Kfc SWOT Presentation

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Kfc SWOT Presentation

  1. 1. Kentucky Fried Chicken and its SWOT Analysis
  2. 2. INTRODUCTION OF KFC <ul><li>Kentucky Fried Chicken is one of the largest fast food </li></ul><ul><li>Franchise concepts of today; it is present in various countries </li></ul><ul><li>around the world and it has been able to establish a renowned </li></ul><ul><li>International reputation in multiple continents. Starting in the </li></ul><ul><li>United States in the 1930s, it has grown to become a true </li></ul><ul><li>multi-domestic company. </li></ul><ul><li> KFC has focused on foreign markets since the 1960s and </li></ul><ul><li>has found a new challenge today in conquering Asia. </li></ul>
  3. 3. HISTORY <ul><li>The Kentucky Fried Chicken® was founded by Colonel Harland Sanders (born on September 9, 1890) at the age of sixty-five. KFC® is currently one of the largest businesses of the global food service industry and is widely known around the world as the face of Colonel Sanders. </li></ul><ul><li>Every year, over a billion KFC® chicken dinners are served featuring the Colonel’s “finger licking’ good” special recipe. The Colonel had spread his industry to more than 80 countries and territories globally. </li></ul>
  4. 4. KFC’s Journey From $105 to 9.7 Billion $ in 58 years <ul><li>1952, Col. Sanders started franchising his recipe door to door financed by $105.00 </li></ul><ul><li>1964, Col Sanders had more than 600 franchised outlets in the US and Canada. </li></ul><ul><li>1964, Sold his interest to Massey & Brown for $2 million . </li></ul><ul><li>1966, KFC went public </li></ul><ul><li>1969, Listed on the NYSE </li></ul><ul><li>1971, KFC was acquired by Heublein Inc . for $285 million . </li></ul><ul><li>1982, Heublein & KFC Inc . was acquired by RJ Reynolds </li></ul><ul><li>1986, RJ Reynolds & KFC , was acquired by PepsiCo, Inc . $840 million . </li></ul><ul><li>1997, PepsiCo, Inc . spined-off it to Tricon Global Restaurants . </li></ul><ul><li>2002, Tricon changed it's corporation name to Yum! Brands, Inc . . </li></ul><ul><li>NOW: </li></ul><ul><ul><li>Yum Brands, Inc . is the world's largest restaurant company in terms of system units with nearly 32,500 in more than 100 countries and territories. </li></ul></ul><ul><ul><li>Current Market value of the Yum Brands on the NYSE is 9.7 Billion $. </li></ul></ul>
  5. 5. SWOT ANALYSIS <ul><li>STRENGTHS </li></ul><ul><li>KFC continued to dominate the Chicken Segment, with sales of 4.4 billion in 1999. </li></ul><ul><li>Despite gain by Boston Market and Chick-fill A, KFC customer base remained loyal to the KFC brand because of its unique taste. </li></ul><ul><li>KFC has continued to dominate the dinner and take out segment of the Industry. </li></ul><ul><li>Strong trademarks recipes. </li></ul><ul><li>Ranks highest among all chicken restaurant chains for its convenience and menu variety. </li></ul><ul><li>Generate $1B each year </li></ul>
  6. 6. MARKET SHARE
  7. 7. WEAKNESSES <ul><li>KFC was loosing market share as other Chicken chain increased sales at a faster rate. </li></ul><ul><li>KFC share of Chicken Segment sales fell from 71 percent 1989 , to less than 56 percent in 1999 , a 10 -years drop of 15 percent. </li></ul><ul><li>KFC leadership in U.S market was so extensive that it had fewer opportunities to expand its U.S restaurant base, which was only growing at about 1 percent per year. </li></ul><ul><li>Failed to rank in top 20 in growth in 2000. </li></ul><ul><li>Lack of knowledge about their customers. </li></ul><ul><li>Question of over franchising leads to loss of control and quality. </li></ul><ul><li>Lack of focus on R&D. </li></ul>
  8. 8. OPPORTUNITIES <ul><li>McDonald’s accounted for 35 percent of the Sandwich Segment while Burger King ran a distant Second, with a 16 percent market share. </li></ul><ul><li>Per store sale at Burger King remained flat and Hardee’s per store sale declined by 10 percent. </li></ul><ul><li>In family Segment, Friend’s and Shoney’s were forced to shut down restaurants because of declining profits. </li></ul><ul><li>Within the Pizza Segment, Pizza Hat and Little Caesars Closed underperforming restaurants. </li></ul><ul><li>Boston Market was a new restaurant chain that emphasized roasted rather than fried chicken. </li></ul><ul><li>In 1999, Boston Market soon entered Bankruptcy proceedings. </li></ul><ul><li>Church’s broadened its menu to include buffalo chicken wings, macaroni and cheese, beans and rice and collard greens. </li></ul><ul><li>Baby boomers aged 35 to 50 constituted the largest customer group for fast-food restaurants. </li></ul>
  9. 9. THREATS <ul><li>McDonald’s with sales of more than 19 billion in 1999, accounted for 15 percent of the sales of the nation’s top 100 restaurant chains. </li></ul><ul><li>McDonald’s generated per store sale 1.5 million per year. </li></ul><ul><li>Much of the growth in dinner houses came from new unit construction in suburban market and small town. </li></ul><ul><li>In Family Segment, Steak n Shake and Cracker Barrel expend its restaurant by more than 10 percent. </li></ul><ul><li>KFC nearest competitor Popeye, ran a distant second with sales of 1.0 billion. </li></ul><ul><li>In early 1990s ’ many industry analysts predict that Boston Market would challenge KFC for market leadership. </li></ul><ul><li>Boston market and Chick-fil-A market share gains were achieved primarily by taking customer away from KFC. </li></ul><ul><li>Popeye’s replaced Boston market as the second largest chicken chain in 1999. </li></ul>
  10. 10. FINDINGS AND RECOMMENDATIONS <ul><li>FINDINGS </li></ul><ul><li>KFC was trying to increase market share in other regions of South America beside Maxico & Carabian. But financial constraints restricted KFC from doing so. </li></ul><ul><li>KFC focus on strengthening its position in Maxico & Carabian Only. </li></ul><ul><li>New Competitors like Habib’s and Wendy’s were establishing new restaurants in Maxico. </li></ul><ul><li>KFC had largest market share of fast food chains in Maxico. </li></ul><ul><li>Devaluation of Peso does not effected KFC, because their production plants in Maxico were utilizing local resources. </li></ul>
  11. 11. RECOMMENDATIONS <ul><li>If KFC could increase company own restaurants, which enables it to control quality, services and restaurant cleanliness. Therefore more capital is needed. </li></ul><ul><li>On the other hand if company operated franchise based restaurants throughout Latin America, its brand image could be build and its competitors will be loosing first more advantage. </li></ul><ul><li>Latin American markets is developing markets, so its growth is high and entry barriers are low. </li></ul><ul><li>KFC could make strategic alliances with key suppliers to gain advantage over competitors in the market. </li></ul><ul><li>An a peeling business model and good strategy has golden opportunity to shape the rules and establish itself as the recognize market leader. </li></ul>
  12. 12. CONCLUSION <ul><li>FOCUS OF THEIR STRATEGY SHOULD BE ON THE </li></ul><ul><li>COUNTRIES LIKE CHINA, AND INDIA ETC BECAUSE THEY </li></ul><ul><li>PROVIDE MARKETS WHICH HAVE HIGH GROWTH RATE </li></ul><ul><li>ON THE OTHER HAND….. </li></ul>
  13. 13. KENTUCKY FRIED CHICKEN <ul><li>QUESTIONS </li></ul><ul><li>& </li></ul><ul><li>ANSWERS </li></ul><ul><li>SESSION </li></ul>
  14. 14. <ul><li>SPECIAL </li></ul><ul><li>THANKS </li></ul><ul><li>TO </li></ul><ul><li>SIR AMJID ALI SHAH </li></ul>KENTUCKY FRIED CHICKEN

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