KFC

6 Pages 1491 Words

1. KFC’s STRATEGIC POSITION

Colonel Harland Saunders founded Kentucky Fried Chicken (KFC) in 1939. In 1952 KFC started with franchisees and entered the global market in 1964. KFC was sold to Heublein Inc. in 1971 and was highly involved in the day to day operations. RJ Reynolds Industries, then acquired Heublein in 1982 and took a more laid back approach than its predecessor. Finally, in 1986, KFC was acquired by PepsiCo, which was trying to grow its quick serve restaurant segment. PepsiCo presently runs Taco Bell, Pizza Hut and KFC.

Today, KFC is the world’s largest chicken restaurant chain and third largest fast-food chain. KFC had a 55 percent share of the chicken segment of the U.S. fast-food (based on sales resources) and operated more than 10 800 restaurants in 85 countries. KFC’s international strategy was to grow its company and franchise restaurant base throughout the world.

With growing competitive rivalry among the leading fast-food chains, KFC, under the management of Tricon Global Restaurants, face greater challenges to compete with other big players to launch into new markets, especially in Latin America. These changes lead to the strategic growth of KFC’s globalization and facing the environmental risk as well as opportunities associated with the international expansion, particularly looking at Mexico and Latin America.

KFC’s return on investment has been excellent to date. Internationally their sales growth and market share has been very strong with a nett growth of over 600 units for 2003 under the Yum! Group. The majority of this growth has come from Greater China with over 280 company owned stores operated in 2003 and 300 projected to be opened in 2004. The United Kingdom comes in second with almost 100 company owned stores opened in 2003 and 100 additional stores planned for 2004.

A number of analytical tools were used to analyze KFC’s current strategic position, for example SWOT...