Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
&
Global Fast Food Industry
Presented To:
Mr. Faeiz H Seyal
Presented By:
7 Usman Atta 82
Group C
4 Muhammad Shahid Sharif 68
6
KFC Strategies
Presented by:
Uman Atta
R# 082
Food industry
• The food industry is the complex, global collection
of diverse businesses that together supply much of
the food energy consumed by the world
population.
• Processed food sales worldwide are approximately
US$3.2 trillion (2004).
• In the U.S., consumers spend approximately US$1
trillion annually on food, or nearly 10 percent of
the Gross Domestic Product (GDP). Over 16.5
million people are employed in the food industry.
Restaurant industry
• Industry break down
• Restaurant Industry
• Full‐service
• Limited‐service (fast food industry )
• Burger Segment
• Sandwiches
• Pizza/pasta
• Chicken
• Mexican
• Etc.
Restaurant industry
• For the past three decades, the restaurant industry
has consistently posted yearly sales gains.
Full‐service Restaurants
• Full service restaurants are defined as those
establishments with waiter/waitress service
and where an order is taken while the
consumer is seated.
• They represent 52% of all restaurant sales in
the U.S.
Limited‐service (fast food industry )
• Limited service restaurants are defined as
those establishments in which consumers
order at a cash register, use a drive‐thru or
select items from a food bar.
• They represent 41‐percent of all restaurant
sales in the U.S.
• The largest chains include giants like
McDonald’s, Burger King and KFC.
Fast food industry
• Fast food is the term given to food that can
be prepared and served very quickly.
• The fast food market is defined as the sale
of food and drinks for immediate
consumption either on the premises or for
consumption elsewhere.
Types of outlets
• The market is first broken down into 4 types
of outlets
9Quick Service Restaurants
9Takeaways
9Mobile & Street Vendors
9Leisure Locations
Global fast food industry
Financial Highlights
• The global fast food market grew by 6.6% in 2008 to reach
a value of $154.7 billion.
• In 2013, the global fast food market is forecast to have a
value of $200 billion, an increase of 29.3% since 2008.
• The global fast food market grew by 3% in 2008 to reach a
volume of 85.8 billion transactions.
• In 2013, the global fast food market is forecast to have a
volume of 94.7 billion transactions, an increase of 10.4%
since 2008.
• QSR segment leads the global fast food market, accounting
for 66.3% of the market's overall value.
• Americas leads the global fast food market, accounting for
52.4% of the market's overall value
Industry Segments
• In fast food industry segments are grouped
by menu format like:
9Burger segment
9Sandwiches segment
9Chicken segment
9Pizza segment
9Mexican segment & etc
• Each segment represents a substitute
Burger segment made up the largest segment of fast food. Major
participants and their sales are given in the following table.
1 1 McDonald's 30,025.00
2 3 Burger King 9,348.00
3 5 Wendy’s 8,013.40
4 10 Sonic 3,811.20
5 12 Jack in the Box 3,080.00
6 16 Dairy Queen 2,519.00
Burger segment (cont.)
• Total segment sales were $64,472.70MM.
Percent Change in sales is 3.9% in 2008, 4.6%
in 2007 and 4.1% in 2006.
• McDonalds leading the segment with segment
share of 46.57%. Burger King being the
distance second with 14.49% segment share.
Major participants of sandwiches segment and their sales for
year 2008 are given in the following table.
1 2 Subway 9,600.00
2 11 Arby’s 3,371.80
3 15 Panera Bread 2,648.00
4 19 Quiznos Subs 1,660.00
5 41 Jimmy John’s 496.60
6 43 Jason’s Deli 467.10
Sandwiches segment (cont.)
• Total segment sales were $18,636.30MM.
Percent Change in sales is 11% in 2008, 7.7%
in 2007 and 8.3% in 2006.
• Subway leading the segment with a segment
share of 51.51%.
Major participants of pizza segment and their sales are given in
the following table:
• Pizza Hut leading the segment with sales of
$5500.00MM and a segment share of
41.32%.
Major participants of chicken segment and their sales are given
in the following table:
• 1930 "Sanders Court & Café.“Sanders opens his first restaurant In
front of gas station and work as station operator, chief cock and
cashier.
• 1936 Kentucky Governor Ruby Laffoon makes Harland Sanders an
honorary Kentucky Colonel in recognition of his contributions to the
state's cuisine cuisine.
• 1937 The Sanders Court & Café adds a motel and expands the
restaurant to 142 seats.
• 1939 The Sanders Court & Café is first listed in Duncan Hines' “So
moist. So delicious. And so much more ." Fire destroys The Sanders
Court & Café, but it is rebuilt and reopened. The pressure cooker is
introduced. Soon thereafter Sanders begins using it to fry his chicken to
give customers fresh chicken, faster.
• 1940 Birth date of the Original Recipe.
KFC11 herbs Formula
• There, his blend of 11 herbs and spices first in 1940.
• For years, Colonel Harland Sanders carried the secret
formula for his Kentucky Fried Chicken in his head and the
spice mixture in his car.
• 9, 2009, the secret recipe was stored in KFC's Louisville
headquarters in a more secure, computerized vault.
• Only two executives had access to the recipe at any one
time
History
• 1950s Sanders Cafe was valued at $165,000, the owner could only get
$75,000 for it at auction, just enough to pay his debts.
• 1952:The Colonel begins actively franchising his chicken business by
traveling from town to town.
• 1952 the Colonel signed on his first franchise to Pete Harman, who
owned a hamburger restaurant in Salt Lake City, Utah.
• 1956 Sanders moved the business to Shelbyville, Kentucky, 30 miles
east of Louisville, to more easily ship his spices, pressure cookers,
carryout cartons, and advertising material.
History
• 1963 Sanders's recipe was franchised to more than 600
outlets in the United States and Canada.
• 1964 Sanders sold Kentucky Fried Chicken for $2 million
and a per‐year salary of $40,000 for public appearances;
that salary later rose to $200,000. The KFC sold to an
investor group headed by John Y. Brown.
History
• 1966 The Kentucky Fried Chicken Corporation goes
public.
• 1967 franchising remained the foundation of the
business. For an initial $3,000 fee.
• Franchisee went to "KFC University" to learn all the
basics. While typical costs for a complete Kentucky
Fried Chicken start‐up ran close to $65,000.
• Red‐and‐white striped buildings.
History
• 1969 The Kentucky Fried Chicken Corporation is listed on the New York
Stock Exchange. Kentucky Fried Chicken stock hit a high of $55.50 in
then fell to as low as $10 per share within a year. Lose accounting
practices .
• 1971 More than 3,500 franchised and company‐owned restaurants are
in worldwide operation when Heublein Inc. acquires KFC Corporation.
They failed to notice that the basic chicken business was slacking off.
Competitors' sales increased as Kentucky Fried Chicken's dropped.
• 1979 KFC 6,000 KFC restaurants worldwide with sales of more than $2
billion .
• 12/16/1980
Colonel Harland Sanders, who came to symbolize quality in the food
industry, dies
The 1980s: Profits and Expansion
• 1980s.R.J. Reynolds Industries Inc. acquired
Heublein, Kentucky Fried Chicken sales that year
reached $2.4 billion.
• 1983.The company had made impressive progress.
With 4,500 stores in the United States and 1,400
units in 54 foreign countries. Mayer took over as
chairman and CEO. Mayer refusing to introduce
new products as obsessively as its competitors.
PepsiCo Buys KFC
• 1986. Soft‐drink giant PepsiCo, Inc., bought Kentucky Fried
Chicken for $840 million. Because of increase in revenues.
• 1986 Kentucky Fried Chicken opened the 2,000,000‐
square‐foot Colonel Sanders Technical Center cost $23
million.
• The company began testing oven‐roasted chicken through
multiple‐franchisee Collins Foods.
• 1987. Kentucky Fried Chicken planned to open 150 overseas.
Cont…….
• In 1987 Japan, a major market, had 520 stores, Great
Britain had 300, and South Africa had 160. KFC
International
• .
1987 KFC was the first American fast‐food chain to open in China.
• September 1990, Kentucky Fried Chicken increased its holding of
company‐owned stores by buying 209 U.S. units from Collins Foods
International Inc.
Culture Problem
• KFC Staff was reduced, KFC managers were replaced with
PepsiCo managers.
• Sandars provided good gob security and stability.
• Rotating its best managers on average two years.
• Turn over was higher, employee loyalty was low.
• Fully control by Pepsi Co managers.
Poor Relationship with Franchisees
• John Cranor change franchise contract.
• Pepsi CO powers increase to take over weak franchises,
relocate franchise and have right to increase royalty fees.
• Franchise did not accept these changes and sued PepsiCo
over new contract.
• 1996 the most objectionable parts were removed from
contract by KFC new president David Novak. In 1997 new
contract was ratified.
Change in Name
• February 1991 Kentucky Fried Chicken changed its name to KFC.
• Version One: Kentucky Fried Chicken, founded by Harland
Sanders, changes it name to KFC is to remove the word
"fried" .
• Version Two: The US food and drug administration reviewed
the operations of Kentucky.
• Version Three: State of Kentucky decided to trademark their state
name. (For instance, the Kentucky Derby became "The Run for the
Roses.“)
• Packaging was changed.
• New menu items were postponed for some time.
Profits in Asia
• A new $20 million computer system was installed.
• In 1993, sales and profits of KFC outlets in Asia were
growing at 30 percent a year. Average per store sales in
Asia were $1.2 million, significantly higher than in the
United States, where per store sales stood at $750,000.
PepsiCo
• 1990 to 1996 PepsiCo sales increases by 10%.
• Competition increase in fast food industry restaurant chain
absorbed one‐half of PepsiCo annual capital spending but
they generated less than one‐third of PepsiCo cash flow.
• PepsiCo return on assets, decrease.
• PepsiCo spin off its restaurant chain with the name of
Tricon.
Tricon Global Restaurants, Inc
• PepsiCo received a one time one time distribution from
tricon of 4.7 billion, 3.7 billion to pay short term debt.
• PepsiCo acquired Tropicane chilled orange juice.
• PepsiCo sales and assets fell by $11.3 billion and $7.2 billion
between 1997 to 1999.
• Operating Margins increase 11% to 16%.
• Policy for shares: Ten shares of Pepsi Co= One share of
Tricon stock
Yum
• 2002 Tricon Global Restaurants, Inc., the world's largest restaurant
company, changes its corporate name to YUM! Brands, Inc. In addition
to KFC, the company owns A&W All‐American Food Restaurants, Long
John Silvers , Pizza Hut and Taco Bell restaurants.
Yum Financial Highlights 2009
• A&W Restaurants (global, limited in Canada)
• KFC / Kentucky Fried Chicken (global)
• Pizza Hut (global)
• Taco Bell (global)
• Wing Street (United States, Canada and Germany)
• Long John Silver's (United States, Puerto Rico,
Taiwan, New Zealand, Australia and Singapore)
• Dong Fang Ji Bai (People's Republic of China)
Yum Financial Highlights
Yum Revenue
Brands Position in Yum
Yum Revenues by country Segments
Yum System units
Cont……
• 2006
More than a billion of the Colonel's "finger lickin' good"
chicken dinners are served annually in more than 80
countries and territories around the world.
• 2007
KFC proudly introduces a new recipe that keeps the Colonel's 11 herbs
and spices and finger‐lickin' flavor, but contains Zero Grams of Trans
Fat per serving thanks to new cooking oil.
KFC
• KFC has a 46% market share in the chicken QSR segment,
close to four times higher than the next competitor.
• KFC operates in over 100 countries with a total of 14,248
restaurants worldwide.
• KFC is working with 2,250 units in China
KFC
• KFC is on number one position in chicken segment with sales of
$5200.00MM in 2008.
• Its nearest competitor Chick‐fil‐A, at second, with sale of $2962.30MM.
• At 3rd position Popeyes with $1593.00MM sales .
Fiscal year 2008 Sales
• Total segment sales were $13452.40MM. Percent Change
in sales is 3.3% in 2008, 5% in 2007 and 7% in 2006.
CHAMPS
• C = Clean Restaurants
• H = Hospitable Employees
• A = Accurate Orders
• M = Maintained Facilities
• P = Product Quality
• S = Speed of Service.
Countries
KFC In China
• 2009, operating profit for the China Division was $602
million. (YUM profits.
• KFC was the first quick‐service restaurant chain to enter
China in 1987.
• China today, with over 2,870 KFC restaurants in more than
650 cities.
• Yum! opens nearly one new KFC every day in mainland
China.
CSR
• Colonel’s Scholars: This program is offered to high school
seniors planning to attend a public in‐state college or
university.
• Packaging and the Environment: KFC is as committed to the
environment as we are to our food and customers.
• Animal welfare program: Yum! Brands, parent company of
KFC, is committed to the humane treatment of animals.
International Menu
Cont……
Urbanization
936% in 2007
Population and Growth
• Population: 204,741,942 (July 2009)
• Growth rate: 1.828% (2007)
• Birth rate: 27.74 births/1,000 population (2007)
• Death rate: 8 deaths/1,000 population (2007)
Age and Gender
• AGE STRUCTURE
• 0‐14 years: 40% (male 33,293,428; female 31,434,314)
• 15‐64 years: 56.9% (male 48,214,298; female 46,062,933)
• 65 years and over: 4.1% (male 3,256,065; female 3,542,522)
• GENDER RATIOS
• Sex ratio at birth: 1.05 male(s)/female
• under 15 years: 1.06 male(s)/female
• 15‐64 years: 1.05 male(s)/female
• 65 years and over: 0.92 male(s)/female
• total population: 1.05 male(s)/female
LITERACY
• Definition: over the age of 15 and can read and write.
• Male: 68%
• Female: 53%
Working Women In Pakistan
• The 1991-92 Labor Force Survey revealed that only
about 16% of women aged 10 years and over were in
the labor force.
• 95% of all food and packaging material used in KFC Pakistan
is procured locally, which sums up to a purchase of over
Rs.35 million per month.
• Each new outlet developed by KFC Pakistan costs approximately Rs.40
million.
• Annual turn over in Pakistan is 2.5 billion.
• 40 million customer turn over on a single outlet.
Suppliers in Pakistan
• There are two categories of supplies. The Dry food supply
and the Frozen food supply.
• Cupola holds the master franchise rights to operate KFC in
Pakistan since 1999.
• When Cupola takes complete Operate in Pakistan that was
only 05 Outlets in allover Pakistan, and then Now the
Cupola takes 45 Outlets in Pakistan
KFC Products in Pakistan
Cont…..
Cont……..
KFC vs. McDonalds in Pakistan
KFC 2010 Launch
KFC Grilled chicken
• Launch new product for health conscious peoples.
• It is not salty, spicy, or overly seasoned and had a hint of
grilled flavor. 80 pieces cooked in 20 min.
• The grilled chicken pieces contain 70 to 80 calories and four
to nine grams of fat.
• KFC’s fried chicken which come in at 110 to 370 calories,
and between 7 and 21 grams of fat.
KFC Grilled Chicken Nutrition's
Corporate Level Strategies
• Switched from franchise to company owned in their
larger markets.
• Interest in local community.
• Combing the two concept in the same unit.
• Changed name.
• Introduced different menu items to keep up with
local competitors.
Corporate Level strategy
• Switched to highly performance based
management strategies.
• More responsibility assigned to franchisees
and marketing managers.
• Pay closely aligned with customer serviced
and restaurant performance.
Business Level Strategy
• Closed unprofitable restaurants.
• Strive to fill the needs of local markets by hiring
locally and offering menu items that reflects the
culture.
• Reestablish and maintain an emphasis on clean
and updated restaurants paying close attention to
strive while maintaining product consistency.
• Cutting out marginal products.
Porters Five Force Analysis
Entry
• It is not difficult for a fast food restaurant to enter the market.
However, it would be extremely difficult to take over already
running major fast food chains' dominancy in Pakistan
• KFC holds the first‐mover advantage into the 'non‐veg food
specialty food segment' that gives them free reputation.
• The brand name is already established.
• McDonald’s, Pizza Hut, Domino's and Subway, and any new fast‐
food entrants would just be presenting something very similar to
what’s already there. While small Neighborhood restaurants
generally have low barriers to entry.
• these are the barriers to entry for similar restaurant businesses to
enter the fast‐food chain market.
Buyer/Supplier Bargaining Power
• The customers of KFC, especially as individual
buyers, have almost no bargaining power because
if only one customer threatens to no longer eat at
KFC, the store is not going to lower its price
because the cost of losing one customer is not very
great.
• KFC created competition among its suppliers,
lowering the supplier bargaining power.
• With so little buyer and supplier bargaining
powers, KFC is able to have a very tight control
over its prices and expenditures.
Substitutes
• there are a few major competitors in the fast‐food industry in
Pakistan for KFC, namely McDonald’s, Pizza Hut, Domino's
and Subway. The substitute products, in this case, would be
burgers, pizza, and sandwiches. Though they are competitors,
their primary products differ greatly from each other, in that
they sell, chicken, burgers and fries, pizzas, and sandwiches,
respectively.
• Traditional Pakistan dining, home‐cooked meals, and grocery
stores with ready‐to‐eat foods are also substitutes, as families
could choose any one of these over fast food for a meal. These
substitutes are definitely considered healthy as compared to
the fast food chains. Even foods from street vendors count as
substitute goods.
Rivalry
• KFC has little rivalry with similar fast‐food chains in
Pakistan.
• The primary reason is that their core products are different,
For example, if KFC raised its price for chicken by a small
amount, Pakistan chicken lovers who may not be as
accepting to pizzas are not going to switch to Pizza Hut just
because the price for KFC increased.
• For example, a full meal at KFC ranges about Rs. 100,
whereas a full meal at Pizza Hut can cost over Rs. 300. The
drastic difference in price assures no price competition
between these restaurants.
What Forces Are at
Work to Change Industry Conditions?
• Industries change because forces are
driving industry participants to alter
their actions
• Driving forces are the major
underlying causes of changing
industry and competitive conditions
Analyzing Driving Forces
1. Identify those forces likely to exert greatest
influence over next 1 ‐ 3 years
– Usually no more than 3 ‐ 4
factors qualify as real
drivers of change
2. Assess impact
– What difference will the
forces make ‐ favorable? unfavorable?
KEY DRIVING FORCES OF CHANGE IN FAST
FOOD INDUSTRY
9Globalization.
9Product Innovation.
9Growing preferences and Changing Societal
concerns, attitudes, and lifestyles.
9Marketing Innovation.
9Technological change.
Why is the World Economy
Globalizing?
• Previously closed national
economies are opening up
their markets to foreign
companies
• Growth‐minded companies
are racing to stake out
positions in the markets of
more and more countries
Globalization in fast food industry
Where one or more globally franchise ambitious companies
are pushing hard to gain significant competitive position in
many attractive markets by expanding globally in more
than 119 countries.
IMPACT:
Increasing competition and major competitors were
expanding their operations in order to increase market
share. Provide more market to serve the customers to
increase the revenue
• McDonald's operates over 31,000
restaurants in 119 countries.
• Subway is an American fast food
franchise with more
than 32000 restaurants
worldwide.
Product Innovation
• The companies tend to distinguish by providing its
customers with a unique fast food experience and offering
value menu items in their foods. Most recently product
innovation includes,
• Pizza Hut (sandwich pizza)
• KFC (grilled chicken)
• Taco Bell (fruit smoothies)
• Long John Silver’s (grilled fish)
KFC Grilled Chicken)
Impact of product innovation
• With the introduction of new menus and
product which is designed to gain competitive
advantage on its competitors, Continuous
innovation is important in order to maintain
sustainable competitive advantage.
Technological change
• Advances in technology can dramatically
alter the industry’s landscape, making it
possible to produce new and better
products at low cost.
• Technology is the artificial enhancement of
human power.
Cont…..
• Speaker systems (McDonald’s)
• HyperActive technology
HyperActive Bob
Marketing innovation
• A big part of fast food success is its
marketing strategy and selling point.
• Innovation means “a new way of doing
something
• To capture buyer interest
• Widen industry demand
• Increase product differentiation
McDonald’s free coffee campaign
(lamp)
KFC potholes advertisement
A perfect example of creative marketing and to
help local government
Growing preferences and Changing Societal
concerns, attitudes, and lifestyles.
• Differentiated products
• Preference for healthy diet
• Income level
• Competitive elements most affecting every industry
member’s ability to prosper
– Specific strategy elements
– Product attributes
– Resources
– Competencies
– Competitive capabilities
– KSFs spell the difference between
– Profit and loss
– Competitive success or failure
• Answers to three questions pinpoint KSFs
– On what basis do customers choose between competing
brands of sellers?
– What resources and competitive capabilities does a
seller need to have to be competitively successful?
– What does it take for sellers to achieve a sustainable
competitive advantage?
• KSFs consist of the 3 ‐ 5 really major determinants
of financial and competitive success in an
industry
Technology
Technology is increasingly used to lower cost and
improve efficiencies in fast food industry as:
•Hospitality point of sale system
•LED technology
•Cube Ice Machine
•Robotic French fryer makers
•Kiosks technology
•Rooftop Cameras and predictive technology.
LED TECHNOLOGY CUBE ICE MACHINES
MARKETING
• Regionally and globally recognized brand name.
• Courtesies, personalized customer service.
• Specially designed advertisement campaign
“I’m Chicken Genius” for its target market.
• Multi‐Brand 2 in 1 units at same place as done by
KFC.
• Marketing strategy to locate franchise in
convenient location
DISTRIBUTION
• Strong relationship with franchises which are
owned by local entrepreneur who are
familiarized in localized culture,customers,
customs, laws, financial market and
marketing characteristics.
• Effective supply chain management
international with company owned outlets
as well as with franchises
SKILLS and CAPABILITIES
• National and global distribution capabilities.
• Product innovation Strategy.
• Talented work force.
• Just in time delivery.
PRODUCTION
• Quality control know how
• Access to attractive supplies of material
• Overall low cost
• Ability to make product that is customized
to buyer specification
Overview of the Fast food industry
• Fast‐food industry includes about 200,000
restaurants
• Combined annual revenue of about $120
billion
• Industry is highly fragmented: the top 50
companies hold 25% of sales
Attractive factors of Fast food industry
• Fast food chains provide consumers with
food at reasonable prices which offers an
alternative to cooking at home
• Rising population
• increases in real disposable income
• Busier lifestyles
Rising Population
• Below is a table with historical and predicted population figures shown
in millions. The availability of historical population figures varies by
region.
Contd..
• Changes in economic conditions, consumer tastes and
preferences, and the type and location of competing
restaurants
• Sales promotions by competitors, changes in customer
visits, and changes in things.
• Changing dietary preferences among consumers in favor of
alternative foods
Contd..
• The restaurant industry is highly competitive
in terms of price, service, location, and food
quality and is often affected by changes in
consumer trends, economic conditions,
demographics, traffic patterns, and
concerns about the nutritional content of
quick‐service foods.
Expected growth of food industry
• The output of US food and drinking places,
which includes fast food restaurants, is
forecast to grow at an annual compounded
rate of 4.3% between 2007 and 2012.
Global fast food industry
Financial Highlights
• The global fast food market grew by 6.6% in 2008 to reach
a value of $154.7 billion.
• In 2013, the global fast food market is forecast to have a
value of $200 billion, an increase of 29.3% since 2008.
• The global fast food market grew by 3% in 2008 to reach a
volume of 85.8 billion transactions.
• In 2013, the global fast food market is forecast to have a
volume of 94.7 billion transactions, an increase of 10.4%
since 2008.
• QSR segment leads the global fast food market, accounting
for 66.3% of the market's overall value.
• Americas leads the global fast food market, accounting for
52.4% of the market's overall value
Unattractive Factors of Fast food
Industry
• Media
• Competition of Industry
• Changes in Economic and Market Conditions
• Earnings Dependant on Franchise
• Health Issues
Competition of Industry
Inflation
• Weighted average:62.7%
• Iran:17% 2007
• Zimbabwe:12,563% 2007
• United Arab Emirates:14% 2007
• Afghanistan:13% 2007
• Pakistan:7.6% 2007
• United Kingdom:2.3%
• European Union1.8%
Increase In Oil Demand
• China: 38.9% (2006)
• US: 19.4%
• Asia outside Japan and China: 13.8%
• Canada: 4%
• UK: 3.5%
• combined other non‐OECD: 21%
Health and services Issues
• Cleanliness and services.
• KFC was involved in a lawsuit in 2005 surrounding trans fat.
• In crease obesity.
Obesity percentage
Children Obesity
• Fast food in school
• Advertising and obese children
Diabetes
• Diabetes is another problem of fast food.
• If a person is having fast food very often,
body needs to take much strain to produce
insulin.
Health Issue about Grilled Chicken
• CAS verified the presence of four HCAs: PhIP, IQ,
MeIQ,and MeIQx mutagenic chemicals.
• Two pieces were sampled from different American
KFC outlets.
• These chemicals are linked to numerous cancers in
humans.
Heart disease
• Fast food is an alarming threat for heart
diseases all over the world. The amount of
oil and grease used in the preparation of the
fast food it creates hindrance for normal
heart functioning. . Large amounts of body
fat usually result in higher levels of LDL
cholesterol and lower levels of HDL.
Cont…
• Respiratory problems
• Being obese due to fast food not only puts
extra pressure on heart but lungs also. The
lungs has to work hard to get enough
oxygen to fulfill the cell requirement where
it needs to faster.
Issues In Fast Food Industry
• Farming
• Food Advertising to Children
• Asian Avian Flu
Conclusion
• The fast‐food industry is becoming more global
and it seems that will continue
• Fast‐food restaurants mostly compete on price,
location, and food quality
• The growth of the fast‐food industry is expected to
generally stay the same over the next few year
• Future growth in the fast‐food restaurant industry
depends on how well retailers are able to
innovate, provide value for money, and keep up
and surpass competitors.
SWOT Analysis of KFC
Presented by:
Muhammad Shahid Sharif
R# 068
Strengths
• Brand Equity KFC.
• KFC secret recipe of 11 herbs and species.
• Multi‐branding Strategy (Yum! Brands).
• 2nd Only to McDonald’s in Foreign Sales
$17,800.0M with 15,580 units (2008).
• Strong Cash Flows.
Cont……
• Very strong Internationally.
• Interactive relationship marketing.
• Employee Loyalty.
• Customer Loyalty.
• Ranks highest among all chicken restaurant
chains.
Weakness
• Recent drop in sales for KFC.
• Relying on local franchisees.
• Lack of customization.
• Unhygienic and unhealthy.
• KFC has a long time to market with new
products.
Opportunities
• Growing nuclear families.
• Growing urban lifestyle.
• Opportunity against. Confused over “mad cow”
and foot‐and‐mouth disease.
• New distribution channels offer a
significant growth opportunity.
Threats:
• Supermarkets and new competitors.
• KFC Fears Bird Flu Will Pluck Its Sales.
• Health Concerns: ‐
• Regulations, customs and Industry
standards.
Cont……
• Saturation of the US market.
• Changing preferences of consumers.
KFC WORLD WIDE
KFC PAKISTAN
KFC FRANCHISE
Term of Agreement and Renewal:
The term of the franchisee agreement is 5 years upon payment of initial fee
and up to a maximum 20 years upon payment of a fee of $1,000 per year after
the first 5 years.
Obligations and Restrictions:
The franchisor is responsible for the full performance of the licensing
agreement
Performance of the obligations under the licence agreement
.
The franchisee must sell all required products as KFC periodically designated
• Total Number of Units
KFC operates more than 5,200 restaurants in the United States and more than
15,000 units around the world
• Total Number of Units
KFC operates more than 5,200 restaurants in the United States and more
than 15,000 units around the world
KFC FRANCHISE
KFC FRANCHISE
Population Division
BRAZIL
Higher risks for a recession in the united states translate
immediately into higher risks for economic growth in the
large majority of countries in latin America including Brazil
• Net migration rate
• ‐0.09 migrant(s)/1,000 population (2009 est.)
• Urbanization
• urban population: 86% of total population (2008)
• Sex ratio
• at birth: 1.05 male(s)/female
under 15 years: 1.04 male(s)/female
15‐64 years: 0.98 male(s)/female
65 years and over: 0.73 male(s)/female
total population: 0.98 male(s)/female (2009 est.)
BRAZIL
• Infant mortality rate
• total: 22.58 deaths/1,000 live births
male: 26.16 deaths/1,000 live births
female: 18.83 deaths/1,000 live births (2009 est.)
• Life expectancy at birth
• total population: 71.99 years
male: 68.43 years
female: 75.73 years (2009 est.)
• Total fertility rate
• 2.21 children born/woman (2009 est.)
• GDP (purchasing power parity):
• $2.024 trillion (2009 est.)
BRAZIL
• GDP (official exchange rate):
• $1.482 trillion (2009 est.)
• GDP ‐ real growth rate:
• 0.1% (2009 est.)
• GDP ‐ per capita (PPP):
• $10,200 (2009 est.)
• Labor force:
• 95.21 million (2009 est.)
• Unemployment rate:
• 7.4% (2009 est.)
• Population below poverty line:
• 26% (2008)
BRAZIL
Current account balance:
‐$11.28 billion (2009 est.)
Exports:
$158.9 billion (2009 est.)
Exports ‐ partners:
US 13.7%, Argentina 8.7%,
China 8.1%, Netherlands 5.2%,
Germany 4.4% (2008)
Imports: $136 billion (2009 est.)
Exchange rates:
reals (BRL) per US dollar ‐ 2.0322 (2009)
Per Capita Income
10100 US dollar
Population Growth
1.008 % (2008)
Brazilian Real Exchange Rate Chart (USDBRL
• The Brazilian Real exchange rate (USDBRL) depreciated 2.84 percent
during the last four weeks. During the last 12 months, the USDBRL
declined 21.84 percent.
Brazil Interest Rate
• Brazil benchmark interest rate stands at 8.75 percent. In
Brazil, interest rate decisions are taken by the Central Bank
of Brazil's Monetary Policy Committee (COPOM).
Brazil Stock Market Index
• In Brazil, the main stock market index, the BOVESPA, rallied 2974
points or 4.52 percent during the last four weeks
Brazil Government Bond 10 Year Yield
• Brazil Government Bond Yield for 10 Year Notes stands at
4.90 percent
Brazilian Real LIBOR Rate (3 month interbank rate)
• The Brazilian Real three months LIBOR rate stands at 8.06
percent.
Brazil GDP Growth Rate
• The Gross Domestic Product (GDP) in Brazil expanded at an
annual rate of 2.00 percent in the last quarter. Brazil Gross
Domestic Product is worth 1613 billion dollars or 2.60% of
the world economy, according to the World Bank.
Brazil GDP Annual Growth Rate
• The Brazilian economy expanded 4.29 percent over the last
year, as measured by the year‐over‐year change in Gross
Domestic Product.
Brazil Gross Domestic Product (GDP)
• Brazil Gross Domestic Product is worth 1613 billion dollars or 2.60% of the
world economy, according to the World Bank. Brazil Gross Domestic Product
(GDP) expanded at an annual rate of 2.00 percent over the last quarter
Brazil GDP per capita (Purchasing Power Parity PPP)
• Brazil GDP Per Capita, when adjusted by purchasing power
parity, stands at 10296 US dollars, according to the World
Bank
Brazil Inflation Rate
• The inflation rate in Brazil was 4.83 percent in February of
2010
Brazil Unemployment Rate
• The unemployment rate in Brazil was 7.20 percent in
January of 2010.
Brazil Government Budget
• Brazil had a government budget surplus in 2010 equivalent
to 3.00 percent of the Gross Domestic Product (GDP).
Brazil Consumer Confidence
• Brazil, consumer confidence improved to 117 in December
of 2009 from 115 in September of 2009.
Brazil Current Account
• Brazil reported a current account deficit equivalent to
3840.7 Million USD in January of 2010
Brazil Balance of Trade
• Brazil reported a balance of trade surplus equivalent to
394.0 Million USD in February of 2010
Mexico
Population:
111,211,789 (July 2009 est.)
Age structure:
0‐14 years: 29.1% (male 16,544,223/female 15,861,141)
Median age:
total: 26.3 years
male: 25.3 years
female: 27.3 years (2009 est.)
Population growth rate:
1.13% (2009 est.)
Birth rate:
19.71 births/1,000 population (2009 est.)
Mexico
• Death rate:
4.8 deaths/1,000 population (July 2009 est.)
• Net migration rate:
‐3.61 migrant(s)/1,000 population (2009 est.)
• Urbanization:
urban population: 77% of total population (2008)
• Sex ratio:
at birth: 1.05 male(s)/female
under 15 years: 1.04 male(s)/female
15‐64 years: 0.94 male(s)/female
65 years and over: 0.82 male(s)/female
total population: 0.96 male(s)/female (2009 est.)
• Infant mortality rate:
total: 18.42 deaths/1,000 live births
male: 20.3 deaths/1,000 live births
female: 16.44 deaths/1,000 live births (2009 est.)
Mexico
• Life expectancy at birth:
total population: 76.06 years
male: 73.25 years
female: 79 years (2009 est.)
• Total fertility rate:
2.34 children born/woman (2009 est.)
• Nationality:
noun: Mexican(s)
adjective: Mexican
• Ethnic groups:
mestizo (Amerindian‐Spanish) 60%, Amerindian or predominantly
Amerindian 30%, white 9%, other 1%
• Religions:
Roman Catholic 76.5%, Protestant 6.3% (Pentecostal 1.4%, Jehovah's
Witnesses 1.1%, other 3.8%), other 0.3%, unspecified 13.8%, none 3.1%
(2000 census)
Mexico
• Languages:
Spanish only 92.7%, Spanish and indigenous languages
5.7%, indigenous only 0.8%, unspecified 0.8%; note ‐
indigenous languages include various Mayan, Nahuatl, and
other regional languages
• Per capita income
14200USD(2008)
Mexico
• Mexico has a free market economy
• GDP (purchasing power parity):
• $1.473 trillion (2009 est.)country comparison to the world:
• GDP (official exchange rate):
• $866.3 billion (2009 est.)
• GDP ‐ real growth rate:
• ‐7.1% (2009 est.)country comparison to the world
• Labor force:
• 46.1 million (2009 est.)country comparison to the world
• Unemployment rate:
• 6.2% (2009 est.)country comparison to the world: 59 4% (2008 est.)note:
underemployment is perhaps 25%
• Household income or consumption by percentage share:
• lowest 10%: 1.7%highest 10%: 36.3% (2008)
• Budget:
• revenues: $188.2 billionexpenditures: $222.7 billion (2009 est.)
Mexico
• Public debt:
• 42.6% of GDP (2009 est.)country comparison to the world
• Inflation rate (consumer prices):
• 5.3% (2009 est.)country comparison to the world
• Stock of domestic credit:
• $287 billion (31 December 2008)country comparison to the world
• Industrial production growth rate:
• ‐9% (2009 est.)country comparison to the world
• Current account balance:
• ‐$10.12 billion (2009 est.)country comparison to the world
Mexico
• Exports:
• $223.6 billion (2009 est.)country comparison to the world
• Exports ‐ partners: US 80.2%, Canada 2.4%, Germany 1.7% (2008)
• Imports:
• $234.6 billion (2009 est.)country comparison to the world
• Imports ‐ partners:
• US 49%, China 11.2%, Japan 5.3%, South Korea 4.4%, Germany 4.1%
(2008)
• Reserves of foreign exchange and gold:
• $89.74 billion (31 December 2009 est.)
INDIVIDUAL POLICIES
Freedom from Internal Control:
Mexicans are free to move anywhere in Mexico when pleased, there is no
restriction by law for people to move internally or to other countries. Mexicans have the
right to travel and engage in any activity they want, that is not unlawful.
Effective, Fair Police Force: 1
One of the biggest problems in Mexico is insecurity, the population lives with fear
not only of thieves, corrupt politicians, and bush but also face injustice from abuse of
power of authorities and the police. It is very dangerous for a population to be fearful of
its protectors the police force. Mexico has to improve its deficient police force, and must
improve the reputation of current police officers
Social Mobility
It is still common in Mexico to have favoritism and have certain groups
segregated, creating difficulties on individual/professional societal
advancement
INDIVIDUAL POLICIES
• Freedom from Outside Control
Mexico is a democratic state that does not require permission
from any other nation for any matter, Mexican citizens must only
follow its constitution
Political Effectiveness
currently there is a more stable government and economy
Exchange rate
•
Mexico Stock Market Index
Mexico Government Bond 10 Year
Yield
Mexico GDP Growth Rate
• The Gross Domestic Product (GDP) in Mexico
expanded at an annual rate of 2.03 percent in the
last quarter.
Mexico GDP Annual Growth Rate
• Mexico Gross Domestic Product (GDP) contracted 6.20% over the last 4
quarters. The Mexico Gross Domestic Product is worth 1086 billion dollars or
1.75% of the world economy
Mexico GDP Annual Growth Rate
Mexico Gross Domestic Product (GDP)
• Mexico Gross Domestic Product is worth 1086 billion dollars or 1.75% of the
world economy, according to the World Bank. Mexico Gross Domestic Product
.
(GDP) expanded at an annual rate of 2.03 percent over the last quarter
Mexico GDP per capita (Constant Prices Since 2000)
• Mexico GDP Per Capita stands at 6591 US dollars, according to the
World Bank.
Mexico GDP per capita (Purchasing Power Parity PPP)
• Mexico GDP Per Capita, when adjusted by
purchasing power parity, stands at 14495 US
dollars, according to the World Bank.
Mexico Inflation Rate
• The inflation rate in Mexico was 4.83 percent in February of
2010. Inflation rate refers to a general rise in prices
measured against a standard level of purchasing power.
The most well known measures of Inflation are the CPI
which measures consumer prices, and the GDP deflator,
which measures inflation in the whole of the domestic
economy.
Mexico Inflation Rate
Mexico Unemployment Rate
• The unemployment rate in Mexico was 5.56
percent in January of 2010.
Mexico Unemployment Rate
Mexico Government Budget
•
Mexico had a government budget surplus,
according to official government figures
released for the 12 months period ended in
April of 2007..
Mexico Government Budget
Mexico Industrial Production
• Industrial Production in Mexico expanded 3.64 percent
during the last surveyed month. Industrial production
measures changes in output for the industrial sector of the
economy which includes manufacturing, mining, and
utilities. Industrial Production is an important indicator for
economic forecasting and is often used to measure
inflation pressures as high levels of industrial production
can lead to sudden changes in prices
Mexico Industrial Production
Mexico Consumer Confidence
• In Mexico, consumer confidence declined to
81 in February of 2010 from 82 in January of
2010.
Mexico Consumer Confidence
Mexico Current Account
• Mexico reported a current account surplus
equivalent to 0.7 Billions USD in December
of 2009.
Mexico Current Account
Mexico Balance of Trade
• Mexico reported a balance of trade deficit equivalent to
333.0 Million USD in January of 2010. Mexico is the biggest
exporter and importer in Latin America.
Mexico Exports
• Mexico exports were worth 19301.0 Million USD in January
of 2010. Mexico is the biggest exporter in Latin America.
Mexico Imports
• Mexico imports were worth 19634.0 Million
USD in January of 2010. Mexico is the
biggest importer in Latin America..
Mexico Imports
INDIA
• India’s highest risk score of 6.87 on a scale of 10 also reflected fears over
Pakistan
• KFC plans 100 outlets in India by 2010
• A market of $12 billion worldwide, plans to invest around $2 billion in India
over the next two years
• Currently KFC has 34 outlets in nine cities that include Pune, Chandigarh and
Ludhiana
INDIA
INDIA
• Occupies 2.4% of the world's land area and supports over 17.5% of the world's
population
• The Indian Rupee exchange rate (USDINR) depreciated 2.16 percent during the
last four weeks. During the last 12 months, the USDINR declined 11.68 percent.
The Indian Rupee spot exchange rate specifies how much one currency, the
USD, is currently worth in terms of the other, the INR.
Exchange Rate
India Interest Rate
• India benchmark interest rate stands at 3.25 percent. In India, interest rate
decisions are taken by the Reserve Bank of India's Central Board of Directors.
India Stock Market Index
• In India, the main stock market index, the SENSEX, rallied 1251 points or 7.86
percent during the last four weeks.
India Government Bond 10 Year Yield
• India Government Bond Yield for 10 Year Notes stands at 7.89 percent.
Indian Rupee LIBOR Rate (3 month interbank rate)
• The Indian Rupee three months LIBOR rate stands at 3.86 percent. The London
Interbank Offered Rate (LIBOR) is a daily reference rate based on the interest
rates at which banks borrow unsecured funds from other banks in the London
wholesale money market (or interbank market).
India GDP Growth Rate
• The Gross Domestic Product (GDP) in India expanded at an annual rate
of 7.20 percent in the last quarter.
India GDP Annual Growth Rate
• India Gross Domestic Product (GDP) expanded 7.90% over the last 4
quarters. The India Gross Domestic Product is worth 1217 billion
dollars or 1.96% of the world economy, according to the World Bank.
India Gross Domestic Product (GDP)
• India Gross Domestic Product is worth 1217 billion dollars or 1.96% of
the world economy, according to the World Bank. India Gross Domestic
Product (GDP) expanded at an annual rate of 7.20 percent over the last
quarter.
India GDP per capita (Constant Prices Since 2000
• India GDP Per Capita stands at 724 US dollars, according to the World
Bank.
India GDP per capita (Purchasing Power Parity PPP)
• India GDP Per Capita, when adjusted by purchasing power parity,
stands at 2972 US dollars, according to the World Bank.
India Inflation Rate
• The inflation rate in India was 16.22 percent in January of
2010. Inflation rate refers to a general rise in prices
measured against a standard level of purchasing power.
The most well known measures of Inflation are the CPI
which measures consumer prices
India Government Budget
• India had a government budget deficit in 2007 equivalent
to 1.41 percent of the Gross Domestic Product (GDP).
India Industrial Production
• Industrial Production in India expanded 16.70 percent
during the last surveyed month.
India Current Account
• India reported a current account deficit equivalent to 12.6
Billion USD in September of 2009. India is leading exporter of
gems and jewelry, textiles.
India Balance of Trade
• India reported a balance of trade deficit equivalent to
10362.0 Millions in January of 2010.
India Exports
• India exports were worth 14343.0 Millions USD in January
of 2010. Exports amount to 22% of India’s GDP. Gems and
jewelry constitute the single largest export item,
accounting for 16 percent of exports.
India Imports
• India imports were worth 24705.0 Millions USD in January
of 2010. India is poor in oil resources and is currently
heavily dependent on coal and foreign oil imports for its
energy needs
Thank
You!