Supply Chain Management of KFC - December 29th, 2010 KFC Corporation (KFC), founded and also known as Kentucky

Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky, in the United States. KFC has been a brand and operating segment, termed a concept[2] of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global Restaurants Inc. KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of grilled and roasted chicken products, side dishes and desserts. Outside North America, KFC offers beef based products such as hamburgers or kebabs, pork based products such as ribs and other regional fare.[citation needed] The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952, though the idea of KFC's fried chicken actually goes back to 1930. The company adopted the abbreviated form of its name in 1991.[3] Starting in April 2007, the company began using its original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the U.S. as part of a new corporate re-branding program;[4][5] newer and remodeled restaurants will have the new logo and name while older stores will continue to use the 1980s signage. Additionally, Yum! continues to use the abbreviated name freely in its advertising. Born and raised in Henryville, Indiana, Sanders passed through several professions in his lifetime.[6] Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a gas station he owned in North Corbin, Kentucky. The dining area was named "Sanders Court & Café" and was so successful that in 1936 Kentucky Governor Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of his contribution to the state's cuisine. The following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across the street.[7] When Sanders prepared his chicken in his original restaurant in North Corbin, he prepared the chicken in an iron skillet, which took about 30 minutes to do, too long for a restaurant operation. In 1939, Sanders altered the cooking process for his fried chicken to use a pressure fryer, resulting in a greatly reduced cooking time comparable to that of deep frying.[8] In 1940 Sanders devised what came to be known as his Original Recipe.[9] The Sanders Court & Café generally served travelers, often those headed to Florida, so when the route planned in the 1950s for what would become Interstate 75 bypassed Corbin, he sold his properties and traveled the U.S. to sell his chicken to restaurant owners. The first to take him up on the offer was Pete Harman in South Salt Lake, Utah; together, they opened the first "Kentucky Fried Chicken" outlet in 1952.[10] By the early 1960s, Kentucky Fried Chicken was sold in over 600 franchised outlets in both the United States and Canada. One of the longest-lived franchisees of the older Col. Sanders' chicken concept, as opposed to the KFC chain, was the Kenny Kings chain. The company owned many Northern Ohio dinerstyle restaurants, the last of which closed in 2004. Sanders sold the entire KFC franchising operation in 1964 for $2 million USD, equal to $14,161,464 today[11] Since that time, the chain has been sold three more times: to Heublein in 1971, to R.J. Reynolds in 1982 and most recently to PepsiCo in 1986, which made it part of its Tricon Global Restaurants division, which in turn was spun off in 1997, and has now been renamed to Yum! Brands. Additionally, Colonel Sanders' nephew, Lee Cummings, took his own Kentucky Fried Chicken franchise

Long Run Growth/ Decline Fast food franchising was still in its infancy in 1954 when Harland Sandlers begun his travels across the United States to speak with prospective franchises about his ³colonel´ sanders recipe Kentucky fried chicken´. By 1960 ³colonel´ Sandlers had granted KFC franchise to over 200 take home retail outlets and restaurants across the unite states. They had also succeeded in establishing a number of franchises in Canada by 1963, the number of KFC franchises had risen to over 300 and revenues had reached $500,000 per unit, on average. By 1964, the colonel had tired of running the day to day operations of the business and was eager to concentrate on public relations issue. He sold the business to two Louisville business people Jack Massey and John Young Brown, Jr. for $2 million. During the next five years, Massey and Brown concentrated on growing KFC¶s franchise system across the U.S. in 1966 they took KFC public, and the company was listed on the New York Stock Exchange. By

late1960¶s a strong foothold had been established in the United States, and Massey and Brown turned their attention to international markets. In 1969, a joint venture was signed with Initsubishi shoji kaisha, Ltd., in Japan, and the right to operate 14 existing KFC franchises in England were acquired. Subsidiaries were also established in Hong Kong, South Africa, Australia, New Zealand, and Mexico. By 1971, KFC had 2,450 franchises and 600 company owned restaurants worldwide, and was operating in 48 countries. 2. Stability of Demand for Products Many KFC¶s problems during the late 1980¶s surrounded its limited menu and its inability to quickly bring new products to market. As KFC entered 1996, it grappled with a number of important issues. During the 1980¶s, consumers began to demand healthier foods, and KFC was faced with a limited menu consisting mainly of fried foods. In order to reduce KFC¶s image as a fried-chicken chain, it change its logo from Kentucky Fried Chicken to KFC in 1991. It responded to consumer demands for greater variety by introducing a variety of new products. The increased popularity of healthier foods and consumers-increasing demand for better variety led to a number of changes in KFC¶s menu offerings. 3. Stage in Product Life Cycle KFC is on its Maturity Stage; KFC¶s products have survived the earlier stages. KFC¶s early entry into the fastfood industry in 1954 had allowed it to strong brand name recognition and a strong foothold in the industry. During the 1990¶s and 1970¶s, KFC pursued an aggressive strategy of restaurant expansion quickly establishing itself as one of the largest fast-food restaurant chains in the United States. By 1990, restaurants located outside of the United States were generating over 50 percent of KFC¶s total profits. By 1995, KFC was one of the three largest fast-food restaurant chains operating outside of the United States. A. SUPPLY OF PRODUCTS AND SERVICES 1. Capacity of the Industry KFC, being the world¶s largest chicken restaurant chain and third largest fast-food chain, with over 9,000 in both franchise and company-owned restaurants worldwide and was operating in 68 countries, simply shows that KFC has the capacity to address the needs of its customers no matter how old their facilities and product form was. However KFC¶s significant service problem will probably push their customers away from them, thus KFC must have to imply ways on how to meet there customers expectations. KFC ought to think that customer goes to their establishment not just because of their product but also their service, because nothing bits a quality service. The continuous opening of new restaurants in 1995, approximately two restaurants in every three days is one way of proving their competence when it comes to business expansion, thereby providing a wide market segment not just local but worldwide. 2. Availability of Needed Resources KFC has several problems when it comes to its resources, specially on the needed materials, because there system is older when it comes to their facilities and product forms and it¶s one thing that needs an attention, since this is the key to success in terms of production and it would be there competitive edge in the wide array of fast food chain industry. KFC Despite of the rivalries of employees and managers, KFC had surpassed this incident. KFC¶s culture was built largely as the employees enjoyed relatively good employment stability and security. Over the years, a strong loyalty had been created among KFC employees, because of the benefits and pensions and other non-income needs. Thereby, KFC has the ability to retain and manage its manpower. As to the company¶s money, KFC has the enough profit on its recent operations as of 1994, worldwide on both company-owned and franchised restaurants. Whereby it reaches $1.7 million in this regard KFC has the capacity to innovate their old system or how to transform the old KFC into new one. 3. Volatility of Technology Basically KFC¶s past technologies still existed at present, which means that their families were durable enough because it works for years. However the main issue now is how they could transform the existing facilities for them to be more competitive.

S.¶ that seated around 142 people. KFC had developed one of the world¶s most recognizable brands. Some incidents were directly attack of nationalist against KFC and closure of the first restaurant in India by local authorities are to protest of local farmers group allied with a campaign across India against foreign investment which was occurring as part of the countries four year old program of economic liberalization. One of the first fast-food chains to go international during the late 1960s. and lost consumers power. later named 'Sanders Court & Cafe. While KFC benefits from lower labor costs. Structure of the Industry KFC remained the largest chicken restaurant chain and third largest fast-food chain. Soon. lead many businesses to lay-off workers. The new development meant the end of this. it result a grossly overvalued peso. Government Support and Regulation The food industry does not get much support from government. high interest rates. His chicken delicacies became popular and people started coming just for food. President Salinas institutes a policy of allowing the peso to depreciate against the dollar by one peso per day.4. but served people on his own dining table in the living quarters of his service station. low job absenteeism. and the new legislation eliminated many restriction for foreign investment. However there are laws regarding its operation on food sanitation and hygiene. increasing trade and current account deficits and the uncertainty surrounding the economic policy. top marginal tax rates were lowered. he perfected his secret blend of 11 herbs and spices and the basic cooking technique of chicken. High tariff and other trades barriers restricted imports in to Mexico. labor unrest. After settling all his . Over the next nine years. when a new interstate highway was planned bypassing the town of Corbin. After 1982. When Carlos Salinas de Gortari seated as President. COMPETITIVE CONDITIONS IN THE INDUSTRY 1. These problems with worker retention and labor unrest were mainly the result of workers frustration over the loss of their purchasing power. Due to inflation & to past government controls on wages increases. labor unrest. BACKGROUND OF (KFC):KFC was founded by Harland Sanders (Sanders) in the early 1930s. His restaurant flourished mainly due to the patronage of highway travellers. when he started cooking and serving food for hungry travellers who stopped by his service station in Corbin. Sanders sold his restaurant operations. Inflation Vulnerability As KFC entered business in Mexico. Kentucky Fried Chicken was born. Sanders moved across the street to a motel-cum-restaurant. KFC¶s primary concern was the stability of Mexico labor markets. A slowdown in business activity brought about by higher interest rates & lower government spending. and foreign ownership of assets in Mexico was largely prohibited or heavily restricted. He did not own a restaurant then. C. Sanders' restaurant business witnessed an unexpected halt in the early 1950s. & punctuality continued to be significant problems. US. Kentucky. and this lowered price of imports & led to an increase in imports of over 23 percent in 1989. Advertisement KENTUCKY FRIED CHICKEN (KFC) IN INDIA. market in terms in sales and ended 1995 with over 9. 5.000 restaurants worldwide. Social Constraints KFC encountered several factors constraining KFC¶s international expansion plans such as the social unrest. Labor was really cheap in Mexico. Sanders' fame grew and he was given the title Kentucky Colonel by the state Governor in 1935 for his contribution to the state's cuisine. the Mexican government battled high inflation. 2. In 1995 KFC opened 234 new restaurants and operated in 68 countries. Mexico improved. It held over 50 percent of U.

The Bangalore outlet was opened in June 1995. RE-ENTRY OF KFC INTO INDIAN MARKET:A case in point is KFC. The regulatory authorities found that KFC's chickens did not adhere to the Prevention of Food Adulteration Act. KFC entered India in 1995 and has been in midst of controversies since then.bills. thanks to the economic liberalization policy of the Government of India (GoI). the company had to shut all but one outlet in the country. Sanders franchised more than 600 chicken outlets in the US and Canada. Also. Since the late 1990s. Only recently in 2003 it made a quiet re-entry into the Indian market. Apart from Bangalore. visiting as many restaurants as possible and cooking batches of chicken. And since 2003 it is expanding successfully its business in India. It chose Bangalore as its launch pad because the city had a substantial upper middle class population. it was considered India¶s fast growing metropolis in the 1990 . He called it Kentucky Fried Chicken. KFC received permission to open 30 new outlets across the country. By 1964. regulatory and ecological issues while establishing business in a country like india . undeterred by the protests by PETA and other animal rights organizations. he was reduced to living on a meagre $105 social security cheque. owned by PepsiCo. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFC's poultry farms. PROBLEMS FACED BY KFC IN INDIA:The case highlights the ethical issues involved in Kentucky Fried Chicken's (KFC) business operations in India. KFC IN INDIA:Foreign fast food companies were allowed to enter India during the early 1990s. Sanders started franchising his chicken business in 1952. Then came up with the strategies and menu that is desirable by the Indian consumers. He travelled the length and breadth of the country by car. » They have not understood the importance of ethics in doing business. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG. Ultimately. . »They have not examine the reasons for protests of PETA. KFC became embroiled in various controversies even before it started full-fledged business in India. But Sanders did not lose hope. However. Banking on the popularity of his product and confident of his unique recipe for fried chicken. KFC entered India in 1995. »KFC has not Appreciated the need for protecting animal rights in developed and developing countries like India. economic. he entered into a handshake agreement that stipulated payment of a nickel9 for each plate of chicken sold by the restaurant. KFC planned a massive expansion program in India. but a controversy surrounding the levels of MSG in its preparations and subsequent protests from farmers' groups and animal rights activists spelt trouble for the company. OUTCOME OF CASE STUDY OF KFC IN RESPECT OF SRC (SELF REFERENCE CRITERION):KFC has not understood the significance of cultural. 1954. PepsiCo planned to open 60 KFC and Pizza Hut outlets in the country over the next seven years. One of the first fast food multinationals to set foot in India was Kentucky Fried Chicken (KFC). KFC faced severe protests by People for Ethical Treatment of Animals (PETA). However. with a trend of families eating out. a flavor enhancing ingredient) as allowed by the Act. an animal rights protection organization. If the restaurant owners liked his chicken.

ACKNOWLEDGEMENT To complete this project. Athar Ali (Dean of KGIM) 2. Mangalam Global Institute of Management has given us an opportunity to show our intellectual ability through an integrated project and allow us to decide the service sector on which we want to make our project. Lajpat Nagar. We concluded that according to the areas the demand keeps on fluctuating. there have been many people who graciously gave their time and expertise in reviewing the manuscript. Their experience and direction has significantly helps us to complete this project. Prof. We would like to thank the following: 1. KFC basically deals in chicken recipes whose main focus in crispy and deep fried chickens. Center Stage Mall. Dr.Khullar (Programme director. But then also KFC have to work hard to earn the goodwill in market in comparison to other fast food chains. like there is more demand in Sector 18 market chain of Noida in comparison to Center Stage Mall and we have the maximum demand in Lajpat Nagar. We visited KFC chain of Noida Sector18. We also had a survey on the people working in the KFC through the human recourse feed back from.November 4th. and Ghaziabad. MBA) And all the faculty members and all of our fellow mates who help us to complete the task. Noida. After the survey on chains we had a survey on the public of city through a feed back form. To know the market response of KFC we visited various chains of KFC and we also had survey on the public (who are the basic consumers of the KFC). and the product what they provide are up to the mark. All the Mangers and workers of KFC outlet where we visited and also the citizens of New Delhi who gave us their precious time .S.Project on KFC . R. KFC is the growing brand in the world for food industry. They find KFC food a best quality food. 2009 SUBMITTED BY:Ramanpreet Kaur Taluja Prakriti Ahluwalia Vikas Dubey Ashish Dhawan Aditi Chopra Amit Saini Integrated Assignment On Concepts & Application On KENTUCKY FRIED CHICKEN PREFACE Our institute K. By people we concluded that they are also satisfied by the service provided by KFC. S. Several people have been of tremendous assistance in the fine-tuning of this project. For this we have chosen the KFC food chain. We found that they are totally satisfied by the human resource strategies of KFC.

6. His foreseeing seemed to be true which is less than 13 years the chain had crossed the 300 mark. KFC is part of Yum! Brands. Founded by Harland Sanders in 1950s when fast moving franchising was still in its infancy. 1. His growing age promoted colonel sanders to sell off the business for $2million in 1964 to Jack Massey and John Brown Jr-two Louisville businessman. Long John Silver's and Pizza Hut restaurants in more than 100 countries and territory.500 KFC. CONTENTS S. Inc. I Introduction 4 II History of KFC 5-8 III Success Story 9 IV KFC¶s Success in India 10 V Factors Against KFC in India 11 VI Finance Strategy 12-19 VII Human Resource Strategy 20-28 VIII Operations Strategy 29-38 IX Marketing Strategy 39-49 X Management Information Systems Strategy 50-54 XI Annexures 55-56 XII Bibliography 57-58 INTRODUCTION KFC Corporation..for feedback. In 1970 KFC merged with Heublien Inc. is the world's most popular chicken restaurant chain. Secret recipe of chicken with eleven herbs and spices. which is the world's largest restaurant system with over 32. Kentucky. 3. Extra Crispy.No. based in Louisville. a producer of alcoholic beverages with little restaurant experience. Twister and Colonel's Crispy Strips chicken with homestyle sides. 5.Taco Bell. specializing in Original Recipe. 2. Colonel Sanders was able to tap a talent hunt. TOPIC PAGE NO. 4. . However soon enough conflicts arose regarding quality control issues and restaurant cleanliness. A&W All-American FoodŒ.

Soon thereafter Colonel Sanders begins using it to fry his chicken to give customers fresh chicken. 1955 An interstate highway is built to bypass Corbin.S. in England. 1969 The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange. After paying debts owed. streetcar conductor." 1936 Kentucky Governor Ruby Laffoon makes Harland Sanders an honorary Kentucky Colonel in recognition of his contributions to the state's cuisines 1937 The Sanders Court & Café adds a motel and expands the restaurant to 142 seats. he is virtually broke. The pressure cooker is introduced. Mexico and places in the Carribean and UK. KFC HISTORY AT-A-GLANCE 9/9/1890 Harland Sanders is born just outside Henryville. insurance salesman. 1900-1924 Harland Sanders holds a variety of jobs including: farm hand. but it is rebuilt and reopened. army private in Cuba. chief cook and cashier and names the dining area "Sanders Court & Café. 1964 Kentucky Fried Chicken has more than 600 franchised outlets in the United States. . future governor of Kentucky. 8. 1952 The Colonel begins actively franchising his chicken business by traveling from town to town and cooking batches of chicken for restaurant owners and employees.. 9. A handshake agreement stipulates a payment of a nickel to Sanders for each chicken sold. Australia. 1939 The Sanders Court & Café is first listed in Duncan Hines' "Adventures in Good Eating. Sanders sells his interest in the U. Sanders sells the service station on the same day that he receives his first social security check for $105. Kentucky." Fire destroys The Sanders Court & Café.7.S. The Colonel remains a public spokesman for the company. Kentucky. 1930 In the midst of the depression. He decides to go on the road to sell his Secret Recipe to restaurants. faster. 1966 The Kentucky Fried Chicken Corporation goes public. 1957 Kentucky Fried Chicken first sold in buckets 1960 The Colonel's hard work on the road begins to pay off and there are 190 KFC franchisees and 400 franchise units in the U. Indiana. 1965 Colonel Sanders receives the Horatio Alger Award from the American Schools and Colleges Association. company for $2 million to a group of investors headed by John Y. Harland Sanders opens his first restaurant in the small front room of a gas station in Corbin. and Canada. Next KFC turned their attention towards tapping into international markets and by around 1980s it had entered Japan. Canada and the first overseas outlet. Brown Jr. blacksmith's helper. railyard fireman. Sanders serves as station operator. In 1986 KFC was sold to Pepsico. 1940 Birthdate of the Original Recipe 1949 Sanders marries Claudia Price. The Colonel awards Pete Harman of Salt Lake City with the first KFC franchise. In the 1990s it could foresee the virgin markets if INDIA and CHINA. tire salesman and service station operator for Standard Oil.

1976 An independent survey ranks the Colonel as the world's second most recognizable celebrity.7 billion pieces of chicken. ‡ Mellowed down their Fried chicken image by changing their name to KFC in 1991. 1977 Colonel Sanders speaks before a U.S. ‡ Customization in different countries.J. Inc. dies after being stricken with leukemia. Inc. Different culture and customers preferences were taken into account .1971 More than 3.) when Heublein. (now RJR Nabisco.KFC. Inc. Congressional Committee on Aging. KFC¶S SUCCESS STORY: ‡ Colonel sanders commitment to quality and hygiene. acquires KFC from RJR Nabisco. ‡ Coordinated through national advertising. who came to symbolize quality in the food industry. 1997 PepsiCo. Flags on all Kentucky state buildings fly at half-staff for four days. ‡ ³Think like a local ««««. Inc 2002 Tricon Global Restaurants. Inc. Reynolds Industries.000 KFC restaurants worldwide with sales of more than $2 billion. 1986 PepsiCo. thus strengthens their market positions. ‡ Were able to provide a wider variety to the customers to chosen from.not like an American Company´.500 franchised and company-owned restaurants are in worldwide operation when Heublein Inc. 12/16/1980 Colonel Harland Sanders. 1979 KFC cooks up 2.into Tricon Global Restaurants. Pizza Hut® and Taco Bell® restaurants. ‡ PepsiCo taking over KFC proved to be a turning point in its life cycle. Long John Silvers®. Inc. 1982 Kentucky Fried Chicken becomes a subsidiary of R. Taco Bell and Pizza Hut . KFC gelled with the people as the operations were in their hands. the world's largest restaurant company. acquires KFC Corporation. In addition to KFC. ‡ Being a leader in its field PepsiCo provided that extra edge to KFC whereby the soft drinks were made available at KFC outlets along with their menu. the company owns A&W® All-American Food® Restaurants. but contains Zero Grams of Trans Fat per serving thanks to new cooking oil. changes its corporate name to YUM! Brands. 2007 KFC proudly introduces a new recipe that keeps the Colonel's 11 herbs and spices and finger-lickin' flavor.. ‡ Consumers were able to relate the soft drinks with the snack foods.. 2006 More than a billion of the Colonel's "finger lickin' good" chicken dinners are served annually in more than 80 countries and territories around the world. ‡ Was able to foresee a huge untapped market in the Asian Countries. is acquired by Reynolds. Inc. announces the spin-off of its quick service restaurants . Inc. There are approximately 6. Inc.

CULTURAL FACTORS CONTRIBUTING TO KFC¶s ³SUCCESS´ IN INDIA ‡ Reducing the psychic distance by handling over of operations to local people so that customers could relate to them more easily. KFC faced severe protests by . ‡ Got an edge since chicken is a staple dish and is taken more frequently in Asian countries. CULTURAL FACTORS IN INDIA THAT GO AGAINST KFC¶s ORIGINAL RECIPE: ‡ KFC is perceived as a restaurant serving only chicken-Indian families obviously wanted more varieties. However this backfired as in India having veg food cooked in a non veg kitchen doesn¶t come out well with the vegetarian segment. ‡ KFC is also quite aware of its ³CSR´. ‡ The target customer of KFC [upper. ‡ Wanted to position itself as a ³family restaurant´ . tastes and preferences. Different relief programmes and other social undertakings have been well executed by them. ‡ Tried to target the vegetarian segment. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG.. ‡ Believed to be expensive ««.to attain GCTC [GETTING CLOSE TO THE CUSTOMERS]. Since the late 1990¶s. 1954. ‡ More accustomed to take out food over the counter. middle and above] are health conscious and hence to cater to their interest Kentucky fried Chicken changed its name to KFC. a flavor enhancing ingredients) as followed by the act. not as a ³teenage hangout´ ‡ Ambience was missing. ‡ Able to adapt to cultural differences. ETHICAL FACTORS: The regulatory authorities found that KFC¶s chicken did not adhere to the prevention of FOOD ADULTRATION ACT. no value for money. ‡ Perceived differences in eating habits. For example keeping in mind the Indian tastes buds KFC launched a fierier ³ZINGER BURGER´. ‡ Price sensitivity of the two economies drove KFC to introduce menus that were easy on the consumer¶s pocket.

Long Term Solvency Ratio 2. an animal rights protection organization. FINANCE STRATEGY Factors Average Demand(per day per branch ) During regular period 150-200 During peak period(promotion schemes) 350-450 During festivals 450-650 GRAPHICAL REPRESANTATION COMPARISION OF FINANCIAL STATEMENT 1. Debt Equity Ratio = Acceptable ratio=2:1 (Although now days lending institutions prefer 1:1) = Debt (Long term loan) / Equity (Shareholder fund) .its current asset ratio is closer to ideal ratio of 2:1 or we can say that its current assets can be more readily converted into cash to meet the current liabilities. Short Term Solvency Ratio Current Ratio: Ideal is 2:1 = Current Assets/Current Liabilities =Stock + debtors + cash + loans & advances/current liabilities CURRENT RATIO 1. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFC¶s poultry farms.people for Ethical Treatment of Animals (PETA).64:1 Conclusion Short term solvency of KFC .

3.11 . Also it indicates the amount of capital supplied to the company by its proprietors and of asset cover availability to its creditors on liquidation. 7. Net Profit Ratio = Net profit*100/Net Sales NPM(%) 22. Proprietary Ratio =Proprietary fund /Total asset =Equity share+ Reserve and surplus / Net fixed asset+ Current asset Proprietary Ratio 0.61 Conclusion Higher ratio indicates a risky financial position while a lower ratio indicates safe financial position. 3.76 Conclusion This ratio is of particular importance for creditors. PROFITABILITY RATIO 6. The higher the numbers more secure the lender in respect of his periodical interest income.29 Conclusion This ratio indicates how efficiently capital employed is being used.= Secured loan +unsecured loan/Equity + Reserve surplus Debt equity ratio 0. However too high ratio may indicate over trading resulting in paucity of funds.firm has adopted imprudent policy of using short term funds for acquiring fixes assets. Interest Coverage Ratio =NPBIT/Interest on fixed(long term) loans or debenture Interest cover 9. If ratio > 1.14 Conclusion If ratio < 1. indicates that long term funds are being used for short term purpose i. A higher ratio shows safety for creditors. ACTIVITY RATIO 5. It is not good from the firms point of view as it¶s usually more difficult to raise long term funds. Capital Turnover Ratio =Net sales / Fixed asset + Networking capital Capital Turnover Ratio 0. It measures margin of safety to lenders. Ratio below 50% may be alarming for creditors since they may have to loose heavily in the event of company¶s liquidation on account of heavy looses.e for financing working capital.58 Conclusion This ratio measures profitability and soundness of business.12 Conclusion This ratio indicates how many times the profit covers fixed interest. Fixed Asset Ratio = Shareholder fund + long term loan / Net fixed asset =Equity share+ Reserve+ secured loan+ unsecured loan / Net block Investment Fixed asset ratio 1. Higher the ratio better it is. High turnover means efficient utilization and improves liquidity and profitability of business. 4. Operating Profit Ratio =Operating profit*100 / Net Sales OPM(%) 43.

10.58 ROCE(%) 28.80 Key operating ratios Year end Mar 07 EPS(Rs) 38.74 Net assets/net worth 3.29 PBDIT/net assets(%) 0.e profit available to equity shareholders.Conclusion This ratio determines the overall efficiency of the business. Return on investment(ROI) = PBITD*100 / Capital Employed ROCE(%) 28.67 NPM(%) 22.89 ROE(%) 26. Higher ratio indicates better position.50 Equity cap pd 22.67 Conclusion Ratio helps in evaluating the prevailing market price of share.87 Conclusion This ratio help the shareholder of the company to know how much there investment have earned to them i.87 Debt/equity 0.61 Interest cover 9. Return on equity(ROE) = Net profit(after interest. tax & dividend) /Equity shareholder fund ROE(%) 26.58 Sales/net assets 0. More earning per share is preferable.97 Dupont model Year end Mar 07 PBIDT/sales(%) 43. Earning Per Share = Net profit.09 Market cap/sales 3.12 Valuation ratios Year end Mar 07 EV/EBIDTA 10.89 Conclusion This ratio measures the earning power of net assets of business.13 PAT/PBIDT(%) 50. Higher ratio is preferable.78 Operating profit 180. Key financials Year end Mar 07(in crores) Net sales 413.76 ROE(%) 26.87 .Preference dividend / Number of equity share EPS(Rs) 38. 9. Higher the ratio better it is.33 Net profit 91. OVERALL PROFITABILITY RATIO 8.11 OPM(%) 43.

customer service. cash handling. marketing. which is committed to serving the best chicken at the fastest speed and with a smile. Trainee Managers help with day-to-day running of the restaurant. which is committed to serving the best chicken at the fastest speed and with a smile. purchasing. leadership and operational support to 8-10 KFC Restaurants within a defined Area. Trainee Managers: Responsible for assisting the Restaurant General Manager and Assistant Managers in creating an energetic and valuable work environment. The Restaurant General Manager reports directly to an Area Manager and is accountable for successfully implementing and maintaining all Company policies and procedures in relation to operations. human resources. administration and training & development policies are followed. Assistant Managers are also responsible for ensuring all Company policies and procedures are followed in relation to operations. administration. administration. marketing. customer service. marketing. health & safety. cash handling. Here you'll find news and research on getting the most from your human resources processes. cash handling. human resources. purchasing. health & safety. customer service. Area Manager: Area Managers are accountable for providing coaching. training and development. and need to ensure that all operations. Restaurant General Managers: The Restaurant General Manager is accountable for creating and running an energetic and valuable work environment. human resources. which is committed to serving the best chicken at the fastest speed and with a smile. service and cleanliness is delivered to all customers at top speed and with a smile! Food Service Team Members: Responsible for putting the crunch in the coating and the zing in the Zinger«the cook¶s main task is to . Assistant Managers: The Assistant Manager is responsible for assisting the Restaurant General Manager (RGM) in creating an energetic and valuable work environment.HUMAN RESOURCE STRATEGY HUMAN RESOURCE POLICY IN KFC Hiring and retaining the right employees is critical to the success of your restaurant's operation. Customer Service Team Members: Responsible for working the service areas and ensuring quality product. purchasing. training and development.

telling them that they in fact can go from being just a team member to the restaurant manager and later area or region coach (KFC Official site). ³KFC has the lowest turnover rate in the fast food industry because it is a fun place to work. For example. Hence. (Kufahl & Agoglia. hence. we can safely assert that KFC believes in eliminating the glass ceiling. which specializes in helping companies motivate employees through comprehensive recognition solutions. life and disability insurance. The company also strongly believes in diversification. is a medical coverage and prescription benefits. As for selection and recruitment practices.´ The company ensures that coming to work is not something employees dread by making the day as enjoyable for its workers as possible. 2003). benefits package and salary scale. it is better to promote older employees rather than hiring people from external sources. stock options. vision/hearing coverage. KFC¶s attractive salary and benefits package is an effective lure for potential employees (Rigdon.S. Retention Practice at KFC KFC is a client of the O. Hence. Tanner Company. Staff retention should be a major concern for employers because it has been proven time and again that if the company is ever in a financial mess. it is very important to promote a certain employee culture. and hiring and keeping female and minority-group executives. Recruitment and Selection at KFC Part of KFC¶s recruitment strategy is to offer employees high-quality options such as potential for advancement. Employees have been given the autonomy to have fun on the job: they can start standing ovations for they whenever they want. as it encourages employees to perform well on their jobs. and apparently given such incentives to join that most of the people offered jobs joined KFC even though they were told before hand that at immediate present. college-planning assistance. These executives were promised quick advancement on their jobs.C. This is because for companies like KFC. the age factor is definitely an issue of concern for recruiters at KFC.´ From this. no senior position was vacant. Training and Development are Priority! On the path from Team Member to Restaurant General Manager.prepare and cook the irresistible KFC products! The cook must also maintain the cleanliness of the cooking area as well as the quality of product and speed of preparation. can sing songs for birthdays etc. the situation has improved today. 2001). like Floppy Chicken. ³We want to bring in the best people but if there are two equally qualified people. a 410k plan (which helps employees save for their future). Nationally Recognised Training Programs are available to employees*. employee discount. When KFC was looking for senior executives who could run a business. a management incentive plan (under which everyone from assistant manager to senior executive is rewarded for remarkable performance). tuition reimbursement plan. marketing and corporate communications. or KFC President Charles Rawley's Bulldog Award to motivate employees and keep them happy (Serving up a bucket of recognition. KFC management strongly believes that hiring young people and later training them is the way to a successful organization. . paid vacation and a group legal plan. president of Kentucky Fried Chicken's U. extensive training and development is a priority. It has incorporated a lot of recognition programs in its culture. dental coverage. adoption assistance. As far as selection is concerned. we'd clearly like to have diversity. with there being numerous managers either female or part of a minority group.S. KFC admits that it actively tries to recruit and promote women and minority members in middle and top management ranks (Rigdon. According to its director. for two years it scoured the management teams across various industries and offered senior executives of companies like Coca Cola attractive benefits and a better salary scale to get them on the team. among the benefits package that KFC offers. KFC is one of those companies which realizes this factor. 1991). Recommendations The recommendations that I would offer KFC is to maintain its current low turnover rates and incorporate even more practices in its culture which provide recognition to employees and make them feel valued. it has to deal with the added loss of employees resigning and leaving the company. age should not be a bias factor and the principle of promotion from within should be adhered to. managers were minority or female. company reputation. KFC also believes in promoting from within. This seems to be working for the company and is an effective policy: where in 1989. not even one of the company's 17 senior U. right when their energy and work is needed the most. 1991). operations. According to Kyle Craig.

strong work ethic.‡ Certificate II in Retail Operations ‡ Certificate III in Retail Supervision ‡ Certificate IV in Retail Management What do you need to become part of our team? Good interpersonal skills. incentive scheme and share ownership programs for company employees. Availability varies by area* Corporate Culture "Reward and Recognition" "Promotion from within" "Belief in People" Our Restaurant General Managers are No. We are an Employer of Choice Yum!'s commitment to being an "Employer of Choice" is demonstated by Yum! being a Registered Training Organisation and our: ‡ Equal Opportunity Employment Policy ‡ Executive Trainee Program ‡ Family Friendly Policies ‡ World Class Training Systems ‡ Education Assistance Program ‡ Product Discount Program ‡ Performance based salary increases and ‡ Employee franchising KFC FAST FOOD INDUSTRY QUESTIONNAIRE 0N HUMAN RESOURCE . You must be prepared to work shiftwork. 1. including nights and weekends. commonsense and great customer service skills. and they are rewarded for their achievements through competitive salary packages.

) less than one month b.) do not know. DEFINITIONS: Fast food industry include businesses which primarily sell meals that are ready to eat immediately and are packaged in take away containers or are packaged where no table service is involved (that are eaten on the premises but there are not waiters or waitresses).)Subross d.) 6 months to 12 months e.What is for employment status? a.) on the job training c.) permanent full-time e. etc««. Q6. Q8.) 3 month to 6 months d.) permanent part-time f. Q4.)Pizza hut b.) yes .what training did you receive for the job? a. or have you worked.) yes b.) no training d.) casual full-time d.) more than 1 year. On an average how many hours would you work a week? ________________ _________________________________________________.Did you sign an employment contract when you started your job? a.) other (please specify) _______________________________________________ Q5. MC¶DONALDS.) less than three months c. Q2. Please list the days and shifts you have worked that? Q7. Q1.) apprentice/training b. b.) casual part-time c.For example: KFC.) training before commenced the job.)McDonalds. Q3.Do you work.) no c.Do you have a supervisor at a work place? a. for one of the following fast food outlets (if worked for more than one outlet pls fill in other questionnaire of each outlet)? a. Q9.How long you have worked for the fast food outlets? a.)Subway c.) do not know Q10.What is your job title and duties at the fast food outlets? _________________ __________________________________________________ ___________.PLEASE READ THIS PAGE BEFORE STARTING THE QUESTIONNAIRE: AIM: The aim off the survey is to find out about the experiences and problems of young people working in the fast food industry as part of the research study.What suburb is the outlet located in?_________________________________ __________________________________________________ ____________.

with a trend of families eating out. š Major reason was KFC was targeting higher income group in India in order to compete with the local chicken dhaba wala¶s. an animal rights protection organization.Did your employer pays you during your training period? a. a flavor enhancing ingredient) as allowed by the Act.) yes b. KFC received permission to open 30 new outlets across the country. š They did not understand the importance of ethics in doing business. Indian people condemned KFC's entry into India. The Bangalore outlet was opened in June 1995. KFC faced severe protests by People for Ethical Treatment of Animals (PETA). saying that it was unethical to promote highly processed 'junk food' in a poor country like India with severe malnutrition problems. . š KFC did not appreciate the need for protecting animal rights in developed and developing countries like India.) do not know Q11. Since the late 1990s.) no c. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFC's poultry farms. ISSUES FACED BY KFC IN INDIA:The case highlights the ethical issues involved in Kentucky Fried Chicken's (KFC) business operations in India. KFC entered India in 1995 and has been in midst of controversies since then. KFC became embroiled in various controversies even before it started fullfledged business in India. Also. OPERATIONS STRATEGY One of the first fast food multinationals to set foot in India was Kentucky Fried Chicken (KFC). However. However. Apart from Bangalore.:____________________________ AGE:______________________________ SEX:______________________________ ETHNIC BACKGROUND:_____________________________________ THANK YOU FOR YOUR TIME AND ASSISTANCE IN TAKING PART IN THIS SURVEY. PepsiCo planned to open 60 KFC and Pizza Hut outlets in the country over the next seven years.b. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG. The regulatory authorities found that KFC's chickens did not adhere to the Prevention of Food Adulteration Act.) no c. It chose Bangalore as its launch pad because the city had a substantial upper middle class population. š KFC did not add the flavours and spices in their menu which Indians favoured. owned by PepsiCo. KFC planned a massive expansion program in India. it was considered India¶s fast growing metropolis in the 1990. š They did not examine the reasons for protests of PETA.) do not know NAME:_________________________________ ADDRESS: __________________________________ PHONE NO. 1954. undeterred by the protests by PETA and other animal rights organizations.

The balance between these 3 flows is what a Supply Chain is all about. chairs. YUM! Brands. To encourage compliance with all legal requirements and ethical business practices. people and the overall experience. C. says that KFC also operates on the franchisee model. It is critical to go beyond one¶s immediate suppliers and customers to encompass the entire chain. "We expect to scale up to 12-13 restaurants by the end of this year. owing to its size and growing aspirations of an upwardly mobile middle class.S. facilities.338 outlets. KFC Marketing. Yum! has adopted best operational practices to ensure high customer orientation. various suppliers. KFC¶s Supply Chain A Supply Chain is a network of facilities including . and Long John Silver¶s restaurants worldwide. cooked and served separately.111 restaurant units world over. geographically dispersed activities. It has developed a range of pure vegetarian food. KFC is looking at extending its presence across India to create a national footprint. the downstream customer. However.S. Pizza Hut. a trucking company with a large fleet.manufacturer ± distributor ± retailer ± consumer. hospitality. shortages/stock outs.S stands for: cleanliness. And so. is a critical market in its overall scheme of things. had successfully established a strong foothold in India. followed by Taco Bell with 7. raw material flows as follows: supplier . Inc. the Supply Chain may include major product elements. The expansion drive would take Pizza Hut across 33 cities. This is the umbrella operation programme for training. "Pizza Hut". the company had to shut all but one outlet in the country. but a controversy surrounding the levels of MSG in its preparations and subsequent protests from farmers' groups and animal rights activists spelt trouble for the company. So.338 outlets. suppliers. Rs. transformation of materials into semi-finished and finished products.200 units worldwide. the Supply Chain operates at its best. even before they opened their first restaurant in India. and mistrust between supply chain partners. a heavy truck manufacturer. Understanding . KFC has around 10. Only recently in 2003 it made a quiet re-entry into the Indian market. 25. says Ms Keswani. and distribution of products to customers and their "downstream" customers at all levels. highchairs and trays are sanitised several times each hour. Chennai and Hyderabad." Both Pizza Hut and KFC have made various alterations to their menus in India to attract more footfalls. Hot Crispy Chicken which contained Indian spices that were liked by Indian¶s. For example. KFC. Then it came up with the strategies and menu that was desirable by the Indian consumers. Such meticulous attention to cleanliness extends beyond the lobby and kitchen to even the pavement and immediate areas outside the restaurant. which is demonstrated through C. is committed to conducting its business in an ethical. At the same time it provided menu items which can be afforded by the middle income group level like KFC¶s Mini Burger for Rs. maintenance. Long John Silver's is America's largest quick-service seafood chain with more than 1. KFC¶s challenge here is to make sure to meet our quality standards in terms of food. Kolkata. 50. Director. KFC spent a few years setting up a unique Supply Chain. When there is a balance in the finished product ordering. Yum! is a fortune 500 corporation that operates or licenses Taco Bell. KFC caters to nearly 7 million customers in more than 78 countries through 11. KFC is committed to providing quality products while supporting other Indian businesses.material flow from suppliers and their "upstream" suppliers at all levels.A.000 crore worth of food produce is wasted in India? This is mainly because of the lack of proper infrastructure for storage and transportation under controlled conditions. a diesel engine manufacturer may be able to integrate a GPS locator system into its engine control system. longer lead times.P. All the vegetarian products are stored. KFC caters to nearly 7 million customers in more than 78 countries through 11. This is called the Bullwhip Effect. and both upstream and downstream activities.A. Stringent cleaning standards ensure that all tables. Ms Sharanita Keswani. is a critical market in its overall scheme of things. where mall culture is fast developing. measuring and rewarding an employee's performance against customer standards. may be very interested in a locator system. PepsiCo also decided to concentrate on the expansion of KFC since its other brand. Now they are adhering to the rules of Food Corporation of India and PETA. Ultimately.M. Yum has established this Supplier Code of Conduct for Yum's U. may see no need for this functionality. The company aimed at targeting cosmopolitan cities like Chandigarh. accuracy. owing to its size and growing aspirations of an upwardly mobile middle class. The company believes that India.286 units worldwide. higher transportation and manufacturing costs. KFC want to ensure that the customers experience in India is no different from a Pizza Hut outlet anywhere else in the world. product quality and speed. from six at present.P. The company believes that India. by a separate crew distinctly identified by their colour-coded uniform. legal and socially responsible manner. Information and money flows in the reverse direction. Any major fluctuation in the product ordering pattern causes excess / fluctuating inventories.H. KFC will set foot in Kolkata and Hyderabad after having forayed into Pune recently.KFC Re-entry into Indian Market KFC entered India in 1995. Depending on the situation. helping them to expand business successfully. Pune. And since 2003 it is expanding successfully its business in India. since hidden value often emerges once the entire chain is visualized. Its immediate customer.H. Did you know that every year.M.

‡ Capability to convert milk into cheese. Its plant has: ‡ State-of-the-art fully automatic machinery requiring no human contact with product. Based on HACCP guidelines. Maharashtra by setting up a network of milk collection centres equipped with bulk coolers. USA.Supplier of Chicken & Vegetable A joint venture with OSI Industries Inc. and KFC India Pvt. within a temperature range of ±18ºC to 4ºC. A world class infrastructure at its plant at Taloja. who have now become an integral part of the Cold Chain. data collection. Uttar Pradesh. inventory management. ‡ Capability to produce frozen foods at temperature as low as -35 Degree Celsius to retain total freshness. ‡ Effective process control for minimum distribution cost. has : ‡ Separate processing lines for chicken and vegetable foods. Ltd. Salient strengths are: ‡ A one-stop shop for all distribution management services. transportation and retailing of food products under controlled temperatures. The factory has: ‡ Fully automatic international standard processing facility. Vital Links in KFC¶s Cold Chain All suppliers adhere to Indian government regulations on food. Ltd. KFC's Quality Inspection Programme (QIP) carries out quality checks at over 20 different points in the Cold Chain system. combined with appropriate exercise. ‡ International standards. About 52% of the food products need to be stored under these conditions before they are used. ‡ Strict quality control supported by a fully equipped quality control laboratory. Triyaka Agriculture ± Supplier of Iceberg Lettuce Implementation of advanced agricultural practices has enabled Trikaya to successfully grow speciality crops like iceberg lettuce. deliveries. skimmed milk powder.the value to the downstream customer is part of the supply chain management process. lactose. Setting up the Cold Chain involves the transfer of state-of-the-art food processing technology by KFC and its international suppliers to pioneering Indian entrepreneurs. warehousing. ‡ Stringent quality control measures and continuous Research & Development Amrit Food ± Supplier of Milk & Milk Products( Frozen Desserts) Amrit Food. As the ingredients move from farms to processing plants to the restaurant. storage. butter/ghee. Easy accessibility has enabled farmers augment their income by finding a new market for surplus milk. They believe eating sensibly. ‡ Refrigerated truck for transportation. Ltd. Foodland specialises in handling large volumes. produces a range of frozen chicken and vegetable foods.. Dynamix Diary ± Supplier of Cheese Dynamix has brought immense benefits to farmers in Baramati. The term Cold Chain describes the network for the procurement. ‡ Pre-cooling room and a large cold room for post harvest handling. health and hygiene while continuously maintaining KFC's recognized standards. an ISO 9000 company. for total hygiene. KFC take great pride and care to provide customers with the best food and dining experience in the quick service outlet business. ‡ Dry and cold storage facility to store and transport perishable products at temperatures up to . Cold Chain The Cold Chain is necessary to maintain the integrity of food products and retain their freshness and nutritional value. Hazard Analysis Critical Control Point (HACCP) is a systematic approach to food safety that emphasizes prevention of illness or presence of microbiological data within KFC¶s supplier facilities and the outlets rather than its detection through inspection. ‡ Drip and sprinkler irrigation in raised farm beds with fertiliser mixing plant. The Cold Chain is an integral part of the Supply Chain. is the best .. quality inspection. special herbs and many oriental vegetables. Maharashtra. recording and reporting. Setting up of the Cold Chain has also enabled KFC to cut down on operational wastage. casein & whey protein and humanised baby food. ‡ Installed capacity of 6000 litres per hour for producing homogenized UHT (Ultra High Temperature) processed milk and milk products.Gagan Milk and Nandan Ghee at its factory at Ghaziabad. control points and critical control points for all KFC major food processing plants and outlets in India have been identified. KFC¶s outlets store products to be used on a daily basis.22 Degrees Celsius. providing the entire range of services including procurement. Farm infrastructure features: ‡ A specialised nursery with a team of agricultural experts. The HACCP verification is done at least twice in a year and certified. procedures and support services. Vista Processed Foods Pvt. manufactures widely popular brands . Radhakrishna Foodland ± Distribution Centre An integral part of the Radhakrishna Group. Vista Processed Foods Pvt.

manufacturing and packaging. While some of us would be happy to subsist on 10 servings of pork and beans. contractors. What is the least cost satisfactory diet? Formulation:First we decide on decision variables. Our objective is to minimize cost. thus ensuring that KFC commitment to growth was mirrored by that of its partners. The relationship between KFC and its Indian suppliers is mutually beneficial. KFC has carefully identified local Indian businesses that take pride in satisfying customers by presenting them with the highest quality products. Local Sourcing KFC has always been committed to sourcing its requirements from local suppliers and farmers. Adherence to Indian Government regulations on food. Let us label the foods 1. we implement stringent internal controls over raw materials. To ensure that all our locally manufactured products conform to halal requirements. . We are extremely careful to prevent cross contamination with filth or dangerous contaminants during the storage. have certifications from our suppliers to confirm that they comply with halal requirements. and 800 mg of calcium (vitamins and iron are supplied by pills). This assurance is rooted in the philosophy of our company's founder. we decree that a satisfactory diet has at least 2000 kcal of energy. health and hygiene is now a top priority. KFC India today purchases more than 96% of its products and supplies from Indian suppliers. 2.. This gives the formulation: MARKETING STRATEGY . be inexpensive. have variety. In keeping with this belief. He firmly believed in mutual benefits arising from a partnership between KFC and the local businesses. We also adhere to best practices to maintain the highest standards of quality and hygiene. 55 g of protein. the supplier gets the opportunity to expand his business. labour and maximum local content in materials. we have decided to impose variety by having a limit on the number of servings/day for each of our six foods. and gets exposure to advanced agricultural practices and the ability to grow or to export. has access to the latest in food technology. As KFC expands in India. and for each serving/day limit. calcium. which can be written We have constraints for energy. preparation. How can we find such a diet? Suppose the only foods in the world are as follows: After consulting with nutitionists. All in all.. packaging and transport of our products. and be ``pleasing to the palate''. handling. KFC offers a variety of menu items for those that want lower fat and lower calorie choices in their menu. and let represent the number of servings of food i in the diet. protein. KFC Operational Model Problem What is the perfect diet? An ideal diet would meet or exceed basic nutritional requirements. Even our restaurants are constructed using local architects. All our raw materials too.solution for a healthy lifestyle. our commitment to halal underscores our commitment to putting ³Customers First´ in all that we do.6.

This is known as Branding. social factors retail environment and many other elements affect KFC success in the market. KFC's marketing department can determine: 1. The marketing mix is a term used to describe the four main marketing tools(4P's): 1.Place 4. Accurate research is essential in creating the right mix to win customers loyalty. Market research identifies these factors and anticipates how they will affect people¶s willingness to buy. Marketing communication methods. What prices consumer willing to pay? 3. In all its market KFC faces competition from other businesses. so do buying patterns. product or service.KFC as a Brand KFC is one of the best-known brands worldwide Doing Integrated assignment we study how KFC continually aims to build its brand by listening to its customer's also identifies the various stages in the marketing process. What products are well received? 2. Branding only works when behaves and presents itself in a consistent way. Marketing involves identifying customer's needs and requirements and meeting these needs in better way then its competitors.Promotion Using that detailed information about its customers. are used to created colors. In this way a company creates loyal customers. These buying decisions can often be affected by wider factors than just the products itself. Lf psychological factors are important. The stating point is to find out who are potential customers are-not everyone will want what KFC has to offer. Programmes. Additionally economic. newspapers and advertising consumer read or view? 4.g. As the economy and social attitudes change. what image does the product give or how the consumer feels when purchasing it? Through marketing. design and image which gives a recognizable face . legal and technological changes. Having identified its key audiences a company has to ensure a marketing mix that created that appeals specifically to those people.Product 2. To build long-term business it is essential to retain . Meeting the needs of Key audience There are a limited number of customers in the market. The Marketing Mix and Marketing Research.At KFC this is represented by its familiar logo-Colonel Harland Sanders is shedding his white suit jacket for a red cook. McDonald¶s establishes a prominent position in the minds of customers. Market research considers everything that affect buying decisions. The people KFC identifies as likely customers are known as key audiences. What T. such as advertising and promotion.Price 3. e.V. What restaurants are visited? Market research is the format which enables KFC to identify this key information. KFC needs to identify whether the number of target customers is growing or shrinking and whether their buying habits will change in the future. Brand Image represents how consumers view the organization. Branding develops a personality for an organization.

prices charged. Children want to visits as it is fun place to eat. These examples represent just a few of KFC possible customer profiles each has different reasons to come KFC. they are combined with the opportunities and threats in the market place. promotions created and where restaurants are located. The business can then determine what it needs to do in identify different types of customers. The analysis will include the: ‡ Company¶s products and how appropriate they are for the future ‡ Quality of employees and how well trained they are to these additional psychological factors are significantly offer the best service to important to the customer. Each has different reasons to come KFC. Teenager visits KFC The Rupee saver menu is affordable and there is Internet access in some restaurant. .people once they have become customers. It is to the needs of specific group. This is known as SWOT analysis (Strengths. They can be even more customers important than the products¶ physical benefits. and Threats). A children wants to visit KFC As it is a fun place to eat A business customer Visits KFC during the work day as service is quick. Using this type of information KFC can tailor communication to the needs of specific groups. A business customer visits KFC during the work day as service is quick the food taste is great and can be eaten in the car without affecting a busy work schedule. Using this type of information KFC can tailor communication to the needs of specific groups. The business can then determine what it needs to do in order to increase its chances of marketing successfully. so that a marketing strategy which is right for the business can be decided upon. so that a marketing strategy which is right for the business can be decided upon.the food taste is great can be eaten in the car without affecting busy work schedule. The analysis will include the: ‡ Company¶s products and how appropriate they are for the future . They can be even more customers important than the products¶ physical benefits. To meet the needs of the key market it is important to analyses the internal marketing strengths the organization. ‡ Systems and how well they function in providing customer satisfaction example marekting database ‡ Financial resources available for marketing Once the strengths and weaknesses are determined. For example a parent with two children might visit and visits KFC to give the children a treat. ‡ Systems and how well they function in providing customer satisfaction e. These examples represent just a few of KFC's possible customer¶s profile. Opportunities. Strengths and weaknesses must be identified. For example: A parent with two children might visit Visits KFC to give the children treat. To meet the needs of the key market it is important to analyze the internal marketing strengths and weaknesses must be identified. marketing databases and restaurant systems. Swot Analysis Strengths(Internal) the brand detailed market research to create the right marketing mix. It is their needs that determine the type of products and services offered. promotions Created and where restaurants are located. prices charged. It is their needs that determine the type of products and services offered. ‡ Financial resources available for marketing. ‡ Quality of employees and how well trained they are to these additional psychological factors are significantly offer the best service to important to the customer. Weaknesses.g.

What is fashionable and attractive today may be discarded tomorrow. Threats(External) New competitors changing lifestyles. Marketing Objectives A marketing plan must be created to meet clear Objectives.KFC knows that items on its menu will vary in popularity. . and goals. Market research establishes exactly what this is. In order to meet these changes KFC has introduced and phased out old ones. The objectives communicate what marketers want to achieve Long-term objectives are broken down into shorter-term measurable targets. The marketing strategy is the statement of how objectives will be delivered. which KFC uses as milestones along the way. Product It is important thing to remember when offering menu items to customers is that they have a choice. Objectives guide marketing actions and are used to measure how well a plan is working. This type of feedback allows the company to change plans. Opportunities (External) increasing number of customers looking for food that is served in quick and friendly way. they have a huge number of ways of spending their money and places to spend it. These can be related to market share. Their ability to generate profits will vary at different points in their life cycle. It explains what marketing actions and resources will be used and how they will work together. sales.Weaknesses (Internal) Kfc has been for around long time. Care is taken not to adversely affect the sale of one choice by introducing another choice which will cannibalize the sale from the existing one( trade off). More people day by day becoming Vegetarian day by day. However customer¶s requirements change over time. And will continue to do so. Marketing continuously monitors customer¶s preferences.therefore they have to keep innovating. It gives flexibility marketing objectives are set the next stage is to define how they will be achieved. KFC's places considerable emphasis on developing a menu which customers want. 4P's of Marketing At this point the marketing mix is put together: 1. Results can be analyzed regularly to see whether objectives are being met. reaching the target audience and creating awareness in the marketplace. Therefore.

This may be to buy the product. Customers draw their own mental picture of what a product is worth. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results. loyalty schemes door drops. Key Objective of advertisement is to make people aware of an item feel positive about it and remember it. It is important when deciding on price to be fully aware of the brands and integrity. This may be supported by in store promotions to get people to try the product and a collect able promotional device to encourage them to keep buying the item support each other and do not confuse customers. it also has psychological connotations for the customer.Products go through a life cycle which is illustrated below: The type of marketing taken and amount invested will be different. In Delhi KFC has open its shop where middle and higher class family. is not just about the physical location or distribution points for products. What distinguishes advertising from other marketing communications is that media owners are paid before the advertiser can take space in the medium. For example launching a new product involves automatically television and other advertising support. TV advertising makes people aware of a food item and press advertising provides more detail. etc. Messages should gain customers¶ attention and keep their interest. etc. the right message must be targeted to the right audience. to reach a single professional woman with income above a certain level. exhibitions. purchase of the menu item. it may be better to take an advertisement in Cosmopolitan than Woman Era. The next stage is to get them to want what is offered.V. To advertise to mothers with children. The right media depends on who the viewers. Promotion The promotions aspect of the marketing mix covers all marketing communications. teenagers will come and enjoy the . Some of KFC's option growing tremendously but some Halal products is in its maturity stage. depending upon the stage product is reached. readers or listeners are and how closely they resemble the target audience. 3. visit a restaurant. on website. A further consequence of price reduction is that competitors match prices resulting in no extra demand . The more KFC knows about the people it is serving the more it is able to communicate messages which appeal to them. For example.. Place Place in the marketing mix. seminars. For example. This means the profit margin has been reduced without increasing sales. Radio. The methods include advertising. news paper. A product is more than a physical item. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. it may be more effective to take advertising space in cinemas during Disney films. At any time company will have a portfolio of products each is in different stage of its life cycle. sometimes known as µabove the line¶ activity. and recommend the choice to a friend or increase. Showing the benefits which they will obtain by taking action are usually sufficient. A thorough understanding of what the brand represents is the key to a consistent message the purpose of most marketing communications is to move the target audience to some type of action. Advertisements conducted on T. demonstrations. It encompasses the management of range of processes involved in bringing products to the end consumer. 4. 2. Price The customer¶s perception of value is an important determinant of the price charged. telemarketing. Other promotional methods include sales promotions.

bad 5.worst Can't eat here anymore.bad 5.! Please rate on the following Criterion: Ambience Airline 1.good 3.bad 5.bad 5.good 3.excellent 2.excellent 2.excellent 2. ok 4.worst N't again yaar -Price Not to much 1. -Washrooms Soap se bhi saaf 1.good 3.worst Lets go dutch Courtesy Yahoooo 1.weekly 3. ok 4.so that every visit to KFC ³will have you say .good 3.bad 5.excellent 2. 30 people were showing result product oriented and 10 mainly on service oriented at.worst Tastes funny -Variety Hazzar 1. ok 4.good 3. Questionnaire Please tell us what you liked and what you didn't about your visit. by preparing questionnaire and making a hypothesis on the result of questionnaire.worst Blue line Décor Inviting 1. ok 4.worst Are bhai maaf Karo Value For Money I left happy 1.worst I left broke How often do you visit KFC 1.bad 5.excellent 2.excellent 2.excellent 2.´.good 3.001 significance level 24. .good 3.it finger licking good.excellent 2.good 3.worst Frightening Service -Quick Ferrari 1.excellent 2.good 3.Occasionally We had done survey on 40 people. Help Us to prepare a integrated assignment and improve KFC .excellent 2. ok 4.bad 5. ok 4.good 3.bad 5. ok 4.worst Dump Cleanliness -Dining area Can eat off the floor 1. ok 4. ok 4.bad 5.worst Cold -Complete All there 1.excellent 2.excellent 2. ok 4.good 3. ok 4.worst Anari -Impressive Gold 1.Monthly 4.excellent 2.worst Hostel Mess -Taste Tastes yummy 1.bad 5.32 goodness of fit. ok 4. ok 4.Daily 2.food. What we have find about KFC .bad 5.good 3.good 3.bad 5.bad 5.worst What -when-where Food -Hot 'n' Fresh Mother's Kitchen 1.

and very useful in formulating HR policies which helps them to rate their employees. Realistic and Time-Specific. Management by Objectives While MIS systems are extremely useful in generating statistical reports and data analysis they can also be of use as a Management by Objectives (MBO) tool. Expert organizations such as the Institute of MIS along with peer reviewed journals such as MIS Quarterly continue to find and report new ways to use MIS to achieve business objectives. MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product which is very useful for KFC future development. a function they perform better than their competition. MIS systems provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers.MANAGEMENT INFORMATION SYSTEMS STRATEGY Management Information Systems (MIS) is the term given to the discipline focused on the integration of computer systems with the aims and objectives on an organization. The development and management of information technology tools assists executives and the general workforce in performing any tasks related to the processing of information. MIS and business systems are especially useful in the collation of business data and the production of reports to be used as tools for decision making. MIS systems can be used to transform data into information useful for decision making. Where in the past business information had to be manually processed for filing and analysis it can now be entered quickly and easily onto a computer by a data processor. Not only do MIS systems allow for the collation of vast amounts of business data. there's hardly any large business that does not rely extensively on their IT systems. MIS systems can also use these raw data to run simulations ± hypothetical scenarios that answer a range of µwhat if¶ questions regarding alterations in strategy. monitoring and implementation of strategy. but they also provide a valuable time saving benefit to the workforce. Computers can provide financial statements and performance reports to assist in the planning. objectives should be Specific. Objectives are set using the SMART ratio: that is. For instance. Agreed. With computers being as ubiquitous as they are today. MBO is a management process by which managers and subordinates agree upon a series of objectives for the subordinate to attempt to achieve within a set time frame. These Decision Support Systems (DSS) enable more informed decision making within an enterprise than would be possible without MIS systems. knowing production. However. Each KFC outlet use MIS in accounting. Measurable. KFC µs Core Competencies Every market leading enterprise will have at least one core competency ± that is. Benefits of MIS The field of MIS can deliver a great many benefits to enterprises in every industry. By building an exceptional management information system into the . allowing for faster decision making and quicker reflexes for the enterprise as a whole. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually. The aim of these objectives is to provide a set of key performance indicators by which an enterprise can judge the performance of an employee or project. there are several specific fields in which MIS has become invaluable.

Burger 20 In KFC the above mentioned kind of information is stored in each computer that they use to maintain is SAP-sale module . MIS systems let the KFC management: ‡ To capture information and store it. Enhance Supply Chain Management Improved reporting of business processes leads inevitably to a more streamlined production process. around and out of the systems. NOTE: This is a hypothetical table and the prices mentioned may differ the actual prices. These factors help KFC to work smoothly and efficiently as we already known that they are the only fast food chain which is selling fried chicken in which they are specialized. they suit your purposes and can be customized to do so. enabling them to push out ahead of the competition and produce a better service and a larger piece of the pie. Better MIS systems enable an enterprise to react more quickly to their environment.) 01 Small Coke 20 02 Medium coke 35 03 Large coke 45 04 Small coke+ Lollipop Chicken 65 05 Fried Chicken tub(small) 105 06 Small French Fries 25 07 Large Fries 45 08 Chicken Burger 25 09 Fried Chicken tub(large) 145 10 Veg. achievement and progression for promotions. Product code Product name Product price (in Rs. and relate to the needs of the organization. ‡ Manage marketing information to further improve sales.. are easy to use and allow rapid data entry with rapid and flexible access for reporting purposes. ‡ Maintain records needed for quality control so that the success story of all the employees can be appraised.enterprise it is possible to push out ahead of the competition. whenever they are making bills it helps them to count sales per day. If Management Information Systems are flexible. With better information on the production process comes the ability to improve the management of the supply chain. ‡ Record and track outcomes. ‡ Work within legislation such as the Data protection Act. ‡ Access stored information easily and manipulate it for the needs of their clients¶ while billing or taking order they just enter the code of the product requested at that time and the quantity demanded. MIS systems provide the tools necessary to gain a better understanding of the market as well as a better understanding of the enterprise itself. ‡ Respond confidently to the demands of the Common Inspection Framework MIS help them because they now easily check when the last stocking was done.They given codes to their 45 products just by entering the code the product name comes out with cost on the screen. Quick Reflexes As a corollary to improved supply chain management comes an improved ability to react to changes in the market. ‡ Manage resources this is a very important function as every day inventory is recorded and therefore resources could be managed. One has to be sure that. then they work well and effectively. ‡ Produce reports for themselves so that they can compare their own performances with their own and other. ‡ And a host of other information related functions. whatever systems you use. ‡ Control flow of information into. including everything from the sourcing of materials to the manufacturing and distribution of the finished product. the clients and the curriculum that they are delivering. . per week and per month because a copy of the bill is stored in the computer. ‡ Manage and track employee records of work.

45 Less: Accum.63 Provisions 79.94 Miscellaneous Expenses 13.404.194.35 Profit before Depreciation & Tax 162.12 Food.11 Profit Before Tax 140.33 Investments 24.Services & Others 413.00 Profit before Interest.37 Profit After Tax 91.387.171.10 Net Current Assets -33.ANNEXURES Annexure 1 KFC Balance Sheet Year Mar 07(in crores) Share Capital 22.505.80 Reserves & Surplus 1.76 Unsecured Loans 0.31 Sundry Debtors 13.83 Total Liabilities 1.45 Net Block 1.404.98 Depreciation 22.33 Interest & Financial Charges 17.07 Total Debt 209. Depreciation & Tax 180.26 Employee Cost 53.87 Tax 49.30 Cash and Bank 34. Depreciation 118. Bevarages & Provisions Consumed 33.47 Less: Preoperative Expenditure Capitalised 0.68 Total Shareholders Funds 1.31 Contingent Liabilities 2.40 Annexure 2 Profit and Loss Account KFC Year Mar 07(in crores) Restaurants.48 Secured Loans 207.52 Power & Fuel Cost 22.00 Shop Security Deposits 2.00 Capital Work in Progress 26.34 Total Income 415.00 Total Assets 1.15 Loans and Advances 99.59 Inventories 8.60 Other Operating & General Expenses 111.36 Current Liabilities 109.61 Miscellaneous Expenses not w/o 0.50 .78 Other Income 1.31 Gross Block 1.

P Gupta 4.Adjustment below net profit 0. Through this we were able to know what people think about KFC and were able to draw the information about KFC. one at secor 18 and second at center stage mall. š We used search engines of google.00 P & L Balance brought forward 62. Marketing Management by Philip Kotler & Armstrong. We got all the information about KFC group from various resources like: š We visited on various outlets of KFC in Delhi. Noida and Ghaziabad for getting the information about services and resources used in making food at KFC. Statistical Methods by S. A. Human Resources authored by VSP Rao. 3. They were clear on the statement that they have no authority to expose the information about KFC strategies. delhi Some of them gave us the favorable response and some of them were reluctant in not providing us the information on various functions of KFC. Ghaziabad. 6. carried down 118. C.29 P & L Bal. 2. Corporate Finance by Khan & Jain. outlets and global information. Advertisement . š We did the sample survey in all the markets we visited at different location of Delhi and NCR region for getting the knowledge about potential demand of KFC. B.K Sharma 5. Lajpat nagar. š Books References:1.93 Extraordinary Items -1. š We visited KFC website Welcome to KFC. its products. yahoo and rediff for getting more knowledge about KFC.48 BIBLIOGRAPHY KFC is the Service sector company which we have chosen for our integrated assignment. Management Information Systems by Lauden & Lauden. Operations Research by J.com. Two outlets at Noida.72 Appropriations 35.

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