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A multinational corporation (MNC) or enterprise (MNE), is a corporation or an enterprise
that manages production or delivers services in more than one country. It can also be referred to as an international corporation. The International Labour Organization (ILO) has defined an MNC as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries. The Dutch East India Company was the first multinational corporation in the world and the first company to issue stock. It was also arguably the world's first megacorporation, possessing quasigovernmental powers, including the ability to wage war, negotiate treaties, coin money, and establish colonies. The first modern multinational corporation is generally thought to be the East India Company. Many corporations have offices, branches or manufacturing plants in different countries from where their original and main headquarters is located. Some multinational corporations are very big, with budgets that exceed some nations' GDPs. Multinational corporations can have a powerful influence in local economies, and even the world economy, and play an important role in international relations and globalization
WELCOME TO THE WORLD OF KFC…
Since its inception, KFC has evolved through several different organizational changes. These changes were brought about due to the changes of ownership that followed since Colonel Sanders first sold KFC in 1964. In 1964, KFC was sold to a small
group of investors that eventually took it public. Heublein, Inc, purchased KFC in 1971 and was highly involved in the day to day operations. R.J. Reynolds then acquired Heublein in 1982. R.J. took a more laid back approach and allowed business as usual at KFC. Finally, in 1986, KFC was acquired by PepsiCo, which was trying to grow its quick serve restaurant segment. PepsiCo presently runs Taco Bell, Pizza Hut, and KFC. The PepsiCo management style and corporate culture was significantly different from that of KFC. PepsiCo has a consumer product orientation. PepsiCo found that the marketing of fast food was very similar to the marketing of its soft drinks and snack foods. PepsiCo reorganized itself in 1985. It divested non-compatible units and organized along three lines: soft drinks, snack foods and restaurants. PepsiCo Worldwide Restaurants was created to create synergism between its restaurant companies. By the end of 1994, KFC was operating 4,258 restaurants in 68 foreign countries. KFC is the largest chicken restaurant and the third largest quick service chain in the world. Due to market saturation in the United States, international expansion will be critical to increased profitability and growth
Based in Louisville, KY, KFC Corporation is the world’s most popular chicken franchise
specializing in Original Recipe®, Kentucky Grilled Chicken™ and The Colonel’s Crispy Strips with home-style sides, Honey BBQ Wings and freshly made chicken sandwiches. KFC has been serving customers complete, freshly prepared, family meals since Colonel Harland Sanders founded the concept in 1952. Famous for its Original Recipe® fried chicken, which is made with the same secret blend of 11 herbs and spices Colonel Sanders perfected more than a half century ago, it is estimated that, on average, more than 185 million people see a KFC commercial at least once a week – that’s more than half the U.S. population. At the end of 2008, KFC was the leader in the U.S. chicken quick serve restaurant (QSR) segment among companies featuring chicken on the bone as their primary product offering, with a 42 percent market share – more than three times the market share of the closest national competitor. KFC serves more than 12 million customers each day in 109 countries and territories around the world. KFC operates 5,200 restaurants in the Unites States and more than 15,000 restaurants internationally. KFC’s parent company is Yum! Brands, Inc., the world's largest restaurant company in terms of system restaurants, with more than 37,000 locations in more than 120 countries and territories and employing more than one million associates. Yum! is ranked number 239 on the Fortune 500 List, with revenues exceeding $11 billion in 2008.
KFC IN INDIA
• The Bangalore outlet was opened in June 1995 • Protest from farmers and doctor • People for Ethical Treatment of Animals(PETA) joined protest over KFC’s treatment of its chickens • People perception • Expensiveness of KFC • Fault in communication
MISSION & OBJECTIVE
To sell food in a fast, friendly environment that appeals to pride conscious, health minded consumers (www.KFC.com).
1. Product development • Increase variety on menu • Introduce desert menu • Introduce buffet to restaurants 1. Introduction on the Neighbourhood Program with following: • Menu items target African Americans in major cities with the following items: ○ Greens ○ Macaroni and cheese ○ Peach cobbler ○ Red beans & rice • Menu items targeting Hispanics in major cities with the following items: • Fried plantains • Flan • Tres Leches 1. Implementation on non-traditional units including the following: • Shopping mall food courts • Universities • Hospitals
• Airports • Stadiums • Amusement Parks • Office Buildings • Mobile Units 1. Increase profitability of KFC through the following: • Reduced overhead costs • Increased efficiencies • Improved customer service • Cleaner restaurants • Faster and friendlier service • Continued high quality products 1. Resolve franchise problems in the United States.
1. Expansion of international operations to provide the following: • Increased percentage of overall sales growth • Increased percentage of profit growth • Increased expansion of franchises into Mexico • Expansion of franchise operation beyond Central America • Continued promotion of healthier image through removal of the word "fried" from the name • Improve menu selection of rotisserie
FRANCHISEE OR JOINT VENTURE
KFC is a franchisee.
The franchisee process is as follows: Step 1 4
QUALIFICATION 2-3 WEEKS
OPERATION INTERVIEW 3-5 WEEKS
DISCOVERY DAY /APPROVAL STRATEGY EXPLORATIO SITE 3 WEEKS 8-10 WEEKS
SECURING SITE CONTROL 12-16 WEEKS
SITE REGISTRATION APPROVAL 6-8 WEEKS
Business type – Franchisee Category – Food & restaurant Investment- $1,000,000$2,000,000
Required capital - $ 360,000 Indian currency Investment – Rs 40,00,000 - Rs 80,00,000
Required capital- RS 1,44,00,000
MENU OFFERED BY KFC
KFC’s speciality is fried chicken served in various forms KFC has two lines of sandwiches: its “regular”
chicken sandwiches and its Snackers line.
A variety of smaller finger food products are available at KFC including chicken strips, wings,
nuggets and popcorns chicken Several pies have been made available from KFC. The KFC Twister is a wrap that consists of either
chicken strips roasted chicken, tomato, cheese, lettuce and mayonnaise wrapped in a tortilla. • Shish kebab – in several markets KFC sells kebabs • KFC may sell hamburgers, pork, ribs or fish. • Three types of salads (which can be topped with roasted or fried chicken) are available at KFC:
Caesar, house and BLT salads. Zinger Burger – A regular sized burger.
PRODUCTS OFFERED BY KFC
McDonald's in India is a locally owned and managed
company run by Indians, employing local staff, procures from local suppliers to serve its customers. McDonald's India opened its first family restaurant at Basant Lok in Oct, 1996; today it has 169 Restaurants across India. This vibrant decade has seen McDonald's evolve Indian menus, Indian sensitivities and yet remain as globally innovative as ever. This journey has seen McDonald's develop a rich brand identity amongst its customers and employees as well as partners alike. At McDonald’s India we have had a single mantra: providing 100% total customer satisfaction and the formula for achieving this goal in our restaurant operation is the long-standing commitment to the McDonald’s Promise.
The Burger King menu has evolved from a basic offering of burgers, french fries, sodas and milkshakes in 1954, to a larger, more diverse set of product offerings. In 1957, the Whopper was the first major addition to the menu; it has since become Burger King's signature product. Conversely, BK has introduced many products which failed to catch hold in the marketplace. Some of these failures in the US have seen success in foreign markets, where BK has also tailored its menu for regional tastes. After the purchase of the company in 2002, Burger King began to aggressively target the 18–34 male demographic with larger products that often carried correspondingly large amounts of unhealthy fats and trans-fats. This tactic would eventually come to hurt the company's financial underpinnings and cast a negative pall on its earnings.
EL POLLO LOCO
El Pollo Loco, pronounced “L Po-yo Lo-co” and Spanish for “The Crazy Chicken,” is the nation’s
leading quick-service restaurant chain specializing in flame-grilled chicken. Founded in Guasave, Mexico in 1975, El Pollo Loco’s long-term success stems from the unique preparation of its award-winning “pollo”-- fresh chicken marinated in a special recipe of herbs, spices and citrus juices passed down from the founding family. The marinated chicken is then flame-grilled, hand cut and served hot off the grill with warm tortillas and a wide assortment of side dishes. Rounding out the menu are fresh flavorful entrées inspired by the kitchens of Mexico, including Signature Grilled Burritos, Pollo Bowls, Pollo Salads, Tacos al Carbon and Quesadillas. And of course, there is the
fresh salsa bar featuring our famous House Salsa, alongside our Avocado, Chipotle and Pico de Gallo salsas. All are made fresh daily.
It all started in San Antonio, Texas in 1952.
W. Church Sr., a retired incubator salesman with
more than 20 years in the poultry industry, conceived the idea of offering freshly cooked, quality fried chicken at a time when only hot dogs and ice cream were marketed fast-food style. Church reasoned that the food service industry would have to change its approach in order to capitalize on the opportunities created by population growth and increased mobility. By cutting the frills common to the restaurant industry philosophy of the day, Church felt he could deliver his product profitably at low cost with a more efficient use of capital and employees.
is a Brazilian fast food franchising specialised in Middle Eastern cuisine. It has more than 300 outlets (many of them self-owned) across the country and has recently begun expansion into foreign markets. It is known for very low prices and exotic dishes. Middle Eastern dishes are very popular in Brazil ever since the immigration of people from that area (particularly Lebanon and Syria) into Brazil, despite their numbers being less than 7% of the overall population
ADVERTISING CAMPAIGN IN INDIA
KFC Ad Campaign
This is a campaign that is created for
Chicken. The target audience was college students (20-25)
who want something quick and good tasting. Realizing that the target audience was a younger demographic, I wanted to create an Ad campaign that was fun and had a sense of humor. When creating these Ads, they wanted to focus on KFC’s 4 main pieces of chicken that they offer.
STORY BOARD FOR A WEB BANNER.
KFC also utilizes internet for advertising.
Following things are done through internet. • Promotion of New Products • Creating awareness about existing products • Distribution of free coupons • Nutrition calculator & Health Tips
KFC great American success story
LOUISVILLE — Pete Harman was building a successful burger business in Utah when a white-haired, goateed acquaintance from Kentucky showed up unexpectedly and offered to cook a fried chicken dinner. Colonel Harland Sanders had a business proposition. He was certain that one helping of his specialty chicken, coated with a blend of 11 herbs and spices, would persuade Mr. Harman to add chicken to his menu. Mr. Harman was hooked after a few bites. Soon, his restaurant was promoting the dish, called Kentucky Fried Chicken. The chicken became an instant hit in that August of 1952 as customers lined up outside the Salt Lake City eatery to take home dinners by the bucketful. For $3.50, they got 14 pieces of chicken, mashed potatoes, rolls and gravy. From humble beginnings, Kentucky Fried Chicken became a fast-food staple and its originator one of the world's most recognizable faces. Fifty years later, the chain built on Mr. Sanders' salesmanship and homestyle cooking boasts nearly 12,000 restaurants worldwide generating sales of nearly $10 billion a year. “It's really one of the great American entrepreneurial stories,” said John Y. Brown Jr., who took the company's reins from the colonel. For Mr. Sanders, success was a long time coming. He drifted from job to job, including stints as a railroad fireman, insurance salesman, steamboat ferry operator, tire salesman and service station operator. He perfected his chicken and the cooking technique in the late 1930s while serving hungry customers who stopped at his service station — now a historic landmark in Corbin, Ky. The title “colonel” was an honorific bestowed on Mr. Sanders by a Kentucky governor.
He decided to take his chicken from a handful of local restaurants to a national stage at the age of 62, a time when most people are thinking of retiring. He crisscrossed the country by car, his cookware and herbs and spices in the back, to whip up batches of chicken for restaurateurs and their employees. The demonstrations sealed many handshake deals in which restaurant operators agreed to pay Mr. Sanders a nickel for each chicken sold. By 1964, Mr. Sanders had signed up more than 600 franchised outlets when he sold the company for $2 million to a group headed by Jack Massey and Mr. Brown, who later became governor of Kentucky. Kentucky Fried Chicken took flight under Mr. Brown and his partners. By 1971, when they sold the company for $285 million to Heublein Inc., it had more than 3,500 franchised and company-owned restaurants. Mr. Brown attributed the company's success to its emphasis on take-home dinners that resembled the kind mother made, a revolutionary concept in the restaurant industry. The company also capitalized on Mr. Sanders' popularity. The colonel always looked the part of the Southern gentleman, wearing his trademark white suit and black string tie while pitching chicken or dishing out homespun wisdom on television shows. Mr. Sanders stayed on as company spokesman, promoting the chicken in folksy television commercials, until his death in 1980 at the age of 90. KFC changed hands a few more times. It became a subsidiary of R.J. Reynolds Industries — later RJR Nabisco — when Heublein sold it in 1982. PepsiCo acquired KFC from RJR Nabisco in 1986 for about $840 million. In 1997, PepsiCo's three fast-food restaurant chains — KFC, Taco Bell and Pizza Hut — spun off to form Tricon Global Restaurants Inc. This year, Louisville-based Tricon changed its name to Yum! Brands Inc.
KEY SUCCESS FACTORS:
➢ Quality ➢ Service ➢ Cleanliness ➢ Satisfying Consumers needs
KFC’S TRADITIONAL FRANCHISING STRATEY HAS BEEN:
➢ Emphasizing standardization ➢ Reducing financial risk.
KFC’S MARKET ENTRY STRATEGIES:
➢ Franchising ➢ Licensing ➢ Joint-ventures
• • • • Understanding the psychic difference Frequent revitalisation Altering the positioning according to the scenario Policy of Getting close to customers
• Good reputation among the customers & Strong brand name. • Competitive advantages such as patents in fried chicken. • Isomorphism of each outlet, which standardize the processes of operation and quality of product, strong culture.
1977-1982 The HEUBLEIN, Inc years
• • • • •
Heublein had little experience in The Restaurant Business – Tried to actively managed KFC using its own managers New restaurants opening slowed down to 20 A year Few restaurants were being remodelled Service quality had declined Quality control Restaurant cleanliness
1986-1997 The PEPSICO, Inc years
Atmosphere of PepsiCo Management vs KFC Management • Conflicts between corporate cultures of PepsiCo & KFC – Created morale problem • Arrogance of PepsiCo executives led to: 1)Loss of employees loyalty 2)High Employee turnover • PepsiCo’s poor relationship with KFC franchises
• 1989 new franchise contract – The first contract change in 13 years. 1) Greater power to PepsiCo to take over weak franchise relocate restaurants & make changes in existing restaurants. 2)Restaurants would no longer be protected from competition from new KFC units. 3) Raise in royalty fees when existing restaurants contracts came up for renewal. • 1990 – 1996 operating margins in the fast- food restaurant division (KFC, Pizza Hut & Taco Bell) of PepsiCo fell from 8% to 4% 1)Declining margins as the US fast food industry was in the advanced maturity stage. 2) Intense competition in the fast food sector. • The restaurants division of PepsiCo absorbed half of PepsiCo’s annual capital spending & generated less than 1/3rd cash flows. • KFC had fewer opportunities to expand in the US market (As its leadership in the US market was extensive) • KFC was losing market share to competitors: 1)Popeyes 2) Chick- Fil – A 3) Boston Market 4) Church’s Chicken • KFC’s share of chicken segment sales fell from 71%(1989) to 56%(1999) • Baby Boomers, generations xers grew older & preferred dinner houses & full service restaurants. • Ethnic foods were gaining popularity ( Japanese, Indian, Vietnamese) • Shortage of employees in the 16- to- 24 age category
1)US economy was expanding: Prosperity 2)Unemployment was at its lowest point • Labour cost was high- But intense competition did not allow inc price. • Higher cost of real estate ( US$ 1.5 to 2.5 million) • Poor availability of prime location. • Market saturation decreased per store sales
• KFC had trouble breaking into the German market • Long distances between headquarters & foreign franchises caused: 1)Difficulty in controlling the quality of individual restaurants. 2) Problems in service & support. 3) Higher costs were incurred in transportation and other resources. • Communication & Operational problems due to time, culture & language differences. • Limited menu & inability to quickly bring new products to market. • Serious setback in 1989: KFC’s chicken sandwich lost the race to McDonald’s chicken sandwich. • Colonel’s crispy strips & 5 new sandwiches accounted for 30% of the sales but cannibalized sales of fried chicken items.
• McDonald’s restaurants base was growing rapidly & beating KFC in terms of sales. • Major Competitors: 1)Burger King 2) El Pollo Loco ( The Crazy Chicken) 3) Habib’s
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WWW.KFC.COM WWW.GOOGLE.COM WWW.SLIDESHARE.COM WWW.SCRIBD.COM WIKIPEDIA
SHRADDHA SAKHARKAR ROLL NO: 40 F.Y.BFM
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