Case Study – Kentucky Fried Chicken & The Global Fast-Food Industry in De Wit & Meyer (2004:909-927)
It is basically to introduce the strategic management of Kentucky fried chicken & understanding key strategic issues relating to the global fast-food industry. In this report, there will be an analysis on the complexity of organisations and the environments by utilising the SWOT analysis, Porter’s Value Chain and Porter’s five forces.
Moreover, this report as well covers understanding of Whittington’s ‘Evolutionary’ and ‘Systemic’ Schools of Thought in order to get know of the implications of these cultural dimensions for international strategic management in constructing a productive relationships with the outside world.
Table of content pages
Question 1 a)
Question 1 b)
Question 1 c)
Question 2 a)
Question 2 b)
Kentucky Fried Chicken Corporation (KFC) was the world's largest chicken restaurant chain and third largest fast-food chain in 2000. KFC had a 55 percent share of the U.S. chicken restaurant market in terms of sales and operated more than 10,800 restaurants in 85 countries. KFC was one of the first fast-food chains to go international in the late 1950s and was one of the world's most recognizable brands. KFC's early international strategy was to grow its company and franchise restaurant base throughout the world. which gave KFC greater control over product quality, service, and restaurant cleanliness.
In other international markets, KFC planned to grow primarily through franchises, which were operated by local business-people who understood the local market better than KFC. Franchises enabled KFC to more rapidly expand into smaller countries that could only support a small number of restaurants. KFC planned to aggressively expand its company-owned restaurants into other major international markets in Europe and Latin America in the future.
a) In the context of the process of strategic thinking and strategy formation, outline what SWOT and Porter’s Value Chain techniques are, and explain their practical relevance to strategic planners at Kentucky Fried Chicken (KFC) Corporation. (15 marks)
SWOT is a strategic planning method used to evaluate the Strength, Weaknesses, Opportunities and Threats involved in a business venture, in this case is involved in KFC Corporation. Strength: characteristics of the business or team that give it an advantage over others in the industry. Weaknesses: characteristics that place the firm at a disadvantage relative to others. Opportunities: external chances to make greater sales or profits in the environment. Threats: external elements in the environment that could cause trouble for the business.
In this case, the SWOT analysis for KFC is as follows:
KFC is the biggest chicken restaurant chain and the 3rd largest fast-food chain. KFC has been a market leader in chicken-based foods for 50 years and it is a most identifiable brand in chicken or fried food. The corporation always places their restaurants on a strategic location, and they have strong store management, strong franchise and license fee revenues for their great cash flow. KFC is also famous for their trademarks secret recipes of spice and 11 herbs that produce quality meals that attract billions of customers. KFC is focusing on the global strategies to raise its corporation and franchise restaurant base all over the globe. With their interactive relationship marketing, the largest multibranded restaurant in the world ranks highest among all chicken restaurant chains for its convenience and their menu variety.
KFC is not innovative enough because the restaurant is basically serves only the...