A presentation on the fast food giant in India, focussing on their strategy for growth.

1. INDIA
STRATEGY TERM PAPER PRESENTATION
Presented By:
Aparna Priyadarshini
MBA 2010,Date: 12th April 2010
Asian Institute of Management,Manila
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2. Company Background
KFC Corp, owned by YUM brands is one of the oldest(1952) and
most popular chicken and food restaurant in the world.
Other restaurants under YUM brands are Taco Bell, Pizza hut, Long
John Silver’s and A&W
KFC primarily sells chicken pieces, wraps, salads and sandwiches.
While its primary focus is fried chicken, KFC also offers a line of
other meat products suiting to local palate.
In India they opened in 1995 and are lagging behind in terms of
sales and reach vis-à-vis chains like McDonalds and Dominos
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3. Target Market
Geography: India Metros and Tier II Cities
Demography: Urban people of both genders aged between
15 to 45 years of age.
Income Group: A, B and C segment of people.
Psychographic: People who have a busy lifestyle and are
influenced by western culture
An important thing to note is that Indian Fast food market is
fundamentally different-Eating at home remains very much ingrained in
Indian culture. Fast food joints or QSRs are one of the cheap sources of
taking a break from home cooked food and eating out.
The growth in nuclear families, particularly in urban India, exposure to
global media and Western cuisine and an increasing number of women
joining the workforce are responsible for changing this trend.
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4. Data-
Strategic Group Data-Competitors
Others
Mc Donalds
33%
35%
Mc Donalds
KFC
Dominos Pizza
Café Coffee Day
KFC
Dominos Pizza 10% Others
15%
Café Coffee Day
7%
In India the fast food joints also compete against the
other Quick Service Restaurants like Pizza Hut(same
company as KFC) and dominos.
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5. PESTLE ANALYSIS
Social: Women are
Political: India is Economic: An ever moving out of
liberally opening growing middle
kitchen to offices.
doors for class with
international fast A lot of Indians
increasing
food joints purchasing power are veggies, so
Positive Positive the menu has to
changed Positive
Technological: Legal: Franchising Environmental:
Enough enabling models available Activists against
technologies and working killing of animals
available successfully in India like PETA can
Positive create trouble
Positive Watch Out
When KFC came to India in 1995, it had to shut down because
of the controversy about their handling of poultry.
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6. PORTER’S FIVE FORCES Verdict:
The
Threat of new industry is
Entrants moderately
India is has opened
attractive
doors for foreign fast
food players recently
MEDIUM
Bargaining power Bargaining power
of Suppliers Competitive of Buyers:
There are a lot of There are only few
Rivalry
suppliers available in western fast food joints
the market HIGH in India
LOW MEDIUM
Threat of
Substitutes
Not a lot of options
available
MEDIUM
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7. STRATEGIC MAP 1
GAP
Domin
os
Pizza
McDonalds
Service
KFC
CCD
Number of Outlets Number of outlets and good
customer service is a KSF in this
industry KFC has to increase its
reach and try to move
rightwards 7

8. STRATEGIC MAP 2
CCD
Domino GAP
s Pizza
KFC
Price
McDonalds
Extensive Menu Both Price and Extensive
menu are KSFs in this
industry and KFC is weak
in both. It should try to
move into the GAP zone 8

9. STRATEGIC MAP 3
KFC Domino
s Pizza
McDonalds
Operations CCD
Extensive Menu As evident from the clutter,
operations are thresholds to
succeed in this industry
whereas Extensive menu i 9

10. STRATEGIC MAP 4
McDonalds
Domino
Number of s Pizza
Outlets
KFC
CCD
Quality Standards
As evident from the clutter,
quality standard is threshold
and number of outlets is a KSF
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11. Key Success Factors
KSF’s:
Location/Number of Outlets
Extensive Menu
Price
Service/Ambience
Taste
Threshold Factors:
Operations
Quality Standards
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12. Competitive Matrix
Factors Weights McDonalds KFC Domino's Coffee Day
Location/No of outlets 35% 9 4 7 4
Extensive Menu 25% 8 5 7 5
Price 15% 8 5 4 4
Service/Ambience 10% 7 7 9 6
Taste 10% 7 8 9 5
Weighted Score 100% 7.75 4.9 6.6 4.35
Market Share 35% 10% 15% 7%
•KFC is losing out because of
fewer number of outlets.
•Given that the market has lot of
veggies, extensive menu is very
important
•KFC’s strength is Taste and it should
try to differentiate on this basis.
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13. Future Competitive Matrix
Factors Weights McDonalds KFC Domino's Coffee Day
Location/No of outlets 35% 9 7 7 4
Extensive Menu 30% 8 7 7 5
Price 10% 8 6 4 4
Taste 10% 7 8 9 5
Service/Ambience 15% 7 7 9 6
Weighted Score 100% 8.1 7 7.2 4.7
Market Share 35% 10% 15% 7%
•To grow, KFC has to improve its
acceptability by customizing its menu to
suit local taste
•Price will become less important as
almost all players in the industry will be
similarly priced
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14. Vision/Mission Statement
Mission:
TO SELL FOOD IN A FAST, FRIENDLY ENVIRONMENT THAT
APPEALS TO PRIDE CONSCIOUS, HEALTH MINDED CONSUMERS
Vision:
OUR PASSION, AS A RESTAURANT COMPANY, IS TO PUT A
YUM ON PEOPLE'S FACES AROUND THE WORLD,
SATISFYING CUSTOMERS EVERY TIME THEY EAT OUR
FOOD AND DOING IT BETTER THAN ANY OTHER
RESTAURANT COMPANY. THE UNIQUE EATING
EXPERIENCE AT EACH OF OUR RESTAURANTS MAKE OUR
CUSTOMERS SMILE AND INSPIRE THEIR LOYALTY FOR
LIFE. TOWARD THAT END, OUR ASSOCIATES AROUND THE
WORLD ARE TRAINED TO BE CUSTOMER MANIACS
MANIACS.'
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15. Competencies – The Ladder Model
Sustainable Competitive
Advantage
Distinctive
Competencies
Strategic
Competencies Competitive Advantage
Threshold
Competencies
Competencies
Peripheral
Competencies Resources:
Resources:
Resources •Good tasting recipe
•Fried
chicken specialist
Incompetencies •People
•Global Experience
•Brand Recognition
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16. Competencies – The Ladder Model
Sustainable Competitive
Advantage
Distinctive
Competencies
Strategic
Competencies Competitive Advantage
Threshold
Competencies
Competencies
Peripheral
Competencies
Resources
Competencies In-
In-competencies
•Patented recipes
•Good customer
Incompetencies Fried chicken
service
•International specialist
footprint
•Brand Equity
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17. Competencies – The Ladder Model
Sustainable Competitive
Advantage
Distinctive
Competencies
Strategic
Competencies Competitive Advantage
Threshold
Competencies
Competencies
Strategic Competencies
Peripheral
•Patented recipes
Competencies
Resources •Brand equity
•Good Custom Service
Incompetencies
Peripheral Competencies
International Footprint
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18. Competencies – The Ladder Model
Sustainable Competitive
Advantage
Distinctive
Competencies
Strategic
Competencies Competitive Advantage
Threshold
Competencies
Competencies
Peripheral Distinctive Competencies
Competencies
Resources •Patented recipes
•Brand equity
Incompetencies
Threshold Competencies
•Good customer service
18

19. Competencies – The Ladder Model
Sustainable Competitive
Advantage
Distinctive
Competencies
Strategic
Competencies Competitive Advantage
Threshold
Competencies
Competencies
Sustainable Competitive Advantage
Peripheral •Patented recipe of chicken
Competencies
Resources
Competitive Advantage
Incompetencies
•Brand Equity
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20. Long Term Objectives
Strategic Objectives:
Expansion into all major urban cities resulting in
market leadership
Multi-brand Innovation and becoming a top of the mind
brand in fast food industry
Market leader in terms of employee welfare and
customer satisfaction
Financial Objectives:
Strong Cash Generation and Returns
Increasing the profit margin from 11% to 17%
through improved operations and reduced overhead costs
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21. Value Proposition-Triangle
Proposition-
KSF’s Competencies
Extensive Menu/Taste Patented recipes
No of Outlets Brand Equity
Customer Service Customer centric culture
Ensuring superior dining experience by offering a wide range of specialized
recipes , wherever you go!
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22. Strengths Weakness
W1. High Price
S1. Good Taste
W2. Image of ‘Fried’
S2. Brand Equity
SWOT S3. Global Experience
S4. Operations
W3. Poor Reach
W4. Fewer Items Menu
W5. Conflict in mgmt style
S5.Trademark Recipes
of PepsiCo and
S5. Strong Customer Focus
Yum Brands
• Introduce cheaper items
• Introduce new recipes
Opportunities suited to local
in the menu (W1,W4,O3)
O1. Increase outlets • Change the image of KFC
taste(S1,S2)
O2. Increase in income from fried to
• Target the brand
of urban Indian ‘healthy’(W2,O3)
conscious urban
O3. Shift in food • Open up new outlets in
population(S2, S3,O2)
habits e.g.-Vegetarian Urban locations
(W3,O1,O2,O3)
• Introduce healthier
Threats recipes(T1,S5)
• Differentiate as one •Work on the image of a
T1. Health conscious
proving fastest healthy fast food chain
eating habits
service(T3,S2,S4) through advertising( T1, W2)
T2. Animal Care
• Engage is CSR •Develop a strong culture of
Activists
activities(T2,S3,S2) good service (T3,W5)
T3.Intense
Competition • Differentiate through
good service(S5,T3)
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23. Options Filter Stategic Vision/ Select
Options Competencies KSF's Intent Mission Score (Yes/No)
Weight 0.3 0.3 0.2 0.2 1
Introduce new recipes suited to
local taste(S1,S2) 7 8 8 6 7.3 Yes
Target the brand conscious
urban population(S2, S3,O2) 7 4 3 4 4.7 No
Introduce cheaper items in the
menu (W1,W4,O3) 6 7 6 7 6.5 Yes
Change the image of KFC from
fried to ‘healthy’(W2,O3) 5 6 8 8 6.5 Yes
Open up new outlets in Urban
locations (W3,O1,O2,O3) 7 7 6 6 6.6 Yes
Introduce healthier
recipes(T1,S5) 5 8 7 7 6.7 Yes
Differentiate as one proving
fastest service(T3,S2,S4) 4 5 5 5 4.7 No
Engage is CSR
activities(T2,S3,S2) 6 7 7 8 6.9 Yes
Differentiate through good
service(S5,T3) 7 8 7 7 7.3 Yes
Work on the image of a healthy
fast food chain through
advertising( T1, W2) 6 6 7 8 6.6 Yes
Develop a strong culture of
service and differentiate from
competition(T3,W5) 7 8 8 8 7.7 Yes
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24. Recommendations
Short Term
Introduce new recipes suited to local taste(S1,S2)
Introduce cheaper items in the menu (W1,W4,O3)
Introduce healthier recipes(T1,S5)
Differentiate through good service(S5,T3)
Work on the image of a healthy fast food chain through
advertising( T1, W2)
Long Term
Change the image of KFC from fried to ‘healthy’(W2,O3)
Open up new outlets in Urban locations (W3,O1,O2,O3)
Engage is CSR activities related to animals &
environment(T2,S3,S2)
Develop a strong culture of good service (T3,W5)
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25. Create Improve reach by
The Fast Food Framework Enabling opening up outlets.
frameworks Make judicious
sourcing decisions
Identify
Research on food Competitive
habits, taste and Advantage
preferences Develop robust
supply chain
Understand Support
Drivers Initiatives
Identify internal
competencies Develop good
Iterate and relationship with
Start Here and KSFs
Understand
Refine customers and
suppliers
Target Market
Indulge in brand
Develop a culture building exercise.
Customize menu. Add of adding value Create trust for
to customer delight to the customer product quality &
through quick and through high
taste
great service quality great and
quick service
Deliver Value
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26. Sources/References:
www.wikipedia.org
www.kfc.com
www.yum.com
www.datamonitor.com
www.ebscohost.com
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