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Case Summary: KFC:
Today, KFC Corporation is considered as the world\'s most popular chicken restaurant chain. The company was established by the “Colonel” Sanders who was able to grant KFC franchises to more than 200 take home retail outlets and restaurants across the United States. After that establishment phase in the United States, KFC entered into many joint ventures that makes it present in 48 countries. In 1966, the company went public and was listed in New York Stock exchange. Later on, KFC was opened in Hong Kong, Australia, New Zealand, and Mexico. Actually, Franchises enabled KFC to more rapidly expand into smaller countries that could support only a small number of restaurants. By 1971, after the company’s acquisition by Heublein, Inc. the company was present in 48 countries with 2450 franchises and 600 company owned restaurants. Thereafter, the company was acquired by Reynolds and sold finally to PepsiCo, INC for approximately $840 million.
During the 1980’s and the 1990’s faced many problems related to its inability to bring new products to market. However, by the late 1990’s, KFC reconsidered its strategy and started offering a variety of new products and new items. Today, the major challenges of the company are the tough competition in addition to the management of the risks associated with its international operations in Asia and Latin America. Therefore, this makes the success of the company strategies in the international markets dependant on many external factors.
· Widely recognized market leader.
· Wide product line with high quality.
· Strategic alliances with famous companies.
· Problems in entering into new markets.
· Problems with its partners due to different cultures
· Limited resources and cash flows.
· The company is loosing market share.
· Operating in new emerging markets with a high customer base.
· Expanding product line.
· The drop of tariff rates in many countries because of regional trade agreements.
o Expanding competitions domestically and internationally.
o Foreign currencies’ Fluctuations that affect the company’s profit.
o Risk of changes in consumer taste.
1-What strategy should KFC use to Compete effectively in the international Markets?
2-Does limiting the product to chicken weaken the company’s position vis-a vis other competitors?
3- Is the company planning to aggressively enter the African market that looks very promising?
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KFC, Kentucky cuisine, Yum! Brands, Laurel County, Kentucky, South Salt Lake, Utah, Heublein, KFC Original Recipe
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