Welcome to KFCPresented By :

Srijan Chandrayan - 121Amit Goyal - 133Puneet Mehta - 143Sanjay Kichloo - 178Sanchit 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. aloneFast 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 outletsKFC 72 outletsPizza hut 147 outletsDominos Pizza 274 outletsCafé Coffee Day 833 outletsBarista 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

Europe

? Asia

USA Latin America

Macro Factors

Micro Factors

KFC

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

Company Competitors

Consumers

Internal Factors SW

• Strengths– Multi branding Strategy

for YUM!

– Goodwill and reputation

– Employee Loyalty

– Global Expansion

– Customer Loyalty

– Ranks highest among all chicken restaurant chains

Weaknesses Conflicting Corporate

Cultures

No defined target market

Time it takes to market new products

losing market share

Lack of Localisation Strategy

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

*In thousand

Yum! Brand Inc. Competition

Yum! International

Segmenting KFC

Geographic Region- Calcutta, Delhi, Bangalore, Hyderabad, Mumbai City- Urban Areas, metrosDemographic 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 etcThreat of suppliers bargaining

power Bargaining power of suppliers is low. Fixed ratesThreat 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

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

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 CafeteriaMarket DevelopmentConcentric Diversification

Similar to Furrs or Lubys

Fast food with traditional restaurant environment

Reaching out to a new market

KFC GroceriesProduct DevelopmentMarket PenetrationConcentric Diversification

Similar to Taco Bell groceries

Advantage of Name Recognition

Frozen MealsChicken Breading Mix