Project on Kentucky Fried Chicken

Submitted by:
Mehwish munir 14
Muqaddas Zubair 32
Mehar ul nisa 35
Sana nazir 42

Submitted to:
Ma’am Atiya Simab
On 13 July,2020

Department of Business Administration

Government College women University Sialkot

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 ACKNOWLEDGEMENT

First, we would like to offer our eternal thanks to the Almighty Allah who blessed
us with the perseverance and the sprit of hard work to complete this project. We
are also grateful to our parents for their patience and belief in us. We offer our
respectful gratitude to our Business and Management teacher Mis. Attiyasimab for
her guidance &encouragement.

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 TABLE OF CONTENTS
OVERVIEW OF KFC.......................................................................5
VISION STATEMENT.....................................................................7
MISSION STATEMENT..................................................................7
KFC'S COMPETITIVE ADVANTAGE..........................................8
CORE VALUES OF KFC................................................................9
HIERARCHY OF KFC..................................................................10
ORGANIZATION CHART...........................................................11
ORGANIZATION CULTURE......................................................12
STRATEGIES OF KFC................................................................12
SWOT ANALYSIS OF KFC........................................................14
STRENGTHS...............................................................................15
WEAKNESSES............................................................................15
OPPORTUNITIES........................................................................16
THREATS....................................................................................16
PORTERS FIVE FORCE ANALYSIS........................................17
MARKETING MIX.....................................................................18
EFE MATRIX ..............................................................................21
VALUE CHAIN ANALYSIS.......................................................23
IFE MATRIX................................................................................24
PORTERS THREE GENERIC STRATEGIES..........................25
SWOT MATRIX ...................................................................27
SPACE MATRIX ..................................................................28
BCG MATRIX ......................................................................29
CPM MATRIX .....................................................................30
QSPM MATRIX ..................................................................31

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 RECOMMENDATIONS...............................................................32
CONCLUSIONS ...............................................................................32

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Purpose of report:
We team members wanted to analyse the strategic management and practices of the KFC
Pakistan, what strategies it currently follows, what impacts or improvements those strategies
cause, what are the reaction or counter strategies of competitors and what impact they have
on KFC and last but not the least do these strategies work or any other strategies could be
followed.

Overview of KFC
Kentucky Fried Chicken (KFC)- one of the most known fast food chains in the world started
in the early 1930's by Kernel Sanders in the Southern USA as a small franchise operation.
Colonel Sanders has become a well-known personality throughout thousands of KFC
restaurants Worldwide. Quality, service and cleanliness (QSC) represents the most critical
success factors to KFC's global success. Food, Fun & Festivity, this is what KFC is all about.
Leading the market since its inception, KFC provides the ultimate chicken meals for the
Chicken Loving Nation. Be it Colonel Sanders secret Original Recipe Chicken or the Hot &
Spicy version, every bite brings a YUM on the face. At KFC we proudly say: KFC has more
than 11,000 restaurants in more than 80 countries and territories around the World. In 1971,
Heublein, Inc. acquired KFC, soon after, conflicts erupted between the Colonel (which was
working as a public relations and goodwill ambassador) and Heublein management over
quality control issues and restaurant KFC is part of Yum! Brands, Inc., however in the case of
Pakistan KFC build the relation of Quality Service and cleanliness for Customer KFC was
acquired by PepsiCo in 1986, it had grown to approximately 6,600 units in 55 countries and
territories. Due to strategic reasons, in 1997 PepsiCo spun off its restaurant businesses (Pizza
Hut, Taco Bell and KFC)

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Vision statement
“To be leading integrated food services group in Asian region delivering consistent quality
products and excellent customer focused”

Mission Statement
“To maximize profitability, improve shareholders value and deliver sustainable growth year
after year”
Colonel Harland sanders, born September 9, 1890, actively began franchising his chicken
business at the age of 65. Now, the Kentucky fried chicken business 7
he started has grown to be one of the largest retail food service systems in the world. And
Colonel Sanders, a quick service restaurant pioneer, have become a symbol of entrepreneurial
spirit. More than two billion of the colonel’s “finger licking’ good” chicken dinners are
served annually. And not just in America. The colonel’s cooking is available in more then 82
countries around the world. When the colonel was six, his father died. His mother was forced
to go to work, and young Harland had to take care of his three-year-old brother and baby
sister. This meant doing much of the family cooking. By the age of seven, he was a master of
a score of regional dishes. At age 10, his first job working on a nearby farm for $2 a month.
When he was 12, his mother remarried and he left his home near Henryville, Ind., for a job on
a farm in Greenwood, Ind. He held a series of jobs over the next few years, first as a 15-year-
old streetcar conductor in New Albany, Ind., and then as a 16-year-old private, soldiering for
six months in Cuba. After that he was a railroad fireman, studied law by correspondence,
practiced in justice of the peace court, sold insurance, operated an Ohio River steamboat
ferry, sold tires, and Operated service station. When he was 40, the colonel began cooking for
hungry travellers who stopped at his service station in Corbin, KY.

Yum! Brands, Inc. International Presence & Competition

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The International Portfolio of 5 leading U.S. Brands give Yum! a distinctive advantage over
the single-brand competitors.

KFC's competitive advantage

KFC's competitive advantage is its supply chain and distribution system. This allows the fast
food giant to cultivate relationships with business partners and establish a footing in regions
where the competition is still struggling.

Because KFC's supply chain and distribution system is so well set up around the world, it has
less difficulty than other fast food giants in establishing a presence, especially in less
saturated areas where there is still much opportunity for growth. KFC is also able to compete
effectively because of its famous trade secret: the 11 herbs and spices that it uses in the
products sold all over the world.

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 World famous Menu of KFC

KFC offers world famous menus in there restaurants, which work as there main motives
in doing business in the world. Every day, nearly eight million customers are served
around the world. KFC’s menu includes Original Recipe chicken — made with the same
great taste Colonel Harland Sanders created more than a half-century ago. Whether
you’re taking back lunch or bringing back dinner, KFC has all your favorite chicken,
salads, sandwiches, snacks, sweets and sides.

Core values of KFC:

1. CUSTOMER FOCUS: We listen and actively respond to our customers. Our

decisions and actions are customer focused.

2. OPERATIONAL EXCELLENCE: We have a passion for excellence. We push to be

the best in the world. We have the energy and confidence to confront today’s reality
and makes the changes necessary to be the best.

3. STRETCH GOALS: We know that anything is possible… set aggressive targets...

recognize and reward progress while understanding accountability and commitment.

4. FEEDBACK: We desire and believe in direct and honest feedback. Politics have no
place in our company.

5. COMMITMENT TO PEOPLE: We believe in the intentions of our people, and want

them to take responsibility, develop, and have fun!

6. POSITIVE ENERGY: We execute with enormous positive energy and have the
ability to invigorate others……we hate bureaucracy and all the nonsense that comes
with it.

7. ACCOUNTABILITY: We do what we say, we are accountable, we act like owners.

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 KFC HIERACHY:

Organizational structure of KFC:

The KFC adopted traditional structure for their outlets that other food chains are
following. There is one General Manager for Pakistan. The outlet is leaded by the
Manager, assisted by two assistant managers, and one shift in-charge for each shift, that
supervises the performance of counter workers and kitchen workers.

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ORGANISATION CULTURE

 Big on diversity in the workplace

 Promotes differences in background, ethnic cultures, and values

 Focuses on teaching everybody something new

 Promotes unity in the workplace

 Focuses on building relationships and creating diversity and commitment within

the company and amongst employees and customers

Strategies of KFC

1.Marketing strategy:

World’s 2nd largest fast food chain and largest chicken restaurant on the basis of sales is KFC,
the successful brand of the parent company YUM! brand. It’s been more than 75 years since
its inception and still, KFC’s original recipe of fried chicken is satisfying the taste buds of
customers because it is finger licking good!!.KFC with its 750000+ workforce, serves fresh
delicious fried chicken to customers in nearly 18000 restaurants across the world in 120+
countries.

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Segmentation, targeting, positioning in the Marketing strategy of KFC:

KFC (Kentucky Fried chicken) uses demographic segmentation to serve the market as per the

customer needs & wants. The consumers of KFC are the young as well as young adults. It
used to serve the same menu all around the world which means that it was using
undifferentiated targeting strategy.However, in recent times, following McDonalds example,
KFC has started localizing its menu, giving it better acceptability in the market. Moreover it
has transformed its positioning strategy from product based to value based in recent times.
KFC is strongly positioned in the minds of consumers for its Chicken menu. There are very
few outlets which serve anything in vegetarian. But when it comes to non vegetarian, KFC is
just superb. Its chicken wings, and chicken bucket is a favorite with everyone. This excellent
targeting technique is the reason that most non vegetarian lovers flock at KFC.
Competitive advantage in the Marketing strategy of KFC

Original recipe of fried chicken with secret blend of 11 herbs & spices have been the driving
force for KFC from last 75 years. KFC has a broad menu with many options for customers
and now even Vegetarian food items have been added by KFC which has helped KFC in
increasing its customer base and volume. Presence in developed & developing nations is
helping the company in strategizing its future growth plans as it is giving them exposure &
experience which is essential element in and fast food industry’s success.
2. Product strategy:
As a global brand, KFC use multiple price strategy due different market situation. The price
strategies that implement in the U.S. have a big difference with its global strategy. Currently,
KFC’s biggest market share is moving to the immature markets and developing countries. As
a result, KFC choose the price skimming as its pricing strategy. Because of its advanced
management experience, advance the supply chain, advance technology, and strong
financial support. KFC is the top brand and its product is more competitive than other
competitors. On this condition, KFC product can attract consumer from middle or higher
income level. However, since the target market changed in the mature markets and
developed countries such as U.S., KFC should choose the status quo pricing strategy which
stays with the price of competitors. In this area, fast-food is the lower consumer goods and this
industry has been very mature. There are full of competitors such as McDonald’s, Burger King,
and Subway which have the same homogeneity and their competition is extremely intense.
On one hand, each competitor has its own independent and perfect supply chain, so
the costs of product can be compressed to a minimum. On the other hand, the service,
product quality, and the product categories are all most the same. Differences are not large.
Because of these two factors, KFC should lower its price in order to attract consumers from
middle and low income levels thus stay in a competitive position. In addition, Comparing
with other competitors, KFC chooses different prices to increase the diversity of
product. Since KFC position itself as a fried chicken expert in the fast-food industry. Fried
chicken is popular and best product of KFC .In order to4

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3. Push and pull strategy used by KFC
The push and pull strategy is most efficient if a producer wants to supply their stock to stores
and at the same time create a demand supply for their products. This is particularly effective
for a business that is still starting. The push strategy is whereby the producer of the goods has
to work extra hard in order to distribute their products to retailers and wholesalers. Fast
moving consumer goods can work effectively well for the push strategy whereby the
customers are ready to make purchasing decisions. The manufacturer can engage the retailers
in promotion strategies such as face to face selling and encouraging them to stock the product
(Kotler & Armstrong 2010). Once the product has gained a good customer base, the product
can sell itself and the pull strategy can then be in cooperated. The pull strategy is whereby the
product has gained popularity and the consumer is actively seeking for this product.
The demand for the product is so high that retailers are making orders so as to stock their
shelves and supply the customer with the product. This can only be made possible through
advertising so that the brand is visible to the consumers as well as to the retailers. The pull
strategy takes advantage of the supply-demand chain whereby the retailers will only stock
goods that the consumer is interested in buying (Lamb, Hair & McDaniel 2008).

KFC is known to be a favorite of meat and chicken lovers, and this segmentation is the main
success factor of KFC. However, due to its franchise business model, the firm faces a lot of
competition from other franchises like McDonalds and Burger kind. Besides burgers, indirect
competition in the form of Italian and fast food is ever present. Some of these competitors
are Pizza hut and Domino’s. Let us have an internal analysis of KFC to know what strategic
initiatives can be taken by the company. 

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Strengths of KFC

Strong parent
company It is the subsidiary of Yum! Brands
, a restaurant company that also owns the Pizza Hut and Taco Bell . Yum! Brands, the
fortune 500 company, is one of the world’s largest fast food restaurant companies in
terms of system units—more than 41,000 restaurants around the world in over 125
countries & it help individual brands in optimizing its resource usage.
Veg & Non veg
offerings KFC is known for its finger licking Chickens
recently they ventured out in Vegetarian category which is helping them in increasing
their business & attracting both veg & non-veg preferred customers.

Secret Recipe
is one of the most famous trade secrets in the catering industry.
: Sanders’ Original Recipe of “11 herbs and spices” is one of the most famous trade
secrets in the catering industry. A copy of the recipe, signed by Sanders, is held inside a
safe inside a vault in KFC’s Louisville headquarters, along with eleven vials containing
the herbs and spices.

Weaknesses in the SWOT analysis of KFC:

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Unhealthy fats:  Managing franchisees:
Use of unhealthy fats & unhygienic Franchisee management is one of
calories is creating problem for the the critical issues in the success of
fast food chains to which KFC is not the fast food chains and due to
an exception. conflicting operational issues
between KFC and its franchisees
many of its outlets got closed since
its inception.

Opportunities in the SWOT analysis of KFC:

M arke t ex p an sio n

Spe cializing into ve g eta rian M e n u : 

:  Em e rging e con om ies
R ise in h e alth c o n scio us p o p u la ti o n
a nd th eir
cha ngin g  lifestyle  re su lti n A ltho u gh KF C rece n tly
g in to m o re o f o u ti ngs en te red in ve ge ta rian fast
: D e sign ing its m e n u fo r
w ith fam ily/frien ds, fo od ca te gory b u t th ey
th e h ealth co n scio us
corp orate p a rti es w ill h ave lim ite d m enu item s a s
po p u lati on w ill be th e
result in th e h igh grow th co m pa re d to o th er ch ain s
driving force fo r the w h ole
o f th e ind ustry like  su b w a y, P izza-h ut, M a c
in du stry in the fu tu re
D o nald ’s, w ho a re alrea d y
becau se d u e to ch an gin g
an e stab lish e d player in the
lifestyle  pe o ple  are getti n g
segm en t. S o sp ecia lizin g
le ss ti m e for the m se lves
in to V eg. item s like th ey
due to w h ich h e alth issu es
h ave in N o n -V e g w ill h elp
are ra ising.
the co m pan y in its o vera ll
glo b al grow th.

Threats in the SWOT analysis of KFC:

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 Competition: KFC is not a leader in the fast food chain
industry so it has to compete with all other well established fast
food companies who all are flourishing in the market.

Changing Consumer Eating habits: With government &

NGO’s health awareness campaigns people are
becoming more aware of what to consume & what to
not which is affecting the business of fast food Industry
as a whole.
Raw Material prices: Rise in the
raw material prices may affect
the industry, of which KFC
business is not an exception.

Porters Five Force Analysis

 Entry
For the current Pakistan market for fast food, it is not difficult for a fast food restaurant to
enter the market. However, it would be extremely difficult to take over already running
major fast food chains' dominancy in Pakistan or even make a significant amount of profit.

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 While there are enough people in urban Pakistan for any restaurant to survive, KFC holds the
first-mover advantage into the 'non-veg food specialty food segment' that gives them free
reputation.

 Buyer/Supplier Bargaining Power

The buyers of KFC products have access to many similar products in outlets such as
McDonald’s, Subway and Pizza Hurt. This makes it difficult for KFC to raise prices because
there is stiff competition from the other. KFC has access to many suppliers of their main
product which is chicken. This gives the restaurant flexibility to work with the best suppliers.

 Substitutes and Complements

As mentioned above, there are a few major competitors in the fast-food industry in Pakistan
for KFC, namely McDonald’s, Pizza Hut, Domino's and Subway. The substitute products, in
this case, would be burgers, pizza, and sandwiches. Though they are competitors, their
primary products differ greatly from each other, in that they sell, chicken, burgers and fries,
pizzas, and sandwiches, respectively. Traditional Pakistan dining, home-cooked meals, and
grocery stores with ready-to-eat foods are also substitutes, as families could choose any one
of these over fast food for a meal. These substitutes are considered healthy as compared to
the fast food chains. Even foods from street vendors count as substitute goods.

 Rivalry
Unlike what one would expect, KFC has little rivalry with similar fast-food chains in
Pakistan. The primary reason is that their core products are different, as in they sell different
kinds of fast foods with very different tastes and styles. For example, if KFC raised its price
for chicken by a small amount, Pakistan chicken lovers who may not be as accepting to
pizzas (many Pakistan people strongly dislike the taste of cheese) are not going to switch to
Pizza Hut just because the price for KFC increased.

Marketing Mix: Marketing mix consists of 4P’s. It contains everything a firm can do to
influence the demand for its product. The 4P’s are:

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 PRODUCT

PROMOTION Marketing PRICE

Mix

PLACE

Their product is classified as consumer product as it has no intermediates.

 KFC offers specialty goods.
 The stock turnover of KFC is high.
 Price and quality of the product is always compared.
 Their product includes
 Goods (Burgers, Chicky Meals etc)
 Services (cleanliness, quick service, parties, and meetings).
Brand Name: KFC
Color: Red, white Symbol:
Colonel Harland Sander’s picture

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  KFC is trade marked registered brand.
 It is distinctive, adaptable to addition to product line.
 It suggests something about product.
 It is legally protected and registered.

Brands Equity
The brand equity is very high as the value added by brand to the product effects the product
selling.

Packaging Strategies
KFC makes its own disposable packaging. If they need promotion Pepsi contributes in
improving the packaging quality. KFC does family packaging. They use paper material for
packaging to avoid health hazards and environmental pollution.

Labelling
KFC does brand labeling. Some of its products also have informational labels such as Halal,
Veggi Burgers and Chicky Meals.

Pricing
In introduction stage KFC entered the market using market-skimming strategy. Their
products were high price and targeted only upper class. Gradually they trickle down focusing
on the middle class to penetrate the market. Also KFC follows one price strategy. Price is
determined according to the rates of the raw materials and policies of the Govt. The political
and legal forces often affect the policies of KFC and eventually results in change of prices
that is due to imposing of taxes.

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THE EXTERNAL FACTOR EVALUATION MATRIX OF KFC

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Through this evaluation ,the firm strategies effectively take advantage of
existing opportunities and minimize the potential adverse effect of external
threats. A total score of 1.0 indicate that the firm’s strategies are not capitalize
on opportunities or avoiding external threats.

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Value chain analysis of KFC

 SPICY PRODUCT
 FREE DELIVERY
 CHICKEN IS EATEN BY EVERY COMMUNITY LOCAL STAFF AND HIGHLY QUALIFIED
BECAUSE ITS STAFF CONSIST OF SIMPLE GRADUATES LOCAL STAFF CAN BETTER DEAL
WITH THE AND GIVE THEM TRAINING CUSTOMERS.

THE INTERNAL FACTOR EVALUATION MATRIX OF KFC

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Porter’s Three Generic Strategies

Broad Differentation :
Broad Of Cost this strategy allows
Leadershp : This strategy company to produce
is all about minimizing products and service that Focused Strategy : slight
the cost of offers unique attributes variation of the other two
creating/delivering the tha customers can generic stategis
firm’s products or persieve to be better
services. than what the
competition offers.

Porter’s Three Generic Strategies of KFC is Broad of Cost leadership, because

KFC having the lowest average cost of production compared to relative
competitors and still not compromise on quality. 

THE STRATEGY FORMULATION ANALYTICAL

FRAMEWORK OF KFC

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SWOT MATRIC OF KFC
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the
managers of the KFC to develop four types of strategies:
SO (strengths-opportunities) Strategies

WO (weaknesses-opportunities) Strategies

ST (strengths-threats) Strategies

WT (weaknesses-threats) Strategies

SWOT MATRIX OF KFC

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[‘SWOT’ is an acronym for Strengths, weaknesses, opportunities and threats. It
is a powerful strategic management tool that can help to know one’s important
strengths and weaknesses and to exploit the opportunities. It can also
help counter the threats. Strengths and weaknesses are internal factors and
opportunities and threats external. So basically, SWOT is a tool designed to
help you reduce your weaknesses and counter the threats. This can improve the
business’ chances of success.  Companies conduct a SWOT before they embark
on a new strategy or before they make an important business move like
investing in a new project.]

SPACE MATRIX OF KFC

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KFC SHOULD PERSUE AGGRESSIVE STRATEGY

BCG matrix of KFC

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 is the representation of company different divisions, on a four quadrant graph. Category of
segments dimension can be identified with the help of market share and industrial growth
rate. It helps the companies to identify the suitable strategies for the segments. Each profit
center requires distinct strategies from other, according to the financial standing of segment.
Companies can identify that, where the company’s each segm ent stands, and which strategy
should be adopted for each? With the help of four-dimensional BCG matrix. Following are
the four dimensions of BCG matrix, Question mark, Cash cows, Dogs and Stars. We will
focus on, KFC four profit centers which are as follow; franchising and licensing, KFC china,
KFC India and KFC USA.

 Businesses represent the organization's best long run opportunities

for growth and profitability.
 This business has a high relative market share anf compete in high
growth rate industries

COMPETITIVE PROFILE MATRIX (CPM) OF KFC

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Critical success factors (CSF) are the key areas, which must be performed at the highest
possible level of excellence if organizations want succeed in the particular industry. They
vary between different industries or even strategic groups and include both internal and
external factors.in this we identity kfc and McDonalds success factors.
Weight
Each critical success factor should be assigned a weight ranging from 0.0 (low importance) to
1.0 (high importance). The number indicates how important the factor is in succeeding in the
industry. If there were no weights assigned, all factors would be equally important, which is
an impossible scenario in the real world. The sum of all the weights must equal 1.0. Separate
factors should not be given too much emphasis (assigning a weight of 0.3 or more) because
the success in an industry is rarely determined by one or few factors.
The ratings in CPM refer to how well companies are doing in each area. They range from 4
to 1, where 4 means a major strength, 3 – minor strength, 2 – minor weakness and 1 – major
weakness. Ratings, as well as weights, are assigned subjectively to each company, but the
process can be done easier through benchmarking
Score & Total Score
The score is the result of weight multiplied by rating. Each company receives a score on each
factor. Total score is simply the sum of all individual score for the company. The firm that
receives the highest total score is relatively stronger than its competitors. In our example, the
strongest performer in the market should be Company B that has 3.33 scores.

Quantitative strategic planning Matrix of KFC

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IN these two alternative strategies ,market development and market
penetration. Note by sum scores of attractiveness of 3.85 vs 4.7that analysis
indicate the kfc should focus on market penetration

Conclusions

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KFC Food is very popular in Cambodia because Cambodian people would like to try Fast
food that from Western as we know KFC food is famous around the world. For in this
research shows us that there are different perception of respondents for choose to eat KFC
food. By result of study showed us there are 68 of respondents [46.3 percent] is the highest
percent that like the taste of the food. The level satisfaction of service on KFC outlets to
respondents is more than good., the level satisfaction of cleanness on KFC outlets to
respondents is more than good [all of them are eating areas, counter areas, and food replenish
process], and for the level satisfaction of eating environment on KFC outlets to respondents
is more than good [all of them are the location , comfort layout of the facility, appearance of
staff, good for eating with children and relaxed atmosphere or ambience], but the level
satisfaction of food product on KFC outlets to respondents is below than good [all of them
are the variety of the healthy menu choice, appropriate temperature of the food, the variety of
vegetarian menu choices, and available of new items]. We can see the clear data from the
table 7 to table10. As the result from chapter 4 page 44 to 45, the main three factors that
make the respondents come to buy KFC food again are the variety of food selection, the Price
or Value and Quality of food.

Recommendations for KFC Food

Demographic Profiles Issues
The different between age, income and education of customers make them choose the
different like at KFC outlets. So the marketing man should do promotion focus on the group
of age 18 to 24 as we see in chapter 4 page 35, there are 44 of respondents that is mean this
group of age like to eat at KFC outlets than other age group.
Food Product Issues
The KFC restaurant should improve the quality of food and add more some types of food like
vegetarian food and nutrition food.
Pricing and Value Issues
High price setting is very sensitive for customers So KFC restaurants should set the
reasonable price. That can make customers buy KFC food more

..................................................................................................................

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