"KFC, Known as Kentucky Fried Chicken is based out of Louisville, Kentucky, US. Harland Sanders came up with the idea of Fried Chicken in 1930 and the company was incorporate in 1952. Even after his death in 1980, Colonel Sanders continue to remain a major part of the promotions and advertising of the company.
The abbreviated form (KFC) of the company was popularized 1991 onwards.KFC primarily offers Fried Chicken. Along with which, it also offers wraps, sandwiches, mashed potatoes, potato wedges, pork, hamburgers etc. It functions out of stand-alone restaurants as well as out of outlets located in shopping complexes, malls etc. KFC has a strong presence in American, European, Asian and Australian Markets.
Every day, KFC caters to 12 million customers on an average across 109 countries. KFC operates more than 15000 outlets across the world with 5, 200 functional outlets only in the US. Parent company of KFC is Yum! Brands, Inc. Yum! Brands is ranked as the top company in fast food Industry. The company is globally present in more than 38,000 locations in 110 countries. In 2010, Yum! Brands was included in Fortune 500 list at 214th position owing to its revenue outnumbering $11 billion.
KFC had added 414 new outlets to its extensive network in 2010. The fast food Industry is growing exponentially on international front. Most of the fast-food restaurant/ outlet players are based out of America. Though, highs and lows are a part of the life cycle of the brands but overall all fast food Industry players are expanding and growing. KFC faces strong competition from Pizza Hit, Wendy's and Mc Donald's internationally. All its competitors are also capitalizing on Brand Management, Customer Service, and Localized Menu.
KFC employs more than 4, 50,000 people worldwide. Employees, once hired, are put through Training Schedules comprising Quizzes and on-the-job training. Team-work is encourages at KFC. Employees are provided with all sorts of benefits at KFC along with the fast career growth opportunities. KFC rewards performance! KFC operated through franchise business like any other multi-national fast food chain. There exists huge franchise opportunities for KFC given that Yum! Brands and KFC both are well-known brands worldwide. However, there exists a loophole here too as the company has to ensure the quality of customer service, food offered etc. are up to the mark in their franchise outlets.
Major business of KFC comes from Chinese market. There exists huge opportunities for KFC in China which it can optimize with a right mix of resourcefulness and brand activation.
With other market players fast acquiring the market share, KFC has to strategize its global moves with more care. What can be the possible growth strategies that KFC should plan and implement to size-up its market share?
[...] Lower return on investment and long-term negative impact on operating margins will hamper competitive advantage. ➢ Steep competitive pressures from low priced local fast food brands such as Chic King, Venky's etc in emerging markets such as India, China etc will hamper net margins on long-term basis. On the other hand, economic turmoil and double dip recession in UK and United States is shifting consumer towards in-house food consumption than eat outs. ➢ Intellectual property rights is critical for restaurant brand manufacturers: Counterfeit product portfolio offered at less than half the pricing in open market especially in emerging markets such as India, China, Indonesia will hamper profitability (Example: In India, KCF is one of the leading chicken quick restaurant brand operators with consumers getting disguised attributed to the brand image). [...]
[...] In 2012, global fast food market reached US$707 billion, with CAGR of (2007-2012). The segment accounted for approximately 38% of global foodservice restaurant marketspace in 2012. The total estimated global core addressable market for the enterprise stood at US$707 billion stipulated to reach US$725 billion by 2016. Global: Marketing & Promotional Strategic Developments In 2011, the marketing and advertising expenditure of Yum Brands stood at US$593 million with year-on-year growth of In Australia, the company follows ethical advertising and marketing mode i.e. negligible promotional activity through interactive games and at educational institutions. [...]
[...] McDonalds Yum Brands Wendy's Texas Road House Brinker Internation al Bn) capitalizat ion Bn) Margin Bn) Source: Krause Fund Research (April 2012) Risks, challenges and Limitations KFC faces steep macro and micro risks due to its operations across 115 countries worldwide. The core risks are as follows (Yum Brands Annual Report, 2011): ➢ Low employee retention and higher labor disputes will hamper competitive advantage. Lower retention rates of key franchise owners will hamper sustainability. ➢ Lack of optimal cost centric integration of IT infrastructure will hamper business continuity on medium term basis. [...]
[...] Finally, its strong green brand position i.e. eco- friendly outlets along with improved focus towards store margins (average of will improve competitive advantage as compared to closest competitors such as McDonalds in home and international markets. Future Research Scope The future research scope involves the following: ➢ Changing consumer purchasing behavior across emerging fast food market worldwide and its impact on US focused businesses such as KFC, Taco Bell, McDonalds etc. ➢ Detailed company snapshot on Yum Brands and its brand positioning on global basis. [...]
[...] KFC: Analysis of its global operations Table of Content ➢ Company Snapshot & Product Portfolio . ➢ Historical and Strategic Developments . ➢ Industry Outlook . ➢ Marketing & Promotional Strategies . ➢ SWOT Analysis . ➢ Peer Benchmarking & Future Outlook . ➢ Risks, challenges and Limitations . ➢ Corporate Social Responsibility and other initiatives . ➢ Recommendations & Future Research Scope . ➢ References . [...]
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