, taking a steady and gradual strategy, and has only entered Japan and Mexico. Cheng Zhengchang believes that the U.S. market is still not saturated, should first be based on domestic, and reduce the risk of foreign investment. For the Chinese market, his attitude is evident: “China does not need such fast food. The net increase is also too intense.”
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