CHAPTER -1

INTRODUCTION
1.1 Background of the study:
Fast food (also known as Quick Service Restaurant or QSR within the industry itself) is the term
given to food that can be prepared and served very quickly. While any meal with low preparation
time can be considered to be fast food, typically the term refers to food sold in a restaurant or store
with preheated or precooked ingredients, and served to the customer in a packaged form for takeout/take-away. The fast food market is defined as the sale of food and drinks for immediate
consumption either on the premises or in designated eating areas shared with other foodservice
operators, or for consumption elsewhere. Kentucky Fried Chicken (KFC) is the world's no. 1
chicken Quick Service Restaurant (QSR). KFC is a fast food restaurant chain that specializes in
fried chicken and is headquartered in Louisville, Kentucky, in the United States. In fact this report
expects to discover the competitive position of KFC discovering numerous strategic factors
including, macro environment, industry dynamics, resource and capabilities, etc. This report also
will explain how KFC have been effectively articulated it business strategies to create a sustainable
strategic lock-in to remain sustainable in their competitive position continuously over several
decades. A PESTEL analysis is carried out to identify the key macro environmental drivers to
change in order to review the strategy against the challenges from them. Industry forces will be
analyzed to identify the nature of competition. To diagnose the strategic capabilities the value
chain model is used.

[1]

1.2 Introduction of the KFC Company

Kentucky Fried Chicken (KFC) is a fast food restaurant chain that specializes in fried chicken and
is headquartered in Louisville, Kentucky, in the United States. It is the world's second largest
restaurant chain (as measured by sales) after McDonald's, with 18,875 outlets in 118 countries and
territories as of December 2013. The company is a subsidiary of Yum! Brands, a restaurant
company that also owns the Pizza Hut and Taco Bell chains. KFC was founded by Harland
Sanders, an entrepreneur who began selling fried chicken from his roadside restaurant in Corbin,
Kentucky, during the Great Depression.
KFC's original product is pressure fried chicken pieces, seasoned with Sanders' recipe of 11 herbs
and spices. The constituents of the recipe represent a notable trade secret. Larger portions of fried
chicken are served in a cardboard "bucket," which has become a well-known feature of the chain
since it was first introduced by franchisee Pete Harman in 1957. Since the early 1990s, KFC has
expanded its menu to offer other chicken products such as chicken fillet burgers and wraps, as well
as salads and side dishes, such as French fries and coleslaw, desserts, and soft drinks, the latter
often supplied by PepsiCo. KFC is known for the slogan "finger lickin good," which has since
been replaced by "Nobody does chicken like KFC" and "So good."
KFC is a subsidiary of Yum! Brands, one of the largest restaurant companies in the world. KFC
had sales of $23 billion in 2013. By December 2013, there were 18,875 KFC outlets in 118
countries and territories around the world. There are 4,563 outlets in China, 4,491 in the United
States, and 9,821 across the rest of the world. Outlets are owned by franchisees or directly by the
company. KFC's core product offering is pressure fried on-the-bone chicken pieces seasoned with
the "Original Recipe". The product is typically available in either two or three piece individual
servings, or in a family size cardboard bucket, typically holding between 6 and 16 chicken pieces.
Poultry is divided into 9 different cuts (2 drumsticks, 2 thighs, 2 wings, 1 keel, and a backbone
based breast cut divided into 2 pieces). The product is hand-breaded at individual KFC outlets with
wheat flour mixed with seasoning in a two to four minute process. It is then pressure fried for
between seven and ten minutes (the timing differs between countries) in oil at 185 degrees Celsius.
Following this, the chicken is left to stand for 5 minutes in order for it to sufficiently cool before
it is placed in the warming oven. It is KFC policy to discard chicken if it has not been sold within
90 minutes, in order to ensure freshness. The frying oil varies regionally, and versions used include
[2]

sunflower, soybean, rapeseed and palm oil. A KFC executive stated that the taste of the chicken
will vary between regions depending on the oil variety used, and whether the chicken has been
corn-fed or wheat-fed. Worlds famous fast food chain KFC have been start serving Nepalese
people with their mouth lickering menu of Hot & Crispy chicken, Twister roll and Zinger burger
since October 2009 right from Annapurna Complex, Durbar Marg.

1.3 Objectives of the study:

The objectives of this report are as follows:

To know about the KFC (Kentucky Fried Chicken) and its current strategies.

To know how much competition is in the fast food restaurant industry.

To know about the market competitive position of the KFC.

To determine what strategic capabilities KFC has in order to sustain competitive

advantages.

To identify the key drivers for change in business.

[3]

CHAPTER -2
PROFILE OF THE ORGANIZATION
2.1 Current strategies of the KFC Company:
Strategy is the direction and scope of an organization over the long-term: which achieves
advantage for the organization through its configuration of resources within a challenging
environment, to meet the needs of markets and to fulfil stakeholder expectations. KFC is
the multinational national company so that its strategies also may different for the different
countries. Although its core strategies are same for all the countries.
Following are the different strategies of KFC:

KFC has top restaurant quality to improve its brand value, called CHAMPS. The word
CHAMPS is the abbreviation of Cleanliness, Hospitality, Accuracy, Maintenance,
Product Quality and Speed of Service. KFC insisted on promoting CHAMPS to its
global market because KFCs organizational goal is to satisfy all customer needs in the
world. The CHAMPS strategy incorporates very strict guidelines that are mandatory
for KFC restaurants to implement in their daily operations. The unified rule helps KFC
easily manage and enter the global market.

KFC has another important strategy that has contributed to their global success called
local cultural strategy. Local cultural strategy means KFC spend much of their time
and resources on analyzing the local consumption eating habits. According to the eating
habits, KFC will create and produce related cultural fast food. Customers will directly
benefit from the perceived value derived from KFCs menu. The best example where
the local cultural strategy was implemented is KFC restaurants in the China. There are
more than 4,000 KFC outlets in 80 cities in China. In order to be successful, KFC
incorporated more than 30 different menu items in order to complement the local
cultural strategy.

KFC has unique marketing strategy that has also contributed to their global success
called market segments strategy. The market segments are basically divided by 4
groups:
[4]

Children

KFC targets children boys and girls with age 12 below who love to eat fried chicken. At the
same time also targets children who love to get free toys with meals. Thus KFC has Chicky
Meal with free toy.

Teen & Young adult

KFC also targets teens and young adult with age 12 to age 25 who love of its fried chicken.
Normally, KFC target boys and girls who like to eat both fried chicken and burger at for an
affordable mean. Thus KFC has X Meal which emphasizes extra choice and extra variety with
lower price.

Family

KFC targets family which both parents and 2 less or more kids dining together in KFC
restaurants or take away. KFC also have children playground that normally parents would
bring their children to play at there, while they could peacefully eat their meals. Thus KFC has
Mini Bucket Combo and Variety Bucket to cater for bigger numbers of people to eat with
favorable price.

Budget customers

KFC has concerned of budget customers appetite with basically age 12 to 55. Thus KFC also
has ala carte menu and real savers menu which emphasize in 1 set with lower price and side
orders as well such as potato wedges.

[5]

2.2 Mission and vision of the KFC Company:

Mission statement of KFC Company:
"The Association of Kentucky Fried Chicken Franchisees, Inc. is united to protect, promote and
advance the mutual interests of all member franchisees and the Kentucky Fried Chicken system".
Vision statement of KFC Company:
Our passion, as a restaurant company, is to put a YUM on people's faces around the world,
satisfying customers every time they eat our food and doing it better than any other restaurant
company.

2.3 SWOT Analysis of the KFC Company:

A SWOT analysis is a structured planning method used to evaluate the strengths, weaknesses,
opportunities and threats involved in a project or in a business venture. A SWOT analysis can be
carried out for a product, place, industry or person. It involves specifying the objective of the
business venture or project and identifying the internal and external factors that are favorable and
unfavorable to achieve that objective.

[6]

The strengths, weakness, opportunities and threats of KFC are presented below:

KFC SWOT analysis 2013

Strengths

Weaknesses

1. Second best global brand in fast food industry in

terms of value ($ 6 billion)

1. Untrustworthy suppliers

2. Original 11 herbs and spices recipe

2. Negative publicity

3. Strong position in emerging China

4. Combination of KFC Pizza Hut and KFC
Taco Bell
5. KFC is the market leader in the world among
companies featuring chicken as their primary

3. Unhealthy food menu

4. High employee turnover
5. Lack of strong marketing
efforts

product offering

Opportunities

Threats
1. Saturated fast food markets in
the developed economies

1. Increasing demand for healthier food

2. Trend towards healthy eating

2. Home meal delivery

3. Introducing new products to its only chicken
range

3. Local fast food restaurant

chains
4. Currency fluctuations
5. Lawsuits against KFC

[7]

Strengths:
1. Second best global brand in fast food industry in terms of value ($ 6 billion).
KFC is known by many and is a trustworthy brand in many countries mainly due to its early
franchising and international expansion.

2. Original 11 herbs and spices recipe.

KFC original chicken recipe is a trade secret and a source of comparative advantage against
firms competitors.
3. Strong position in emerging China.
KFC receives half of its revenue from China, where it operates more than 4,000 outlets. KFC
position in China is one of its main strengths as Chinas fast food market is growing steadily.
4. Combination of KFC Pizza Hut and KFC Taco Bell.
KFC partnership with other Yum! Brands yields some advantage as the restaurant can offer
items from its partners it doesnt have itself and satisfy more customers needs.
5. KFC is the market leader in the world among companies featuring chicken as their
primary product offering.
KFC has positioned itself clearly among other fast food chains bearing its famous slogan and
trademark chicken products.

Weaknesses:
1. Untrustworthy suppliers.
Over the years, KFC has been contracting suppliers, which supplied contaminated poultry to
KFC or were mistreating chicken, thus resulting in falling sales and damaged reputation.

2. Negative publicity.
KFC receives much criticism from PETA over the conditions chickens have been raised.
Furthermore, it received bad publicity for selling chicken wing with kidney. There are many
more or less bad news from KFC, which damage firms reputation significantly.
[8]

3. Unhealthy food menu.

KFC menu is largely formed of high calorie, salt and fat meals and drinks. Such menu
offering prompts protests by organizations that fight obesity and hence, decreases KFC
popularity. Consumers also often opt out for healthier choices.

4. High employee turnover.

Employment in KFC is a low paid and low skilled job. It results in low performance and high
employee turnover, which increases training costs and add to overall costs of KFC.

Opportunities:

1. Increasing demand for healthier food.

While demand for healthier food increases, KFC could introduce more healthy food choices
in its menu and reverse its weakness into strength.

2. Home meal delivery.

KFC could fully exploit (it test deliver services now) this opportunity and reach more
customers.

3. Introducing new products to its only chicken range.

KFC could introduce new meals to its menu and offer pork, beef or only vegetarian meals,
which would target wider consumer group and would result in more costumers.

Threats:
1. Saturated fast food markets in the developed economies.
The fast food market in the developed countries is already overcrowded by so many fast food
restaurant chains and this already proves to be a threat to KFC as it finds it hard to grow in
the developed economies.

[9]

2. Trend towards healthy eating.

Due to government and various organizations attempts to fight obesity, people are becoming
more conscious of eating healthy food rather than what KFC has mainly to offer in its menu.

3. Local fast food restaurant chains.

Local fast food restaurants can often offer a more local approach to serving food and menu
that exactly represents local tastes. Although KFC does a great job in adapting its own menu
to local tastes, the rising number of local fast food chains and their lower meal prices is a
threat to KFC.

4. Currency fluctuations.
KFC receives part of its income from foreign operations. That income has to be converted
into dollars and may affect the business' profits, especially when the dollar is appreciating
against other currencies.

5. Lawsuits against KFC.

KFC has already been sued for many times and lost quite a few lawsuits. Lawsuits are
expensive as they require time and money. As KFC continues to operate more or less the
same way, there is high probability for more expensive lawsuits to come.

2.4 External Environment (PESTLE) Analysis of KFC:

PESTEL analysis helps us to understand the overall picture of the operation of an industry.

A. Political Factors:
The operations of any organization are heavily influenced by the individual state policies
enforced by each government and KFCs is no exception. For instance, there are certain
groups in Europe and the United States that protest to the state pertaining to the health
implications of consuming fast food. They claim that harmful elements like cholesterol and
adverse effects like obesity are attributable to consuming fast food. There are other factors
[10]

such as the tax law, employment law and related trade restrictions. Tax rates could affect the
growth of the organization. In a diverse working environment employment restrictions like
working hours regulation require the organization to employ more staff. Amendments like
this increase the overall cost involved. Certain restriction has very strong influence in the
operation of the organization. Certain laws penetrate so deep that they even constrain the
content of the food.

1. Economic Factors:
KFC which have global presence are affected by the changes in inflation and the exchange
rates. Hence, these chains may have to adapt to the issues and the effects of the economic
environment. The economic factors also determine the supply and demand relationship of
the raw materials within the organization. Other economic factors that impact the
organization are inflation rate, wage rate, and cost of living.

2. Socio-Cultural Factors:
International strategies of KFC seem to act on several fields to guarantee lucrative returns
for the organization. To illustrate, the organization improves on establishing a positive mindset from their core consumers.

KFC have understood its customers based on their

characteristics. A recent survey has proved that KFC most frequent customers are below the
age of thirty-five.

3. Technological Factors
The Companys key tool for marketing is by means of television advertisements. Elements
like the inventory system and the management of the value chain of the company allows for
easy payments for theirs. The integration of technology in the operations of KFC tends to
add value to their products. The improvement of the inventory system as well as its supply
chain allows the company to operate in an international context.

[11]

4. Environment
The social responsibility of KFC on a region is influenced by the operations of the company
in that specific region. These entail accusations of environmental damage. Among the
reasons why the company is charged with such claims is the employment of nonbiodegradable substances for the glasses and Styrofoam coffers, which is offered for the
meals.

5. Legal Factors
Legal aspects like tax obligations, employment standards, and quality requirements are only
a few among the other equally important legal factors on which the company has to take into
consideration.

2.5 Michael Porter's Five force analysis:

Porter's Five Forces is a framework developed by economist Michael E. Porter to determine
the profitability and attractiveness of a market or market segment. Porter's framework
maintains that the attractiveness of a market segment is determined by five competitive
forces. Porter's five forces include - three forces from 'horizontal' competition: the threat of
substitute products or services, 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. Here this model is used to determine the profitability and
attractiveness of a market of the KFC Company. They are presented below:

1. Threat of New Entrants: LOW

For several reasons, the threat of new entrants to the industry is somewhat low. First, the capital
requirements to enter the industry are very large. The threat of new entry is low (weak force)
because:

Many customers have strong loyalty towards KFC.

It is extremely difficult to develop brand awareness and image for new brands in a
well-developed industry like fast-food (KFC).

High fixed costs reduce the likelihood that new firms will enter the industry.
[12]

Economies of scale force new entrants to enter at a cost disadvantage.

Existing fast-food chains are intensely competitive and willing to defend their
positions with discounting and advertising.

2. Industry rivalry: HIGH

There is considerable rivalry within the fast food industry. If the rivalry is weak, companies
have an opportunity to increase prices and gain more profits. If there is a strong competition,
companies would compete in prices, which might result in a price war. This would reduce or
limit profitability due to the reduction in the sales margins. For instance, there is a huge
competition between KFC and McDonalds as each one of them is competing to improve its
customer services such as introducing new items in its menu and home delivery service.
KFCs primary competitors are:

Other chicken chains (Churchs, Chick-fil-A, Boston Market, Popeyes, Bojangles).

Pizza outlets (Pizza Hut, Domino's, Papa Johns, Little Caesars).

Sandwich chains (McDonald's, Burger King, Wendys)

Competition (rivalry) is a strong force (intense) because:

Industry sales growth is flat.

Competition for market share among existing chains is intense.

There are high first mover advantages (e.g., McDonald's created brand awareness for
its chicken sandwich by introducing its sandwich before KFC).

Low customer switching costs have increased pressure on chains to attract customers
through advertising, new product offerings, and price discounts.

3. Bargaining Power of Suppliers: LOW

Within the industry, the bargaining power of suppliers is quite minimal. Large fast food chains
thousands of suppliers to choose from and select theirs through a competitive bid process. They
can switch suppliers easily and tend to make up a large portion of the suppliers revenue. This
severely limits the bargaining power of suppliers.

[13]

Suppliers are a weak force because:

Paper and plastic are standardized commodities. This allows KFC to shop around for
the best price.

Switching costs are low. KFC can easily switch from one supplier to another.

Threat of backward integration. KFC could integrate backward if needed.

KFC buys in large volumes, giving it the power to negotiate lower prices.

4. Bargaining Power of Buyers: LOW

Even though customer switching costs are nearly zero, the fast food industry (KFC) does not
worry about loyalty because On average, one-fifth of the population of the USA eats in a fastfood restaurant each day (Oxford University Press). It is this volume that keeps customer
bargaining power low by diluting the effect of a few picky customers.

5. Threat of Substitutes: HIGH

With so many firms in the quick service industry, low switching costs, similar products, and
healthier options, the threat of substitutes is very high.
Substitute products include:

Full service restaurants.

Cafeterias.

Microwavable products purchased at grocery stores and eaten at home.

Family restaurants (Denny's, IHOP, and Cracker Barrel)

Dinner houses (Red Lobster, Chilis, and Outback Steakhouse)

Grilled buffet chains (Golden Corral, Ryans, and Ponderosa).

Substitute products are a strong force because:

There are a variety of high quality, reasonably priced eating alternatives available.

There are numerous restaurants and other eating alternatives located near most at KFC
locations.

Customer switching costs are low.

[14]

CHAPTER -3
ASSESSING THE STRATEGIES
3.1 Short term and long term objectives:
A. Short term objectives of KFC Company:
a. Strive to fill the needs of local markets by hiring locally and offering menu items that
reflect the culture.
b. Reestablish and maintain an emphasis on clean and updated restaurants paying close
attention to service while maintaining product consistency.
c. Cutting out marginal products.
d. Closed unprofitable restaurants.

B. Long term objectives of KFC Company:

a. Introduced different menu items to keep up with local competitors.
b. Updated Technologies in Service and Production unit.
c. More responsibility assigned to franchisees and marketing managers.
d. Continued promotion of healthier image through removal of the word fried from the
name.

3.2 Value chain analysis:

Value chain analysis offers management the means to evaluate existing and new strategic
opportunities. It provides insights into how opportunities might be pursued while identifying
potential problems to be addressed. It helps to identify optimal solutions, i.e., solutions acceptable
to customers, suppliers, employees and investors. A value chain identifies the separate activities,
functions, and business processes performed in designing, producing, marketing, delivering and
supporting a product or service.

[15]

Primary Activities
A. Inbound logistics.
KFC contracts with multiple suppliers internationally, therefore the company has to maintain
highly complicated supply-chain operations without any disruptions. KFC possesses an in-depth
organizational knowledge about supply-chain management and inbound logistics. It is compulsory
of all suppliers to adhere to KFC Supplier Code of Conduct and The KFC Supplier Requirements.
B. Operations.
KFC operates more than 17,000 restaurants in the Unites States and internationally. KFC's parent
company is Yum! Brands, Inc., the world's largest restaurant company in terms of system
restaurants, with more than 40,000 locations in more than 130 countries and territories and
employing more than one million associates. Internal & External layout of KFC outlet is attractive
and charming all over the world. Ideal color schemes, pleasant lighting outlets, comfortable sitting
arrangement, fully trained employees and their proper work division, State of the art
interior beautification, speedy & appropriate cooking process, special club/block for kids, etc. are
the chief characteristic of the KFC layout.

[16]

C. Outbound logistics.
Distribution of products and services are facilitated by Outlets or directly by the company. Outlets
are owned by franchisees or directly by the company but in some countries or market there is
online sales channels also available, although it is not directly from official website of the company
it is from other online store. Distributors of KFCs products and services include franchises
restaurant of KFC company, although their name (restaurant name) are different at different
countries, market or cities but the product and services given by those restaurant are almost same
because of franchises. The franchises restaurant must follow the quality control mechanism of the
KFC Company and just in time order and delivery.
D. Marketing and sales.
KFC has unique marketing strategy that has also contributed to their global success called market
segments strategy. The market segments are basically divided by 4 groups. KFC targets children
boys and girls with age 12 below who love to eat fried chicken. At the same time also targets
children who love to get free toys with meals. Thus KFC has Chicky Meal with free toy. On every
Wednesday customer get 6pc hot crispy free with 6pc order.
E. Service.
KFC attempts to maintain highest level of customer services, during the purchase and after the
purchase. There is free Wi-Fi service at the boundary of the KFC restaurant, free home delivery at
the pre-specified area or location and free tour to KFC kitchen.
Secondary Activities:
A. Infrastructure
KFC has created strong infrastructure because the company has been building on it since inception.
KFC has successfully managed changes in organizational structure with changes in size of the
company. All prime location store own by KFC itself. KFC has top restaurant quality to improve
its brand value, called CHAMPS. The word CHAMPS is the abbreviation of Cleanliness,
Hospitality, Accuracy, Maintenance, Product Quality and Speed of Service. The unified rule helps
KFC easily manage and created strong infrastructure to enter the global market.
[17]

B. Human Resources Management

A companys human resources can be measured in terms of its employees qualifications,
commitment. KFC is able to attract and retain the best talent in the fast food business especially in
the chicken items and they are mostly local people because they can better deal with the customer.
Their employees are educated, dedicated and committed to their company, and this loyal and
intelligent employee base is a very strong resource for KFC. KFC provides high pay and great
benefits in addition to a highly competitive work environment and thus is a magnet for high
achievers. Live video at official site of people having work experience, Education grant
programme- 2000$ scholarship.
C. Technological Development:
Over the years KFC has continually created innovative technology which helps to prepared
hygienic product at the same time helps to prepare the product at short time which helps to achieve
the just in time strategy at the operation system. In the product development process the company
is interested and is considering the feedback of its partners and customer in delivering and building
value into every product they make.
D. Procurement:
One key place that technology can really make a difference is in the procurement process. Whether
a commercial business or government agency, each must balance the challenges of maintaining
efficiency while lowering cost and meeting the requirements of transparency throughout the
procurement process. KFC Company is practicing e-procurement tools meet all those challenges,
and its getting better all the time. Mainly KFC uses procurement process for chicken-weekly
purchase and vegetables-after every three days. Electronic purchasing is eliminating handwritten
requisition forms and long waits for supplies and services. Its more efficient, provides a better
grip on the procurement process, and altogether easier than paper-based methods. Before payment
can be approved, every KFC supplier has to be approved by the KFC Procurement group, have
signed an agreement with KFC, and have a purchase order in hand.

[18]

3.3 Strategic group map of the Fast Food Industries:

A strategic group is a concept used in strategic management that groups companies within an
industry that have similar business models or similar combinations of strategies. For example, the
restaurant industry can be divided into several strategic groups including fast-food and fine-dining
based on variables such as preparation time, pricing, and presentation. The number of groups
within an industry and their composition depends on the dimensions used to define the groups.
The following framework identifies the key players in the international fast-food industry and
identifies which firms are in the most direct competition with each other:

High
McDonalds

Global
Brand
Value
(US$)

Pizza Hut

KFC

Burger King

Subway
Dominos

Low
Low

Global Presence

High
High

Brand value and the chains global presence (in above figure) are significant indicators of overall
performance. The positions of each company are represented by the circles in the strategic group
map. The above strategy-group chart maps the firms performance. Brand value (US$) is plotted
against the chains global presence, in terms of the number of outlets worldwide. The strategygrouping shows that McDonalds has the highest global market value and revenue in the industry,
then KFC is on the second position. KFC is the world's second largest restaurant chain (as
measured by sales) after McDonald's, with 18,875 outlets in 118 countries and territories as of
December 2013.

[19]

3.4 Multi Business Strategy / BCG Matrix:

BCG analysis is mainly used for Multi Category / Multi Product companies. All categories and
products together are said to be Business portfolio. Thus, the various entities of your business
portfolio may move forward by a different pace and with a different strategy. The BCG analysis
actually helps you in deciding which entities in your business portfolio are actually profitable,
which are duds, which you should concentrate on and which gives you a competitive advantage
over others. The following matrix shows the BCG analysis of the KFC Company's products.

Market Growth

High

Low

Crispy Boneless
Chicken

Chicken Bucket

High

Krushers

Veg ThaLi

Market Share

Low

Question Mark:
Currently KFC have launched a new product in the market. They have also tried to come into the
beverages market by launching its new brand of shakes called KRUSHERS. As it is a fairly new
product it comes in the category of the Question Mark in the BCG Matrix. It has a low market
share thus brings low revenue. KFC is advertising a lot to popularize this product so there is a lot
of expenditure on it. This product is individually not bringing any profits and is a cash drain for
the company. Company may decide to completely remove this product from the market if it does
not do well soon and start bringing in revenue.

[20]

Dog:
KFCs Veg Thali comes under this category. Although company had launched this product much
earlier, it has still failed to become a success. As KFC is known more for its non-veg food, this
also results in low demand for this item. It has a low market share and although low on expenditure
(as company does not spend on its promotion), it does not bring in much revenue as demand is
low. The product is mostly CASH NEUTRAL.

Cash Cow:
KFCs Chicken Bucket is the most successful product of the company. It has the highest market
share amongst all the other products. It has good demand in the market and brings in huge sales
revenue. The development and other expenses are also low and thus this product is a CASH
SIRPLUS for the company.

Star:
The star product of the company is its crispy Boneless Chicken. It has a high market share and
brings in high revenue. But it also has high developmental expenditure involved. The profit
therefore is generally not very high brought in by this product. This product is CASH NEUTRAL
for the firm. The company is trying make this product a cow as well, by reducing the expenditure.

[21]

CHAPTER 4
SUMMARY AND CONCLUSION
4.1 Summary:
The fast food market is defined as the sale of food and drinks for immediate consumption either
on the premises or in designated eating areas shared with other foodservice operators, or for
consumption elsewhere. Kentucky Fried Chicken (KFC) is a fast food restaurant chain that
specializes in fried chicken and is headquartered in Louisville, Kentucky, in the United States. It
is the world's second largest restaurant chain (as measured by sales) after McDonald's, with 18,875
outlets in 118 countries and territories as of December 2013. The company is a subsidiary of Yum!
Brands, a restaurant company that also owns the Pizza Hut and Taco Bell chains. KFC had sales
of $23 billion in 2013. By December 2013, there were 18,875 KFC outlets in 118 countries and
territories around the world. KFC is known for the slogan "finger lickin good," which has since
been replaced by "Nobody does chicken like KFC" and "So good."
There is a strong competition, companies would compete in prices, which might result in a price
war. This would reduce or limit profitability due to the reduction in the sales margins. For instance,
there is a huge competition between KFC and McDonalds as each one of them is competing to
improve its customer services such as introducing new items in its menu and home delivery
service. KFC has successfully managed changes in organizational structure with changes in size
of the company. All prime location store own by KFC itself. KFC has top restaurant quality to
improve its brand value, called CHAMPS. The word CHAMPS is the abbreviation of Cleanliness,
Hospitality, Accuracy, Maintenance, Product Quality and Speed of Service. The unified rule helps
KFC easily manage and created strong infrastructure to enter the global market.

[22]

4.2 Conclusion:
In the fast changing world keeping on track with competition is a challenge. KFC being the world's
second largest fast food restaurant chain, it is facing many challenges from industry forces. It was
then concluded that KFCs Global Standardized Strategy was perhaps one of its greatest downfalls
because of its lack of local responsiveness in regards to food laws and the high vegetarian
population. KFC maintain a Global Standardized Strategy however choose to adapt this strategy
to suit international markets that require a higher level of local responsiveness and not so much
focus on cost reductions.
4.3 Recommendation to the College:
There should be individual short presentation of individual's report rather than group
presentation of one report.
By evaluating report feedback should be provided to the students and there should be fair
evaluation and marking.
College's computer lab should be standard and the internet speed should be high so that
there will be much easier to make the report on time.

4.4 Recommendation to the KFC Company:

Short Term:

Introduce new recipes suited to local taste

Introduce cheaper items in the menu

Save by closing unprofitable restaurants.

Choose attractive countries for the business.

Work on the image of a healthy fast food chain through advertising

Long Term:

Change the image of KFC from fried to healthy

Open up new outlets

Engage in CSR activities related to animals & environment

Increase recycling and environmental friendly material and packaging completely

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References:
http://www.kfc.co.in/AboutUs.aspx
http://en.wikipedia.org/wiki/KFC
www.kfc.com

www.yum.com
http://www.scribd.com/doc/2021691/Kfc-Swot-Analysis
http://www.csgstrategies.com/search-pest-analysis-of-kfc.asp
http://www.freeessays123.com/essay21631/kentuckyfriedchickenkfcinindia.html
Adhikari, Dr. Dev Raj (2012: 3rd edition), "Strategic Management". Kathmandu, Nepal: Buddha
Academic Publishers and Distributors Pvt. Ltd.

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