|
Papers > Miscellaneous > KFC
Featured Papers from Direct Essays |
|||
1. mc donalds business report
|
|||
This is a preview of a paper to view the full text you need to signup and login.
KFC |
|||
|
Case 10 KFC and the Global Wine Industry Overview 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 chicken segment of the U. ... 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. By early 2000, however, KFC had refocused its international strategy on several high growth markets, including Canada, Australia, the United Kingdom, China, Korea, Thailand, Puerto Rico, and Mexico. KFC planned to base much of its growth in these markets on company-owned restaurants, which gave KFC greater control over product quality, service, and restaurant cleanliness. In other international markets, KFC sought to expand primarily through the efforts of local franchisees to open additional KFC outlets. Relying on the investment capital and experience of local franchisees familiar with host country eating habits and customs enabled KFC to open more outlets and also to have locations in countries that could only support a small number of restaurants. KFC’s strategy entailed opening company-owned restaurants in selected larger countries in Europe and Latin America where chicken was popular and where it was economical for KFC to eventually establish numerous restaurants. ... KFC’s task in Latin America was to select the proper countries for future investment and to devise an appropriate strategy for penetrating the Latin American market. This case traces the strategic changes that occurred at Kentucky Fried Chicken Corporation (KFC) as it moved through a variety of ownership changes, beginning with KFC’s founding by “Colonel” Harland Sanders in 1952 and including the sale of KFC to Jack Massey and John Young Brown Jr. in 1964, Heublein’s acquisition of KFC in 1971, R. ... Reynolds’s acquisition of KFC in 1982, PepsiCo’s acquisition of KFC in 1986, and PepsiCo’s spin off of KFC, Pizza Hut, and Taco Bell into Tricon Global Restaurants, Inc. ... The strategies of both the parent company and KFC in each era are covered. The case continues with an analysis of the fast-food industry from a domestic and international point of view and a presentation of KFC’s business strategy from the early 1990s through 2000, particularly the development of KFC’s Latin American strategy and the company’s situation and challenges in Mexico. The concluding sections set forth country risk management issues in light of KFC’s Latin American strategy and raise issues regarding KFC’s future strategy in Latin America and Mexico in particular. The case requires that students focus on three major topics: (1) analysis of the fast-food industry, both from a domestic and an international point of view, and KFC’s competitive position vis-à-vis rival fast-food chains, (2) the development of KFC’s business strategy, particularly in Mexico and Latin America, and (3) what actions KFC should take with respect to expanding its operations in Mexico and/or other parts of Latin America. ... Because students are so familiar with both the fast-food industry and KFC’s product offering, they will find it easier to wrestle with the range of global strategy issues confronting KFC and its products. ... Reynolds Industries, and PepsiCo, you can poll the class on their views about what value they see each acquiring company transferring to KFC. Why does acquiring KFC make good strategic sense for Heublein, R. ... Why did the KFC acquisition not work well for either Heublein or RJR? ... Reynolds transferred much value to KFC and did not build much shareholder value from the acquisition—KFC did not prosper under either of these two parent companies. ... Students will see that there were several opportunities for PepsiCo to transfer value to KFC and to take advantage of value chain fits between KFC and its other business units. You can conclude this facet of the discussion by asking whether corporate management at Tricon Global will be a better “parent” for KFC than PepsiCo, RJR, or Heublein and why. The sections on the fast-food industry and KFC’s strategy permit students to apply the tools of industry and competitive analysis and conduct a SWOT analysis for KFC. Once you’ve taken the class briskly through the economic characteristics of the fast-food industry, the five-forces model of competition, driving forces assessment, identification of the key success factors for fast-food enterprises, and perhaps a strategic group map, you can move the discussion directly to KFC’s strategy and competitive position within the fast food industry as a whole, within the chicken segment of the fast-food industry, and in Latin America. We like to assess KFC’s growth and financial performance relative to other chains—there is good data in the case for this exercise. There’s merit in going through a SWOT analysis, but you will have to move along quickly in order to have ample time for probing all the global strategy issues and getting recommendations for what KFC should do in Latin America and Mexico. ... There is ample data and information in the case for students to evaluate KFC’s prospects in the Mexican market (and possibly the Brazilian and Argentine markets) and to analyze the costs and benefits of KFC expanding further in Mexico versus concentrating its expansion efforts in other areas of Latin America such as Brazil. The KFC case is quite suite suitable for either oral team presentations or a written case assignment. ... What is your assessment of KFC’s competitive position, strategy, and growth prospects? ... What recommendations would you make to KFC’s management regarding further investment in Mexico and/or Latin America? ... KFC’s management has employed you as a consultant to assess KFC’s strategic situation and to recommend a set of strategic actions to improve KFC’s long-term competitive position and overall financial performance. Please prepare a report to KFC management covering these points. ... If you prefer, you can also assign students the task of doing further library/Internet research on recent developments in the fast-food industry and/or at Tricon Global and KFC. ... How well did KFC fare under its various owners — Heublein, Reynolds, and PepsiCo? What value did they add to the KFC enterprise? Did they have anything to offer KFC that would help KFC imrove its financial performance or competitive strength? ... What does your 5-forces analysis of the fast-food industry tell you about the competition facing KFC? ... What is KFC’s current strategy and how well is it working? ... What are KFC’s internal strengths and weaknesses? ... What are the major strategic issues surrounding KFC’s decision to expand or freeze growth in Latin America and in Mexico in particular? ... What are KFC’s alternatives for expanding internationally? ... What recommendations would you make to KFC management regarding the company’s operations in Latin America and Mexico? ... How well did KFC fare under its various owners — Heublein, Reynolds, and PepsiCo? What value did they add to the KFC enterprise? Did they have anything to offer KFC that would help KFC imrove its financial performance or competitive strength? n KFC Under Heublein Heublein produced and distributed alcoholic beverages; its main motivation in acquiring KFC was to expand into mildly related businesses. ... When Heublein put its own management team in place at KFC, growth slowed, performance suffered, and KFC’s standard’s for quality control and restaurant cleanliness deteriorated for years. ... n KFC Under R. ... Reynolds Reynolds was interested in diversifying out of its tobacco operations and had the cash reserves to acquire KFC along with its parent company, Heublein. Like Heublien, Reynolds had little knowledge of the fast-food restaurant business, but unlike Heublein, Reynolds left KFC management intact and maintained a hands-off approach. KFC experienced aggressive expansion and profitability under Reynold’s ownership. n KFC Under PepsiCo Unlike either Heublein or Reynolds, PepsiCo had considerable experience in the restaurant business. In fact, its motivation for acquiring KFC was to broaden its penetration into the fast food industry. There were tremendous opportunities to transfer skills between PepsiCo’s other fast-food businesses, Pizza Hut and Taco Bell, and KFC. ... PepsiCo’s installation of its own management team at KFC was similar to Heublein’s approach, but the difficulties each encountered were dissimilar. Whereas Heublein’s problems with KFC were due to its lack of experience in the fast-food industry, PepsiCo’s problems with KFC were primarily culture-based. There were problems with the assimilation of PepsiCo’s fast-track New York culture, including long-hours, a pressure cooker environment, strong competition between managers, hiring from outside of KFC, frequent transfer of PepsiCo executives into KFC management positions, and constant change. Under PepsiCo’s management, however, KFC experienced significant domestic and international growth. So while there were problems, KFC fared far better as part of PepsiCo than it did under Heublein and RJR. ... Build a portfolio of businesses around three strategic areas: (1) soft drinks (Pepsi-Cola), (2) snack foods (Frito Lay), and (3) restaurants (KFC, Pizza Hut, and Taco Bell). ... There’s merit in spending a few minutes of class time exploring the value chain fits between PepsiCo and KFC. Students ought to be able to see that PepsiCo had several ways it could add value to KFC’s business because of similarities and overlaps in their respective value chains. ... Following the acquisition of KFC, PepsiCo began to sell Pepsi-Cola products in all KFC restaurants (previously, KFC franchises could distribute Pepsi-Cola or Coca-Cola). ... KFC gained access to PepsiCo’s management expertise. PepsiCo believed that its management skills, developed by operating Pizza Hut and Taco Bell, could be used to operate its KFC division in Louisville. Thus, shortly after the acquisition most upper level KFC managers were quickly replaced with managers from other parts of PepsiCo. ... PepsiCo transferred its marketing skills to KFC by transferring marketing managers into KFC headquarters. ... KFC products were advertised alongside Pepsi-Cola products (e. ... This created advertising economies of scale and enhanced KFC’s image. ... PepsiCo stored and distributed food to its KFC, Pizza Hut, and Taco Bell restaurants in the same warehouses and trucks. ... Why did it make good strategic sense for PepsiCo to spin off its KFC, Pizza Hut, and Taco Bell businesses into Tricon Global Restaurants in 1997? Students ought to be able to cite several good reasons for the spinoff of KFC, Pizza Hut, and Taco Bell into a stand-alone company: 1. |
|||
To link to this page, copy the following code to your site:
Paper Information |
|||||
Title: KFC
|
|||||
Signup & Login |
|||||
If you don't currently have a login then Signup here |
|||||
| Pre-Written Papers | |||||
|
|||||
| Custom Papers | |||||
|
|||||
Copyright 2003-2008 doingmyhomework.com. All rights reserved.