ccl_kfc
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JONATHAN P. RICOHERMOSO 1340, Purok Matahimik Cotta, Lucena CityContact #:09293428368 / 09182135251Email Add: [email protected] : [email protected]
POSITION DESIRE Service Crew
OBJECTIVE
To share my ability to work and talent also to enhance my skill for more improvement not only for myself and also to the company I been working.
PERSONAL INFORMATION
Date of Birth : November 26, 1988Place of Birth : Lucena CityAge : 20Height : 5’6”Weight : 130 lbs.Gender : MaleCitizenship : FilipinoCivil Status : SingleReligion : Roman CatholicFather’s Name : Nilo P. RicohermosoOccupation : CarpenterMother’s Name : Gloria P. RicohermosoOccupation : HousewifeSpecial Skill : Operating Microsoft Access/Microsoft Excel/web design
EDUCATIONAL BACKGROUND
Bachelor of Science And Entrepreneurship Tertiary : City College of Lucena 2nd year
Better living Subdivision Iyam Lucena City2008-2009
Secondary : Lucena City National High School Cotta-AnnexCotta Lucena city Quezon2006 – 2007
Primary : Torrijos Central SchoolTorrijos, Marinduque
ATTENDING ACTIVITY
Utilizing and Maximizing EntrepreneursAugust 7, 2008Activity Center Pacific Mall
CHARACTER REFERENCE
Mr. Welfredo AssiloCity Councilor/ prof.Lucena City
Mrs. Marcedita TorresHead Program of Bachelor of Science EntrepreneurshipCity City College of LucenaLucena City
Mrs. Dennia RavaraHead Program of Bachelor of Science Public AdmistrationCity College of LucenaLucena City
“I hereby certify that the above information is true and correct to the best of my knowledge”.
_______________________
Jonathan P Ricohermoso Applicant`s Signature
Case Study: Kentucky Fried Chicken and the Global Fast-Food Industry
Relevant Case Facts - History
Early Life of Colonel Sanders
Sander’s First Franchise in 1952
New Management/culture for Kentucky Fried Chicken after KFC sale for $2M
Acquisition of KFC by Pepsico/Tricon Global
Heublein Makes Changes in 1970
1980’s Profit and Expansion
From $105 to 7.2 Billion in 50 years
1952, Col. Sanders started franchising his recipe door to door financed by his $105.00 SS
Check
1964, Col Sanders had more than 600 franchised outlets in the US and Canada.
1964, Sold his interest in his company for $2 million to a group of investors.
1966, KFC went public
1969, Listed on the NYSE
1971, KFC was acquired by Heublein Inc . for $285 million .
1982, Heublein & KFC Inc . was acquired by RJ Reynolds
1986, RJ Reynolds & KFC , was acquired by PepsiCo, Inc . $840 million .
1997, PepsiCo, Inc . spined-off of its qsr’s into independent Tricon Global Restaurants .
2002, Tricon changed it's corporation name to Yum! Brands, Inc . .
NOW:
Yum Brands, Inc . is the world's largest restaurant company in terms of system units with nearly
32,500 in more than 100 countries and territories.
Yum! Brands, Inc ., is a Fortune 300 company
Yum! Brands, Inc. global system sales totaled more than $22 billion in the year 2001.
Current Market Cap value on the NYSE is 7.2 Billion
Problem/Issue
How would KFC maintain a market leadership in the global fast-food industry
Issue:
A competitive marketing strategy in the international market focused on the Latin American
countries
Internal Analysis Functional Areas
Finance/Accounting
Since 2001, Yum Brands Inc. has outperformed the market
Computer Information Systems
Newly established Computer information system
Marketing
Positioning among competitors is favorable
unconventional methods of distribution
multibranding
Management
Objectives and goals are measurable and achievable
Team empowerment
Productions/Operations
Constant improvement on quality of chicken
Producer and operators are strategically located
SWOT ANALYSIS: Strengths
The Management style of Col. Sanders was to rely on the basic goodness of the people
around him and trust the franchisees to play fair.
KFC is a Market leader : World’s largest chicken restaurant chain and third largest fast-food
chain in 2000
Key Success Factor (KFC):
Location
Effective store management/cleanliness
Key to continued growth was to find, motivate, and retain hard-working and entrepreneurial
managers and franchisees around the globe
In addition to short term profits, store managers were also responsible for building local
public relations, maintaining employee morale, developing customer good-will, keeping tab on
the competing chains and creating a legacy of special chicken cooking recipe.
Overall market image also became increasingly clear.
Strength
KFC had a refocused international strategies to grow its company and franchise restaurant
base all over the world.
Competitive marketing strategy: Developed three types of chicken: Original recipe (pressure
cooked) Extra crispy (fried) Tender roast (roasted)
Distribution strategy
- First, focused on building smaller restaurants in non-traditional outlets like airports
Shopping malls, universities, and hospitals.
Second, KFC continued to experiment with home delivery, which was already firmly
established in Louisville, Las Vegas and LA markets
Third, KFC established “2 in 1” units that sold both KFC and Taco Bell or KFC and Pizza Hut
Cont. Strength
KFC continued to dominate the chicken segment ($4.4B) past its nearest competitor
Popeyes at a distant second ($1.0B)
SWOT ANALYSIS: Weaknesses
Year 1986
Management Shift- KFC was acquired by Pepsico from RJR Industries.
Sweeping changes into the culture was initiated by the new management- this brings about
demoralization to old KFC employees and even franchisees.
Several restructurings led to layoffs throughout KFC, replacement of KFC managers with
PepsiCo managers
Conflicts between KFC and PepsiCo cultures- this is manifested with PepsiCo’s stronger
emphasis on performance rather than loyalty expressed by Col. Sanders to KFC employees over
the years.
Cont. Weaknesses
Market Segment (1990’s)
KFC’s leadership in the US market was so extensive that it had fewer opportunities to
expand its US restaurant base, which was growing at about 1% per year.
KFC chicken segment sales fell from 71% in 1989 to less than 56% in 1999.
SWOT ANALYSIS: Weaknesses
KFC finds difficulty in entering the German market (culture incompatibility)
KFC sales stagnated. There was widespread discontent among the franchisees, some of
whom felt the new owners did not understand the chicken business and were not providing
leadership expected from a franchisor.
Company stores floundered and become underperforming the franchised operations, further
convincing franchisees that the company did not know its own business. (KFC HQ acquired them
to company-owned)
SWOT ANALYSIS: Opportunities
Overseas expansion with the rapid economic growth and trend toward two-income families
that had fuelled the growth of fast-food industry in the 1950s and 1960s were appearing in the
late 1960s in the other country.
US market maturity- many restaurants expand to international markets as strategy for
growing sales.
KFC is an American company and 35 largest restaurant chains in the world (2000) were
American firms
Expansion program for the Mexican market/Latin American markets
NAFTA advantage
Demographic trends (demand for food eaten outside of the home)
SWOT ANALYSIS: Threats
Consumer health food trend
Saturated fast food industry in the U.S. market
Strategic Management
Market Development
KFC will introduce their present and new products and services into new
geographic/demographic areas.
Product Development
Bring back rotisserie chicken
Concentric Diversification
Add more to KFC product & service variety to the public
consumers
Implementations
Market Research
Determine area’s demand to determine boundaries
Expand menu
Healthier choices
Meals will be sold at cost
Determine effects on budget
Company Strategy
Primary objective is to take advantage of the potential growth in other countries, to
establish a strong position and to develop their image. Key Success Factors are ever continuing
cost savings through R&D, innovations and use of new technology to work efficiently. These
success techniques will lower costs and increase profits in the industry.
KFC uses an integrated low cost/differentiation leadership, since it can count on its brand
name and original taste and recipes to be unique while at the same time compete on price using
the benefits of cost savings from economies of scale.
Recommendations
Short-term:
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.
Cont.
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 detail in the
intermediate term.
But first, they need to have a clear vision, solve the internal issues and get some cash in
order to make sure that they are strong as a company and ready to compete internationally
before going ahead with their expansion project.
ü Create a great working atmosphere
ü Develop a healthier menu
ü Get some cash from selling unprofitable restaurants
ü Evaluate countries based on attractiveness
International Investments
Concerning investing internationally, extremely attractive 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 developing an international expansion. 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.
Long Term
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 most likely
going to try them. 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 over franchises to make sure they follow the company’s procedures.
Cont.
Concerning the American market, they should always keep an eye at competitors and see if
possible mergers or acquisitions could be made. McDonald’s has been faster than KFC when they
acquired Boston, which could have really helped KFC regain its loss market share and reduce
competition. They also have to keep working on their low-cost/differentiation strategy by better
taking advantage of their competitive forces such as economies of scales, bargaining power,
image/brand worldwide recognition.
Cont.
They also need to keep an eye and be aware of new technology in order to improve their
productivity and be able to compete more efficiently because even though they may have a
competitive advantage now, they can be sure that they will eventually be challenged.
ü Stick to their mission ; quality food-excellent service- restaurant cleanliness
ü Keep control over franchises
ü Come up with new items regularly
ü Keep an eye on possible mergers & acquisitions
ü Be aware of new technology to stay efficient and competitive
© 2010 SlideShare Inc. All rights reserved
1. Kentucky Fried Chicken and its SWOT Analysis
2. INTRODUCTION OF KFC
Kentucky Fried Chicken is one of the largest fast food
Franchise concepts of today; it is present in various countries
around the world and it has been able to establish a renowned
International reputation in multiple continents. Starting in the
United States in the 1930s, it has grown to become a true
multi-domestic company.
KFC has focused on foreign markets since the 1960s and
has found a new challenge today in conquering Asia.
3. HISTORY
The Kentucky Fried Chicken® was founded by Colonel Harland Sanders (born on September 9, 1890)
at the age of sixty-five. KFC® is currently one of the largest businesses of the global food service
industry and is widely known around the world as the face of Colonel Sanders.
Every year, over a billion KFC® chicken dinners are served featuring the Colonel’s “finger licking’
good” special recipe. The Colonel had spread his industry to more than 80 countries and territories
globally.
4. KFC’s Journey From $105 to 9.7 Billion $ in 58 years
1952, Col. Sanders started franchising his recipe door to door financed by $105.00
1964, Col Sanders had more than 600 franchised outlets in the US and Canada.
1964, Sold his interest to Massey & Brown for $2 million .
1966, KFC went public
1969, Listed on the NYSE
1971, KFC was acquired by Heublein Inc . for $285 million .
1982, Heublein & KFC Inc . was acquired by RJ Reynolds
1986, RJ Reynolds & KFC , was acquired by PepsiCo, Inc . $840 million .
1997, PepsiCo, Inc . spined-off it to Tricon Global Restaurants .
2002, Tricon changed it's corporation name to Yum! Brands, Inc . .
NOW:
Yum Brands, Inc . is the world's largest restaurant company in terms of
system units with nearly 32,500 in more than 100 countries and territories.
Current Market value of the Yum Brands on the NYSE is 9.7 Billion $.
5. SWOT ANALYSIS
STRENGTHS
KFC continued to dominate the Chicken Segment, with sales of 4.4 billion in 1999.
Despite gain by Boston Market and Chick-fill A, 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.
Strong trademarks recipes.
Ranks highest among all chicken restaurant chains for its convenience and menu variety.
Generate $1B each year
6. MARKET SHARE
7. WEAKNESSES
KFC was loosing market share as other Chicken chain increased sales at a faster rate.
KFC share of Chicken Segment sales fell from 71 percent 1989 , to less than 56 percent in 1999 , a 10
-years drop of 15 percent.
KFC leadership in U.S market was so extensive that it had fewer opportunities to expand its U.S
restaurant base, which was only growing at about 1 percent per year.
Failed to rank in top 20 in growth in 2000.
Lack of knowledge about their customers.
Question of over franchising leads to loss of control and quality.
Lack of focus on R&D.
8. OPPORTUNITIES
McDonald’s accounted for 35 percent of the Sandwich Segment while Burger King ran a distant
Second, with a 16 percent market share.
Per store sale at Burger King remained flat and Hardee’s per store sale declined by 10 percent.
In family Segment, Friend’s and Shoney’s were forced to shut down restaurants because of declining
profits.
Within the Pizza Segment, Pizza Hat and Little Caesars Closed underperforming restaurants.
Boston Market was a new restaurant chain that emphasized roasted rather than fried chicken.
In 1999, Boston Market soon entered Bankruptcy proceedings.
Church’s broadened its menu to include buffalo chicken wings, macaroni and cheese, beans and rice
and collard greens.
Baby boomers aged 35 to 50 constituted the largest customer group for fast-food restaurants.
9. THREATS
McDonald’s with sales of more than 19 billion in 1999, accounted for 15 percent of the sales of the
nation’s top 100 restaurant chains.
McDonald’s generated per store sale 1.5 million per year.
Much of the growth in dinner houses came from new unit construction in suburban market and small
town.
In Family Segment, Steak n Shake and Cracker Barrel expend its restaurant by more than 10 percent.
KFC nearest competitor Popeye, ran a distant second with sales of 1.0 billion.
In early 1990s ’ many industry analysts predict that Boston Market would challenge KFC for market
leadership.
Boston market and Chick-fil-A market share gains were achieved primarily by taking customer away
from KFC.
Popeye’s replaced Boston market as the second largest chicken chain in 1999.
10. FINDINGS AND RECOMMENDATIONS
FINDINGS
KFC was trying to increase market share in other regions of South America beside Maxico & Carabian.
But financial constraints restricted KFC from doing so.
KFC focus on strengthening its position in Maxico & Carabian Only.
New Competitors like Habib’s and Wendy’s were establishing new restaurants in Maxico.
KFC had largest market share of fast food chains in Maxico.
Devaluation of Peso does not effected KFC, because their production plants in Maxico were utilizing
local resources.
11. RECOMMENDATIONS
If KFC could increase company own restaurants, which enables it to control quality, services and
restaurant cleanliness. Therefore more capital is needed.
On the other hand if company operated franchise based restaurants throughout Latin America, its
brand image could be build and its competitors will be loosing first more advantage.
Latin American markets is developing markets, so its growth is high and entry barriers are low.
KFC could make strategic alliances with key suppliers to gain advantage over competitors in the
market.
An a peeling business model and good strategy has golden opportunity to shape the rules and
establish itself as the recognize market leader.
12. CONCLUSION
FOCUS OF THEIR STRATEGY SHOULD BE ON THE
COUNTRIES LIKE CHINA, AND INDIA ETC BECAUSE THEY
PROVIDE MARKETS WHICH HAVE HIGH GROWTH RATE
ON THE OTHER HAND…..