...What does it take to succeed in the fast food business? Response: Following are key success factors in the fast food business. 1. Ability to expand through franchising. Because of high capital requirement to set up new stores, a fast food business must have the ability to expand through franchising. Franchising helps businesses to establish territories faster and helps them to capture operating economies especially in advertising and raw material purchasing, which reduces the total cost of operation. 2. Location Location of the fast food restaurant is also a key success factor for the business. Because fast food restaurants have high fixed cost and because per unit margin is very low, it is important that the restaurant attracts lot of customers in order to meet the revenue and profit targets. A fast food restaurant at a good location will help the business to attract more customers and thereby will help the business meet its financial targets. 3. Effective store management In fast food restaurants because the margins are low, store must be managed effectively in order to reduce wastes, shrinkages and other inefficiencies. Effective management of the fast food restaurant ensures a smooth operation and a profitable business. An effective store manager can make a difference to the business in so many ways including improved public relation, high employee morale and excellent customer service etc. 4. Focused theme or product line With increased...
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...Kentucky Fried Chicken (Japan) Limited Background • Harland Sanders – 6th grade dropout – casual cook. Late 40’s – developed a recipe for chicken based on a pressure-cooking method and secret seasoning mix of 11 herbs and spices. • Sold 700 franchises < 9 years. • Sander’s management style – relied on basic goodness of people around him and trusted the franchises to play fairly. There were no formal management systems or strategic controls in place. • Sanders in his 70’s – Jack Massey offered him $2 million, lifetime salary, and position in control of business. • Explosive growth – revenues increased from $7 million to $200 million. • Loy Weston took the challenge to open the first store in Japan. o Studied the culture of Japan. o Performed test marketing – found that Japanese did not like mashed potatoes and the cole slaw was too sweet. Changed to French fries and lowered the sugar content in the slaw. Company Culture - Industry and Growth – the industry norms and rules of the game of the fast food industry • Expansion via franchising. • Location – important for economies of scale – high fixed costs and small returns on sales required high traffic volume. • Effective store management – keeping waste, shrinkage and inefficiency to a minimum. • Market image – focused on theme or product – consistency and reliability throughout all stores was critical. Organizational Structure • Headquarters...
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...Kfc Japan Case Study – KFC Japan INTRODUCTION Kentucky Fried Chicken (KFC) was set up by Harland Sanders. In the first decades of the enterprise there were no management systems or strategic controls. However, it worked fine in the beginning, mainly because for launching new franchises an entrepreneurial spark was fundamental. Nevertheless, the company grew and after suffering declines in sales and profits the implementation of strategic planning, which was introduced by Michael Miles in late 1975, seemed to be an adequate measure to solve the problems. By 1979, the various programs of the strategic planning progress were beginning to show results. Anyhow, some foreign subsidiaries resisted and didn’t want to adopt these measurements. PROBLEM STATEMENT One of the main problems KFC was facing, was that foreign subsidiaries were not willing to adapt standards – like strategic planning - imposed by the headquarter. Especially KFC-J has been strongly resisting the implementation of administrative operational controls and systems. Should the headquarters be prepared to accept operational variations? Moreover, it had to be clarified what was an appropriate level of performance expectations for overseas units. Even though it was obvious that KFC had to maintain its drive for aggressive growth, there was incertitude about how to ensure the continuance of such growth. Additionally, there was the issue of how to expand into new markets and countries successfully. KFC had...
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...KENTUCKY FRIED CHICKEN IN JAPAN-A CASE STUDY There are two critical questions which are important to the case. These are: What should Dick Mayer do about Loy Weston? What do you think of Dick Mayer's "Stages Theory" of country management responsibilities? What should Dick Mayer do about Loy Weston? Dick Mayer has to be very careful while evaluating his options of what to do with Loy Weston. There are several actions that Dick Mayer can implement against Mr. Weston. I would like to evaluate the effectiveness of each one of the actions and finally recommend the best solution. We have to realize that Mr. Weston is a very competent person, who has been exposed in a wide array of entrepreneurial situations and his business instincts and knowledge should be appreciated. First, Mr. Mayer can terminate Loy Weston. If he chooses to do so, he will get rid of an "organizational nightmare" and the problem is solved. Furthermore, he does not have to spend time and energy worrying about whether Mr. Weston is obeying company policies and headquarters decisions. The negative aspects of terminating Mr. Weston are all of the following: He may start working for one of Kentucky Fried Chicken's (KFC's) close competitors and with his knowledge about the company's strategic mission and his skills, he may become a significant rival to KFC. Furthermore, KFC-International will surely loose an excellent worker with plenty of valuable experience in starting-up new business enterprises. Also,...
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...KFC-Japan history from the beginning gives a good picture of the different existing ways of managing subsidiaries. Lessons learned from successive managers can help us to identify what is the best way of seizing external opportunities in a given situation. The dilemmas KFC is facing at the different stages of her history which can be represented with the three stages theory describes well the organizational and operational challenges usually faced by a “transnational” company. Each appointed manager represents a specific way of managing subsidiaries or a stage of the “three stages theory”. At the beginnings, each country manager was on his own to make a success of his venture, and most had to learn the business form scratch. From this start point, the main issue is to determinate the appropriate level of control in this given situation. The issue of performance measurement is closely linked to the one of the level of control. On one hand, standardization facilitates performance measurement and control, but can also lead to counter performances if excessive. In this respect, it is very important to determine the expected level of performance (the same everywhere?). On the other hand, tolerating exceptions tends to weaken the whole system. KFC development until the critical point of confrontation illustrates one of the existing methods of launching a new activity overseas (I). Conflicts between headquarters and KFC-J raise a number of issues which well depict...
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...BA 304 Marketing Management Individual Assignment “Colonel comes to Japan” KFC case study Presented Colonel Comes to Japan This case study we going to talk about how and when KFC come to japan? KFC (Kentucky Fried Chicken) is the biggest company that everyone know as a fast food restaurant that serve a quality fried chicken around the world but some people don’t know how KFC come to be famous in in the world including Japan. KFC (Kentucky Fried Chicken) was founded by Colonel Harland Sanders, and the first "Kentucky Fried Chicken" franchise opened in Salt Lake City, Utah in 1952. KFC was one of the first fast-food chains to expand internationally, opening outlets in England, Mexico and Jamaica by the mid-1960s. Throughout the 1970s and 80s. The chain continued to expand overseas. A series of documentary programs examining the American business community with concentration on the attempt by American fast food chain Kentucky Fried Chicken to gain a foothold in the protected Japanese market. Focusing on the daily duties of Loy Weston, chair of Kentucky Fried Chicken in Japan, the program examines the cultural differences, which had to be overcome for the American poultry powerhouse to open and maintain over 300 restaurants in Japan in eleven years. Highlights include the following: footage of many life-size statues of "Colonel Harlan Sanders" -- the chicken chain's apocryphal antebellum progenitor - on the back of a flatbed truck being hauled to various franchise...
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...Janay Booker BUAD 4020 November 2, 2013 McDonald’s and KFC Case Analysis Brief Summary In 2008 McDonald’s and KFC were the largest quick service restaurants (QSR) in the world, with 31,999 and 15,580 outlets respectively. Both chains were renowned for their broad spectrum of consumers on a global basis. McDonald’s spearheaded global expansion with its first overseas outlet in Canada in 1967 and entering Japan in 1971. McDonald’s outlets experienced tremendous success in Japan with record breaking daily sales and speed of expansion in the initial stage. KFC similarly started global expansion early with its first overseas outlet in England in 1964 and entered Japan in 1970. However KFC was not as successful as McDonald’s and did not experience profit until six years after entry. KFC opened outlets in Hong Kong in 1973 which all were closed within two years. The company would eventually gain the confidence of Hong Kong customers ten years after its entry. There was a completely different experience in China for KFC. They were recognized as the leader in foreign QSR as well as a significant player in the Chinese restaurant industry as a whole, contributing 1% in the country’s total food and beverage revenues in 2005. In 2005 KFC outlets in China recorded an average on 1.2 million in annual sales per store, compared to just 900,000 for similar stores in the US. In contrast McDonald’s presence in China was less than half of KFC’s with a significantly lower estimated profit margin...
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...Natsumi’s family excited about their “surprise” for her? You can tell by the connotation of Natsumi’s description of her home in Japan that it is more likely a smaller town instead of a major metropolis; the construction of a fast food chain restaurant would be a big deal. I have a friend who was stationed outside of Tokyo while in the Air Force and in the last year a McDonalds was built in the town. When we had spoken he said that everyone in the town was excited as if they were building an amusement park. Do you think that Natsumi’s reaction of Kentucky Fried Chicken (KFC) was the same as her families? Why or why not? No, she was not excited. Natsumi had mentioned that she had been living in Texas for many years and as a native Texan I can attest to the abundance of KFCs. Natsumi’s reaction was probably one of shock or disappointment; instead of pleasantly surprised. She mentioned that her town was noticeably changed since she was a kid, which seemed to upset her some. Natsumi wanted to get away from the culture of her new life in Texas and return to what she always viewed as home in her heart. What differences do you think there may be in the KFC location in Tokyo and the one in Texas where Natsumi usually eats? Why do you think that KFC is different in Tokyo from the way it is in Texas, even though it is called KFC? I imagine the staple of the KFC in Tokyo would still in chicken; however, I’d think the sides would be different. Instead of various mashed potatoes or macaroni...
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...INTRODUCTION KFC (the name was originally an initialize for Kentucky Fried Chicken) is a fast food restaurant chain that specializes in fried chicken and is headquartered in Louisville, Kentucky, in the United States. It is the world's second largest restaurant chain (as measured by sales) after McDonald's, with 18,875 outlets in 118 countries and territories as of December 2013. The company is a subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut and Taco Bell chains. KFC was founded by Harland Sanders, an entrepreneur who began selling fried chicken from his roadside restaurant in Corbin, Kentucky, during the Great Depression. Sanders identified the potential of the restaurant franchising concept, and the first "Kentucky Fried Chicken" franchise opened in Utah in 1952. KFC popularized chicken 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, the company's rapid expansion saw it overwhelm the ageing Sanders, and in 1964 he sold the company to a group of investors led by John Y. Brown, Jr.and Jack C. Massey. KFC was one of the first fast food chains to expand internationally, opening outlets in the United Kingdom, Mexico, and Jamaica by the mid-1960s. Throughout the 1970s and 1980s, KFC experienced mixed fortunes domestically...
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...I. ISSUES In 1996, KFC remained the world’s largest chicken restaurant chain and third largest fast food chain. It held over 50 percent of the U.S market in terms of sales and ended 1995 with over 9000 restaurants worldwide. KFC opened 234 new restaurants in 1995 and operated in the 68 countries. One of the first fast food chains to international during the late 1960’s, KFC had developed one of the world’s most recognizable brands. Despite of the KFC’s past success in the U.S market, much of the KFC’s growth was driven by its international operations, which accounted for 94 percent of all KFC restaurants built in 1994 and for 100 percent of the increase in 1995. Domestically the restaurant count dropped by seven restaurants because of unit closures, intense competition among the largest fast food competitors resulted in a number of obstacles to further expansion in the U.S market. Expansion of free standing restaurants was particularly difficult. Fewer sites were available for new construction and those sites, because of their increase cost, were driving profit margins down. However the most critical or major issue of this case in the future will be their ability to handle changes. Their system is older, in terms of facilities and product form, and their attitudes still don’t reflect the realities of their changing business environment. One on the great challenges at KFC is that there is a lot that needs fixing and the...
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...Kentucky Fried Chicken (JAPAN) Limited 1. By the apparent basic interpretation of the fast food, one of the most significant characteristic is the food to be served fast. a. Within few minutes, the food is ready to go. b. Order in the counter, as well as take the order. c. Product standardization. There is no table-service, less waiting time, no need for reservation, fast food simply save people’s time. While the high calories, low nutrition and health issue such as diabetes lower the people’s intention to dine at there. Japanese prefer delight food and cooked with only little oil, their staple food is rice, and the protein source from fish, soy beans seafood and other meat. I believe that Japanese customer do not want oily food, and prefer some innovations between rice and fish or any seafood such as rice burger or fish burger etc. The success factors that KFC in Japan take is the reduction of the original 12 pieces chicken to 6 piece chicken which described that Japanese prefer less volume food than American, also the innovative fish burger is welcomed by customers. 2. What are the rules between the country managers and headquarter decision? This report almost describes their relation in almost half pages. Headquarter want its franchise to report their every report, and corporate with its central decision to make the stable management to sustain certain level of control, which is conversely not abided by subsidiary. What headquarters’ goal is to back to the basic...
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...MINOR PROJECT REPORT ON “TO STUDY AND ANALYZE THE CONSUMER BUYING BEHAVIOR WHILE EATING OUT AT KFC AND TO STUDY THE MARKETING STRATEGIES OF KFC FROM THE PERSPECTIVE OF STRATEGIC MARKETING” PROJECT SUPERVISOR SUBMITTED BY:- Amity School Of Business (ASB) Sector 125, Noida, Uttar Pradesh Phones: 0120 244 5252 Website: www.amizone.net CERTIFICATE This is to certify that Mr.___________, Roll No.________, has completed his research project and has submitted this project report entitled “To study and analyze the consumer buying behavior while eating out at KFC and To study the marketing strategies of KFC from the perspective of Strategic Marketing” towards part fulfillment of the requirements for...
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...Company History: KFC Corporation is the largest fast-food chicken operator, developer, and franchiser in the world. KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of roasted chicken products, side dishes and desserts. Outside North America, KFC offers beef based products such as hamburgers or kebabs, pork based products such as ribs and other regional fare. KFC, a wholly owned subsidiary of PepsiCo, Inc. until late 1997, operates over 5,000 units in the United States, approximately 60 percent of which are franchises. Internationally, KFC has more than 3,700 units, of which two-thirds are also franchised. In addition to direct franchising and wholly owned operations, the company participates in joint ventures, and continues investigating alternative venues to gain market share in the increasingly competitive fast-food market. In late 1997 the company expected to become a wholly owned subsidiary of Tricon Global Restaurants, Inc., to be formed from the spinoff of PepsiCo's restaurant holdings. New Management for Kentucky Fried Chicken In 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 offer came from an investor group headed by John Y. Brown, Jr. a 29-year-old graduate of the University of Kentucky law school, and Nashville financier John (Jack) Massey. A notable member of the investor...
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...Kentucky Fried Chicken KFC is the largest fast-food chain in Malaysia and Brunei, serving world famous Original Recipe fried chicken which contains secret blend of 11 herbs and spices. Apart from serving finger-licking good food, they continuously aim for high quality and are committed to ensure food safety by stringent control to maintain their standards. Products They cook their products well above the minimum temperature recommended by WHO. They have developed standard procedure that would minimize risk of cross contamination between raw and ready-to-eat products. They provide information on the nutritional values of KFC products to assist their customers in planning a wholesome and balanced meal. For frying all of their products, they use non-hydrogenated palm oil that contains insignificant amount of trans fat and it is 100% cholesterol free. They have a team of food technologists constantly experimenting with new flavors and creative concepts to provide more value, choices and healthy options for their customers. Apart from introducing international products into our market, they have also developed some popular local flavors designed to enable their customers to enjoy an exciting dining experience. KENTUCKY FRIED CHICKEN Food, fun & Festivity, this is what KFC is all leading the market since its inception. KFC provides the ultimate chicken meals for a chicken loving nation. Be it colonel sanders secret original recipe chicken or the hot & spicy version...
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...ase 3–6: McDonald’s and C KFC: Recipes for Success in China Quick Service Restaurant Giants in the Middle Kingdom In 2008, McDonald’s and KFC were the two largest quickservice restaurants (QSR) in the world, with 31,999 and 15,580 outlets, respectively.1 Both chains were renowned for their broad spectrum of consumers on a global basis. McDonald’s appeared to be a clear winner in international expansion. It had over 17,500 international outlets and was the first corporation to set up a solid foundation for international franchising. It spearheaded global expansion with its first overseas outlet in Canada in 1967, and entered Japan in 1971.2 McDonald’s outlets had tremendous success in Japan—despite the difference in culture— with record-breaking daily sales and speed of expansion in the initial stage.3 KFC also started international expansion early, opening its first overseas outlet in England in 1964. However, it was given a bumpy ride when it began to penetrate the market in Asia. The Japanese outlets were far less successful than McDonald’s and only started to make a profit in 1976, six years after KFC entered Japan. KFC outlets opened in Hong Kong in 1973 but were all closed down within two years. The company would eventually win the confidence of Hong Kong customers ten years after its first entry. In Taiwan it experienced relatively smoother development, although KFC headquarters was to spend a huge amount of money and effort in order to get the...
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