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 – Employee Loyalty – Global Expansion – Targeting Non-Traditional Outlets

• Weaknesses
– Conflicting Corporate Cultures – No defined target market – Time it takes to market new products

External Factors OT
• Opportunities
– International Appeal to American products – Economies of Scale and Scope – The downturn of the US economy

• Threats
– PETA – Consumer health food trend – Saturated fast food industry

Space Matrix
• Competitive Advantage • Industry Strength
CA

Aggressive position
FS

• Environmental Stability • Financial Strength
ES

IS

BCG Matrix

Asia

Europe

?
Americas

USA

Additional Matrices

• IE Matrix
4.0 THE EFE TOTAL WIEGHTED 3.0 SCORES

THE IFE TOTAL WIEGHTD SCORES Strong Average 3.0 to 4.0 2.0 to 2.99 3.0 Asia 20% US 67%

Weak 1.0 to 1.99 2.0 1.0

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
Market Development Concentric Diversification

KFC Groceries
Product Development Market Penetration Concentric Diversification

• Similar to Furrs or Lubys • Fast food with traditional restaurant environment • Reaching out to a new market

• Similar to Taco Bell groceries • Advantage of Name Recognition • 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