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INTERVIEW CHAPTER 2 & 3:
KENTUCKY FRIED CHICKEN
KFC introduction
KFC (Kentucky Fried Chicken) is a fast food restaurant chain. This
company headquartered in Louisville, Kentucky, in U.S. The company is
a subsidiary of Yum! Brands(), a restaurant company that also
owns the Pizza Hut and Taco Bell chains. The founder was Harland
Sanders. Its the worlds second largest restaurant chain (as measured
by sales) after McDonalds with 18,875 outlets in 118 countries and
territories as in 2013.
KFC was founded Colonel by Harland Sanders (born on Sep 9, 1890)
who began sell fried chicken from his roadside restaurant in Corbin,
Kentucky during Great Depression. He identified the potential of the
restaurant franchising concept and the first Kentucky Fried Chicken
franchise opened in Utah in 1952. KFC popularized in the fast food
industry, diversifying the market by challenging the established
dominance of the hamburger. By branding himself as Colonel
Sanders, Harland became a prominent figure of American cultural
history, and his image remains widely used in KFC advertising.
However, Harland sold the company to a group of investors led by John
Y. Brown and Jack C. Massey in 1964.
KFC was one of the first fast food chains to expand internationally. In
the mid of 1960s, KFC opened outlets in Canada, the U.K, Mexico and
Jamaica. Throughout the 1970s and 1980s, KFC went through a series
of changes in corporate ownership with little or no experience in the
restaurant business.
In the early 1970s, KFC was sold to the spirits distributor Heublein who
were taken over by the R.J Reynolds food and tobacco conglomerate,
who sold the chain to PepsiCo. The chain continued to expand
overseas. However, in 1987 became the first Western restaurant chain
to open in China, which is now the company's single largest market.
PepsiCo spun off its restaurants division as Tricon Global Restaurants,
which later changed its name to Yum! Brands.
Yum! Brands company owns 4491 stores in U.S, 4563sores in China
and 9821 stores across the rest of countries. They totally own the
18875 outlets in 118 countries in 2013. Their average annual sales per
unit is 1.2 million. In 2014, they already had more than 41000
restaurants in over 125 countries and global sales totaled more than
US$ 13 billion.
for
company tries to undercut the others price and offer more valuable
products, finally resulting in decreased industry profits.
What are the implications of price wars for KFC?
According to the definition of price wars, there must be a competitor to
compete with KFC. Once, the rivalry of a company such as MCdonalds
and KFC starts, KFC focuses more on differentiating, launching new fast
food product,
wars and advertising battles, while the other company is trying price
cuts. but on the whole rivalry in the industry remains moderate due to
the existence of numerous players operating in various sizes.
How KFC deals with the threat of price wars?
The most common way to try and deal with the threat of a price war
by seeking to consolidate the industry following the price of the
dominant company, however, price-fixing and collusion needs to be
avoided (the idea cannot be communicated between companies).
it is not very difficult to enter the fast food industry, but it is extremely
difficult to enter as KFCs competitor. So, for KFC, they overcome this
by differentiating its products, effective marketing and branding
efforts. In this way, KFC escapes from potential price wars. On the
other hand, KFC may want to reduce its cost so that it will survive in
case of price wars.
Including
todays
emerging
industry,
like
bakery,
Chinese
fast
food. .They are enough to achieve consumers needed. There are all
the substitutes, and they can replace KFC.
Power of complement providers
Complementors-companies that sell products that add value to other
product.Like PEPSI is strong complementors, if KFC revenue is
decrease, PEPSIs cola will decrease.
Primary activities
The primary activities is activities related to the design, creation,
and
delivery of the product, its marketing, and its support and after-sales
service.
KFC not only provide the family package but also another package
like
two burger with two drinks. The package usually will more cheaper.
KFC advertising is simple and easy to understand, because they
want the
customer know what they are promote about.
Customer Service
Customer service can create superior utility by solving customer
problems and supporting customer after they have purchased the
product.
Customer Service of KFC
KFC provides delivery service
KFC also provides a clean place for the customer to eat.
Support Activities
Activities of the value chain that provide inputs that allow the
primary activities to take
Materials Management
Definition:
that people
are adequately
trained, motivated
and
Information Systems
Definition :
The electronic systems for managing inventory, tracking sales,
pricing products, selling products, dealing with customer service
inquires and so on.
KFC:
Each KFC outlet use MIS in accounting, knowing production
HR policies: helps them to rate their employees.
MIS systems let the KFC management:
To capture information and store it, whenever they are making bills
it helps them to count sales per day, per week and per month
because a copy of the bill is stored in the computer.
KFC has a comprehensive online websites: updating prices, latest
activities, promotions, advertisements and customer feedback
Company Infrastructure
Definition:
The companywide context within which all the other value creation
activities take place: the organizational structure, control systems
and company culture
KFC:
Highly impressive and uniform design structure.
Fascinating and charming all over the world
Ideal color schemes, pleasurable lighting outlets, comforting sitting
arrangement, special block for kids