COMPETITIVE ADVANTAGE OF

‘KFC’ CHAIN OF

RESTAURANTS

Something that places a companyor a person above the competition

COMPETITIVEADVANTAGE

COSTADVANTAGE

DIFFERENTIATIONADVANTAGE

SIMILAR PRODUCT, LOWER COST

HIGHER PRICE, UNIQUE PRODUCT

COMPETITIVEADVANTAGE

DifferentiationAdvantage

Market Segmentation & Targeting

Geographic segmentation : In India KFC focuses how geographically its customers demand different products.

Demographic Segmentation: In demographic segmentation, the market is divided into groups based on an age, gender, family size, income, occupation, religion, race and nationality.

Psychographic segmentation: in this segmentation ,the market is divided into middle class & upper class.

As the outlets of KFC are in posh area and prices are too high (overhead expenses-rent, air-conditioning, employees), so KFC targets upper and middle classes. Target market depends upon size and growth rate of population, Company resources and structural attractiveness of market segment.

• For a product to occupy a clear, distinctive and desirable place relative to “Competing products in the minds of target consumer.”

• In KFC feedback is taken from the customer in order to know the customer demands and then improvements are made in products.

• KFC focuses on pure and fresh food in order to create a distinct and clear position in the minds of customers KFC has a strong brand name and they are leading the market in fried chicken. 

Market Positioning

Business Model

Video

PESTLE Analysis

POLITICAL ECONOMICAL

SOCIAL TECHNOLOGICAL

LEGAL ENVIRONMENTAL

PORTER’S 5 Force Model

LOW MEDIUM

MEDIU

M

MEDIUM

HIGH

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, etc

Threat of substitute products

There are a lot of competitors in the market making substitute chicken products in the market

Threat of new entrantsLow entry barriers

KSF’s:

Location/Number of Outlets

Extensive Menu Price Service/

Ambience Taste

Threshold Factors: Operations Quality

Standards

KFC’sKey Success

Factors

Chicken specialist/ experts

Innovation

Buckets

Variety of product in the

chickenKids meal

PRODUCT

Location Target market

Free home delivery

Mobile units

35 outlets in the

countryInternet

PLACE

Their products are priced high and target the middle to upper class people

KFC adopted the Cost-based Pricing strategy

Pricing of the product includes the govt. tax and excise duty

The products are bit high priced according the market segment and it is also comparable to the standard of their product

In the cost based method we include the variable and fixed cost. 

PRICE

• Bill boards

• News papers

• TVC

• Pop-ups on internet

• Special packages

PROMOTION

Cruel treatment of chickens

1 billion chickens killed each year

Unsafe chicken/Bird flu

Unhealthy food

Ethical Issues- KFC Products

Yum! Environm

ent

Waste management

Sustainable building design

Packaging

Yum! Animal Welfare

Partnership with industry experts

Ongoing training and education

Animal treatment

Ethical Issues- KFC Products –Steps Taken

KFC’sCompetencies

Ladder

Specifications KFC Mc Donald’s

Core Target Group

Youth Kids

Pricing Strategy Cost-based Pricing

EDLP

USP Differentiation through variants in product range

Pricing + Value Provided

2011

2013

CUSTOMER FEEDBACK

VIDEO

Short Term Introduce new recipes suited to local taste Introduce cheaper items in the menu Introduce healthier recipes Differentiate through good service Work on the image of a healthy fast food chain through

Advertising

Long Term Change the image of KFC from fried to ‘healthy’ Open up new outlets in Urban locations Engage is CSR activities related to animals & environment Develop a strong culture of good service

Recommendations for KFC

to sustain Competitive Advantage

THANK YOU!