Kfc Situation Analysis

4 Pages 1005 Words

I. Situation Analysis
Kentucky Fried Chicken was one of the first fast-food chains to go international in the 1950’s and has remained a strong competitor in the industry. By 2000, KFC had become the third largest chain in the world with 11,000 locations in 85 countries. Even though the ownership of the corporation has changed hands many times over the past few decades, the values that Colonel Sanders lived by are still alive and functioning today. Some of these essential values are product quality, service, and restaurant cleanliness.
The strategies utilized by KFC and its management appear to be quite effective. In 1999, KFC was ranked number six in the top 50 fast-food restaurants in the United States with sales exceeding 4.3 million dollars. They were number one in the chicken chain category with a substantial market share of 55.2%. Their sales grew at a steady rate of 4%. The competitors had growth rates that doubled and almost tripled the rate of KFC, but these rates were not sufficient to threaten KFC’S vast holding in the market which allows them to remain strong and stable for the time being.
Kentucky Fried Chicken encountered many issues over time. The strict reliance on values of company owned stores was quite important but franchising stores was much more cost-effective. The American market was becoming saturated with fast-food establishments and real estate was difficult to locate and quite costly, so the need to expand on an international level became a necessity. By 2000, Tricon Global Restaurants, which consists of KFC, Taco Bell, and Pizza Hut, had close to 30,000 international locations.
Over the years competition in the chicken chain category has grown enormously. Companies like Boston Market and Chic-Fil-A catered to those who preferred a healthier version of chicken. Even though growth in this market has been rapid, it has not greatly affected the sales of KFC. It appears as though customers flocking to ...