KFC - March 26th, 2008

KFC - March 26th, 2008
KENTUCKY 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.
INTERVIEW OF TRANEE AT KFC,SEC.18,NOIDA:-

TRANEE’S NAME:- MR. DEBASHISH
• HE SAID THAT WHEN KFC ENTERED IN INDIA IN 1995 IT WAS NOT SUCCESSSFUL BECAUSE THEY
HAVE NOT ADDED THE FLAVOURES AND SPICES IN THE KFC MENU WHICH INDIAN PEOPLE LIKE.
• THE MAIN REASON OF KFC FAILURE WAS THAT KFC WAS TARGETTING HIGHER CLASS INCOME
GROUP IN INDIA TO HAVE THE COMEPETITIVE ADVANTAGE WITH THE LOCAL ‘ CHICKEN DHABA
WALAS’.
• BUT DUE TO PROTEST OF INDIAN FARMERS AND GOVERNMENT PRESSURE IT HAD TO LEAVE INDIA.
• BUT AGAIN IN 2003 IT CAME BACK INTO INDIA WITH THE STRATEGIES LIKE TARGETTING HIGHER
INCOME GROUP LEVEL.
• BUT AT THE SAME TIME PROVIDING MENU WHICH CAN BE AFFORDED BY THE MIDDLE INCOME
GROUP LEVEL LIKE KFC MINI BURGER AT RS.25 AND CAME UP WITH MENU LIKE HOT CRISPY CHICKEN
WHICH CONTAINS INDIAN SPICES WHICH INDIAN PEOPLE LIKE.
• BUT NOW THEY ARE ADHERING THE RULES OF FOOD CORPORATION OF INDIA AND PETA AND
EXPANDING BUSINESS SUCCESSFULLY.

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KFC - March 26th, 2008

KENTUCKY FRIED CHICKEN (KFC) IN INDIA.

PROBLEMS FACED BY KFC IN INDIA:-

OUTCOME OF CASE STUDY OF KFC IN RESPECT OF SRC

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

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

INTERVIEW OF TRANEE AT KFC,SEC.18,NOIDA:-

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