Documente Academic
Documente Profesional
Documente Cultură
KFC Corporation, based in Louisville, Kentucky, is the world’s most popular chicken
restaurant chain, specializing in Original Recipe ®, Extra Crispy TM, and Colonel’s Crispy
Strips® chicken with home style sides and five new freshly made sandwiches. Every day,
nearly eight million customers are served around the world. KFC’s menu everywhere
includes Original Recipe® chicken—made with the same great taste Colonel Harland
Sanders created more than a half-century ago. Customers around the globe also enjoy more
than 300 other products—from a Chunky Chicken Pot Pie in the United States to a salmon
sandwich in Japan.
KFC continues reaching out to customers with home delivery in more than 300 restaurants in
the United States and several other countries. And in quite a few U.S. cities, KFC is teaming
up with other restaurants, Taco Bell and Pizza Hut, selling nearly fifty years ago; Colonel
Sanders invented what is now called “home meal replacement” – selling complete meals to
harried, time-strapped families. He called it, “Sunday Dinner, Seven Days a Week.” Today,
the Colonel’s spirit and heritage are reflected in KFC’s brand identity – the logo features
Colonel Harland Sanders, one of the best recognized icons in the world.
“No body’s cooking like KFC today and we are the chicken experts”
Introduction
KFC History
KFC is an internationally renowned fast food industry in the world. They have the main
ambition to increase & maintain the quality in fast food industry. Their aim is to capture the
fast food market. Basically they want to provide their products to anyone that is why they
expanding their branches in all over the world. They want to increase their profit through
giving maximum satisfaction & other better facilities to people that they want. Now after
catching such a marvelous position in the International Market, KFC is introducing a new
item “Boneless Fried Chicken”, with even more attractive and charming taste.
KFC India
KFC is the world’s No.1 Chicken QSR and has industry leading stature across many
countries like UK, Australia, South Africa, China, USA, Malaysia and many more. KFC is
the largest brand of Yum Restaurants, a company that owns other leading brands like Pizza
Hut, Taco Bell, A&W and Long John Silver. Renowned worldwide for it’s finger licking
good food, KFC offers its signature products in India too! KFC has introduced many
offerings for its growing customer base in India while staying rooted in the taste legacy of
Colonel Harland Sander’s secret recipe. Its signature dishes include the “crispy outside, juicy
inside” Hot and Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy
& crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages and
desserts. For the vegetarians in India, KFC also has great tasting vegetarian offerings that
include the Veggie Burger, Veggie Snacker and Veggie Rice meals. In India, KFC is growing
Values of KFC
• Focus all our resources to our restaurants operation because that is where we serve
our customers.
• Expand and update training with time and be the best we can be and more.
• Be open, honest and direct in our dealings with one and other.
• Commit ourselves to the highest standard to the personal and professional integrity at
all times.
• Encourage new and innovative ideas because these are the key to our competitive
growth.
• Work as a team.
Segmentation
KFC has divided the market of India into distinct groups of customers with different
demands, tastes and behavior who require separate products or marketing mix.
In India the niche marketing is being used for particular classes of people.
• Demographical
• Behavior
• Geographical
DEMOGRAPHICAL BASIS
BEHAVIOR
In behavioral aspect they segmented the market on the basis of quality, taste and price.
• Taste conscious
• Quality conscious
• Class conscious
On the basis of the geographical factor we have divided our market in three main segments.
• Urban areas
Porter's five forces is a framework for the industry analysis and business strategy
concepts developing, Industrial Organization (IO) economics to derive five forces that
this context refers to the overall industry profitability. An "unattractive" industry is one
where the combination of forces acts to drive down overall profitability. A very unattractive
internal threats. It is useful to use Porter's five forces in conjunction with SWOT analysis
Porter referred to these forces as the micro environment, to contrast it with the more general
term macro environment. They consist of those forces close to a company that affect its
ability to serve its customers and make a profit. A change in any of the forces normally,
requires a business unit to re-assess the marketplace given the overall change in industry
information. The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability. Firms are able to apply their core competencies, business
model or network to achieve a profit above the industry average. A clear example of this is
the airline industry. As an industry, profitability is low and yet individual companies, by
applying unique business models, have been able to make a return in excess of the industry
average.
Porter's five forces include - three forces from 'horizontal' competition: threat of substitute
products, the threat of established rivals, and the threat of new entrants; and two forces from
'vertical' competition: the bargaining power of suppliers and the bargaining power of
customers.
This five forces analysis, is just one part of the complete Porter strategic models. The other
For the current Indian market for fast food, it is not difficult for a fast food restaurant to enter
the market. However, it would be extremely difficult to take over already running major fast
food chains' dominancy in India or even make a significant amount of profit. While there are
enough people in urban India for any restaurant to survive, KFC holds the first-mover
advantage into the 'non-veg food specialty food segment' that gives them free reputation.
Customers, especially children who are used to going to KFC as a treat or reward from their
parents or grandparents, are not going to want to go to other restaurants they’ve never heard
of. The brand name is already established. Also, there is already a large variety in the
numerous western-style dining places in India, such as McDonald’s, Pizza Hut, Domino's
and Subway, and any new fast-food entrants would just be presenting something very similar
to what’s already there. While small Neighborhood restaurants generally have low barriers to
entry, these are the barriers to entry for similar restaurant businesses to enter the fast-food
chain market.
The customers of KFC, especially as individual buyers, have almost no bargaining power
because if only one customer threatens to no longer eat at KFC, the store is not going to
lower its price because the cost of losing one customer is not very great. The suppliers, like
the buyers, have very little bargaining power. In terms of food, KFC, upon its move into
India, urged many of its U.S. suppliers to also extend branches into India. KFC also began
helping local suppliers by giving them technological support to improve their products. This
is a brilliant strategy because the supplies that KFC would otherwise need to import from the
U.S. can now be obtained domestically, and if the U.S. suppliers decide to raise their prices,
KFC can easily switch to the local suppliers. This gives us a brilliant strategy. With this
strategy, KFC created competition among its suppliers, lowering the supplier bargaining
power. In terms of human resources, labor cost is extremely low because the supply of non-
skilled workers great exceeds the demand for them. With so little buyer and supplier
bargaining powers, KFC is able to have a very tight control over its prices and expenditures.
As mentioned above, there are a few major competitors in the fast-food industry in India for
KFC, namely McDonald’s, Pizza Hut, Domino's and Subway. The substitute products, in this
case, would be burgers, pizza, and sandwiches. Though they are competitors, their primary
products differ greatly from each other, in that they sell, chicken, burgers and fries, pizzas,
and sandwiches, respectively. Traditional Indian dining, home-cooked meals, and grocery
stores with ready-to-eat foods are also substitutes, as families could choose any one of these
over fast food for a meal. These substitutes are definitely considered healthy as compared to
the fast food chains. Even foods from street vendors count as substitute goods. While other
fast foods serve as substitute to KFC, they can also serve as complements for fast foods as a
whole. If the general price of fast foods goes up, KFC’s price rises as well, and the same can
be said of the quantity sold of these products, which make them complements to each other.
KFC also sets up stores located near popular tourist attractions, so tickets to these tourist
spots are also complementary goods because the more people tour these attractions, the more
Unlike what one would expect, KFC has little rivalry with similar fast-food chains in India.
The primary reason is that their core products are different, as in they sell different kinds of
fast foods with very different tastes and styles. For example, if KFC raised its price for
chicken by a small amount, Indian chicken lovers who may not be as accepting to pizzas
(many Indian people strongly dislike the taste of cheese) are not going to switch to Pizza Hut
just because the price for KFC increased. In addition to that, these restaurants have such
different target customers that the fluctuation of price for one restaurant is not going to affect
the others. For example, a full meal at KFC ranges about Rs. 100, whereas a full meal at
Pizza Hut can cost over Rs. 300. The drastic difference in price assures no price competition
Competitive analysis
Competitors
You cannot enjoy the business without competitors. No organization can afford to ignore
there competitors. It is very important for a marketing managers to monitor the activities of
there competitors, what they are doing? KFC adopted such sort of strategy that there is no
competitor for spicy chicken, which is made by KFC. KFC beats its competitors through the
revising marketing strategy at every movement but the main competitor of KFC are Mc
Donald
KFC McDonalds
Strength
■ Goodwill and reputation: The company certainly has earned a good name and
reputation by its previous products and services in the market. It is even more
recognised in other markets outside India, where the company is among the leading
fast food giants. The brand is recognised and trusted in India for its quality products,
price, and customer service. It therefore has a good head start and enjoys a good
■ Employee Loyalty: Employee Loyalty is one of the major strengths of KFC. The
KFC customer base remained loyal to the KFC brand because of its unique taste. KFC
has continued to dominate the dinner and take out segment of the Industry.
Ranks highest among all chicken restaurant chains for its convenience and menu
Weaknesses
n KFC was losing market share as other Chicken chain increased sales at
a faster rate.
n KFC share of Chicken Segment sales fell from 71 percent 1999 , to less
India is especially very much so. This may reduce the market share of the company.
KFC has not yet invested much on R&D, and innovating new products for Indian
Markets. This may lead to failure of their products as they are not in line with the Indian
mind set, peoples taste and preferences and their likes and dislikes. This may prove fatal
OPPURTUNITIES
n New Markets: Globalisation has opened doors for new markets for the company.
As the developed markets are mostly saturated, the developing countries like India
and China promises a good market and generation of demand in the future. With
more than 70% of the markets in india being unexplored and un organised, KFC
food in India. People are opening up to fast foods more regularly in their daily
lives and not just keeping it a once in a month affair. Thus Indian mindset is fast
changing.
n Large Youth population: India has a very large share of youth population a
compared to other countries. More than 60% of the population is under the age of
30yrs. As the young generation are more open to fast foods and demand it more,
New variety: Company can also come up with new variety in the menu like Pizzas,
Threats
n Competition: Competitor companies like McDonalds are fast catching up with the
market.McDonald’s with sales of more than 19 billion in 1999, accounted for 15 percent
n Organisations like PETA People for Ethnic Treatment for Animals have given a
bad name to the company which may prove disastrous to the image of the firm. Currently,
KFC is under massive attacks from animal organisations, questioning the way KFC’s
suppliers are threatening the chicken, before they got slaughtered. Anti-KFC campaigns,
such as the one from PETA are affecting KFC’s brand image in a negative way and result
sales. As the US markets are already saturated and leave no or little scope for growth,
company necessarily needs to look at offshore foreign markets to generate sales and keep
up the profits.
Based on the analysis, we can conclude that they should start by solving their internal issues
such as management and restaurant menu before thinking about expanding. They should
work on the management issues to create a good atmosphere where employees are happy to
work in. I certainly do not believe that by treating employees poorly, a company can be
successful. They also need to make sure that their restaurants offer a diversified menu,
provide their customers with quality food, excellent service and restaurant cleanliness. KFC
should always listen to their customers and try to follow the new trends on the market in
order to fully satisfy their customers. Otherwise, competitors will satisfy them and will
eventually outperform you as Boston did with its grilled chicken. Even though, KFC seems
to have an emotional attachment to their original recipe that made their success, they
definitely need to move on and develop new products that customers want in order to
increase their financial performance and value. We have seen that Boston and Popeye’s are
stealing customers away from KFC because they understood what customers wanted and
started offering healthier items. KFC should certainly do the same and enhance their menu.
Concerning their expansion strategy, KFC should start by closing a few non-profitable stores
in the US that are currently drowning money from KFC. This will allow KFC to get the cash
necessary to invest in new markets, which offer more growth potential. We have seen that the
US market is not as attractive as it used to be, it has become saturated and certainly does not
appear to have a bright future ahead. There is also the competition in the US that makes it
really hard to compete in, whereas in other foreign markets that are quasi untouched as I will
discuss more in detail later. KFC has to select countries based on their attractiveness and
make sure that they can provide above-average returns, which will be discussed more in
countries that can provide above-average returns are regions that have chicken as traditional
dish such as Asia and Latin America. Those regions should certainly be prioritized while
While they start attacking those new markets, they should keep in mind to focus locally even
though they go international in order to overcome certain barriers such as language, law and
a good understanding of needs. Targeting new countries usually work better if you adapt to
the local market. They need to stay close to their mission (provide customers with quality
food, excellent service and restaurant cleanliness) and make sure to know how to achieve
their long-term objectives. They also have to keep innovating and coming up with new items
regularly. Remember that even though, they come up with similar products, customers are
They also have to follow the trend and go hand in hand with customers to satisfy their
changing needs, as we have previously discussed with the current healthier food trend. They
also want to keep an excellent image by treating employees fairly and keeping a good control
References
Cahill, T. (1995), How the Irish Saved Civilization, Doubleday, New York, NY.
Chittister, J. (1992), The Rule of Benedict: Insight for the Ages, Crossroads, New York, NY.
Fayol, H. (1949), General and Industrial Management (C. Storrs, trans.), Sir Isaac Pitman
andSons, London (original work published 1916).
Moss, D.C. (1957), Of Cell and Cloister, The Bruce Publishing Company, Milwaukee, WI.
Wren, D.A. (1994), The Evolution of Management Thought (4th ed.), John Wiley & Sons,
New York, NY.
Koo, L.C. (1997), “Improving quality service through balanced scorecard”, The 2nd
InternationalConference on Quality and Reliability, Transactions of Nanjing University of
Aeronauticsand Astronautics, China (TNUAA), Vol. 15 No. 1, pp. 147-53.