Problem area discussions for KFC(Kentucky Fried Chicken)

Prepared by: Shayak Ray(91404)

At: SATYAM TECHNOLOGY CENTRE, HYDERABAD 07.02.2011

Introducing KFC
Way back in 1930 s Colonel Harland Sanders got some distinguished Kentucky folks lickin their fingers. It s been in fashion since then! Colonel Harland Sanders, founder of the original Kentucky Fried Chicken, was born on September 9, 1890.When he was six, his father died and his mother was forced to go to work while young Sanders took care of his three year old sibling. This meant he had to do much of the family cooking. By the time he was seven, Harland Sanders was a master of a range of regional dishes. After a series of jobs, in the mid 1930s at the age of forty, Colonel Sanders bought a service station, motel and cafe at Corbin, a town in Kentucky about 25 miles from the Tennessee border. It is here that Sanders began experimenting with different seasonings to flavor his chicken which travelers loved and for which he soon became famous. During the next nine years he developed his secret recipe of 11 herbs and spices and the basic cooking technique which is still used today. Sander's fame grew. He sold his chicken on the highway! But when the highway was removed, he sold up and traveled the United States by car, cooking chicken for restaurant owners and their employees. If the reaction was favorable Sanders entered into a handshake agreement on a deal which stipulated a payment to him of a nickel for each chicken the restaurant sold. By 1964, from that humble beginning, Colonel Harland Sanders had 600 franchise outlets for his chicken across the United States and Canada. Later that year, Colonel Sanders sold his interest in the United States operations for $2 million. The 65-year-old gentleman had started a worldwide empire using his $105 social security cheque. Sadly, Colonel Harland Sanders passed away on December 16th, 1980 aged 90. His legacy lives on with KFC restaurants all over the world. KFC now stretches worldwide with more than 13,000 restaurants in more than 80 countries and territories around the world serving up the Colonel s Original Recipe. It is a $13 billion brand based out of Kentucky and is the leading QSR around the world which is based in Louisville, Kentucky. Yum! Brands own 5 brands, out of which KFC is the largest brand within the Yum! Portfolio, founded by Colonel Harland Sanders in the year 1938.

KFC India
KFC is the world s No.1 Chicken QSR and has industry leading stature across many countries like UK, Australia, South Africa, China,USA, Malaysia and many more. KFC is the largest brand of Yum Restaurants, a company that owns other leading brands like Pizza Hut, Taco Bell, A&W and Long John Silver. Renowned worldwide for it s finger licking good food, KFC offers its signature products in India too! KFC has introduced many offerings for its growing customer base in India while staying rooted in the taste legacy of Colonel Harland Sander s secret recipe. Its signature dishes include the crispy outside, juicy inside Hot and Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy & crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages and desserts. For the vegetarians in India, KFC also has great tasting vegetarian offerings that include the Veg Zinger and Veggie Snacker . In India, KFC is growing rapidly and today has presence in 21 cities with close to 107 restaurants.

KEYWORDS:
KFC, Business Ethics, International Business, People for Ethical Treatment of Animals (PETA), Food Adulteration, Selling Junk Food, Cruelty against Animals, Animal Welfare Legislation, KFC's Poultry Welfare Guidelines

PROBLEM : ABSTRACT
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. The regulatory authorities found that KFC's chickens did not adhere to the Prevention of Food Adulteration Act, 1954. Since the late 1990s, KFC faced severe protests by People for Ethical Treatment of Animals (PETA), an animal rights protection organization. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFC's poultry farms. However, undeterred by the protests by PETA and other animal rights organizations, KFC planned a massive expansion program in India.

ISSUES:
1. Understand the significance of cultural, economic, regulatory and ecological issues while establishing business in a foreign country. 2. Appreciate the need for protecting animal rights in developed and developing countries like India. 3. Understand the importance of ethics in doing business. 4. Examine the reasons for protests of PETA . 5. Identify solutions for KFC's problems in India

PROBLEMS
From the very first day of opening its restaurant, KFC faced problems in the form of protests by angry farmers led by the Karnataka Rajya Ryota Sangha (KRRS). The farmers leader, Nanjundaswamy, who led these protests, vehemently condemned KFC's entry into India, saying that it was unethical to promote highly processed 'junk food' in a poor country like India with severe malnutrition problems. Nanjundaswamy expressed concern that the growing number of foreign fast food chains would deplete India's livestock, which would adversely affect its agriculture and the environment. He argued that non-vegetarian fastfood restaurants like KFC would encourage Indian farmers to shift from production of basic crops to more lucrative varieties like animal feed and meat, leaving poorer sections of society with no affordable food. KRRS held a convention on November 01, 1995 to protest the entry of fast food multinationals and the Westernization of local agriculture

CONSEQUENCES
By late 2003, PETA further intensified its campaign against the cruel treatment meted out to chickens by KFC through protests at regular intervals. Celebrities like Anoushka Shankar, daughter of the legendary sitar maestro Ravi Shankar, directly supported the cause of PETA Anoushka, a sitarist herself, wrote a letter to the top management of PepsiCo condemning the continued cruelty of KFC in spite of repeated requests of PETA. The organization also had the support of other celebrities like the famous cricket player Anil Kumble (based in Bangalore), popular Indian models like Aditi Govitrikar, the late Nafisa Joseph and John Abraham, who promoted vegetarianism. Film actresses like Raveena Tandon and Ameesha Patel also took up the cause of animal abuse. Undeterred by the continued protests, KFC added three more outlets to its existing one at Bangalore. KFC also announced a major expansion programme for 2005. Sharanita Keswani (Keswani), KFC's Marketing

Director, said that as the retail business was poised for a boom in India, they considered it the right time for expansion. Feeling positive about the flourishing malls in all big cities, Keswani revealed that this time KFC planned to have a presence in prime locations or in a mall where turnout would be assured. The company aimed at targeting cosmopolitan cities like Chandigarh, Pune, Kolkata, Chennai and Hyderabad, where mall culture was fast developing. PepsiCo also decided to concentrate on the expansion of KFC since its other brand, "Pizza Hut", had successfully established a strong foothold in India. Vegetarianism was predominant and was a way of life in India. Many people ate non-vegetarian food only occasionally and avoided it during festivals or religious occasions.

TRANSACTION
As far as transaction is concerned, KFC being a global brand, issues a lot of billing transaction per day which is completely based on electronically automated systems. The maintenance of these daily records along with the scheduling of menu items has been a matter of concern ever since. This is where the role of an application developer comes in. The application keeps a record of simultaneous transactions being performed at a particular outlet. The billing invoice and the menu scheduling is an add on to this application which is suggested. With the implementation of all the discussions and suggestions it can be hence hoped that the organization keeps on saying It s finger lickin good!