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. 1) 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

11. THANKYOU