Kentucky Fried Chicken (KFC)

Introduction

KFC in the beginning was changing companies which belonged, since in 1964 Colonel Sanders first sold KFC. It was sold in a small group of investors who promoted KFC in public. In 1971 Heublein was highly involved in the day to day operations. However, R.J. Reynolds then acquired Heublein in 1982. R.J. took a more laid back approach and allowed business as usual at KFC. After that in 1986 PepsiCo bought this company and tried to grow it very fast and as well the restaurant segment even if KFC and PepsiCo had a very different culture and style which means that it was totally different. PepsiCo is a big company which recognized itself in 1985 and owns as well Pizza Hut, Taco Bell and now KFC. PepsiCo has a consumer product orientation and found that the marketing of fast food was very similar to the marketing of its soft drinks and snack foods. PepsiCo combines snack food, soft drinks and restaurants together and it's a huge company in the world with many restaurants.

Nowadays KFC belongs to YUM international and is the largest chicken restaurant in the world with over 32,500 restaurants with, A&W All-American Food™, Taco Bell, Long John Silver's and Pizza Hut in more than 100 countries. Today, some of the older KFC restaurants have become famous in their own right. One such restaurant is located in Marietta, Georgia. This store is notable for a 17m tall sign that looks like a chicken. The sign, known locally as the Big Chicken, was built for an earlier fast-food restaurant on the site called Johnny Reb's Chick, Chuck and Shake. It is often used as a travel reference point in the Atlanta area by locals and pilots.

The original handwritten recipe is kept locked away at the KFC corporate headquarters in Louisville, Kentucky as a closely-guarded secret. Only two members within the Yum! Corporation knows the recipe in its entirety.

Mission and Objectives

"we find reasons to celebrate the achievements of others and have fun doing it"

The mission of the KFC is to sell food in a fast ,to have a friendly environment that appeals to pride conscious, to be in a health minded consumers. The objectives of KFC is to increase the variety of menu, to introduce desert menu and introduce buffet to restaurants. Another objective goal is to target Menu items of African Americans in major cities with the following foods: greens, macaroni and cheese, peach cobbler, red beans and rice. However there are also menu items which should be target in Hispanics major cities are the fried plantains, flan, tres Leches. The implementations on non-traditional units are including the shopping mall food courts, universities, hospitals, airports, stadiums, amusement parks, office buildings, mobile units.

Pest analysis

Political

  • UK Government has launched a new corporate tax scheme in April 2008, in which the tax is to decrease from 30% down to 28%, helping revive the economy and boost competition (BBC, 2008, p.1). Fast food companies like McDonald's, KFC, etc. could save millions of pounds from this stimulus.
  • The Government is considering a proposed ban on junk food advertising to billboards, computer games and cinemas act in the face of the public health of child obesity. A blanket ban would be a hammer blow to companies such as KFC, McDonald's, Coca-Cola, Nestle, etc. (Mintel, 2009m, p.1)
  • Economic

  • As a result of the credit crunch and market instability, global markets are in disarray, deleveraging is under way (Kohler, 2009, p.27). The UK economy is now challenged by serious economic downturn. Latest Indicators published by Office for National Statistics (2009, p.1) states that all indexes are at negative interpretation, such as unemployment rate increased, GDP and national productivity decreased.
  • The UK is heavily impacted by the economic downturn. Hickman (2007, p.1) argues that the era of spend, spend, and spend no longer exists. Britain shoppers' habit of depending on credit cards is now forced to change. They have to cut back their expenditure since credit availability would be now a historic concept.
  • Social

  • Customers concern about environmental issues in every item they buy (Mintel, 2009p, p.1). Environmental concerns are now a key priority among UK consumers and their importance is continuing to grow. Consumer concerns are encouraging retailers to introduce green products and to put their entire operations on a greener footing (Mintel, 2009c, p.1)
  • Consumers may be increasingly turning to chicken outlets as a relatively healthy alternative to red meat, particularly on the back of recent government and health campaigners' concerns over the nutritional content of fast food (Mintel, 2009a4, p.1)
  • Technological and environmental issues

  • The Internet is changing the way that many businesses are operating (Avinash and Minh, 2008, p.83). The Internet accounts for 8% of global advertising spend and growing rapidly (The Economist, 2007, p.124). It is an opportunity for fast food companies enabling its customers to order online easily via its website, creating competitive advantage for the company.
  • Technology helps to shorten the geographic distance, booting business communication. Technology also helps to design and manufacture modern machines to produce high quality foods, saving time and human capital.
  • Global warming, green house gas, recyclable materials are among most interests of environmental supporters.
  • Swot analysis

    Strengths

    Weaknesses

    Opportunities

    Threats

    BCG MATRIX

    KFC uses large amounts of cash and is leader in the business so since it is a leader it should use a large amount of cash.

    The company has the worst cash characteristics of all, because there are high demands and low returns due to low market share. If there is not market share, question marks will simply take in great amounts of cash and when the growth will stop then there will be a dog.

    CASH COW

    Profits and cash generation should be high, and because of the low growth, investments were low. Keep profits high

    DOGS

    KFC should avoid and minimize the dogs in the company.

    As I mentioned before the BCG Matrix of KFC is depending totally from the YAM! Company which includes as well the other companies the referent standard is the industry growth rate measured against the SBUs' growth rate.

    Product life cycle

    All the products have their life cycle whether it is very successful or not. The life cycle has four stages.

    The first stage is the introduction of the product and such an example will be the hot wings.

    The second stage is the growth of the product and the product is the hot shots.

    The third stage is the maturity and the product is zinger, chicken mania, chicken burger.

    And the fourth stage is the decline which is the twister.

    Task environment

    My company diversified in many industries and for each industry has different suppliers. It audits its suppliers for compliance and non compliance.

    1. "Kentucky Fried Chicken" Garcia, Augie. Discussions, March 12, 1999
    2. www.scribd.com "applied marketing" Mr. Muhammad Nouman
    3. BBC (2008). Call for corporate tax clampdown. Available at http://news.bbc.co. uk/1/hi /uk_politics/7681165.stm. Accessed 3 January 2009
    4. Mintel (2009m). Proposed banned on junk food advertising could be extended. Available online at: http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=118422/display/id=218594 Accessed 07 March 2009
    5. Office for National Statistics (2009). Latest indicators. Available online at: http://www.statistics.gov.uk/instantfigures.asp. Accessed 09 March 2009
    6. Hickman M. (2007): First the credit crunch... now the spending squeeze, The Independent on Sunday (2007) Thursday, 13 September 2007.
    7. Bird K and Hughes D. (1997). Ethical Consumerism: The Case Of "Fairly-Traded" Coffee. Business Ethics A European Review Volume 6 Issue 3,Pages159-167
    8. Mintel (2009p). KFC reduces packaging. (27/1/2009). Available online at: http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&&set_access_filter=all-ZUK/display/id=280379/display/id=227776/display/id=438171. Accessed 08 March 2009
    9. Mintel (2009c). Internal market environment. Available online at http://academic.mintel.com/sinatra/oxygen_academic/subject/view=reports_category&levels=90849&list=cat_items&cat=17&lev=1/display/id=394656/display/id=442497. Accessed 07 March 2009.
    10. Mintel (2009a4). Chicken and Burger Bar UK March 2008: Market in brief. Available online at: http://academic.mintel.com/sinatra/oxygen_academic//display/&id=280379/display/id=329487. Accessed 07 March 2009
    11. Mintel (2009d). Burgers UK - 2008. Available online at http://academic.mintel.com/sinatra/oxygen_academic/my_reports/display/id=227787&anchor=atom/display/id=227776. Accessed 07 March 2009
    12. Avinash, W. and Minh. Q. H. (2008) How Can Internet Service Providers Tap into the Potentially-Lucrative Small Business Market? International Journal of E-Business Research, 4(1), p.82-98
    13. The Economist (2007). The world in figures: industries. The world in 2008. p124, 126.