...Introduction of KFC....................................................................................................2 2. Operations of KFC.......................................................................................................3 3. SWOT analysis.............................................................................................................5 1. Strengths...........................................................................................................5 2. Weaknesses.......................................................................................................7 3. Opportunities....................................................................................................8 4. Threats..............................................................................................................9 4. Positioning..................................................................................................................10 5. Conclusion..................................................................................................................14 References........................................................................................................................15 1. INTRODUCTION OF KFC KFC Corporation, based in Louisville – Kentucky, is the internationally most famous restaurant chain and franchise specialising in...
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...Iowa Tax Case Could Cost Nation’s Franchises September 2010 Franchising World Franchisors should also expect the impact of the decision in KFC Corp. to extend beyond Iowa. The Iowa Supreme Court in late May heard oral arguments in KFC Corp. vs. Iowa Department of Revenue, a case that could have a substantial financial impact on franchisors across the nation. Iowa asserted that KFC is subject to the state’s corporate income tax based solely on the fact that it received royalties from franchisees in Iowa. The state cited Geoffrey v. South Carolina Tax Commission and related cases in support of its position. However, a victory by the state would represent an extension of those cases because KFC involves licensing agreements between unrelated parties. The KFC case could result in a landmark decision for states attempting to impose income tax on out-of-state franchisors and other similarly situated taxpayers. Background on State Tax Nexus Historically, many franchisors have reported and paid income taxes only in states in which they have a physical presence. This practice is based on a 1992 U.S. Supreme Court case, Quill Corp. v. North Dakota, which held that the Commerce Clause of the United States Constitution barred states from imposing a use-tax collection obligation on out-of-state corporations that had no physical presence in the taxing state. The court held that such corporations did not have the “substantial nexus” with the state that was required under the Commerce...
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...FRANCHISES AND SPECIAL FORMS OF BUSINESS 40 Seoul, South Korea This is a KFC restaurant in Seoul, South Korea. International franchising of American brands to foreign countries—and foreign countries’ brands to the United States—exploded in the late twentieth century. Franchising on a global scale continues unabated in the twenty-first century. CHAPTER OBJECTIVES After studying this chapter, you should be able to: 1. Define franchise and describe the various forms of franchises. 2. Describe the rights and duties of the parties to a franchise agreement. 3. Identify the contract tort liability of franchisors and franchisees. 4. Define licensing and describe how trademarks and intellectual property are licensed. 5. Describe how international franchising, joint ventures, and strategic alliances are used in global commerce. CHAPTER CONTENTS ISBN 0-558-40229-1 INTRODUCTION TO FRANCHISES AND SPECIAL FORMS OF BUSINESS FRANCHISE FRANCHISE AGREEMENT International Law • International Franchising LIABILITY OF FRANCHISOR AND FRANCHISEE Contemporary Environment • FTC Franchise Notice Case 40.1 • Martin v. McDonald’s Corporation 629 Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues , Seventh Edition, by Henry R. Cheeseman. Published by Prentice Hall. Copyright © 2010 by Pearson Education, Inc. 630 PART VIII BUSINESS ORGANIZATIONS AND ETHICS LICENSING JOINT VENTURE STRATEGIC ALLIANCE Contemporary Environment...
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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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...Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) Development in China Wei Hu & Yuanyuan Xie Bachelor’s Thesis 28. 04. 2013 International Business Administration Bachelor’s degree (UAS) SAVONIA UNIVERSITY OF APPLIED SCIENCES THESIS Abstract Field of Study Social Sciences, Business and Administration Degree Programme Degree Programme in International Business Author(s) Wei Hu & Yuanyuan Xie Title of Thesis Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) development in China Date 28.04.2013 Pages/Appendices 53+2 Supervisor(s) Jari Niemelä &Heikki Likitalo Client Organization/Partners McDonald's Corporation & Kentucky Fried Chicken Corporation Abstract McDonald's and KFC are two international fast food restaurants. They both expended their businesses in global scale. It is obvious that McDonald surpassed KFC in terms of sales and fame in international level. However, in China, KFC performs better than McDonald's. The aim of this study is to find out how these two companies developed differently in Chinese market. By making a comparative study of McDonald's and KFC, different operation and competitive strategy theory will be integrated with their development situation. Research is made based on strategy theory, Internet sources and interviews. The thesis is started with general information, Chinese fast food industrial situation introduction and thesis structure. After having introduced the two companies background, we illustrated strategy...
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...Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) Development in China Wei Hu & Yuanyuan Xie Bachelor’s Thesis 28. 04. 2013 International Business Administration Bachelor’s degree (UAS) SAVONIA UNIVERSITY OF APPLIED SCIENCES THESIS Abstract Field of Study Social Sciences, Business and Administration Degree Programme Degree Programme in International Business Author(s) Wei Hu & Yuanyuan Xie Title of Thesis Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) development in China Date 28.04.2013 Pages/Appendices 53+2 Supervisor(s) Jari Niemelä &Heikki Likitalo Client Organization/Partners McDonald's Corporation & Kentucky Fried Chicken Corporation Abstract McDonald's and KFC are two international fast food restaurants. They both expended their businesses in global scale. It is obvious that McDonald surpassed KFC in terms of sales and fame in international level. However, in China, KFC performs better than McDonald's. The aim of this study is to find out how these two companies developed differently in Chinese market. By making a comparative study of McDonald's and KFC, different operation and competitive strategy theory will be integrated with their development situation. Research is made based on strategy theory, Internet sources and interviews. The thesis is started with general information, Chinese fast food industrial situation introduction and thesis structure. After having introduced the two companies background, we illustrated strategy...
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...Franchising Industry in China 1. An Overview of Franchise Development in China Franchising first emerged in China in the late 1980s. In 1987, KFC’s first Chinese outlet was opened in Beijing, the capital city of China. Franchising industry in China experienced a period of disordered development in the early days. In the poor legal environment, some franchisers conducted substandard business or even defrauded franchisees of money. In some cases, franchisees delayed payments to the franchisers or infringed on their intellectual property rights. In 1997, the Ministry of Internal Trade established the first Chinese franchise law, the Regulation on Commercial Franchise Business, which included guidelines on such issues as trademarks, copyrights, and intellectual property protection. A lack of specific provisions in the 1997 version governing foreign direct franchising allowed relatively few major international companies to have significant franchise businesses in China. Although many of these international brands such as 7-Eleven, McDonald’s, KFC and Pierre Cardin, normally do business through franchising, in China foreign franchising was still a grey area before the new rule was published. Because franchising typically does not involve investing in equities, the Chinese Government used to put less focus on such business. But the government came to find that franchises are a good business model for China to help solve its job problems and its scattered private capital. China’s capital...
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...FPT University Small Business Entrepreneur Individual Assignment Student: Trinh Cong Khoi MSSV: BA60116 – Class BA0662 Teacher: Nguyen Quoc Cuong I ndividualAssignment Small Business Entrepreneur Small Business Entrepreneur Individual Assignment Page 1 Small Business Entrepreneur Table Of Content I. Background ..................................................................................................2 1. 2. 3. II. III. IV. V. VI. History ...................................................................................................2 Mission and Vision .................................................................................3 Business Objectives ................................................................................3 S.W.O.T analysis in Vietnam’s Market .......................................................4 Advantages & disadvantages McDonald’s franchise ....................................5 Investment Decision ...................................................................................6 Summary ...................................................................................................7 Reference ..................................................................................................7 I. Background McDonald's is a huge multi-national restaurant chain. There are restaurants all over the world that are willing to sell you a Big Mac and fries. Indeed, you would probably be hard-pushed...
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...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 locations, footage of future employees diligently...
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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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...VIII. I. EXECUTIVE SUMMARY II. SOLUTION ANALYSIS 1. Company analysis 2.1 Mission Statement * We are committed to customer satisfaction through offering high quality with excellent services and good value. * We take great pride in serving each other, our customer and our communities. * We seek continuous improvement in all that we do. 2.2 Marketing Objective * Make profits in the first year of operations. * Acquire customer from the target market. * Maintain a high customer satisfaction level. * To establish a presence as successful local fast food outlets and gain a market share in Vietnamese fast food industry. * To expand into a number of outlets by year three and sell the franchise to neighboring metropolitan cities such as Nam Dinh, Thanh Hoa, Ninh Binh. 2. Environment analysis 3.3 Economic environment The world economy has gone through a severe financial crisis originated from the U.S. and...
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...YUM! BRANDS, PIZZA HUT, AND KFC Teaching Note Overview This case describes the evolution of the global fast-food industry and Yum! Brands, Inc.’s development of the Pizza Hut and KFC franchises worldwide. It focuses on international business risk assessment and develops a model of country evaluation that students can use to analyze international business and market entry decisions in a variety of industries, regions, and countries. Teaching Objectives 1. Develop skills in industry analysis 2. Develop skills in global industry analysis. 3. Develop knowledge of franchising and the costs and benefits of expanding globally using franchises versus company-owned stores. 4. Develop skills in international business risk analysis. 5. Develop skills in country portfolio evaluation and assessment. Suggestions for Using the Case This case has been used successfully in undergraduate, MBA, and Executive MBA classes in strategic management, marketing management, and international business. It can be used in undergraduate courses to develop student skills in industry structure analysis, strategy analysis, and international business risk assessment. The teaching note is designed to give students practice in each of these three areas. Instructors may choose to use the case to discuss only one of these three areas during a single class period or to cover all three areas over two class periods. The case can be also...
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...defined Vietnamese fast food chain in Vietnam Fast food culture was initially imported to Vietnam in 1994 with the birth of the first restaurant named Chicken Texas on Nguyen Trai Street, District 1, Saigon. Gradually, a queue of foreign fast food jumbos have landed onto Vietnam and dominated the market with the everyday-seen names like KFC, Lotteria, Jollibee…They have helped shape up fast food culture with western style in the country that has been globally emerging at an amazing speed . A critical question is then raised that why we do not have pure Vietnamese fast food mode for Vietnamese people. Later, some Vietnamese brand names were with great effort introduced like Pho 24, Kinh Do Bakery, Wrap and Roll… However, insiders do not consider these names typical fast food vein. Mr. Truong Han Lam, Marketing Director of Lotteria commented that Kinh Do Bakery business was not a fast food model. Mr. Ly Qui Trung –Founder of Pho 24- added that the existing Vietnamese names were following a quick service mode, not fast food form. Owner of Wrap and Roll, Ms Kim Oanh, admitted that hers was a restaurant form, not fast food (”KFC, Lotteria, Jollibee,” 2012). In order to answer the question if there are any real Vietnamese fast food models, a definition of fast food needs being made clear. According to Oxford dictionary, fast food is an “easily prepared processed food served in snack bars and restaurants as a quick meal or to be taken away” (Fast food, 2013). Or “Fast...
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...Kentucky Fried Chicken and the Global Fast-Food Industry Case Analysis 1.0 Source Problem The change in demographic trends in the past two decades has seen an overall increase in costs for KFC and other fast food chains. Due to immense price competition and saturation of the US market, KFC is unable to raise its prices to cover the increased costs. The slower US population growth rate, oversupply of fast food chains and the minuscule 1% growth in the US restaurant industry per year has resulted in KFC¡¦s focus on expansion of their international markets. 2.0 Secondary Problems 2.1 Short Term - New product introductions are slow. - Market research inefficiency. Eg. Germans were not accustomed to buying takeout or ordering over the counter. McDonalds performed better in this aspect. - Crispy strips and chicken sandwiches cannibalized the fried chicken sales. 2.2 Long Term - Differences between the PepsiCo and KFC corporate strategy and culture. - PepsiCo/KFC poor relationship with franchisees. - Increased competition from direct and indirect competitors. - Reduction in market share in the US market. - Risks involved in international operations: long distances made it difficult to control quality and service, increased transportation and other resource costs, and time, culture and language differences increased communication and operational problems. - Fast food sales grew at a slower rate (5%) in comparison to other sectors in the restaurant industry. ...
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...Kentucky Fried Chicken (KFC) Operations Management Group Final Project Outline Table of Contents I. Background of Kentucky Fried Chicken (Mehmet Kaptan) II. Operations management activities in details 1. Process Strategy and Capacity planning (Mehmet Kaptan) 2. Managing Quality (Alaa Tashkandi) 3. Project Management: Manpower planning, acquisition, and control (Yi-Chien Lee) 4. Scheduling (Yi-Chien Lee) 5. Location Strategy and Layout Planning (Yi-Chien Lee) 6. Material control (Yi-Chien Lee) 7. Aggregate Planning (Tsing-Hui Chen) 8. HR Strategy: Training and development for employees (Tsung-Hui Chen) 9. Supply Chain Management (Tsung-Hui Chen) 10. Design of Goods and Services (Alaa Tashkandi) III. Operations Management Problem 1 and Solutions (All members participate in discussion, consolidated by Alaa Tashkandi) IV. Operations Management Problem 2 and Solutions (All members participate in discussion, consolidated by Mehmet Kaptan) V. Conclusion (Tsung-Hui Chen) VI. Bibliography (All members) I. Background of Kentucky Fried Chicken (Mehmet Kaptan) Kentucky Fried Chicken as known as KFC is one of the most famous fast restaurant chains in the world with its over 17,000 outlets in 105 countries. Headquartered in Louisville, Kentucky, the chain became an “American icon” with its specialization in fried chicken. As a subsidiary of “Yum! Brands” like Pizza Hut and Taco Bell, the company made an estimated...
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