Case Study of KFC: Establishment of a Successful Global Business Model.pptx

Case Study of KFC: Establishment of a Successful Global Business Model

1. Case Study of KFC: Establishment of a Successful Global Business Model Prof – Dr. Sheetal Sharma Organization Dynamics (Group – 6)

2. Smrati Gupta Shivam Kashyap Stuti Shukla Tushar Sharma Yash Nishad Yashsvi Yadav Group Members

3. KFC was founded in the mid-1950s by Harland Sanders with a recipe of 11 herbs and spices. He travelled across countries to market his recipe and In 1963, the number of KFC franchises had crossed 300. As it was getting difficult for Sanders to manage operations of 300 franchises at the age of 74 so, In 1964, He sold the business to two Louisville businessmen (1) Jack Massey and (2) John Young Brown Jr. for $2 million. They both then made the KFC public by listing it in New York Stock Exchange. KFC signed a joint venture with Mitsuoishi Shoji Kaisha Ltd. in Japan in the late 1960s and some more subsidiaries were in Great Britain, Hong Kong, South Africa, Australia, New Zealand, and Mexico. In the late 1970s, KFC merged with Heublein, Inc . It was a producer of Alcoholic beverages with little restaurant experience. Conflicts quickly arose between the Heublein management and Colonel Sanders on cleanliness issues. In 1977, Heublein sent in a new management team to redirect KFC’s strategy Summary

4. In October 1986, KFC was sold to PepsiCo as soft drinks and fast food can be sold together. Which in result gave PepsiCo the leading market share. Many cultures have strong culinary traditions and have not been easy to  penetrate like German, Malaysia, Indonesia Challenges faced by KFC are of demand of healthier foods, which in result in 1991, it’s name is changed by KFC from Kentucky Fried Chicken to soften their brand image. Responding to consumers' demands for healthier foods led KFC to introduce several new products in the 1990s, such as Oriental Wings, Popcorn Chicken, and Honey BBQ Chicken After entering India, KFC suffered a lot to position their business. The was of variety as they they positioned themselves as a family restaurant. To overcome from these issues, KFC came up with better positioning and varieties in their menu. Summary (Contd..)

5. Problem Identification & Alternatives Problem Identification Alternatives to the Problems Quality Control Cultural Barriers Competition Negative public perception Revenue challenges Limited Menu Adapting Foreign Cultures Rigorous training programs, High-quality cleanliness, Automated cleaning systems, Consistent maintenance Adapt service & menu offerings to local preferences, Localized marketing strategies, Appeal to local consumers Research and development Alternative revenue streams, Delivery, catering, franchising, Expanding in high-growth regions Transparent and ethical sourcing practices, Sustainable practices Diversify menu offerings, Include healthier options, Market to health-conscious consumers Partner with local franchisees, Better understanding of local market and culture ,Hire local employees to manage restaurants

6. Selection of The Best Alternative Quality control - Rigorous training program . Cultural barriers - Adapt service & menu offerings to local preferences . Competition - Unique menu items . Negative public perception - Transparent and ethical sourcing practices . Revenue Challenges - Expanding in high growth regions . Limited menu - Diversify menu offerings . Adapting Foreign cultures - Hire local people to manage restaurants

7. Analyse the case and determine the factors that have made KFC’s a success global business. Strong brand recognition: Adaptation to local markets: Franchising model: Consistency in quality: Innovation and product development Marketing and advertising Questions

8. 2) Why are cultural factors so important to KFC’s sales success in India and China? Cultural factors influence consumer behavior in India and China. KFC adapted its menu in India to offer only chicken and vegetarian options due to Hindu beliefs. In China, KFC offers a spicy Sichuan-style chicken and delivery services to suit local taste and preferences. Adapting to cultural factors helped KFC build a strong presence in both India and China. Questions (Contd..)

9. 3) Spot the cultural factors in India that go against KFC’s original recipe. Religious Beliefs Dietary Preference Spices Cooking Method 4) Why did Kentucky Fried Chicken change its name to KFC? Shortening the name  Modernizing the brand  Removing the word "fried Questions (Contd..)

10. KFC was established in the 1950s as a small fast-food chain in the US and expanded its operations worldwide through franchising. KFC faced challenges in adapting to foreign cultures, localizing its menu to cater to local tastes and preferences, and ensuring quality control in individual franchises. KFC was successful in some markets, such as Asia, where chicken is a staple dish. However, in some countries, KFC failed to penetrate due to cultural factors. KFC faced challenges in responding to changing consumer demands for healthier food options and introduced several new products as alternatives to its Original Recipe fried chicken. KFC's expansion into India was met with protests from farmers, customers, doctors, and environmentalists, and the company was not able to set up as many restaurants as planned due to low revenue. Conclusion

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