THE CHALLENGING JOURNEY OF KFC IN INDIA

By
Usman, Farhanna N
Ulama, Allyza M
Macmod, Norhanna
Tolentino, Dennese George
 INTRODUCTION

Kentucky Fried Chicken, or KFC for short, is a fast food restaurant brand famous for its

fried chicken. KFC is the world's second largest chain restaurant behind McDonald's, with

headquarters in Louisville, Kentucky. KFC currently has over 18,000 locations in over 100

countries. More than 12 million customers are served every day at KFC restaurants throughout

the world. Yum Brands, which also owns Taco Bell and Pizza Hut, is the parent company of

KFC. After the Indian government launched the LPG policy in the 1990s, KFC was the first

foreign fast food restaurant chain to enter India. KFC was given permission by the Indian

government to open 30 locations around the country at the time.

The first KFC restaurant in India launched in Bangalore in June 1995, and the company

now has 296 locations around the country. Fast food restaurants have been increasingly popular

in India as a result of their personalized menus that cater to local tastes. There were a lot of

protests when KFC initially came to India, and the Bangalore location was ransacked several

times. Many Indians were concerned that western culture would infiltrate their roots, causing

indigenous customs to become diluted. In the same year, a second KFC store opened in Delhi,

but the total revenue from both locations was insufficient to keep the KFC business afloat in

India. Anti-KFC movements claimed that KFC used an unlawfully high amount of mono-sodium

glutamate, which is hazardous to one's health. This is why KFC has not gained popularity. Anti-

KFC activists also alleged that KFC sold a lot of chicken. Moreover, anti-KFC activists alleged
that KFC served food prepared and fried in pork fat. As a result of these factors, KFC was forced

to exit the Indian market.

Aside from the issue in the India, false reports circulated in 2014 that KFC had been

genetically engineering chickens to make bigger, meatier birds, the company was targeted with a

particularly strange one. The story grew into false allegations that the company's rebranding from

Kentucky Fried Chicken to KFC was mandated by law because the mutant monsters they were

frying were not chickens. However, due to KFC's commitment to earning India's trust, they have

cleared their name by developing a good business plan that ensures a more beneficial impact on

their reputation.

In 1999, after the Indian market finally calmed down, KFC returned to the India and

opened an outpost in Bangalore. KFC only had one outlet in India until 2004. Once the single

outlet started earning money, KFC expanded its operations across the country, and today, KFC

outlets can be found in a variety of cities. It was tenacity that won the hearts and stomachs of

millions of Indians, who finally decided to accept KFC's recipes and give the KFC a second

opportunity.

Statement of the problem

1. Understanding the significance of culture issues while establishing business in foreign

country.

2. Understand the global strategic planning that KFC conducted.

3. How KFC manage to survive all the obstacle in India.

 BODY

This study will look at three important elements to see how KFC has dealt with obstacles

in India and what strategies they have implemented. It will focus on three topics: "The culture

challenge," "Global strategic planning," and "Doing Business in the Developing countries." This

three factors will show the relation between how KFC deals with the many obstacles that they

experience and how they solve all of the problems in this chapter.

The three primary objective of this case study.

The culture challenge. One of the most difficult challenges that KFC encounter when

conducting business in the India is the cultural impact, because their menus are unfamiliar to

people in India who are not used to consuming western food. However, as time passes, people

begin to embrace and enjoy KFC. And because of their alleged popularity and the fact that their

business is beginning to succeed in India, it was also the start of their problem. The case

highlights the ethical challenges that Kentucky Fried Chicken (KFC) faces in its Indian

operations. KFC originally opened for business in India in 1995, and it has been surrounded by

controversy ever since. KFC's chickens were discovered to be in violation of the Prevention of

Food Adulteration Act of 1954, according to regulatory authorities. The Act allows for roughly

three times the amount of monosodium glutamate (commonly known as MSG, a flavor enhancer)

in chickens. People for the Ethical Treatment of Animals (PETA), an animal rights organization,

has been protesting KFC since the late 1990s. PETA accused KFC of animal cruelty and

published a video showing birds at KFC's poultry farms being mistreated. Regardless of PETA
and other animal rights organizations' complaints, KFC planned a large growth campaign in

India.

Global strategic planning. In accordance with Yum Brand KFC global plan to exit

capital-intensive businesses and focus on brand growth and development, KFC India is selling 61

equity-owned outlets to diversified group RJ Corp-promoted Devyani International (DIL) for an

undisclosed amount. DIL, as part of the deal, is already Yum! India's largest franchise partner,

would buy 61 more restaurants in Karnataka, AndhraPradesh, and Telangana. The part of an

annual process and in response to business growth, they continue to re-evaluate their ownership

plan. The goal of the strategy is to boost the brand's growth. (Ratna Bhushan, 2019). KFC has

used a variety of business tactics throughout the years to grow from a one-man operation to a

multi-billion-dollar corporation. One of the first abilities it employed was guaranteeing that one's

skills and knowledge are priceless. The level of experience that a company brings in has a

significant impact on its success. It is self-evident that the higher the level of expertise and

talents, the greater the chance of commercial success. The strategy of achieving uniqueness was

used as well. Being able to differentiate yourself from your competition goes a long way toward

increasing your company's growth rate. Only by doing things differently can this be

accomplished. As a result, it is recommended that the entrepreneur first scans the market to see

what they can accomplish that is unique from their competitors and also appealing to their

clients. The way things are manufactured, packaged, distributed, or even serviced to customers

must be distinct from that of competitors. Pressure fried chicken was invented by KFC, which set

them different from other chicken eateries. It also contained a unique blend of recipes and spices

that set its chicken apart from the competition.

KFC's success has been attributed to the India because a combination of intelligent localization,

astute pricing methods, effective customer education, and a menu that caters to the changing

tastes of sophisticated, urban Indian consumers. In accordance with Yum Brand, KFC global

planning to exit capital-intensive businesses and focus on brand growth and development, KFC

India is selling 61 equity-owned outlets to diversified group RJ Corp-promoted Devyani

International (DIL) for an undisclosed amount. DIL, as part of the deal, is already Yum! India's

largest franchise partner and would buy 61 more restaurants in Karnataka, AndhraPradesh, and

Telangana. DIL is Yum's oldest franchise partner in the country with an operating footprint of

close to 500 KFC and Pizza Hut restaurants. With the latest divestiture, only about 10%of KFC

India's 400 stores in over a hundred cities are currently owned by the business.

Doing business in developing countries. Food companies use the diplomatic term

"emerging markets" to refer to people living in developing countries. Processed food

corporations, such as KFC, are using developing countries to stimulate economic growth. The

world's poor are an important opportunity, and it is food companies that have taken full

advantage of these unexplored territories, bringing poverty and obesity into the public view.

KFC entered in India by not just developing the economic growth but also to represent the taste

of the western culture in terms of foods industry. KFC has been in India since the early 1990s,

and in recent years has rapidly grown into larger cities around the country, with a total of 395

outlets, up from 128 in 2010. Many are in crowded town markets, airports, and shopping malls.

They are one of more than 15,000 locations in more than 150 countries around the world. India is

known for colorfully exotic food that consumes much of the day to prepare, while fast food is the

culinary reflection of the fast-paced, consumerist society the nation is now embracing. Many

customers looking for a quick, excellent, and reasonably priced dinner are coming to KFC,
which is regarded one of India's trendiest restaurants, attracting rich customers who want to be

noticed. India is one of the largest consumer markets in the world, and many of those consumers

fall into a highly sought-after demographic. Nearly 65 percent of the population is under the age

of 35, and about 600 million are under the age of 30 and KFC is one of the opportunity that can

help the growth potential of India since it is one of the trendy fast food. One challenge for KFC

has been to stay true to its products yet still create a menu that appeals to a wide consumer base

in India. After all, Col. Sanders' famous Kentucky Fried Chicken recipe was originally created

with 11 herbs and spices to replicate Southern comfort food. Indian consumers also appreciate

the prices at KFC, and how much they get for those prices. Dishes live up to American standards

of portion sizes, which is particularly appealing to the younger population.

Moreover, KFC provides a modern twist on a centuries-long tradition of inexpensive but

flavorful street food. In recent years, there has been a lot of criticism directed at street food due

to cleanliness concerns. Because Indian health inspectors spend the majority of their time and

money enforcing restaurant standards, they prefer to ignore street food regulations, leaving

vendors to rely on their own food safety, which is minimal. Aside for helping the developing

growth the taste of India, KFC is one of the reason to be more educated about food hygiene of

Indian consumers and slowly moving away from food kiosks and turning to cleaner options such

as international fast-food restaurants like KFC. The also KFC wanted to create safe, localized

food that resembled in taste, look and price traditional Indian street food, but with higher quality

produce and higher hygiene standards. Consumers and experts say fast food comes with the

added benefit of being a sign of social success.

 Therefore, Company officials and consumers expect all this will continue and India is

already becoming one of the fastest-growing fast food markets in the world. A report from the

National Restaurant Association of India estimates the fast food industry will grow at a rate of

35-40 percent annually. And food historians predict that vegetarian options will continue to play

a major role, since they are expected to remain important to urban, health-conscious consumers.
 ANALYSIS

SWOT

Strength, Weaknesses, Opportunities and Threats of KFC in India

Strength

 World’s largest restaurant company in terms of system restaurants, operates more than

15,000 units in 109 countries and territories around the world.

 KFC is world famous for its Original Recipe fried chicken, made with the same secret

blend 11 herbs and spices.

 Ranks highest among all chicken restaurant chains for its convenience and menu variety.

 Generate 1b dollars each year.

 KFC adapted to other cultures, creating taste-specific menus for local customers.

Weaknesses

 Lack of Knowledge about their customers

 MSG flavor in Chicken

 Untrustworthy suppliers

 Negative publicity

 Unhealthy food menu

 High employee turnover

  Lack of strong marketing efforts

Opportunities

 Retail boom in India

 Indians youth are adopting western culture

 Indian economy adapting new taste

 Metropolitan rapid development

 Increasing demand for healthier food

 Home meal delivery

 Introducing new products to its only chicken range

Threat

 Indian recipes like Tandoori chicken.

 Political parties protesting junk food.

 Protest support from famous personalities.

 Saturated fast food markets in the developed economies

 Trend towards healthy eating

 Local fast food restaurant chains

 Currency fluctuations

 Lawsuits against KFC

TOWS ANALYSIS

SO Strategy WO Strategy

 Introduce new taste base on the  Introduce cheaper and trends items

Indian taste and taste like feel home. in the menu that will attract

 Increase number of outlet in millennials in India.

different place in India so that they  Change the image of KFC from fried

can adapt. to healthy.

 Capture customer by introducing  Should have develop strong culture

new deals. on services.

ST Strategy WT Strategy

 Introduce new healthier recipes and  Work on the image of a healthy fast

trademark recipes in India. food chain through advertising.

 Differentiate as one providing in  Develop a strong culture of strong

fastest service, operation and best service.

quality products.  Should have to buy or import the

 Engage in CSR activities. material in bulk so that the currency

not eventually effect the prices in

daily routine.
PESTEL

Political, Economic, Social, Technology, Legal, Environment of KFC in India

Political. India is liberally opening doors for international fast food joints.

Economic. An ever growing middle class with increasing purchasing power.

Social. Women are moving out of kitchen to offices. A lot of Indians are veggies, so the

menu has to changed.

Technological. Enough enabling technologies available.

Legal. Franchising models available and working successfully in India.

Environmental. Activists against killing of animals like PETA can create trouble.
 V. Summary, Recommendation and Conclusion

SUMMARY

Kentucky Fried Chicken, or KFC for short, is a fast food restaurant brand famous for its

fried chicken. In their business venture to become a globally know fast food chain with their best

friend chicken, KFC should focus on how they will maintain their services and products in India

since they have experience the protest about their product especially in the Chicken. They should

sell some product that suit in the taste of the Indian since a lot of them is vegetarian. KFC Should

also consider their Strength and Weaknesses since they already have issues in India and they

should give assurance that their product is safe and the food is suit to their taste since the KFC

adapt the culture in the India.

RECOMMENDATION

Based on the analysis, we can conclude that they should start by solving their internal

issues such as management and restaurant menu before thinking about expanding. They also

need to make sure that their restaurants offer a diversified menu, provide their customers with

quality food, excellent service and restaurant cleanliness. KFC should always listen to their

customers and try to follow the new trends on the market in order to fully satisfy their customers.

Otherwise, competitors will satisfy them. They need to stay close to their mission provide

customers with quality food, excellent service and restaurant cleanliness. They also have to follow

the trend and go hand in hand with customers to satisfy their changing needs, as we have previously

discussed with the current healthier food trend. They also want to keep an excellent image by
treating employees fairly and keeping a good control over franchises to make sure they follow the

company’s procedures.

COUNCLUSION

Finally, we may conclude from this instance that every business firm should recognize

the importance of ethics by learning about the culture, regulatory, and environmental challenges

that exist in many nations. We also discovered that starting a business in a country, particularly

one that is emerging and has a strongly oriented culture, is not easy. We should always be

prepared for various obstacles and ensure that we have a strong personality and the ability to

think of solutions quickly.