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Cristal Ann G. Laquindanum   ASMPH Class of 2012
•   Pioneered by Colonel Harland Sanders; Kentucky Fried Chicken (KFC)    has grown to become one of the largest quick foo...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Or...
Lunch/dinner    Lunch/dinner     Side      Breakfast   Snack      Coffee       All               main dishes       sides  ...
Lunch/dinner    Lunch/dinner     Side      Breakfast   Snack      Coffee       All               main dishes       sides  ...
Threat of new entrants                                          LOW                                 Franchising, small-sca...
Critical Success Factors                     Wt         Score       Ave       Score         Ave        Score   Ave1 Produc...
Critical Success Factors                     Wt         Score       Ave       Score         Ave        Score   Ave1 Produc...
Critical Success Factors                     Wt         Score       Ave       Score         Ave        Score   Ave1 Produc...
Critical Success Factors                      Wt         Score       Ave       Score         Ave        Score   Ave1 Produ...
Critical Success Factors                      Wt         Score       Ave       Score         Ave        Score   Ave1 Produ...
Critical Success Factors                      Wt         Score       Ave        Score        Ave        Score     Ave1 Pro...
Critical Success Factors                      Wt         Score       Ave       Score         Ave        Score   Ave1 Produ...
Critical Success Factors                      Wt         Score       Ave       Score         Ave        Score   Ave1 Produ...
Weighted                                Key External Factors                           Weight   Rating                    ...
Weighted                                Key External Factors                           Weight   Rating                    ...
Weighted                                Key External Factors                            Weight    Rating                  ...
Weighted                                Key External Factors                           Weight   Rating                    ...
Weighted                                Key External Factors                           Weight   Rating                    ...
Weighted                                Key External Factors                            Weight     Rating                 ...
Weighted                                Key External Factors                           Weight   Rating                    ...
Weighted                                Key External Factors                           Weight   Rating                    ...
Weighted                           Key External Factors                                       Weight     Rating           ...
Weighted                         Key External Factors                                  Weight     Rating                  ...
Rank              Brand            Outlets                        Key External Factors                         Weight Rati...
Weighted                                Key External Factors                           Weight   Rating                    ...
Weighted                                Key External Factors                           Weight    Rating                   ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                           Key Internal Factors                                      Weight     Rating            ...
Weighted                            Key Internal Factors                                       Weight     Rating          ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                              Key Internal Factors                                               Weight   Rating  ...
Weighted                            Key Internal Factors                                        Weight     Rating         ...
Key Internal Factors      Restaurant Lunch/dinner Lunch/dinner           Side                     Coffee Weighted         ...
Weighted                              Key Internal Factors                                               Weight    Rating ...
Strategy Option              TOWS SPACE IEM GSM Total       Integration Strategy       1      Forward Integration         ...
•   Carries more risk•   Develop a new product    targeted to its existing    customers                               •   ...
Why Product Development?• KFC needs to increase sales by improving or modifying  its menu items (tried and tested)• It wil...
• Long term Company Objective:   - Increase net profit margin by 5% annually from 2012 to 2016                            ...
Completion                             Team                  Activities                  Date       Expected Output       ...
Goals               Measures               Current             TargetsCustomer ServiceMarket Share                  Global...
Cristal Ann G. Laquindanum   ASMPH Class of 2012
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KFC STRAMA (defense ppt)

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KFC STRAMA (defense ppt)

  1. 1. Cristal Ann G. Laquindanum ASMPH Class of 2012
  2. 2. • Pioneered by Colonel Harland Sanders; Kentucky Fried Chicken (KFC) has grown to become one of the largest quick food service systems in the world; touted as the “world’s most popular chicken franchise”• Well known for their Original Recipe Fried Chicken from a recipe of 11 herbs and spices• Company went through many acquisitions (Heublin Inc  RJ Reynolds  PepsiCo Inc  Tricon Global Restaurants, Inc  YUM! Brands, Inc)• Currently, KFC is under the restaurant company YUM! Brands, Inc (along with Taco Bell and Pizza Hut) with nearly 5,200 restaurants in the United States
  3. 3. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Customers“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  4. 4. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Products & Services“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  5. 5. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Markets“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  6. 6. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Concern for Survival; Growth and Profitability“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  7. 7. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Technology“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  8. 8. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Philosophy“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  9. 9. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Self-concept“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  10. 10. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Concern for Public Image“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  11. 11. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Concern for Employees“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  12. 12. Kentucky Fried Chicken is one of the world’s largest fast food systems serving theworld’s most popular chicken with its Original Recipe® fried chicken - made withthe same secret blend of 11 herbs and spices Colonel Harland Sanders perfectedmore than a half-century ago. The world’s best-fried chicken that tastes so goodstill continuously searches for better ways to improve. Fast food doesn’t have tomean unhealthy foods. Here at KFC, we are still in the forefront of healthy fast-food menu choices. Nation-Building“Our passion, as a restaurant company, is to put a KFC on peoples faces aroundthe world, satisfying customers every time they eat our food and doing it betterthan any other restaurant company. KFC offer customers the food they crave,comeback value, and customer-focused teams. The unique eating experience ateach of our restaurants make our customers smile and inspire their loyalty forlife. Toward that end, our 140,000 employees in the US are trained to becustomer maniacs. It is with passion that we strive to be known by our “Southern”way of cooking chicken and share KFC’s unique flavor all around the nation.”
  13. 13. Lunch/dinner Lunch/dinner Side Breakfast Snack Coffee All main dishes sides beverages items items beverages itemsKFC 48 28 102 0 20 0 198Chick-Fil-A 21 13 19 18 16 2 89Popeyes 31 23 12 10 6 0 82
  14. 14. Lunch/dinner Lunch/dinner Side Breakfast Snack Coffee All main dishes sides beverages items items beverages itemsKFC 48 28 102 0 20 0 198Chick-Fil-A 21 13 19 18 16 2 89Popeyes 31 23 12 10 6 0 82
  15. 15. Threat of new entrants LOW Franchising, small-scale entrepreneurs; high fixed cost; intense competitionBargaining Power of Buyers Rivalry Among Existing Bargaining Power of Suppliers LOW Competitors LOW HIGHLow volume purchases, not Low switching costs price sensitive Highly competitive industry with many players; trend of quality meals Threat of Substitute Products HIGH Frozen food section, home cooked meals, healthier alternatives
  16. 16. Critical Success Factors Wt Score Ave Score Ave Score Ave1 Product Quality 0.35 3 1.05 4 1.40 3 1.052 Competitive Pricing 0.20 3 0.60 2 0.40 2 0.403 Distribution capability 0.20 4 0.80 2 0.40 2 0.404 Brand Image 0.10 4 0.40 RECIPE FOR SUCCESS: 0.30 3 0.30 3 good product, competitive5 Menu variability 0.05 2 0.10 2 price, 0.10 2 0.106 Advertising 0.10 3 0.30 widely distributed 3 3 0.30 0.30Total 1.00 3.25 2.90 2.55Note: rating values are as follows: 1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength.
  17. 17. Critical Success Factors Wt Score Ave Score Ave Score Ave1 Product Quality 0.35 3 1.05 4 1.40 3 1.052 Competitive Pricing 0.20 3 Chick-fil-A: High satisfaction rating 0.40 0.60 2 0.40 23 Distribution capability 0.20 4 0.80 gaining multiple awards 0.40 and 2 0.40 24 Brand Image 0.10 4 0.40 3 0.30 3 0.305 Menu variability 0.05 2 0.10 2 0.10 2 0.106 Advertising 0.10 3 0.30 3 0.30 3 0.30Total 1.00 3.25 2.90 2.55Note: rating values are as follows: 1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength.
  18. 18. Critical Success Factors Wt Score Ave Score Ave Score Ave1 Product Quality 0.35 3 1.05 4 1.40 3 1.052 Competitive Pricing 0.20 3 0.60 2 0.40 2 0.403 Distribution capability 0.20 4 0.80 2 0.40 2 0.40 KFC value meals4 Brand Image 0.10 4 0.40 from 99c to $1.99 3 3 0.30 0.30 draws consumers in5 Menu variability 0.05 2 0.10 2 0.10 2 0.106 Advertising 0.10 3 0.30 3 0.30 3 0.30Total 1.00 3.25 2.90 2.55Note: rating values are as follows: 1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength.
  19. 19. Critical Success Factors Wt Score Ave Score Ave Score Ave1 Product Quality 0.35 3 1.05 4 1.40 3 1.052 Competitive Pricing 0.20 3 0.60 2 0.40 2 0.403 Distribution capability 0.20 4 0.80 2 0.40 2 0.404 Brand Image 0.10 4 0.40 ranked 9th in 10 largest KFC 3 0.30 3 0.30 fast food chains in the US5 Menu variability 0.05 2 0.10 (5,200 units) 2 0.10 2 0.106 Advertising 0.10 3 0.30 3 0.30 3 0.30Total 1.00 3.25 2.90 2.55 Note: rating values are as follows: 1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength.
  20. 20. Critical Success Factors Wt Score Ave Score Ave Score Ave1 Product Quality 0.35 3 1.05 4 1.40 3 1.052 Competitive Pricing 0.20 KFC is joining the healthy bandwagon 0.40 3 0.60 2 0.40 23 Distribution capability 0.20 4 with its KFC 2 0.80 Grilled0.40 Chicken 2 0.404 Brand Image 0.10 4 0.40 3 0.30 3 0.305 Menu variability 0.05 2 0.10 2 0.10 2 0.106 Advertising 0.10 3 0.30 3 0.30 3 0.30Total 1.00 3.25 2.90 2.55 Note: rating values are as follows: 1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength.
  21. 21. Critical Success Factors Wt Score Ave Score Ave Score Ave1 Product Quality 0.35 3 1.05 4 1.40 3 1.052 Competitive Pricing 0.20 3 0.60 2 0.40 2 0.403 Distribution capability food choices than 2 0.80 KFC has more 0.20 4 2 0.40 2 0.404 Brand Image competitors combined! 4 0.10 0.40 3 0.30 3 0.305 Menu variability 0.05 2 0.10 2 0.10 2 0.106 AdvertisingLunch/dinner 0.10 Side Lunch/dinner 3 0.30 Breakfast 3 Snack0.30 Coffee 3 0.30 All main dishes sides beverages items items beverages itemsTotal KFC 48 1.00 28 102 3.25 0 202.90 0 2.55 198 Chick-Fil-A 21 13 19 18 16 2 89 Popeyes 31 23 12 10 6 0 82 Note: rating values are as follows: 1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength.
  22. 22. Critical Success Factors Wt Score Ave Score Ave Score Ave1 Product Quality 0.35 3 1.05 4 1.40 3 1.052 Competitive Pricing 0.20 3 0.60 2 0.40 2 0.403 Distribution capability 0.20 4 0.80 2 0.40 2 0.404 Brand Image 0.10 4 All three chicken fast food chains made 0.40 3 0.30 3 0.30 effective advertising efforts5 Menu variability 0.05 2 0.10 2 0.10 2 0.106 Advertising 0.10 3 0.30 3 0.30 3 0.30Total 1.00 3.25 2.90 2.55 Note: rating values are as follows: 1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength.
  23. 23. Critical Success Factors Wt Score Ave Score Ave Score Ave1 Product Quality 0.35 3 1.05 4 1.40 3 1.052 Competitive Pricing 0.20 3 0.60 2 0.40 2 0.403 Distribution capability 0.20 4 0.80 2 0.40 2 0.404 Brand Image 0.10 4 0.40 3 0.30 3 0.305 Menu variability 0.05 2 0.10 2 0.10 2 0.106 Advertising 0.10 3 0.30 3 0.30 3 0.30Total 1.00 3.25 2.90 2.55 Note: rating values are as follows: 1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength.
  24. 24. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.153-E US food industry provides employment to the country 0.05 3 0.154-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  25. 25. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.153-E US food industry provides employment to the country 0.05 3 0.154-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  26. 26. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.153-E 0.05 3 US food industry provides employment to the country retail food and beverage industry, including The U.S. 0.15 restaurants, is about a $1.5 trillion industry4-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 Restaurant industry sales = $632 B or 4% of GDP 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  27. 27. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.153-E US food industry provides employment to the country 0.05 3 0.154-C US consumers prefer to eat out Restaurant industry is projected to employ 12.9 million 0.30 4 1.205-SC Increasing and aging US population workforce (NRA, 2012) people or 10% of the US 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  28. 28. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product Food expenditures have increased steadily; 0.05 3 0.152-E 0.05 Total away-from-home expenditures amount to $594 billion in 2010 Continued growth of US food service industry 3 0.15 (considerable amt in eating and drinking places)3-E US food industry provides employment to the country 0.05 3 0.154-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  29. 29. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.15 US residents = 307,007 million and is projected to increase to 392 million by 2050 but projected to decrease in the next 63-E US food industry provides employment to the country 0.05 3 decades by 50% (due to aging population) 0.15 Older individuals tend to eat out leas often4-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  30. 30. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.153-E US food industry provides employment to the country 0.05 3 0.15 60% of traffic growth was accounted for breakfast4-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  31. 31. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.15 • A household’s structure can have2-E Continued growth of US food service industry implications on how it buys and 0.05 3 0.153-E US food industry provides employment to the country prepares food 0.05 3 0.15 • Dining out = most convenient4-C US consumersthose witheat out choice for prefer to dual-income 0.30 4 1.205-SC and single-parent families Increasing and aging US population 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  32. 32. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.153-E US food industry provides employment to the country 0.05 3 0.15 Older people more likely to:4-C US consumers prefer to eat out •watch their diet 0.30 4 1.205-SC Increasing and aging US population •choose healthier foods 0.05 3 0.15 •compromise out for breakfast Popularity of eatingcompromise on6-SC convenience and taste 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 Fast food industry blamed for obesity-related heath problems 0.053-C • non-fried chicken chains 0.10 Increased competition fromNYC regulation requirin restaurants to remove most trans fats 2 0.20 •Health care act in 2010, restaurants post calorie counts for menu and4-C Operating costs on the rise buffet items 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  33. 33. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.15 • Growing rate of service industry Continued growth of US foodAsian and Pacific Islander2-E population to expand over 12 million 0.05 3 0.153-E • Hispanic-origin population, largest growing US food industry provides employment to the country 0.05 3 0.15 group, may increase to 31 million by 20154-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.05 • With the growing rate of these population, there is also a growing2 0.10 demand 0.203-C Increased competition from non-fried chicken chains4-C Operating costs on for ethnic cuisine the rise 0.05 1 0.05 • Asian fast food and full-service restaurants seeing strong growth E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  34. 34. Rank Brand Outlets Key External Factors Weight Rating Weighted Score 1 SUBWAY 21,635EXTERNAL OPPORTUNITIES 13,867 2 McDonald’s1- E 3 Starbucks 10,987 Increasing US gross domestic product 0.05 3 0.152-E Continued growth ofHut food service7,564 4 Pizza US industry 0.05 3 0.15 5 Burger King 7,2133-E US food industry provides employment to the country 6 Dunkin’ Donuts 5,863 0.05 3 0.154-C 7 Wendy’s US consumers prefer to eat out 5,742 0.30 4 1.205-SC Increasing and aging US population 5,622 8 7-Eleven 0.05 3 0.156-SC Popularity of Taco Bell breakfast 5,588 9 eating out for 0.10 3 0.30 10 KFC 5,253 • Hamburgers continue to be very7-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 popular (14% of all restaurant to eat out orders or 8.7 B servings)EXTERNAL THREATS • Increased popularity of Subway outlets (made with fresh and specialty0.10 ingredients2 0.201-C Growing health concerns on fast food service restaurants2-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  35. 35. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.153-E US food industry provides employment to the country 0.05 3 0.154-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 0.156-SC• Popularity of and labor costs have been rising  pressure Food prices eating out for breakfast 0.10 3 0.307-SC Demographicmargins in the American household causes a tendency on operating changes 0.10 4 0.40 • to eat out price increase  cost for restaurant Commodity increasesEXTERNAL THREATS to absorb the increase in • Restaurants most likely commodity prices1-C Growing health concerns on fast food service restaurants • Some counteracted these with higher pricing 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  36. 36. Weighted Key External Factors Weight Rating ScoreEXTERNAL OPPORTUNITIES1- E Increasing US gross domestic product 0.05 3 0.152-E Continued growth of US food service industry 0.05 3 0.153-E US food industry provides employment to the country 0.05 3 0.154-C US consumers prefer to eat out 0.30 4 1.205-SC Increasing and aging US population 0.05 3 0.156-SC Popularity of eating out for breakfast 0.10 3 0.307-SC Demographic changes in the American household causes a tendency 0.10 4 0.40 to eat outEXTERNAL THREATS1-C Growing health concerns on fast food service restaurants 0.10 2 0.202-SC Growing demand for ethnic cuisine 0.05 1 0.053-C Increased competition from non-fried chicken chains 0.10 2 0.204-C Operating costs on the rise 0.05 1 0.05 E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive TOTAL 3.00
  37. 37. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.405-M Advertising 0.05 3 0.156-MT Value given to franchise operators 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 0.10 2 0.203-F Stagnant net profit margin 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  38. 38. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees • KFC’s early entry in 1954 allowed it to develop strong brand name recognition and strong foothold in the3-M KFC is the market leader in the fast food chicken category industry 0.25 4 1.004-M Wide distribution capability • Pride of having KFC’s Original Recipe Fried 4 0.10 0.40 Chicken with5-M Advertising 11 herbs and spices 0.05 3 0.15 • Colonel Sanders influence since the beginning6-MT Value given to franchise operators 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 0.10 2 0.203-F Stagnant net profit margin 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  39. 39. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.00 • 1986: management shift when PepsiCo acquired KFC from RJR4-M Wide distribution capability Industries 0.10 4 0.405-M Advertising • Several restructurings led to layoffs throughout KFC  0.05 3 demoralization to old KFC employees and franchisees 0.156-MT Value given to franchise operators 0.05 3 0.15 • Spin off of PepsiCo to Tricon Global Restaurants (currently named7-HR High employment rate YUM! Brands) was lead by David Novak 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 0.10 2 0.203-F Stagnant net profit margin 0.05 1 0.054-R Limited menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  40. 40. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.40 • KFC systemwide sales of $4.70 billion in 20105-M Advertising • 0.05 3 Chick-fil-A and Popeyes as close competitors 0.156-MT Value given to franchise operators 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 0.10 2 0.203-F Stagnant net profit margin 0.05 1 0.054-R Limited menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  41. 41. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.405-M Advertising 0.05 3 0.156-MT Value given to franchise operators 0.05 3 0.15 As of0.05 KFC3 0.157-HR High employment rate • 2012, had 5,200INTERNAL WEAKNESSES units in the US (17% of the units are operated by YUM!1-O Slow US growth 0.05 2 0.10 Brands)2-M Customer satisfaction rating is low • Ranked 9 out of 2 largest0.20 0.10 10 fast food chains in the US3-F Stagnant net profit margin 0.05 1 0.054-R Limited menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  42. 42. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.405-M Advertising 0.05 3 0.156-MT Value given to franchise operators 0.05 3 0.15 • Before: “finger-lickin’ good” and Colonel Sanders7-HR High employment rate as its trademark. 0.05 3 0.15 • Now: “healthier” “Kentucky Grilled Chicken”INTERNAL WEAKNESSESfat chickens products, 0 grams trans1-O • Brandgrowth revamp: younger consumers Slow US image 0.05 2 0.10 (animated character, bolder colors, updated2-M Customer satisfaction rating is low graphics) 0.10 2 0.203-F • 52 week/ profit margin Stagnant net year TV ad schedule 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  43. 43. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.405-M Advertising 0.05 3 0.156-MT Value given to franchise operators 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL •WEAKNESSES only about 5% ownership of KFC YUM! Brands retain1-O • Franchise operators can run their branches almost independently Slow US growth • Less friction between mother company and franchise operators. 0.05 2 0.102-M Customer satisfaction rating is low on sals of $7.4 billion from a loss of 0.10 million in • Net income of $617 miion $111 2 0.203-F net income in 1997 Stagnant net profit margin 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  44. 44. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.405-M Advertising 0.05 3 0.156-MT Value given to franchise operators 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 140,000 people working at over 5,000 KFC 0.10 2 0.20 restaurants across the country with an average of3-F Stagnant net profit margin 28 employees per 0.05 restaurant 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  45. 45. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees • KFC’s growth was driven by international operations3-M KFC is the market leader in the fast food chicken category 0.25 4 1.00 • 95% of new restauratns were from international franchise4-M Wide distribution capability (China) 0.10 4 0.40 • 2004, KFC could not open any more restaurants until its5-M Advertising domestic same-store sales figures improved 3 0.05 0.156-MT Value given to franchise operators • KFC US growth is just 1% per year 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 0.10 2 0.203-F Stagnant net profit margin 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  46. 46. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.40 • American Customer Satisfaction Index in5-M Advertising KFC scored 75 out of 100 2011, 0.05 3 0.15 • given to franchise operators6-MT Value Another survey from Customer Reports puts KFC near the bottom of the rankings 0.05 3 0.157-HR High employment rate • Dissatisfaction from consumers 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 0.10 2 0.203-F Stagnant net profit margin 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  47. 47. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M 10% NET PROFIT MARGIN0.10 Wide distribution capability 4 0.405-M Advertising 0.05 3 0.156-MT Value given to franchise operators 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 KFC net profit margin has been stagnant at 0.10 10% for the past 3 years2-M Customer satisfaction rating is low 0.10 2 0.203-F Stagnant net profit margin 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  48. 48. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.405-M Advertising 0.05 3 0.156-MT Value given to franchise operators 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 0.10 2 0.20 No menu items in US branches of KFC3-F Stagnant net profit margin 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  49. 49. Key Internal Factors Restaurant Lunch/dinner Lunch/dinner Side Coffee Weighted Breakfast Weight Rating Snack All Score main dishes sides beverages items items beverages itemsINTERNAL STRENGTHS 16 Subway 3 10 0 0 0 291-C Starbucks Strong trademark brand 0 0 6 7 0.05 13 4 10 0.20 362-MT Change in management improved relationship between management0 0.10 Taco Bell 7 0 0 0 0 3 0 0.30 7 Pizza Hut and franchisees 6 0 0 0 0 63-M KFC is the market leader in 0 fast food chicken category Dunkin’ the 0 12 13 0.251 4 20 1.00 46 Donuts4-M Wide distribution capability 0.10 4 0.405-M KFC Advertising 8 0 0 0 0 0 8 Sonic 4 2 40 0 0.056 3 0 0.15 526-MT Value given to franchise operators 0.05 3 0.15 Domino’s 10 0 0 0 0 0 107-HR High employment rate Twelve 51 5 68 20 0.05 20 3 30 0.15 194 restaurantsINTERNAL WEAKNESSES1-O Slow US growth • 0.05 2 0.10 Only 8 lunch/dinner main dishes that are2-M Customer satisfaction rating is low considered healthy • 0.10 2 0.20 Three out of the four restaurants with fewer3-F Stagnant net profit margin 0.05 1 0.05 healty items are all YUM! Brands companies4-R No menu items for breakfast • Introduction of KFC Grilled Chicken 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  50. 50. Weighted Key Internal Factors Weight Rating ScoreINTERNAL STRENGTHS1-C Strong trademark brand 0.05 4 0.202-MT Change in management improved relationship between management 0.10 3 0.30 and franchisees3-M KFC is the market leader in the fast food chicken category 0.25 4 1.004-M Wide distribution capability 0.10 4 0.405-M Advertising 0.05 3 0.156-MT Value given to franchise operators 0.05 3 0.157-HR High employment rate 0.05 3 0.15INTERNAL WEAKNESSES1-O Slow US growth 0.05 2 0.102-M Customer satisfaction rating is low 0.10 2 0.203-F Stagnant net profit margin 0.05 1 0.054-R No menu items for breakfast 0.05 2 0.105-R Limited healthy menu options 0.10 2 0.20 C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information TOTAL 3.00
  51. 51. Strategy Option TOWS SPACE IEM GSM Total Integration Strategy 1 Forward Integration 1 1 1 3 2 Backward Integration 1 1 1 3 3 Horizontal Integration 1 1 1 3 Intensive Strategy 4 Market Penetration 1 1 1 1 4 5 Market Development 1 1 1 3 6 Product Development 1 1 1 1 4 Diversification Strategies 7 Related Diversification 1 1 8 Unrelated Diversification 0 Defensive Strategies 9 Retrenchment 0 10 Divestiture 0 11 Liquidation 0 Wt Market Penetration Product DevelopmentKey Factors Total Attractiveness Score Total Attractiveness ScoreTotal AttractivenessScore 1 4.40 4.55(Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable; 0 = not relevant)
  52. 52. • Carries more risk• Develop a new product targeted to its existing customers • Less risky; leverages on existing resources and capabilities • Increase market share • Volume discounts, bonus cards, customer relationship management
  53. 53. Why Product Development?• KFC needs to increase sales by improving or modifying its menu items (tried and tested)• It will entail large research and development expenditures• KFC had successful products in the past and consumer may be attracted to try new products based on their past positive experience.• KFC holds the leading market share and is in a very competitive fast food industry
  54. 54. • Long term Company Objective: - Increase net profit margin by 5% annually from 2012 to 2016 << R&D annual objective << Production annual objective << Marketing annual objective << Financial annual objective << Personnel annual objective
  55. 55. Completion Team Activities Date Expected Output Responsible New range of menu Develop five new breakfast items that Market Q1 that includes1 are low in salt, low in fat, and low in Research and 2014 healthy breakfast calories Development items Finance and Reposition franchise outlets with low Q2 Lower operating2 Accounting profit and nonperforming 2013 expense Team Interviews, surveys, Organize market research on consumers’ Q1 Market3 small group current needs and wants 2013 Research Team discussions A statewide marketing effort of Marketing and Increase promos and advertisements to Q24 promotions and Advertising states with lowest market share 2014 advertisements on Team the new menu items Develop training programs to support Team building Human teamwork and work efficiency of the Q15 activities and HR Resource employees in all divisions of the 2013 training programs Management company
  56. 56. Goals Measures Current TargetsCustomer ServiceMarket Share Global Market 50% market 35.2% market share Research shareBrand Image Customer surveys 75 out of 100 90 out of 100Financial Performance Grow by 10%Net Sales 2014 Net Sales $1,768,000,000 year-on-year from 2013-2015 Grow by 10% byNet Income Income Statement $ 185,000,000 2014 % of sales from Grow sales from launched products/Profitable new products 10% 10% to 15% per gross profit from new year productsInnovation and Learning Awareness levelsNew menu breakfast items Consumer surveys None available of 80%
  57. 57. Cristal Ann G. Laquindanum ASMPH Class of 2012

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