Supply Chain Management of KFC - December 29th, 2010KFC Corporation (KFC), founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky, in the United States. KFC has been a brand and operating segment, termed a concept[2] of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global Restaurants Inc.

KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of grilled and roasted chicken products, side dishes and desserts. Outside North America, KFC offers beef based products such as hamburgers or kebabs, pork based products such as ribs and other regional fare.[citation needed]

The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952, though the idea of KFC's fried chicken actually goes back to 1930. The company adopted the abbreviated form of its name in 1991.[3] Starting in April 2007, the company began using its original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the U.S. as part of a new corporate re-branding program;[4][5] newer and remodeled restaurants will have the new logo and name while older stores will continue to use the 1980s signage. Additionally, Yum! continues to use the abbreviated name freely in its advertising.

Born and raised in Henryville, Indiana, Sanders passed through several professions in his lifetime.[6] Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a gas station he owned in North Corbin, Kentucky. The dining area was named "Sanders Court & Café" and was so successful that in 1936 Kentucky Governor Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of his contribution to the state's cuisine. The following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across the street.[7] When Sanders prepared his chicken in his original restaurant in North Corbin, he prepared the chicken in an iron skillet, which took about 30 minutes to do, too long for a restaurant operation. In 1939, Sanders altered the cooking process for his fried chicken to use a pressure fryer, resulting in a greatly reduced cooking time comparable to that of deep frying.[8] In 1940 Sanders devised what came to be known as his Original Recipe.[9]

The Sanders Court & Café generally served travelers, often those headed to Florida, so when the route planned in the 1950s for what would become Interstate 75 bypassed Corbin, he sold his properties and traveled the U.S. to sell his chicken to restaurant owners. The first to take him up on the offer was Pete Harman in South Salt Lake, Utah; together, they opened the first "Kentucky Fried Chicken" outlet in 1952.[10] By the early 1960s, Kentucky Fried Chicken was sold in over 600 franchised outlets in both the United States and Canada. One of the longest-lived franchisees of the older Col. Sanders' chicken concept, as opposed to the KFC chain, was the Kenny Kings chain. The company owned many Northern Ohio diner-style restaurants, the last of which closed in 2004.

Sanders sold the entire KFC franchising operation in 1964 for $2 million USD, equal to $14,161,464 today[11] Since that time, the chain has been sold three more times: to Heublein in 1971, to R.J. Reynolds in 1982 and most recently to PepsiCo in 1986, which made it part of its Tricon Global Restaurants division, which in turn was spun off in 1997, and has now been renamed to Yum! Brands. Additionally, Colonel Sanders' nephew, Lee Cummings, took his own Kentucky Fried Chicken franchise

Long Run Growth/ Decline

Fast food franchising was still in its infancy in 1954 when Harland Sandlers begun his travels across the United States to speak with prospective franchises about his “colonel” sanders recipe Kentucky fried chicken”. By 1960 “colonel” Sandlers had granted KFC franchise to over 200 take home retail outlets and restaurants across the unite states. They had also succeeded in establishing a number of franchises in Canada by 1963, the number of KFC franchises had risen to over 300 and revenues had reached $500,000 per unit, on average. 

By 1964, the colonel had tired of running the day to day operations of the business and was eager to concentrate on public relations issue. He sold the business to two Louisville business people Jack Massey and John Young Brown, Jr. for $2 million.During the next five years, Massey and Brown concentrated on growing KFC’s franchise system across the U.S. in 1966 they took KFC public, and the company was listed on the New York Stock Exchange. By late1960’s a strong foothold had been established in the United States, and Massey and Brown turned their attention to international markets. In 1969, a joint venture was signed with Initsubishi shoji kaisha, Ltd., in Japan, and the right to operate 14 existing KFC franchises in England were acquired. Subsidiaries were also

established in Hong Kong, South Africa, Australia, New Zealand, and Mexico. By 1971, KFC had 2,450 franchises and 600 company owned restaurants worldwide, and was operating in 48 countries.

2. Stability of Demand for Products

Many KFC’s problems during the late 1980’s surrounded its limited menu and its inability to quickly bring new products to market. As KFC entered 1996, it grappled with a number of important issues. During the 1980’s, consumers began to demand healthier foods, and KFC was faced with a limited menu consisting mainly of fried foods. In order to reduce KFC’s image as a fried-chicken chain, it change its logo from Kentucky Fried Chicken to KFC in 1991. It responded to consumer demands for greater variety by introducing a variety of new products. The increased popularity of healthier foods and consumers-increasing demand for better variety led to a number of changes in KFC’s menu offerings.

3. Stage in Product Life Cycle

KFC is on its Maturity Stage; KFC’s products have survived the earlier stages. KFC’s early entry into the fast-food industry in 1954 had allowed it to strong brand name recognition and a strong foothold in the industry.During the 1990’s and 1970’s, KFC pursued an aggressive strategy of restaurant expansion quickly establishing itself as one of the largest fast-food restaurant chains in the United States. By 1990, restaurants located outside of the United States were generating over 50 percent of KFC’s total profits. By 1995, KFC was one of the three largest fast-food restaurant chains operating outside of the United States. 

A. SUPPLY OF PRODUCTS AND SERVICES1. Capacity of the Industry

KFC, being the world’s largest chicken restaurant chain and third largest fast-food chain, with over 9,000 in both franchise and company-owned restaurants worldwide and was operating in 68 countries, simply shows that KFC has the capacity to address the needs of its customers no matter how old their facilities and product form was. However KFC’s significant service problem will probably push their customers away from them, thus KFC must have to imply ways on how to meet there customers expectations. KFC ought to think that customer goes to their establishment not just because of their product but also their service, because nothing bits a quality service.

The continuous opening of new restaurants in 1995, approximately two restaurants in every three days is one way of proving their competence when it comes to business expansion, thereby providing a wide market segment not just local but worldwide.

2. Availability of Needed Resources

KFC has several problems when it comes to its resources, specially on the needed materials, because there system is older when it comes to their facilities and product forms and it’s one thing that needs an attention, since this is the key to success in terms of production and it would be there competitive edge in the wide array of fast food chain industry. KFC

Despite of the rivalries of employees and managers, KFC had surpassed this incident. KFC’s culture was built largely as the employees enjoyed relatively good employment stability and security. Over the years, a strong loyalty had been created among KFC employees, because of the benefits and pensions and other non-income needs. Thereby, KFC has the ability to retain and manage its manpower.

As to the company’s money, KFC has the enough profit on its recent operations as of 1994, worldwide on both company-owned and franchised restaurants. Whereby it reaches $1.7 million in this regard KFC has the capacity to innovate their old system or how to transform the old KFC into new one. 

3. Volatility of Technology

Basically KFC’s past technologies still existed at present, which means that their families were durable enough because it works for years. However the main issue now is how they could transform the existing facilities for them to be more competitive. 

4. Social Constraints

KFC encountered several factors constraining KFC’s international expansion plans such as the social unrest, increasing trade and current account deficits and the uncertainty surrounding the economic policy. Some incidents were directly attack of nationalist against KFC and closure of the first restaurant in India by local authorities are to protest of local farmers group allied with a campaign across India against foreign

investment which was occurring as part of the countries four year old program of economic liberalization. 

5. Inflation Vulnerability

As KFC entered business in Mexico. High tariff and other trades barriers restricted imports in to Mexico, and foreign ownership of assets in Mexico was largely prohibited or heavily restricted. After 1982, the Mexican government battled high inflation, high interest rates, labor unrest, and lost consumers power. When Carlos Salinas de Gortari seated as President, Mexico improved, top marginal tax rates were lowered, and the new legislation eliminated many restriction for foreign investment.

President Salinas institutes a policy of allowing the peso to depreciate against the dollar by one peso per day, it result a grossly overvalued peso, and this lowered price of imports & led to an increase in imports of over 23 percent in 1989.

KFC’s primary concern was the stability of Mexico labor markets. Labor was really cheap in Mexico. While KFC benefits from lower labor costs, labor unrest, low job absenteeism, & punctuality continued to be significant problems. These problems with worker retention and labor unrest were mainly the result of workers frustration over the loss of their purchasing power. Due to inflation & to past government controls on wages increases. A slowdown in business activity brought about by higher interest rates & lower government spending, lead many businesses to lay-off workers.

C. COMPETITIVE CONDITIONS IN THE INDUSTRY

1. Structure of the Industry

KFC remained the largest chicken restaurant chain and third largest fast-food chain. It held over 50 percent of U.S. market in terms in sales and ended 1995 with over 9,000 restaurants worldwide. In 1995 KFC opened 234 new restaurants and operated in 68 countries. One of the first fast-food chains to go international during the late 1960s, KFC had developed one of the world’s most recognizable brands.

2. Government Support and Regulation

The food industry does not get much support from government. However there are laws regarding its operation on food sanitation and hygiene.AdvertisementKENTUCKY FRIED CHICKEN (KFC) IN INDIA.

BACKGROUND OF (KFC):- KFC was founded by Harland Sanders (Sanders) in the early 1930s, when he started cooking and serving food for hungry travellers who stopped by his service station in Corbin, Kentucky, US.He did not own a restaurant then, but served people on his own dining table in the living quarters of his service station. His chicken delicacies became popular and people started coming just for food. 

Kentucky Fried Chicken was born. Soon, Sanders moved across the street to a motel-cum-restaurant, later named 'Sanders Court & Cafe,’ that seated around 142 people. 

Over the next nine years, he perfected his secret blend of 11 herbs and spices and the basic cooking technique of chicken. Sanders' fame grew and he was given the title Kentucky Colonel by the state Governor in 1935 for his contribution to the state's cuisine.Sanders' restaurant business witnessed an unexpected halt in the early 1950s, when a new interstate highway was planned bypassing the town of Corbin. His restaurant flourished mainly due to the patronage of highway travellers.The new development meant the end of this. Sanders sold his restaurant operations. After settling all his bills, he was reduced to living on a meagre $105 social security cheque. But Sanders did not lose hope. Banking on the popularity of his product and confident of his unique recipe for fried chicken, Sanders started franchising his chicken business in 1952. He called it Kentucky Fried Chicken. He travelled the length and breadth of the country by car, visiting as many restaurants as possible and cooking batches of chicken. If the restaurant owners liked his chicken, he entered into a handshake agreement that stipulated payment of a nickel9 for each plate of chicken sold by the restaurant. By 1964, Sanders franchised more than 600 chicken outlets in the US and Canada.

KFC IN INDIA:-Foreign fast food companies were allowed to enter India during the early 1990s, thanks to the economic liberalization policy of the Government of India (GoI). One of the first fast food multinationals to set foot in India was Kentucky Fried Chicken (KFC), owned by PepsiCo.KFC received permission to open 30 new outlets across the country. It chose Bangalore as its launch pad because the city had a substantial upper middle class population, with a trend of families eating out. Also, it was considered India’s fast growing metropolis in the 1990 .

The Bangalore outlet was opened in June 1995. Apart from Bangalore, PepsiCo planned to open 60 KFC and Pizza Hut outlets in the country over the next seven years. However, KFC became embroiled in various controversies even before it started full-fledged business in India.

PROBLEMS FACED BY KFC IN INDIA:-The case highlights the ethical issues involved in Kentucky Fried Chicken's (KFC) business operations in India. KFC entered India in 1995 and has been in midst of controversies since then. The regulatory authorities found that KFC's chickens did not adhere to the Prevention of Food Adulteration Act, 1954. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG, a flavor enhancing ingredient) as allowed by the Act. Since the late 1990s, KFC faced severe protests by People for Ethical Treatment of Animals (PETA), an animal rights protection organization. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFC's poultry farms.However, undeterred by the protests by PETA and other animal rights organizations, KFC planned a massive expansion program in India. RE-ENTRY OF KFC INTO INDIAN MARKET:-A case in point is KFC. KFC entered India in 1995, but a controversy surrounding the levels of MSG in its preparations and subsequent protests from farmers' groups and animal rights activists spelt trouble for the company. Ultimately, the company had to shut all but one outlet in the country. Only recently in 2003 it made a quiet re-entry into the Indian market. Then came up with the strategies and menu that is desirable by the Indian consumers. And since 2003 it is expanding successfully its business in India.

OUTCOME OF CASE STUDY OF KFC IN RESPECT OF SRC(SELF REFERENCE CRITERION):- KFC has not understood the significance of cultural, economic, regulatory and ecological issues while establishing business in a country like india .

»KFC has not Appreciated the need for protecting animal rights in developed and developing countries like India.

» They have not understood the importance of ethics in doing business.

»They have not examine the reasons for protests of PETA.

Project on KFC - November 4th, 2009

SUBMITTED BY:-

Ramanpreet Kaur Taluja Prakriti AhluwaliaVikas DubeyAshish DhawanAditi ChopraAmit Saini

Integrated Assignment OnConcepts & Application

On 

KENTUCKY FRIED CHICKEN

PREFACE

Our institute K. R. Mangalam Global Institute of Management has given us an opportunity to show our intellectual ability through an integrated project and allow us to decide the service sector on which we want to make our project.For this we have chosen the KFC food chain. KFC is the growing brand in the world for food industry. KFC basically deals in chicken recipes whose main focus in crispy and deep fried chickens.

To know the market response of KFC we visited various chains of KFC and we also had survey on the public (who are the basic consumers of the KFC).We visited KFC chain of Noida Sector18, Lajpat Nagar, Center Stage Mall, Noida, and Ghaziabad. We concluded that according to the areas the demand keeps on fluctuating, like there is more demand in Sector 18 market chain of Noida in comparison to Center Stage Mall and we have the maximum demand in Lajpat Nagar.After the survey on chains we had a survey on the public of city through a feed back form. We also had a survey on the people working in the KFC through the human recourse feed back from.We found that they are totally satisfied by the human resource strategies of KFC. By people we concluded that they are also satisfied by the service provided by KFC, and the product what they provide are up to the mark. They find KFC food a best quality food. But then also KFC have to work hard to earn the goodwill in market in comparison to other fast food chains.

ACKNOWLEDGEMENT

To complete this project, there have been many people who graciously gave their time and expertise in reviewing the manuscript. Their experience and direction has significantly helps us to complete this project. We would like to thank the following:

1. Dr. Athar Ali (Dean of KGIM)

2. Prof. S.S.Khullar (Programme director, MBA)

And all the faculty members and all of our fellow mates who help us to complete the task.

Several people have been of tremendous assistance in the fine-tuning of this project. All the Mangers and workers of KFC outlet where we visited and also the citizens of New Delhi who gave us their precious time for feedback.

CONTENTS

S.No. TOPIC PAGE NO.I Introduction 4II History of KFC 5-8III Success Story 9

IV KFC’s Success in India 10V Factors Against KFC in India 11VI Finance Strategy 12-19VII Human Resource Strategy 20-28VIII Operations Strategy 29-38IX Marketing Strategy 39-49X Management Information Systems Strategy 50-54XI Annexures 55-56XII Bibliography 57-58

INTRODUCTION

KFC Corporation, based in Louisville, Kentucky, is the world's most popular chicken restaurant chain, specializing in Original Recipe, Extra Crispy, Twister and Colonel's Crispy Strips chicken with homestyle sides.

KFC is part of Yum! Brands, Inc., which is the world's largest restaurant system with over 32,500 KFC, A&W All-American Food™,Taco Bell, Long John Silver's and Pizza Hut restaurants in more than 100 countries and territory.

1. Founded by Harland Sanders in 1950s when fast moving franchising was still in its infancy. Colonel Sanders was able to tap a talent hunt.

2. Secret recipe of chicken with eleven herbs and spices.

3. His foreseeing seemed to be true which is less than 13 years the chain had crossed the 300 mark.

4. His growing age promoted colonel sanders to sell off the business for $2million in 1964 to Jack Massey and John Brown Jr-two Louisville businessman.

5. In 1970 KFC merged with Heublien Inc, a producer of alcoholic beverages with little restaurant experience.

6. However soon enough conflicts arose regarding quality control issues and restaurant cleanliness.

7. In 1986 KFC was sold to Pepsico. 

8. Next KFC turned their attention towards tapping into international markets and by around 1980s it had entered Japan, Australia, Mexico and places in the Carribean and UK.

9. In the 1990s it could foresee the virgin markets if INDIA and CHINA.

KFC HISTORY AT-A-GLANCE

9/9/1890Harland Sanders is born just outside Henryville, Indiana. 1900-1924Harland Sanders holds a variety of jobs including: farm hand, streetcar conductor, army private in Cuba, blacksmith's helper, railyard fireman, insurance salesman, tire salesman and service station operator for Standard Oil. 1930In the midst of the depression, Harland Sanders opens his first restaurant in the small front room of a gas station in Corbin, Kentucky. Sanders serves as station operator, chief cook and cashier and names the dining

area "Sanders Court & Café." 1936Kentucky Governor Ruby Laffoon makes Harland Sanders an honorary Kentucky Colonel in recognition of his contributions to the state's cuisines1937The Sanders Court & Café adds a motel and expands the restaurant to 142 seats. 1939The Sanders Court & Café is first listed in Duncan Hines' "Adventures in Good Eating." Fire destroys The Sanders Court & Café, but it is rebuilt and reopened. The pressure cooker is introduced. Soon thereafter Colonel Sanders begins using it to fry his chicken to give customers fresh chicken, faster. 1940Birthdate of the Original Recipe 1949Sanders marries Claudia Price. 

1952The Colonel begins actively franchising his chicken business by traveling from town to town and cooking batches of chicken for restaurant owners and employees. The Colonel awards Pete Harman of Salt Lake City with the first KFC franchise. A handshake agreement stipulates a payment of a nickel to Sanders for each chicken sold. 1955An interstate highway is built to bypass Corbin, Kentucky. Sanders sells the service station on the same day that he receives his first social security check for $105. After paying debts owed, he is virtually broke. He decides to go on the road to sell his Secret Recipe to restaurants. 1957Kentucky Fried Chicken first sold in buckets 1960The Colonel's hard work on the road begins to pay off and there are 190 KFC franchisees and 400 franchise units in the U.S. and Canada. 1964Kentucky Fried Chicken has more than 600 franchised outlets in the United States, Canada and the first overseas outlet, in England. Sanders sells his interest in the U.S. company for $2 million to a group of investors headed by John Y. Brown Jr., future governor of Kentucky. The Colonel remains a public spokesman for the company. 1965Colonel Sanders receives the Horatio Alger Award from the American Schools and Colleges Association. 1966The Kentucky Fried Chicken Corporation goes public. 1969The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange. 1971More than 3,500 franchised and company-owned restaurants are in worldwide operation when Heublein Inc. acquires KFC Corporation. 1976An independent survey ranks the Colonel as the world's second most recognizable celebrity. 1977Colonel Sanders speaks before a U.S. Congressional Committee on Aging. 1979KFC cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC restaurants worldwide with sales of more than $2 billion. 12/16/1980Colonel Harland Sanders, who came to symbolize quality in the food industry, dies after being stricken with leukemia. Flags on all Kentucky state buildings fly at half-staff for four days. 1982Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries, Inc. (now RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds. 1986PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc. 1997PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell and Pizza Hut - into Tricon Global Restaurants, Inc2002Tricon Global Restaurants, Inc., the world's largest restaurant company, changes its corporate name to YUM!

Brands, Inc. In addition to KFC, the company owns A&W® All-American Food® Restaurants, Long John Silvers®, Pizza Hut® and Taco Bell® restaurants. 2006More than a billion of the Colonel's "finger lickin' good" chicken dinners are served annually in more than 80 countries and territories around the world. 2007KFC proudly introduces a new recipe that keeps the Colonel's 11 herbs and spices and finger-lickin' flavor, but contains Zero Grams of Trans Fat per serving thanks to new cooking oil.

KFC’S SUCCESS STORY:

• Colonel sanders commitment to quality and hygiene.• PepsiCo taking over KFC proved to be a turning point in its life cycle.• Being a leader in its field PepsiCo provided that extra edge to KFC whereby the soft drinks were made available at KFC outlets along with their menu.• Coordinated through national advertising.• Consumers were able to relate the soft drinks with the snack foods.• Was able to foresee a huge untapped market in the Asian Countries.• “Think like a local …………..not like an American Company”. KFC gelled with the people as the operations were in their hands.• Mellowed down their Fried chicken image by changing their name to KFC in 1991.• Were able to provide a wider variety to the customers to chosen from, thus strengthens their market positions.• Customization in different countries. Different culture and customers preferences were taken into account to attain GCTC [GETTING CLOSE TO THE CUSTOMERS].• KFC is also quite aware of its “CSR”.Different relief programmes and other social undertakings have been well executed by them.

CULTURAL FACTORS CONTRIBUTING TO KFC’s “SUCCESS”IN INDIA

• Reducing the psychic distance by handling over of operations to local people so that customers could relate to them more easily.• Able to adapt to cultural differences, tastes and preferences. For example keeping in mind the Indian tastes buds KFC launched a fierier “ZINGER BURGER”. 

• Got an edge since chicken is a staple dish and is taken more frequently in Asian countries.• More accustomed to take out food over the counter.• The target customer of KFC [upper, middle and above] are health conscious and hence to cater to their interest Kentucky fried Chicken changed its name to KFC.• Price sensitivity of the two economies drove KFC to introduce menus that were easy on the consumer’s pocket. 

CULTURAL FACTORS IN INDIA THAT GO AGAINST KFC’s ORIGINAL RECIPE:

• KFC is perceived as a restaurant serving only chicken-Indian families obviously wanted more varieties.• Believed to be expensive …….. no value for money.• Wanted to position itself as a “family restaurant” , not as a “teenage hangout”• Ambience was missing.• Perceived differences in eating habits.• Tried to target the vegetarian segment. However this backfired as in India having veg food cooked in a non veg kitchen doesn’t come out well with the vegetarian segment. 

ETHICAL FACTORS:

The regulatory authorities found that KFC’s chicken did not adhere to the prevention of FOOD ADULTRATION ACT, 1954. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG, a flavor enhancing ingredients) as followed by the act. Since the late 1990’s, KFC faced severe protests by people for Ethical Treatment of Animals (PETA), an animal rights protection organization. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFC’s poultry farms. 

FINANCE

STRATEGY

Factors Average Demand(per day per branch )

During regular period 150-200During peak period(promotion schemes) 350-450During festivals 450-650

GRAPHICAL REPRESANTATION

COMPARISION OF FINANCIAL STATEMENT

1. Short Term Solvency Ratio

Current Ratio: Ideal is 2:1

= Current Assets/Current Liabilities=Stock + debtors + cash + loans & advances/current liabilities

CURRENT RATIO 1.64:1 

ConclusionShort term solvency of KFC - its current asset ratio is closer to ideal ratio of 2:1 or we can say that its current assets can be more readily converted into cash to meet the current liabilities. 

Long Term Solvency Ratio

2. Debt Equity Ratio = Acceptable ratio=2:1(Although now days lending institutions prefer 1:1)= Debt (Long term loan) / Equity (Shareholder fund)= Secured loan +unsecured loan/Equity + Reserve surplusDebt equity ratio 0.61 

ConclusionHigher ratio indicates a risky financial position while a lower ratio indicates safe financial position. Also it indicates the amount of capital supplied to the company by its proprietors and of asset cover availability to its creditors on liquidation. 

3. Interest Coverage Ratio =NPBIT/Interest on fixed(long term) loans ordebentureInterest cover 9.12 

ConclusionThis ratio indicates how many times the profit covers fixed interest. It measures margin of safety to lenders. The higher the numbers more secure the lender in respect of his periodical interest income.3. Fixed Asset Ratio = Shareholder fund + long term loan / Net fixed asset=Equity share+ Reserve+ secured loan+ unsecured loan/ Net block Investment

Fixed asset ratio 1.14 

ConclusionIf ratio < 1,firm has adopted imprudent policy of using short term funds for acquiring fixes assets.If ratio > 1, indicates that long term funds are being used for short term purpose i.e for financing working capital. It is not good from the firms point of view as it’s usually more difficult to raise long term funds.

4. Proprietary Ratio =Proprietary fund /Total asset=Equity share+ Reserve and surplus / Net fixed asset+ Current asset

Proprietary Ratio 0.76 

ConclusionThis ratio is of particular importance for creditors. A higher ratio shows safety for creditors. Ratio below 50% may be alarming for creditors since they may have to loose heavily in the event of company’s liquidation on account of heavy looses.ACTIVITY RATIO

5. Capital Turnover Ratio =Net sales / Fixed asset + Networking capital

Capital Turnover Ratio 0.29 

ConclusionThis ratio indicates how efficiently capital employed is being used. High turnover means efficient utilization and improves liquidity and profitability of business. However too high ratio may indicate over trading resulting in paucity of funds.

PROFITABILITY RATIO

6. Operating Profit Ratio =Operating profit*100 / Net Sales OPM(%) 43.58 

ConclusionThis ratio measures profitability and soundness of business. Higher the ratio better it is.

7. Net Profit Ratio = Net profit*100/Net Sales NPM(%) 22.11 

ConclusionThis ratio determines the overall efficiency of the business. Higher the ratio better it is.

OVERALL PROFITABILITY RATIO

8. Return on investment(ROI) = PBITD*100 / Capital EmployedROCE(%) 28.89 

ConclusionThis ratio measures the earning power of net assets of business. Higher ratio indicates better position.

9. Return on equity(ROE) = Net profit(after interest, tax & dividend) /Equity shareholder fundROE(%) 26.87 

ConclusionThis ratio help the shareholder of the company to know how much there investment have earned to them i.e profit available to equity shareholders.Higher ratio is preferable.10. Earning Per Share = Net profit- Preference dividend / Number of equity share

EPS(Rs) 38.67 

ConclusionRatio helps in evaluating the prevailing market price of share. More earning per share is preferable.

Key financialsYear end Mar 07(in crores)Net sales 413.78 Operating profit 180.33 Net profit 91.50 Equity cap pd 22.80 

Key operating ratiosYear end Mar 07 EPS(Rs) 38.67 

NPM(%) 22.11 OPM(%) 43.58 ROCE(%) 28.89 ROE(%) 26.87 Debt/equity 0.61 Interest cover 9.12 

Valuation ratios Year end Mar 07 EV/EBIDTA 10.09 Market cap/sales 3.97 

Dupont modelYear end Mar 07 PBIDT/sales(%) 43.58 Sales/net assets 0.29 PBDIT/net assets(%) 0.13 PAT/PBIDT(%) 50.74 Net assets/net worth 3.76 ROE(%) 26.87 

HUMAN RESOURCE

STRATEGY

HUMAN RESOURCE POLICY IN KFC

Hiring and retaining the right employees is critical to the success of your restaurant's operation. Here you'll find news and research on getting the most from your human resources processes.

Area Manager:

Area Managers are accountable for providing coaching, leadership and operational support to 8-10 KFC Restaurants within a defined Area.

Restaurant General Managers:The Restaurant General Manager is accountable for creating and running an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed and with a smile.The Restaurant General Manager reports directly to an Area Manager and is accountable for successfully implementing and maintaining all Company policies and procedures in relation to operations, customer service, cash handling, marketing, purchasing, human resources, health & safety, administration, training and development.

Assistant Managers:

The Assistant Manager is responsible for assisting the Restaurant General Manager (RGM) in creating an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed and with a smile. Assistant Managers are also responsible for ensuring all Company policies and procedures are followed in relation to operations, customer service, cash handling, marketing, purchasing, human resources, health & safety, administration, training and development.

Trainee Managers:

Responsible for assisting the Restaurant General Manager and Assistant Managers in creating an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed and with a smile. Trainee Managers help with day-to-day running of the restaurant, and need to ensure that all operations, customer service, cash handling, marketing, purchasing, human resources, administration and training & development policies are followed.

Customer Service Team Members:

Responsible for working the service areas and ensuring quality product, service and cleanliness is delivered to all customers at top speed and with a smile!

Food Service Team Members:

Responsible for putting the crunch in the coating and the zing in the Zinger…the cook’s main task is to prepare and cook the irresistible KFC products! The cook must also maintain the cleanliness of the cooking area as well as the quality of product and speed of preparation.

Recruitment and Selection at KFC

Part of KFC’s recruitment strategy is to offer employees high-quality options such as potential for advancement, company reputation, benefits package and salary scale. When KFC was looking for senior executives who could run a business, for two years it scoured the management teams across various industries and offered senior executives of companies like Coca Cola attractive benefits and a better salary scale to get them on the team. These executives were promised quick advancement on their jobs, and apparently given such incentives to join that most of the people offered jobs joined KFC even though they were told before hand that at immediate present, no senior position was vacant. Hence, KFC’s attractive salary and benefits package is an effective lure for potential employees (Rigdon, 1991).

For example, among the benefits package that KFC offers, is a medical coverage and prescription benefits, dental coverage, vision/hearing coverage, life and disability insurance, a 410k plan (which helps employees save for their future), stock options, a management incentive plan (under which everyone from assistant manager to senior executive is rewarded for remarkable performance), adoption assistance, tuition reimbursement plan, college-planning assistance, employee discount, paid vacation and a group legal plan. KFC also believes in promoting from within, as it encourages employees to perform well on their jobs, telling them that they in fact can go from being just a team member to the restaurant manager and later area or region coach (KFC Official site).

As far as selection is concerned, KFC management strongly believes that hiring young people and later training them is the way to a successful organization. Hence, the age factor is definitely an issue of concern for recruiters at KFC. The company also strongly believes in diversification. According to Kyle Craig, president of Kentucky Fried Chicken's U.S. operations, “We want to bring in the best people but if there are two equally qualified people, we'd clearly like to have diversity.” From this, we can safely assert that KFC believes in eliminating the glass ceiling, and hiring and keeping female and minority-group executives. This seems to be working for the company and is an effective policy: where in 1989, not even one of the company's 17 senior U.S. managers were minority or female, the situation has improved today, with there being numerous managers either female or part of a minority group. KFC admits that it actively tries to recruit and promote women and minority members in middle and top management ranks (Rigdon, 1991). 

Retention Practice at KFC

KFC is a client of the O.C. Tanner Company, which specializes in helping companies motivate employees through comprehensive recognition solutions. According to its director, marketing and corporate communications, “KFC has the lowest turnover rate in the fast food industry because it is a fun place to work.” The company ensures that coming to work is not something employees dread by making the day as enjoyable for its workers as possible. Employees have been given the autonomy to have fun on the job: they

can start standing ovations for they whenever they want, can sing songs for birthdays etc. (Kufahl & Agoglia, 2003).Staff retention should be a major concern for employers because it has been proven time and again that if the company is ever in a financial mess, it has to deal with the added loss of employees resigning and leaving the company, right when their energy and work is needed the most. KFC is one of those companies which realizes this factor. It has incorporated a lot of recognition programs in its culture, like Floppy Chicken, or KFC President Charles Rawley's Bulldog Award to motivate employees and keep them happy (Serving up a bucket of recognition, 2001).

Recommendations

The recommendations that I would offer KFC is to maintain its current low turnover rates and incorporate even more practices in its culture which provide recognition to employees and make them feel valued. As for selection and recruitment practices, age should not be a bias factor and the principle of promotion from within should be adhered to. This is because for companies like KFC, it is very important to promote a certain employee culture; hence, it is better to promote older employees rather than hiring people from external sources.

Training and Development are Priority!On the path from Team Member to Restaurant General Manager, extensive training and development is a priority. Nationally Recognised Training Programs are available to employees*. • Certificate II in Retail Operations • Certificate III in Retail Supervision • Certificate IV in Retail Management 

What do you need to become part of our team? Good interpersonal skills, strong work ethic, commonsense and great customer service skills. You must be prepared to work shiftwork, including nights and weekends.Availability varies by area*

Corporate Culture "Reward and Recognition""Promotion from within" "Belief in People" Our Restaurant General Managers are No. 1, and they are rewarded for their achievements through competitive salary packages, incentive scheme and share ownership programs for company employees. We are an Employer of Choice Yum!'s commitment to being an "Employer of Choice" is demonstated by Yum! being a Registered Training Organisation and our: • Equal Opportunity Employment Policy • Executive Trainee Program • Family Friendly Policies • World Class Training Systems • Education Assistance Program • Product Discount Program • Performance based salary increases and • Employee franchising 

KFC FAST FOODINDUSTRY

QUESTIONNAIRE0NHUMAN RESOURCE

PLEASE READ THIS PAGE BEFORE STARTING THE QUESTIONNAIRE:

AIM:The aim off the survey is to find out about the experiences and problems of young people working in the fast food industry as part of the research study.

DEFINITIONS:Fast food industry include businesses which primarily sell meals that are ready to eat immediately and are packaged in take away containers or are packaged where no table service is involved (that are eaten on the premises but there are not waiters or waitresses).For example: KFC, MC’DONALDS, etc…….

Q1.Do you work, or have you worked, for one of the following fast food outlets (if worked for more than one outlet pls fill in other questionnaire of each outlet)?

a.)Pizza hutb.)Subwayc.)Subross d.)McDonalds.

Q2.What suburb is the outlet located in?___________________________________________________________________________________ ____________.Q3.What is your job title and duties at the fast food outlets? ___________________________________________________________________ ___________.

Q4.What is for employment status?a.) apprentice/trainingb.) casual part-timec.) casual full-timed.) permanent full-timee.) permanent part-timef.) other (please specify) _______________________________________________

Q5.How long you have worked for the fast food outlets?a.) less than one monthb.) less than three monthsc.) 3 month to 6 monthsd.) 6 months to 12 monthse.) more than 1 year.

Q6. Please list the days and shifts you have worked that?

Q7. On an average how many hours would you work a week? ________________

_________________________________________________.

Q8.Did you sign an employment contract when you started your job?a.) yesb.) noc.) do not know.

Q9.what training did you receive for the job?a.) training before commenced the job.b.) on the job trainingc.) no trainingd.) do not know

Q10.Do you have a supervisor at a work place?a.) yesb.) noc.) do not know

Q11.Did your employer pays you during your training period?a.) yesb.) noc.) do not know

NAME:_________________________________ADDRESS: __________________________________PHONE NO.:____________________________AGE:______________________________SEX:______________________________ETHNIC BACKGROUND:_____________________________________

THANK YOU FOR YOUR TIME AND ASSISTANCE IN TAKING PART IN THIS SURVEY.

OPERATIONS

STRATEGY

One of the first fast food multinationals to set foot in India was Kentucky Fried Chicken (KFC), owned by PepsiCo. KFC received permission to open 30 new outlets across the country. It chose Bangalore as its launch pad because the city had a substantial upper middle class population, with a trend of families eating out. Also, it was considered India’s fast growing metropolis in the 1990. The Bangalore outlet was opened in June 1995. Apart from Bangalore, PepsiCo planned to open 60 KFC and Pizza Hut outlets in the country over the next seven years. However, KFC became embroiled in various controversies even before it started full-fledged business in India.

ISSUES FACED BY KFC IN INDIA:-

The case highlights the ethical issues involved in Kentucky Fried Chicken's (KFC) business operations in India. KFC entered India in 1995 and has been in midst of controversies since then. The regulatory authorities found that KFC's chickens did not adhere to the Prevention of Food Adulteration Act, 1954. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG, a flavor enhancing ingredient) as allowed by the Act. Indian people condemned KFC's entry into India, saying that it was unethical to promote highly processed 'junk food' in a poor country like India with severe malnutrition problems. Since the late 1990s, KFC faced severe protests by People for Ethical Treatment of Animals (PETA), an animal rights protection organization. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFC's poultry farms. However, undeterred by the protests by PETA

and other animal rights organizations, KFC planned a massive expansion program in India.

KFC did not appreciate the need for protecting animal rights in developed and developing countries like India.

They did not understand the importance of ethics in doing business.

They did not examine the reasons for protests of PETA. KFC did not add the flavours and spices in their menu which Indians favoured. Major reason was KFC was targeting higher income group in India in order to compete with the local chicken dhaba wala’s.

KFC Re-entry into Indian Market

KFC entered India in 1995, but a controversy surrounding the levels of MSG in its preparations and subsequent protests from farmers' groups and animal rights activists spelt trouble for the company. Ultimately, the company had to shut all but one outlet in the country. Only recently in 2003 it made a quiet re-entry into the Indian market. Then it came up with the strategies and menu that was desirable by the Indian consumers. And since 2003 it is expanding successfully its business in India.At the same time it provided menu items which can be afforded by the middle income group level like KFC’s Mini Burger for Rs. 25, Hot Crispy Chicken which contained Indian spices that were liked by Indian’s. Now they are adhering to the rules of Food Corporation of India and PETA, helping them to expand business successfully. The company aimed at targeting cosmopolitan cities like Chandigarh, Pune, Kolkata, Chennai and Hyderabad, where mall culture is fast developing. PepsiCo also decided to concentrate on the expansion of KFC since its other brand, "Pizza Hut", had successfully established a strong foothold in India. The expansion drive would take Pizza Hut across 33 cities; KFC will set foot in Kolkata and Hyderabad after having forayed into Pune recently. Ms Sharanita Keswani, Director, KFC Marketing, says that KFC also operates on the franchisee model. "We expect to scale up to 12-13 restaurants by the end of this year, from six at present. KFC is looking at extending its presence across India to create a national footprint." Both Pizza Hut and KFC have made various alterations to their menus in India to attract more footfalls. It has developed a range of pure vegetarian food. All the vegetarian products are stored, cooked and served separately, by a separate crew distinctly identified by their colour-coded uniform, says Ms Keswani. KFC has around 10,286 units worldwide, followed by Taco Bell with 7,111 restaurant units world over. Long John Silver's is America's largest quick-service seafood chain with more than 1,200 units worldwide. KFC caters to nearly 7 million customers in more than 78 countries through 11,338 outlets. The company believes that India, owing to its size and growing aspirations of an upwardly mobile middle class, is a critical market in its overall scheme of things. Yum! is a fortune 500 corporation that operates or licenses Taco Bell, KFC, Pizza Hut, and Long John Silver’s restaurants worldwide.YUM! Brands, Inc. is committed to conducting its business in an ethical, legal and socially responsible manner. To encourage compliance with all legal requirements and ethical business practices, Yum has established this Supplier Code of Conduct for Yum's U.S. suppliers.Yum! has adopted best operational practices to ensure high customer orientation, which is demonstrated through C.H.A.M.P.S. This is the umbrella operation programme for training, measuring and rewarding an employee's performance against customer standards. C.H.A.M.P.S stands for: cleanliness, hospitality, accuracy, maintenance, product quality and speed. KFC’s challenge here is to make sure to meet our quality standards in terms of food, facilities, people and the overall experience. KFC want to ensure that the customers experience in India is no different from a Pizza Hut outlet anywhere else in the world.KFC caters to nearly 7 million customers in more than 78 countries through 11,338 outlets. The company believes that India, owing to its size and growing aspirations of an upwardly mobile middle class, is a critical market in its overall scheme of things. Stringent cleaning standards ensure that all tables, chairs, highchairs and trays are sanitised several times each hour. Such meticulous attention to cleanliness extends beyond the lobby and kitchen to even the pavement and immediate areas outside the restaurant. Did you know that every year, Rs. 50,000 crore worth of food produce is wasted in India? This is mainly because of the lack of proper infrastructure for storage and transportation under controlled conditions. KFC is committed to providing quality products while supporting other Indian businesses. And so, KFC spent a few years setting up a unique Supply Chain, even before they opened their first restaurant in India. KFC’s Supply Chain 

A Supply Chain is a network of facilities including - material flow from suppliers and their "upstream" suppliers at all levels, transformation of materials into semi-finished and finished products, and distribution of products to customers and their "downstream" customers at all levels. So, raw material flows as follows: supplier - manufacturer – distributor – retailer – consumer. Information and money flows in the reverse direction. The balance between these 3 flows is what a Supply Chain is all about. When there is a balance in the finished product ordering, the Supply Chain operates at its best. Any major

fluctuation in the product ordering pattern causes excess / fluctuating inventories, shortages/stock outs, longer lead times, higher transportation and manufacturing costs, and mistrust between supply chain partners. This is called the Bullwhip Effect. Depending on the situation, the Supply Chain may include major product elements, various suppliers, geographically dispersed activities, and both upstream and downstream activities. It is critical to go beyond one’s immediate suppliers and customers to encompass the entire chain, since hidden value often emerges once the entire chain is visualized. For example, a diesel engine manufacturer may be able to integrate a GPS locator system into its engine control system. Its immediate customer, a heavy truck manufacturer, may see no need for this functionality. However, the downstream customer, a trucking company with a large fleet, may be very interested in a locator system. Understanding the value to the downstream customer is part of the supply chain management process.

Cold ChainThe Cold Chain is necessary to maintain the integrity of food products and retain their freshness and nutritional value. The Cold Chain is an integral part of the Supply Chain. Setting up the Cold Chain involves the transfer of state-of-the-art food processing technology by KFC and its international suppliers to pioneering Indian entrepreneurs, who have now become an integral part of the Cold Chain.The term Cold Chain describes the network for the procurement, warehousing, transportation and retailing of food products under controlled temperatures. KFC’s outlets store products to be used on a daily basis, within a temperature range of –18ºC to 4ºC. About 52% of the food products need to be stored under these conditions before they are used.Vital Links in KFC’s Cold ChainAll suppliers adhere to Indian government regulations on food, health and hygiene while continuously maintaining KFC's recognized standards. As the ingredients move from farms to processing plants to the restaurant, KFC's Quality Inspection Programme (QIP) carries out quality checks at over 20 different points in the Cold Chain system. Setting up of the Cold Chain has also enabled KFC to cut down on operational wastage.Hazard Analysis Critical Control Point (HACCP) is a systematic approach to food safety that emphasizes prevention of illness or presence of microbiological data within KFC’s supplier facilities and the outlets rather than its detection through inspection. Based on HACCP guidelines, control points and critical control points for all KFC major food processing plants and outlets in India have been identified. The HACCP verification is done at least twice in a year and certified.Triyaka Agriculture – Supplier of Iceberg LettuceImplementation of advanced agricultural practices has enabled Trikaya to successfully grow speciality crops like iceberg lettuce, special herbs and many oriental vegetables. Farm infrastructure features:• A specialised nursery with a team of agricultural experts.• Drip and sprinkler irrigation in raised farm beds with fertiliser mixing plant.• Pre-cooling room and a large cold room for post harvest handling.• Refrigerated truck for transportation. Vista Processed Foods Pvt. Ltd.- Supplier of Chicken & VegetableA joint venture with OSI Industries Inc., USA, and KFC India Pvt. Ltd. Vista Processed Foods Pvt. Ltd. produces a range of frozen chicken and vegetable foods. A world class infrastructure at its plant at Taloja, Maharashtra, has :• Separate processing lines for chicken and vegetable foods.• Capability to produce frozen foods at temperature as low as -35 Degree Celsius to retain total freshness.• International standards, procedures and support services.Dynamix Diary – Supplier of CheeseDynamix has brought immense benefits to farmers in Baramati, Maharashtra by setting up a network of milk collection centres equipped with bulk coolers. Easy accessibility has enabled farmers augment their income by finding a new market for surplus milk. The factory has:• Fully automatic international standard processing facility.• Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose, casein & whey protein and humanised baby food.• Stringent quality control measures and continuous Research & Development Amrit Food – Supplier of Milk & Milk Products( Frozen Desserts)Amrit Food, an ISO 9000 company, manufactures widely popular brands - Gagan Milk and Nandan Ghee at its factory at Ghaziabad, Uttar Pradesh. Its plant has:• State-of-the-art fully automatic machinery requiring no human contact with product, for total hygiene.• Installed capacity of 6000 litres per hour for producing homogenized UHT (Ultra High Temperature) processed milk and milk products.• Strict quality control supported by a fully equipped quality control laboratory. 

Radhakrishna Foodland – Distribution CentreAn integral part of the Radhakrishna Group, Foodland specialises in handling large volumes, providing the entire range of services including procurement, quality inspection, storage, inventory management, deliveries, data collection, recording and reporting. Salient strengths are:

• A one-stop shop for all distribution management services.• Dry and cold storage facility to store and transport perishable products at temperatures up to - 22 Degrees Celsius.• Effective process control for minimum distribution cost.KFC take great pride and care to provide customers with the best food and dining experience in the quick service outlet business. They believe eating sensibly, combined with appropriate exercise, is the best solution for a healthy lifestyle. KFC offers a variety of menu items for those that want lower fat and lower calorie choices in their menu. Local SourcingKFC has always been committed to sourcing its requirements from local suppliers and farmers. This assurance is rooted in the philosophy of our company's founder. He firmly believed in mutual benefits arising from a partnership between KFC and the local businesses, thus ensuring that KFC commitment to growth was mirrored by that of its partners.In keeping with this belief, KFC has carefully identified local Indian businesses that take pride in satisfying customers by presenting them with the highest quality products. Adherence to Indian Government regulations on food, health and hygiene is now a top priority.KFC India today purchases more than 96% of its products and supplies from Indian suppliers. Even our restaurants are constructed using local architects, contractors, labour and maximum local content in materials. The relationship between KFC and its Indian suppliers is mutually beneficial. As KFC expands in India, the supplier gets the opportunity to expand his business, has access to the latest in food technology, and gets exposure to advanced agricultural practices and the ability to grow or to export. All our raw materials too, have certifications from our suppliers to confirm that they comply with halal requirements. All in all, our commitment to halal underscores our commitment to putting “Customers First” in all that we do. To ensure that all our locally manufactured products conform to halal requirements, we implement stringent internal controls over raw materials, manufacturing and packaging. We are extremely careful to prevent cross contamination with filth or dangerous contaminants during the storage, preparation, handling, packaging and transport of our products. We also adhere to best practices to maintain the highest standards of quality and hygiene.

KFC Operational Model

ProblemWhat is the perfect diet? An ideal diet would meet or exceed basic nutritional requirements, be inexpensive, have variety, and be ``pleasing to the palate''. How can we find such a diet? Suppose the only foods in the world are as follows: 

After consulting with nutitionists, we decree that a satisfactory diet has at least 2000 kcal of energy, 55 g of protein, and 800 mg of calcium (vitamins and iron are supplied by pills). While some of us would be happy to subsist on 10 servings of pork and beans, we have decided to impose variety by having a limit on the number of servings/day for each of our six foods. What is the least cost satisfactory diet? 

Formulation:-First we decide on decision variables. Let us label the foods 1, 2, ...6, and let represent the number of servings of food i in the diet. Our objective is to minimize cost, which can be written 

We have constraints for energy, protein, calcium, and for each serving/day limit. This gives the formulation: 

MARKETING

STRATEGY

KFC as a Brand

KFC is one of the best-known brands worldwide Doing Integrated assignment we study how KFC continually aims to build its brand by listening to its customer's also identifies the various stages in the marketing process.

Branding develops a personality for an organization, product or service. Brand Image represents how consumers view the organization.

Branding only works when behaves and presents itself in a consistent way, Marketing communication methods, such as advertising and promotion, are used to created colors, design and image which gives a recognizable face .At KFC this is represented by its familiar logo-Colonel Harland Sanders is shedding his white suit jacket for a red cook.

Marketing involves identifying customer's needs and requirements and meeting these needs in better way then its competitors. In this way a company creates loyal customers.

The stating point is to find out who are potential customers are-not everyone will want what KFC has to offer. The people KFC identifies as likely customers are known as key audiences. 

The Marketing Mix and Marketing Research.

Having identified its key audiences a company has to ensure a marketing mix that created that appeals specifically to those people. The marketing mix is a term used to describe the four main marketing tools(4P's):

1.Product

2.Price 

3.Place

4.Promotion

Using that detailed information about its customers. KFC's marketing department can determine:1. What products are well received?2. What prices consumer willing to pay?3. What T.V. Programmes, newspapers and advertising consumer read or view?4. What restaurants are visited?

Market research is the format which enables KFC to identify this key information. Accurate research is essential in creating the right mix to win customers loyalty.In all its market KFC faces competition from other businesses. Additionally economic, legal and technological changes, social factors retail environment and many other elements affect KFC success in the market.Market research identifies these factors and anticipates how they will affect people’s willingness to buy. As the economy and social attitudes change, so do buying patterns. KFC needs to identify whether the number of target customers is growing or shrinking and whether their buying habits will change in the future.

Market research considers everything that affect buying decisions. These buying decisions can often be affected by wider factors than just the products itself. Lf psychological factors are important, e.g. what image does the product give or how the consumer feels when purchasing it? Through marketing, McDonald’s establishes a prominent position in the minds of customers. This is known as Branding. 

Meeting the needs of Key audience

There are a limited number of customers in the market. To build long-term business it is essential to retain

people once they have become customers. For example a parent with two children might visit and visits KFC to give the children a treat. Children want to visits as it is fun place to eat. A business customer visits KFC during the work day as service is quick the food taste is great and can be eaten in the car without affecting a busy work schedule. These examples represent just a few of KFC's possible customer’s profile. Each has different reasons to come KFC.Using this type of information KFC can tailor communication to the needs of specific groups. It is to the needs of specific group. It is their needs that determine the type of products and services offered, prices charged, promotionsCreated and where restaurants are located. To meet the needs of the key market it is important to analyses the internal marketing strengths the organization. 

Strengths and weaknesses must be identified, so that a marketing strategy which is right for the business can be decided upon.

The analysis will include the:

• Company’s products and how appropriate they are for the future .

• Quality of employees and how well trained they are to these additional psychological factors are significantly offer the best service to important to the customer. They can be even more customers important than the products’ physical benefits.

• Systems and how well they function in providing customer satisfaction e.g. marketing databases and restaurant systems.

• Financial resources available for marketing.

The business can then determine what it needs to do in identify different types of customers. For example:

A parent with two children might visit Visits KFC to give the children treat.A children wants to visit KFC As it is a fun place to eatA business customer

Visits KFC during the work day as service is quick,the food taste is great can be eaten in the car without affecting busy work schedule.Teenager visits KFC The Rupee saver menu is affordable and there is Internet access in some restaurant.

These examples represent just a few of KFC possible customer profiles each has different reasons to come KFC. Using this type of information KFC can tailor communication to the needs of specific groups. It is their needs that determine the type of products and services offered, prices charged, promotions created and where restaurants are located. To meet the needs of the key market it is important to analyze the internal marketing strengths and weaknesses must be identified, so that a marketing strategy which is right for the business can be decided upon. The analysis will include the:

• Company’s products and how appropriate they are for the future• Quality of employees and how well trained they are to these additional psychological factors are significantly offer the best service to important to the customer. They can be even more customers important than the products’ physical benefits.• Systems and how well they function in providing customer satisfaction example marekting database• Financial resources available for marketing

Once the strengths and weaknesses are determined, they are combined with the opportunities and threats in the market place. This is known as SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats).The business can then determine what it needs to do in order to increase its chances of marketing successfully.

Swot Analysis

Strengths(Internal)the brand detailed market research to create the right marketing mix.

Weaknesses (Internal)

Kfc has been for around long time.therefore they have to keep innovating.

Opportunities (External)increasing number of customers looking for food that is served in quick and friendly way.

Threats(External)New competitors changing lifestyles.More people day by day becoming Vegetarian day by day. 

Marketing Objectives

A marketing plan must be created to meet clear Objectives.Objectives guide marketing actions and are used to measure how well a plan is working. These can be related to market share, sales, and goals, reaching the target audience and creating awareness in the marketplace. The objectives communicate what marketers want to achieve Long-term objectives are broken down into shorter-term measurable targets, which KFC uses as milestones along the way.Results can be analyzed regularly to see whether objectives are being met. This type of feedback allows the company to change plans. It gives flexibility marketing objectives are set the next stage is to define how they will be achieved. The marketing strategy is the statement of how objectives will be delivered. It explains what marketing actions and resources will be used and how they will work together. 

4P's of Marketing

At this point the marketing mix is put together:

1. Product It is important thing to remember when offering menu items to customers is that they have a choice, they have a huge number of waysof spending their money and places to spend it.

Therefore, KFC's places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is.

However customer’s requirements change over time. What is fashionable and attractive today may be discarded tomorrow. Marketing continuously monitors customer’s preferences. In order to meet these changes KFC has introduced and phased out old ones. And will continue to do so.Care is taken not to adversely affect the sale of one choice by introducing another choicewhich will cannibalize the sale from the existing one( trade off).KFC knows that items on its menu will vary in popularity. Their ability to generate profits will vary at different points in their life cycle.

Products go through a life cycle which is illustrated below:

The type of marketing taken and amount invested will be different, depending upon the stage product is reached. For example launching a new product involves automatically television and other advertising support.

At any time company will have a portfolio of products each is in different stage of its life cycle. Some of KFC's option growing tremendously but some Halal products is in its maturity stage.

2. Price

The customer’s perception of value is an important determinant of the price charged.Customers draw their own mental picture of what a product is worth. A product is more than a physical item, it also has psychological connotations for the customer.The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brands and integrity.A further consequence of price reduction is that competitors match prices resulting in no extra demand . This means the profit margin has been reduced without increasing sales.

3. Promotion

The promotions aspect of the marketing mix covers all marketing communications. The methods include advertising, sometimes known as ‘above the line’ activity. Advertisements conducted on T.V., Radio, news paper, on website, etc.

What distinguishes advertising from other marketing communications is that media owners are paid before the advertiser can take space in the medium. Other promotional methods include sales promotions, telemarketing, exhibitions, seminars, loyalty schemes door drops, demonstrations, etc. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results.For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in store promotions to get people to try the product and a collect able promotional device to encourage them to keep buying the item support each other and do not confuse customers.A thorough understanding of what the brand represents is the key to a consistent message the purpose of most marketing communications is to move the target audience to some type of action. This may be to buy the product, visit a restaurant, and recommend the choice to a friend or increase, purchase of the menu item. Key Objective of advertisement is to make people aware of an item feel positive about it and remember it. 

The more KFC knows about the people it is serving the more it is able to communicate messages which appeal to them. Messages should gain customers’ attention and keep their interest. The next stage is to get them to want what is offered. Showing the benefits which they will obtain by taking action are usually sufficient, the right message must be targeted to the right audience.

For example, to reach a single professional woman with income above a certain level, it may be better to take an advertisement in Cosmopolitan than Woman Era. To advertise to mothers with children, it may be more effective to take advertising space in cinemas during Disney films.

The right media depends on who the viewers, readers or listeners are and how closely they resemble the target audience.

4. Place

Place in the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of range of processes involved in bringing products to the end consumer.

In Delhi KFC has open its shop where middle and higher class family, teenagers will come and enjoy the food.

What we have find about KFC , by preparing questionnaire and making a hypothesis on the result of questionnaire.

Questionnaire

Please tell us what you liked and what you didn't about your visit. Help Us to prepare a integrated assignment and improve KFC ,so that every visit to KFC “will have you say ,it finger licking good.”.!

Please rate on the following Criterion:

Ambience Airline 1.excellent 2.good 3. ok 4.bad 5.worst Blue line

Décor Inviting 1.excellent 2.good 3. ok 4.bad 5.worst Frightening

Service -Quick Ferrari 1.excellent 2.good 3. ok 4.bad 5.worst Anari-Impressive Gold 1.excellent 2.good 3. ok 4.bad 5.worst Cold-Complete All there 1.excellent 2.good 3. ok 4.bad 5.worst What -when-where

Food 

-Hot 'n' Fresh Mother's Kitchen 1.excellent 2.good 3. ok 4.bad 5.worst Hostel Mess-Taste Tastes yummy 1.excellent 2.good 3. ok 4.bad 5.worst Tastes funny-Variety Hazzar 1.excellent 2.good 3. ok 4.bad 5.worst N't again yaar-Price Not to much 1.excellent 2.good 3. ok 4.bad 5.worst Lets go dutch

Courtesy Yahoooo 1.excellent 2.good 3. ok 4.bad 5.worst Dump

Cleanliness -Dining area Can eat off the floor 1.excellent 2.good 3. ok 4.bad 5.worst Can't eat here anymore.

-Washrooms Soap se bhi saaf 1.excellent 2.good 3. ok 4.bad 5.worst Are bhai maaf Karo

Value For MoneyI left happy 1.excellent 2.good 3. ok 4.bad 5.worst I left broke

How often do you visit KFC

1.Daily 2.weekly 3.Monthly 4.Occasionally

We had done survey on 40 people, 30 people were showing result product oriented and 10 mainly on service oriented at.001 significance level 24.32 goodness of fit.

MANAGEMENT INFORMATIONSYSTEMSSTRATEGY

Management Information Systems (MIS) is the term given to the discipline focused on the integration of computer systems with the aims and objectives on an organization. Each KFC outlet use MIS in accounting, knowing production, and very useful in formulating HR policies which helps them to rate their employees.

The development and management of information technology tools assists executives and the general workforce in performing any tasks related to the processing of information. MIS and business systems are especially useful in the collation of business data and the production of reports to be used as tools for decision making. With computers being as ubiquitous as they are today, there's hardly any large business that does not rely extensively on their IT systems. However, there are several specific fields in which MIS has become invaluable. 

MIS systems can be used to transform data into information useful for decision making. Computers can provide financial statements and performance reports to assist in the planning, monitoring and implementation of strategy. 

MIS systems provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually. 

MIS systems can also use these raw data to run simulations – hypothetical scenarios that answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product which is very useful for KFC future development. These Decision Support Systems (DSS) enable more informed decision making within an enterprise than would be possible without MIS systems. 

Not only do MIS systems allow for the collation of vast amounts of business data, but they also provide a valuable time saving benefit to the workforce. Where in the past business information had to be manually processed for filing and analysis it can now be entered quickly and easily onto a computer by a data processor, allowing for faster decision making and quicker reflexes for the enterprise as a whole.

Management by Objectives 

While MIS systems are extremely useful in generating statistical reports and data analysis they can also be of use as a Management by Objectives (MBO) tool. 

MBO is a management process by which managers and subordinates agree upon a series of objectives for the subordinate to attempt to achieve within a set time frame. Objectives are set using the SMART ratio: that is, objectives should be Specific, Measurable, Agreed, Realistic and Time-Specific. 

The aim of these objectives is to provide a set of key performance indicators by which an enterprise can judge the performance of an employee or project.Benefits of MIS 

The field of MIS can deliver a great many benefits to enterprises in every industry. Expert organizations such as the Institute of MIS along with peer reviewed journals such as MIS Quarterly continue to find and report new ways to use MIS to achieve business objectives. 

KFC ‘s Core Competencies 

Every market leading enterprise will have at least one core competency – that is, a function they perform better than their competition. By building an exceptional management information system into the enterprise it is possible to push out ahead of the competition. MIS systems provide the tools necessary to gain a better understanding of the market as well as a better understanding of the enterprise itself. 

Enhance Supply Chain Management 

Improved reporting of business processes leads inevitably to a more streamlined production process. With better information on the production process comes the ability to improve the management of the supply chain, including everything from the sourcing of materials to the manufacturing and distribution of the finished product. 

Quick Reflexes 

As a corollary to improved supply chain management comes an improved ability to react to changes in the market. Better MIS systems enable an enterprise to react more quickly to their environment, enabling them to push out ahead of the competition and produce a better service and a larger piece of the pie.

These factors help KFC to work smoothly and efficiently as we already known that they are the only fast food chain which is selling fried chicken in which they are specialized.MIS systems let the KFC management:• To capture information and store it, whenever they are making bills it helps them to count sales per day, per week and per month because a copy of the bill is stored in the computer.• Access stored information easily and manipulate it for the needs of their clients’ while billing or taking order they just enter the code of the product requested at that time and the quantity demanded.Product code Product name Product price (in Rs.)01 Small Coke 2002 Medium coke 3503 Large coke 4504 Small coke+ Lollipop Chicken 6505 Fried Chicken tub(small) 10506 Small French Fries 2507 Large Fries 4508 Chicken Burger 2509 Fried Chicken tub(large) 14510 Veg. Burger 20

In KFC the above mentioned kind of information is stored in each computer that they use to maintain is SAP-sale module .They given codes to their 45 products just by entering the code the product name comes out with cost on the screen.NOTE: This is a hypothetical table and the prices mentioned may differ the actual prices.

• Control flow of information into, around and out of the systems.• Work within legislation such as the Data protection Act.• Manage resources this is a very important function as every day inventory is recorded and therefore resources could be managed.• Produce reports for themselves so that they can compare their own performances with their own and other.• Maintain records needed for quality control so that the success story of all the employees can be appraised.• Respond confidently to the demands of the Common Inspection Framework MIS help them because they now easily check when the last stocking was done.• Manage and track employee records of work, achievement and progression for promotions.• Record and track outcomes.• Manage marketing information to further improve sales..• And a host of other information related functions.If Management Information Systems are flexible, and relate to the needs of the organization, the clients and the curriculum that they are delivering, then they work well and effectively. One has to be sure that, whatever systems you use, they suit your purposes and can be customized to do so, are easy to use and allow rapid data entry with rapid and flexible access for reporting purposes.

ANNEXURES

Annexure 1

KFC Balance Sheet

Year Mar 07(in crores)Share Capital 22.80Reserves & Surplus 1,171.68Total Shareholders Funds 1,194.48Secured Loans 207.76Unsecured Loans 0.00Shop Security Deposits 2.07Total Debt 209.83Total Liabilities 1,404.31

Gross Block 1,505.45Less: Accum. Depreciation 118.45Net Block 1,387.00Capital Work in Progress 26.33Investments 24.59Inventories 8.31Sundry Debtors 13.30Cash and Bank 34.15Loans and Advances 99.36Current Liabilities 109.63Provisions 79.10Net Current Assets -33.61Miscellaneous Expenses not w/o 0.00Total Assets 1,404.31Contingent Liabilities 2.40

Annexure 2

Profit and Loss Account KFCYear Mar 07(in crores)Restaurants,Services & Others 413.78Other Income 1.34Total Income 415.12Food, Bevarages & Provisions Consumed 33.52Power & Fuel Cost 22.26Employee Cost 53.60Other Operating & General Expenses 111.94Miscellaneous Expenses 13.47Less: Preoperative Expenditure Capitalised 0.00Profit before Interest, Depreciation & Tax 180.33Interest & Financial Charges 17.35Profit before Depreciation & Tax 162.98Depreciation 22.11Profit Before Tax 140.87Tax 49.37Profit After Tax 91.50Adjustment below net profit 0.00P & L Balance brought forward 62.72Appropriations 35.29P & L Bal. carried down 118.93Extraordinary Items -1.48

BIBLIOGRAPHY

KFC is the Service sector company which we have chosen for our integrated assignment. We got all the information about KFC group from various resources like:

We visited on various outlets of KFC in Delhi, Noida and Ghaziabad for getting the information about services and resources used in making food at KFC.

A. Two outlets at Noida, one at secor 18 and second at center stage mall.

B. Ghaziabad.C. Lajpat nagar, delhiSome of them gave us the favorable response and some of them were reluctant in not providing us the information on various functions of KFC. They were clear on the statement that they have no authority to expose the information about KFC strategies. 

We did the sample survey in all the markets we visited at different location of Delhi and NCR region for getting the knowledge about potential demand of KFC. Through this we were able to know what people think about KFC and were able to draw the information about KFC. Books References:-1. Human Resources authored by VSP Rao. 2. Corporate Finance by Khan & Jain.3. Statistical Methods by S.P Gupta4. Operations Research by J.K Sharma5. Management Information Systems by Lauden & Lauden.6. Marketing Management by Philip Kotler & Armstrong.

We visited KFC website Welcome to KFC.com.

We used search engines of google, yahoo and rediff for getting more knowledge about KFC, its products, outlets and global information.Advertisement