Cheng Zhengchang started his restaurant business in the United States in 1973, and unlike the Chinese restaurants in Chinatowns and Chinese neighborhoods, he targeted Americans from the start. After all, he said, Chinese people in the United States are a minority, and doing business with Americans is the only way to make a big business. After opening two Jufeng Garden restaurants, Panda Express opened its first restaurant in a California shopping mall in 1983, which grew to nine in 1985 and 254 in 1997, with revenues of $178 million. From that point on, Panda set a goal to become a billion-dollar company. in 2010 Panda reached its goal with sales of $1.069 billion.
Like many Chinese restaurants, Panda is run by a husband-and-wife team, not to mention the husband-and-wife team of Cheng Zhengchang and Peggy Chiang, who have a master's degree in mathematics and a doctorate in electrical engineering, a combination that adds to the legend of Panda. More importantly, of course, Panda's management is therefore very different from that of Chinese restaurants in Chinatown, and even other fast-food brands of the same era.
Wife Peggy Chiang joined the family business in 1982, and her prior schooling and work experience have made her very much a planner and efficient. "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, and she designed a software system that automatically tracked the chain's inventory and allowed for the automatic purchase of additional ingredients. She perfected the system, named it the "Panda Automatic Workstation" and applied for a patent. In the 1980s, Panda was one of the first restaurants in the U.S. to use computerized management, and the only Chinese restaurant to use an automated management system.
In order to absorb the professional management experience of American restaurants and accelerate its expansion throughout the United States, Panda hired management expert Don McComas as president of the company in 1992, who was in charge of Panda's chain promotion program, breaking the trend of having a Chinese-American management team for the first time. Later, Mr. Cheng 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 of the company. This talent program has effectively accelerated the growth of Panda Express.
Panda Express has grown without debt, with only one loan of $500,000 in 1983 on record. "After forty years of doing catering, we have not taken a penny from investors." From the beginning of the catering business, Cheng Zhengchang every store, we must first win, and then use the profits to develop. When you start out, you basically invest $300,000 to $500,000 in a store, and you can usually recoup your investment within three years.
Menu of learning Chinese cuisine dishes between the big differences in raw materials, a wide variety of dishes, so Cheng Zhengchang believes that the most important thing to do Chinese fast food chain is to solve the problem of maintaining Chinese food characteristics and standardization of the contradiction. From the store large filial piety logistics costs and the menu is simple and easy to understand several considerations, Panda Catering chose to "do a few dishes less".
Panda focuses on Beijing and Sichuan cuisines, with orange chicken being its hottest selling dish, sweet and sour with a spicy kick, accounting for about 30 percent of sales. Panda fast food basic dishes only a dozen, in addition to the specialty varieties retained throughout the year, each month will also innovate 2 varieties, in order to allow customers to maintain a certain degree of freshness. The menu design is also simple and clear, but also indicates the ingredients and cooking methods, so customers do not have to waste time when ordering at a glance.
The small number of varieties also allows Panda Catering to take a handmade approach on-site, where it stir-fries the dishes over a traditional Chinese open fire to preserve the original flavor and character of the dish. After the chef has fried the dishes, they are put on plates and kept warm on the table for sale. The quantity of each plate is small, and it is fried again 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 crockpot and shengjian. In addition, they make uniform compound seasonings and sauces to achieve uniformity of flavor.
Panda Express has also standardized the handling of raw materials, leaving the cleaning, cutting, and transporting of food to suppliers, which reduces the pressure and size of the kitchen. The only two types of meat supplied by Panda Express are chicken and beef, which greatly facilitates the standardization of stocking and ensures that the freshest products are available at each outlet. Cheng Zhengchang believes that the streamlined menu plays a key role in both quality assurance and cost control.
Panda Express, which is mostly directly operated, has expanded from shopping malls to supermarkets, airports, universities, office buildings, casinos and libraries as the number of outlets continues to grow. With the accelerated pace of development, the number of stand-alone stores on the street has also begun to increase. Two of the most notable Panda Express locations in recent years have been on the West Coast, one in a public **** library in downtown Los Angeles, and the other in New York's financial and stock market district on Wall Street in Manhattan.
Cheng Zhengchang believes that a diversified corporate strategy is necessary in the dynamic and increasingly competitive marketplace of Chinese food. In addition to Panda Express, Panda Restaurant Group also operates the full-service restaurant Jufeng Garden, the Japanese restaurant Hibachi-San, the fast-casual format home-cooked restaurant Double Double Panda, the Kitchen Garden restaurant, and the Bookends Cafe restaurant. "Getting a head start is necessary, and our decision to do a Japanese restaurant in 1992 was a defense strategy, to prevent Japanese restaurants from serving the same Chinese dishes as Panda Express."
For cross-border operations, Panda Express is more cautious, adopting 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 the domestic, to reduce the risk of foreign investment. For the Chinese market, his attitude is very clear: "China does not need such fast food, the net increase is also too intense."