Welcome to KFC

Angeles Flores
Rene Guillarme
Yvette Minjares
Jarvis Mullahan
Armando Robles
Denise Simon
 KFC Facts
• KFC is based in Louisville, Kentucky, and is the world’s most
popular chicken restaurant chain.
• Founded by Colonel Harland Sanders in 1952.
• More than 11,000 outlets
• 85 countries and territories around the world.
• 8 million customers each day.
• Yum! Brands is run by David Novak,
Chairman & CEO
• KFC Division is run by Cheryl Bachelder,
President and Chief Concept Officer
 From $105 to 7.2 Billion in 50 years

• 1952, Col. Sanders started franchising his recipe door to door financed by his $105.00 SS Check
• 1964, Col Sanders had more than 600 franchised outlets in the US and Canada.
• 1964, Sold his interest in his company for $2 million to a group of investors.
• 1966, KFC went public
• 1969, Listed on the NYSE
• 1971, KFC was acquired by Heublein Inc. for $285 million.
• 1982, Heublein & KFC Inc. was acquired by RJ Reynolds
• 1986, RJ Reynolds & KFC, was acquired by PepsiCo, Inc. $840 million.
• 1997, PepsiCo, Inc. spined-off of its qsr’s into independent Tricon Global Restaurants.
• 2002, Tricon changed it's corporation name to Yum! Brands, Inc. .
• NOW:
– Yum Brands, Inc. is the world's largest restaurant company in terms of system units with
nearly 32,500 in more than 100 countries and territories.
– Yum! Brands, Inc., is a Fortune 300 company
– Yum! Brands, Inc. global system sales totaled more than $22 billion in the year 2001.
– Current Market Cap value on the NYSE is 7.2 Billion
 Yum! Financial Data & Trends

In Past 5 Years:
Debt Ratio has dropped 25%
Net Income after Taxes has increased 31%
Profit Margin has increased 41%
Yum! Brands, Inc. International Presence & Competition

The International Portfolio of 5 leading

U.S. Brands give Yum! a distinctive
advantage over the single-brand
competitors.

*In Thousands
KFC Domestic & International
Internal Analysis Functional Areas

Finance/Accounting
Since 2001, Yum Brands Inc. has outperformed the market

Computer Information Systems

Newly established Computer information system

Marketing
Positioning among competitors is favorable
unconventional methods of distribution
multibranding
Management
Objectives and goals are measurable and achievable
Team empowerment

Productions/Operations
Constant improvement on quality of chicken
Producer and operators are strategically located
 Internal Factors SW

• Strengths
– Multibranding Strategy
– Name recognition and
Reputation
• Weaknesses
– Conflicting Corporate
Cultures
– No defined target market

– Employee Loyalty – Time it takes to market new

products
– Global Expansion

– Targeting Non-Traditional
Outlets
 External Factors OT

• Opportunities • Threats
– International Appeal to – PETA
American products
– Consumer health food
– Economies of Scale trend
and Scope
– Saturated fast food
– The downturn of the industry
US economy
 Space Matrix

• Competitive Aggressive position

FS
Advantage

• Industry Strength
CA IS
• Environmental
Stability

• Financial Strength ES
 BCG Matrix

Asia Europe
?
USA

Americas
 Additional Matrices

• IE Matrix Strong
THE IFE TOTAL WIEGHTD SCORES
Average Weak
3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
3.0 2.0 1.0
4.0
THE EFE Asia 20% US 67%
TOTAL
WIEGHTED 3.0
SCORES
Americas 7%

Europe 6%
2.0

1.0

• Grand Strategy Matrix

– Quadrant I
 Alternatives

• KFC Hospice Dinners – Delivering a

caring outreach to the terminally ill (SO)

• KFC Cafeterias – Offering dishes

competitors do not (SO)

• KFC Grocery Products – The Cornel is

always home (SO)
 Alternatives Not Chosen
Our recommendations to KFC

KFC Cafeteria KFC Groceries

Market Development Product Development
Concentric Diversification Market Penetration
Concentric Diversification

• Similar to Furrs or Lubys • Similar to Taco Bell

• Fast food with traditional groceries
restaurant environment • Advantage of Name
• Reaching out to a new Recognition
market • Frozen Meals
• Chicken Breading Mix
 KFC Hospice dinners
Delivering outreach to terminally ill

– Hospice delivers meals to the terminally ill

nationwide.
– These meals are delivered directly to the
patient in their own home.
– Why?
• Political & Social Image
• Advances KFC’s name recognition and reputation
• “Secret Recipe”
• Expands employee loyalty
 Strategic Management

Market Development
KFC will introduce their present and new products and
services into new geographic/demographic areas.
Product Development
Bring back rotisserie chicken
Concentric Diversification
Add more to KFC product & service variety to the
patients
 Implementations

• Market Research
• Determine area’s demand to determine boundaries
• Expand menu
• Healthier choices
• Meals will be sold at cost
• Determine effects on budget
 Long-term company objective

• KFC is a publicly traded company with responsibilities to all

shareholders

• By becoming a more “socially responsible” corporation we hope to

attract a new type of investor while retaining our current
stockholders.
Thank you for your attention
• Ben & Jerries & Starbucks have benefited financially by promoting
their “socially responsible corporation”

• KFC hopes to achieve this by becoming synonymous with

hospice.
The End
Yum! Brands, Inc.
http://www.yum.com
KFC
http://www.kfc.com
Thailand
http://www.kfc.co.th/
Japan
http://www.kfc.co.jp/
Cruelty
http://www.kfccruelty.com/
The Wall Street Journal
http://www.wsj.com