INDIA STRATEGY TERM PAPER PRESENTATION

Presented By: Aparna Priyadarshini Asian Institute of Management,Manila

th

MBA 2010,Date: 12April 2010

Company Background Company Background Company BackgroundCompany Background

KFC Corp, owned by YUM brands is one of the oldest(1952) and most popular chicken and food restaurant in the world. Other restaurants under YUM brands are Taco Bell, Pizza hut, Long John Silvers and A&W

KFC primarily sells chicken pieces, wraps, salads and sandwiches. KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of other meat products suiting to local palate. In India they opened in 1995 and are lagging behind in terms of sales and reach vis--vis chains like McDonalds and Dominos

33%Mc

Donalds

Dominos Pizza 15% Caf Coffee Day

10%35% Mc Donalds KFC KFC 7%K FC Dominos Pizza Caf Coffee Day Others

Strategic Group DataStrategic Group DataStrategic Group

DataCompet itors

PESTLE ANALYSIS PESTLE ANALYSIS PESTLE ANALYSISPESTLE ANALYSIS

Political:India is liberally opening doors for international fast food joints Positive Enough enabling technologies available PositiveEconomic: An ever growing middle class with increasing purchasing power Positive

Technological:

Legal: Franchising models available and working successfully in India

PositiveSocial:W

changed

omen are moving out of kitchen to offices. A lot of Indians are veggies, so the menu has to
Positive

Environmental: Activists against killing of animals like PETA can create trouble Watch Out

PORTERS FIVE FORCES PORTERS FIVE FORCES PORTERS FIVE FORCESPORTERS FIVE FORCES
Threat of new Entrants
India is has opened food players recently

doors for foreign fast Verdict:

The industry is moderately attractive

MEDIUM Bargaining power Bargaining power

Threat of Substitutes
Not a lot of options available

MEDIUM
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of Suppliers
There are a lot of suppliers available in the market

LOWCo mpetitive Rivalry

HIGHof Buyers:
There are only few western fast food joints in India

MEDIUM

STRATEGIC STRATEGICSTR ATEGIC

KFCKFC
CCD

Service

MAP 1MA

GAP

Number of OutletsNumber of outlets and good customer service is a KSF in this industry KFC has to increase its reach and try to move

rightwar

ds7

STRATEGIC
PriceKFC Extensive MenuMcDona
lds

STRATEGICSTRATE

Bot h Pric e and

int

KFCDomino

whereas Extensive menu i9 Op erati onss Pizza

CCD

Extensive MenuMcDonalds

As evident from the clutter, operations are thresholds to succeed in this industry

Number of Outlets

Outlets

McDonald s

Domi no s Pizza

KFC
C C D

Quality StandardsAs evident from the clutter,

quality standard

is threshold and number of

outlets is a KSF
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Key Success Factors Key Success Factors Key Success FactorsKey Success Factors
KSFs: Location/Number of Outlets Extensive Menu Price Service/Ambience

Service/Ambience Taste Threshold Factors: Operations Quality Standards

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Competitive Matrix Competitive Matrix Competitive MatrixCompetitive Matrix

Factors Weights McDonalds KFC Domino'sCoffee Day Location/No of outlets 35% 9 4 7 4 Extensive Menu 25% 8 5 7 5 Price 15% 8 5 4 4 Service/Ambience 10% 7 7 9 6 Taste 10% 7 8 9 5Taste 10% 7 8 9 5

Weighted Score 100% 7.75 4.9 6.6 4.35 Market Share 35% 10% 15% 7%
KFC is losing out because of fewer number of outlets. Given that the market has lot of veggies, extensive menu is very important KFCs strength is Taste and it should try to diff ere nti ate on

this basis.12

Future Competitive Matrix Future Competitive Matrix Future Competitive MatrixFuture Competitive Matrix
Factors Weights McDonalds KFC Domino'sCoffee Day Location/No of outlets 35% 9 7 7 4 Extensive Menu 30% 8 7 7 5 Price 10% 8 6 4 4

Taste 10% 7 8 9 5 Service/Ambience 15% 7 7 9 6Service/Ambience 15% 7 7 9 6 Weighted Score 100% 8.1 7 7.2 4.7 Market Share 35% 10% 15% 7%
To grow, KFC has to improve its acceptability by customizing its menu to suit local taste Price will become less important as almost all players in the industry will be similarly priced
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Vision/Mission Statement Vision/Mission Statement Vision/Mission StatementVision/Mission Statement

Mission:Mission: Mission:Mission:

Vision: Vision:

Vision:Vision:

E I
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Competencies Competencies

ModelThe Ladder
ResourcesSustainable Competitive Advantage Distinctive Competencies Competitive Advantage Threshold Competencies

: Resources: Resources :: ResourcesResources Good tasting recipe

Competencies Competencies

ModelThe Ladder

R es e s o u Competencies r c e Peripheral s C o m p e t e n ci

Competencies
CompetenciesDistin ctive Competencies

Threshold Competencies

Competencies

In-

competenciescomp

etencies
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IncompetenciesG

ood customer service International footprint

chicken specialist

Brand EquityFried

CompetenciesSt rategic

ncompetencies

CompetenciesCompetenciesIn

InI

Competencies Competencies

ModelThe Ladder
ResourcesSustainable Competitive Advantage Distinctive Competencies

Competitive Advantage Threshold Competencies

Strategic Competencies Strategic Competencies Strategic CompetenciesStrategic Competencies Patented recipes Brand equity Good Custom Service

Competencies Competencies

ModelThe Ladder
ResourcesSustainable Competitive Advantage Distinctive Competencies

Competitive Advantage Threshold Competencies

Distinctive Competencies Distinctive Competencies Distinctive CompetenciesDistinctive Competencies Patented recipes Brand equity

Competencies Competencies

ModelThe Ladder
ResourcesSustainable Competitive Advantage Distinctive Competencies C C

S S C C

Long Term Objectives Long Term Objectives Long Term ObjectivesLong Term Objectives
Strategic Objectives:
Expansion into all major urban cities resulting in market leadership Multi-brand Innovation and becoming a top of the mind brand in fast food industry Market leader in terms of employee welfare and Market leader in terms of employee welfare and

customer satisfaction Financial Objectives: Strong Cash Generation and Returns Increasing the profit margin from 11% to 17% through improved operations and reduced overhead costs

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KSFs Competencies
Extensive Menu/Taste Patented recipes
No of Outlets Brand Equity

Customer Service Customer centric culture

Ensuring superior dining experience by offering a wide range of specialized recipe s, where ver you go!

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Value Proposition

Value Propositio nValue Propositio nTriangle

SWO TSW OTS WOT SWO T

Opportunities Opportunities

Opportunities Opportunities
O1. Increase outlets O2. Increase in income of urban Indian O3. Shift in food O3. Shift in food habits e.g.Vegetarian

T3.Intense

Threats Threats ThreatsThre ats

T1. Health conscious eating habits T2. Animal Care Activists

CompetitionStr

engths Strengths StrengthsStr engths

S1. Good Taste S2. Brand Equity S3. Global Experience S4. Operations S5.Trademark Recipes S5. Strong Customer Focus Introduce new recipes suited to local taste(S1,S2) Target the brand conscious urban population(S2, S3,O2) population(S2, S3,O2)

Introduce healthier recipes(T1,S5) Differentiate as one proving fastest service(T3,S2,S4) Engage is CSR activities(T2,S3,S2) Differentiate through

good service(S5,T3)

Weakness Weakness WeaknessWeakn ess

W1. High Price W2. Image of Fried W3. Poor Reach W4. Fewer Items Menu W5. Conflict in mgmt style of PepsiCo and Yum Brands Introduce cheaper items in the menu (W1,W4,O3) Change the image of KFC from fried to healthy(W2,O3) Open up new outlets in Open up new outlets in Urban locations (W3,O1,O2,O3)

Work on the image of a healthy fast food chain through advertising( T1, W2)

Develop a strong culture of good service (T3,W5)

2 2

Options Filter Options FilterOptions Filter Options Filter Options FilterOptions Filter Options FilterOptions Filter
Options Competencies KSF'sStategic Weight 0.3 0.3 0.2 0.2 1 Introduce new recipes suited to local taste(S1,S2) 7 8 8 6 7.3Yes Target the brand conscious urban population(S2, S3,O2) 7 4 3 4 4.7No Introduce cheaper items in the menu (W1,W4,O3) 6 7 6 7 6.5Yes Change the image of KFC from IntentVis ion/ Mission ScoreSelect (Yes/No)

fried to healthy(W2,O3) 5 6 8 8 6.5Yes Open up new outlets in Urban Open up new outlets in Urban locations (W3,O1,O2,O3) 7 7 6 6 6.6Yes Introduce healthier recipes(T1,S5) 5 8 7 7 6.7Yes Differentiate as one proving fastest service(T3,S2,S4) 4 5 5 5 4.7No Engage is CSR activities(T2,S3,S2) 6 7 7 8 6.9Yes Differentiate through good service(S5,T3) 7 8 7 7 7.3Yes Work on the image of a healthy fast food chain through advertising( T1, W2) 6 6 7 8 6.6Yes Develop a strong culture of service and differentiate from competition(T3,W5) 7 8 8 8 7.7Yes
2 3

Recommendations RecommendationsRecom mendations Recommendations RecommendationsRecom mendations RecommendationsRecom mendations

Short Term

Introduce new recipes suited to local taste(S1,S2) Introduce cheaper items in the menu (W1,W4,O3) Introduce healthier recipes(T1,S5) Differentiate through good service(S5,T3) Work on the image of a healthy fast food chain through advertising( T1, W2)

Long Term Long Term

Change the image of KFC from fried to healthy(W2,O3) Open up new outlets in Urban locations (W3,O1,O2,O3) Engage is CSR activities related to animals & environment(T2,S3,S2) Develop a strong culture of good service (T3,W5)

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Sources/References: Sources/References:Source s/References: Sources/References: Sources/References:Source s/References: Sources/References:Source s/References:

www.wikipedia.org www.kfc.com www.yum.com www.datamonitor.com www.ebscohost.com www.ebscohost.com

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