Harland Sanders laid the foundation of KFC.

He was an entrepreneur who began selling fried chicken from his roadside restaurant in Corbin, Kentucky. In the early 1970s, KFC was sold to the spirits distributor Heublein, who were taken over by the R.J. Reynolys food and tobacco conglomerate, who sold the chain to PepsiCo.

The chain continued to expand overseas, and in 1987 KFC became the first Western restaurant chain to open in china. Now KFC is a subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut and Taco Bell restaurant chains through out the world.

KFC is a multinational company and its outlets are opened all over the World. So, in Pakistan KFC first opened its branch at Gulshan-e-Iqbal, Karachi (1997). Now Kfc branched out in 18 major cities with more than 60 outlets. Rawalpindi branch started work in 1999 and in Islamabad in August 2002.

Political Factors Economic changes Technological changes Social factors

The political instability of Pakistan is affecting the progress of KFC. Some of their outlets have burned in Karachi at the death of Benazir Bhutto. Some of their products are banded by the government because these are not Halal from Islam point of view.

Continued....

Some areas like Peshawar and Swat has political unrest and their policies are affecting KFC being an American MNC

The trend of dual career couples is rapidly increasing in Pakistan, so there is increase in household income. Purchasing power of families is increased. Thats why people prefer to go out for spending their leisure time. In the early times of KFC they target only the upper class. But later they adapted different strategies and now they are also targeting the middle class. But increase in general sales tax is making pricing strategy difficult.

KFC is very flexible to adopt the change. Whenever they want newness they adopt technology to innovate their services and products. R&D department is very important in the technological factor. They also support their work in order to introduce any technology.

Continued....

KFC has strong capital like efficient machinery to cook food timely. KFC plans its procedure online because the usage of credit card and debit cards are increased.

In Pakistan KFC is playing a very active role for education sector. It has invested much for inauguration of schools in different areas of Pakistan. For example in Karachi it has made a school for disabled children.

Continued...
KFC is spending a lot towards NGOs for less fortunate people. At the start of KFC in Multan a mega function with meal was given to SOS kids Major events are special focus of KFC e.g. Mothers day, Fathers day, Valentines day, Eid days, Independence day of Pakistan etc. KFC also use sports events like cricket world cup, & FIFA to promote their brand and they offer different packages too according to events. .

This

model provide ease to determine the current industry structure and current competitive position. It also helpful to analyze the market attractiveness and market profitability. Five forces that we discussed in considering the fast food industry.

Threat of new entrant is high because the entry barriers for new firms are low. WHY? Expected retaliation low. Lack of product differentiation. Less technology requirement. Easily raw materials are available. Least effect of electricity crises on fast food industry.

Bargaining power of buyer is high w.r.t industry. WHY??? Customers are easily switch towards low price substitute. Bargaining power of buyers are low w.r.t KFC. WHY??? KFC has large pool of customers, if they switch, then the cost of switching customers are not very high.

Bargaining power of suppliers are low. WHY?? Raw materials are locally purchased. But in case of soft drink, bargaining power is high because they cant adopt other alternatives. In case of bakery items, manufactured internally, least rely on external suppliers.

Threat of substitute is high. WHY?? Health consciousness customers believe that fast food are not healthier one, they move towards health oriented food like ready to eat & home made food.

The degree of competition is not intense among firms. WHY?? Competition is high where profitability is low but in fast food industry the profitability is high thats why competition is low. Other reason : products are less differentiated.

KFC Type Wholly Subsidiary Owned

McDonalds

Subway

Fri Chicks Locally Franchised

Franchising Privately held company

Industr Fast Food y

Product Fried chicken, s grilled chicken, & burgers

Fast Food

Restaurant

Fast Food

Burgers, Customized Fried Milkshakes Burgers, Chickens, & Ice-cream Sandwiches Grilled & Salads chickens & Burgers Burger King Worldwide,I nc., Yum! Brand Inc., Subway McDonalds All fried Corporation chicken , Burger restaurant King Worldwide

Compet McDonalds itors Corporation, Burger King Worldwide Inc., Subway,

KFC Objective To sell food in a s fast, friendly environment that appeals to pride conscious, health minded consumers.

McDonalds Achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonald's system through innovation and technology. Kids & Youngsters Human Resource(Highl y qualified

Subway Be the number one Quick Service Restaurant (QSR) franchise in the world, while delivering fresh, delicious sandwiches and an exceptional experience."

Fri Chicks Give the taste that is newest & most exciting food range in the heart of your city!

Target Market

Youngsters & Families

Individuals Only fast food restaurant offering customized products

Youngsters & Families

Distinctiv Only deals in e white meat Capabiliti es

Strategy

cost base Competitive price strategy, Pricing Push strategy Strategy to create awareness, Be different and sound attractive

Differentiation Strategy

Branding.
Food on the GO Convenient Locations. Taste and Operations Consistency. Home Delivery of Fast food.

Kids specific deals.

Branding. Food Quality. Accessibility. Product variety. Prices.

Fast Food could be Healthier:

For many people in Pakistan fast food is not something related to good health

Growth rate of the category is depicted in following graph

Burger King. Fat Burger.