Welcome to KFC

Presented By :

Srijan Chandrayan - 121

Amit Goyal - 133
Puneet Mehta - 143
Sanjay Kichloo - 178
Sanchit Agrawal - 181
About The Industry
 Fast Food Industry

 Fast food restaurants represent one of the largest segments of

the food industry
 With over 200,000 restaurants.
 $120B in sales in the U.S. alone
 Fast food restaurants, also known as quick service restaurants
(QSRs)
 Highly fragmented industry with top 50 cos. Having 25%
market share.
 Among the major fast food chain hamburger restaurants are
50% of the market, while sandwich, pizza, chicken, snack shops
are 10% each.
 Customers consume 60% of food off-premises.
 Major players in fast food in India

McDonalds 132 outlets

KFC 72 outlets
Pizza hut 147 outlets
Dominos Pizza 274 outlets
Café Coffee Day 833 outlets
Barista 200 outlets
About The Company
 YUM! Brands Inc.
 Yum! Brands Inc. (NYSE: YUM) is the world's largest fast food
company

 35,000 restaurants

 Present in over 110 countries

 Yum! Brands, Inc. global system sales totaled more than $22
billion

 Yum! Brands, Inc., is a Fortune 300 company

 Yum restaurants include KFC, Pizza Hut, Taco Bell, Long John
Silvers (LJS), A&W, Pasta Bravo, Wing Street, and East Dawning
 KFC Facts
 KFC is based in Louisville, Kentucky, and is the world’s most
popular chicken restaurant chain.
 Founded by Colonel Harland Sanders in 1952.
 More than 11,000 outlets
 85 countries and territories around the world.
 8 million customers each day.
 Yum! Brands is run by David Novak,

Chairman & CEO

 KFC Division is run by Cheryl Bachelder,

President and Chief Concept Officer

 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 it into independent Tricon Global
Restaurants.
 2002, Tricon changed it's corporation name to Yum! Brands, Inc.
 BCG Matrix

Asia Europe

?
USA Latin
America
Macro Factors
 Micro Factors

Company Competitors

KFC

Consumers

Graphic 3 (Source: Kotler et al 2003) Micro Environment

 Internal Factors SW

• Strengths  Weaknesses
– Multi branding Strategy for YUM!  Conflicting Corporate Cultures

– Goodwill and reputation  No defined target market

– Employee Loyalty
– Global Expansion
– Customer Loyalty
 Time it takes to market new
products
 losing market share

– Ranks highest among all chicken

 Lack of Localisation Strategy
restaurant chains
 External Factors OT
Opportunities
 International Appeal to
American products
 Economies of Scale and
Scope
 Large Youth population
 New variety
Threats
 Growing Competition
 Consumer health food
trend
 Saturated fast food
industry
 Yum! Brand Inc. Competition

*In thousand

Yum! Brands = 30000 units ( KFC = 11981, PH = 11960 and

others)
Yum! International
 Segmenting KFC

 Geographic
Region- Calcutta, Delhi, Bangalore,
Hyderabad, Mumbai
City- Urban Areas, metros
 Demographic
Targeted on: upper- middle, middle
Family- full nest
 Psychographic
Motivations
Personality
Perceptions
Learning
•Initially KFC targeted detached personality people,
offering only individual meals of international taste

•Later they changed their target to families

Poter’s Generic Strategy
 Porter’s 5 Forces Model:
Threat of buyers bargaining power
 Highly Elasticity (high demand fried
chicken)
 Too many options and substitutes
 FMCG, McDonald etc
Threat of suppliers bargaining power
 Bargaining power of suppliers is low.
 Fixed rates
Threat of intense segment rivalry
 Low entry barriers
 Too many big giants in the market like
 McDonalds
 Subway
 AFC

Threat of substitute products

 There are a lot of competitors in the market
making substitute chicken products in the
market
Threat of new entrants
 Low entry barriers
 Some Basic Strategies

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.
 Some Basic Strategies

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.
 Our recommendations to KFC
KFC Cafeteria
Market Development
Concentric Diversification
 Similar to Furrs or Lubys
 Fast food with traditional
restaurant environment
 Reaching out to a new
market
KFC Groceries
Product Development
Market Penetration
Concentric Diversification
 Similar to Taco Bell
groceries
 Advantage of Name
Recognition
 Frozen Meals
 Chicken Breading Mix