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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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1. Introduction

KFC Corporation, based in Louisville, Kentucky, United States of America (US) is the second largest fast food chain worldwide after McDonalds. It is one of the oldest restaurant chains in the US specializing in Original Recipe, Extra Crispy, Twister and Colonel's Crispy Strips chicken with homestyle sides. The brand is know worldwide.

There are over 21,000 KFC outlets in more than 130 countries and territories around the world.

KFC is a subsidary of YUM brands restaurant company that also owns PIZZA HUT, TACCO BELL and WING STREET.

• The legend

In 1929 Colonel Sanders opened a gas station in Kentucky and cooked fried chicken to occasional customers in the back room. He enjoyed cooking the food his mother had taught him to make, especialy pan-fried chicken (delicacy from the South). Demand for Sanders's cooking rose and he had to open a larger outlet across the street.

• The beginning of the success story

During the 1930s he started to developp the famous fried chicken that is still very popular. First, Sanders was named an honorary Kentucky Colonel by the state's governor (glory); second, he developed a unique, quick method of spicing and pressure-frying chicken. Due to the regional popularity of the recipe, the Harland Sanders Court and Café received an endorsement by Duncan Hines's Adventures in Good Eating in 1939.

• The expansion

However, the real expansion started in 1952 when the owner signed on his first franchise to Pete Harman, who owned a hamburger restaurant in Salt Lake City, Utah. Throughout the next four years, he persuaded several other restaurant owners to add his Kentucky Fried Chicken to their menus. They opened their first restaurant in China in 1987. China is now their biggest market outside the US. There are more than 5.000 outlets, including Hong Kong.

The group was sold to PEPSI CO in 1986.

Today KFC serves more than 1 million customers each month through over 80 stores across Singapore. This makes KFC one of the largest fast food chains in the country.

Revenue 2017:

3.2 Billion USD worldwide

Number of employees in 2017:

Over 100.000 worlwide

2. Role and Responsibility

- Roles

The front desk – Customer Experience. The counter will be the first person, who customers will see right from the entrance. KFC staff should be the one of the mains, who gives a fantastic experience for all of them. They should be friendly, welcoming and make their customers feel like their choice of the place for eating was right.

For cleanliness – The employee is responsible for ensuring the front of the counter, restaurant and toilet areas clean. They need to be sure that all of the customers have a great clean and comfortable place for having their food.  

Health and Safety of Food – KFC provide very safe environment for all employees and customer at the same time. Therefore, KFC still expect their staff to respect all health and safety of food guidelines. They need to follow all hygiene rules anytime.

- Responsibility

Their primary focus is based on fried chicken, but KFC also offers a line of roasted chicken products, different types of sides and many desserts. The popularity of KFC has led to the special formula of the fried chicken recipe, which has been used since early 30's and KFC still has it nowadays.

   

- Mission

  “We are passionate about serving our customers freshly prepared, great tasting food with a key part of this being the Colonel's signature blend of 11 herbs and spices. Even today these remain a secret with the original recipe under lock and key in our headquarters in Kentucky, USA” (KFC website, 2013)

- Vision

  To sell food fast, have a friendly environment that appeals to provide conscious and health minded customer.

- Values

 The value is not only reflected in the delicious products, it is also because of the consumers, enjoying a reliable quality, a courteous service, a comfortable and hygienic dining environment within a reasonable price.

- Goals

  The company's main goal is to provide such a great food for the customers, so it will put smiles on their faces. Also the company should provide such service and food, so customers would love to come back for more.

 

 

3. Success Factors (4)

3.1 The Franchise system of KFC improved their image and quality standards

In 1952 KFC adopted the concept of franchising, having their first franchise outlet in Salt Lake City, Utah. Colonel Harland Sanders had strict rules for running the business, with that comes a long list of standard that is required for franchisee to follow. This led the franchise system of KFC to success. Franchisee has to adopt many of the following rules. (Ukessays.com, 2018). For example:

• Size of chicken must be three hundred grams and at least 8cm wide.

• Only 60-70 days grown chicken can be used.

• The size of restaurant must be at least twenty-four by sixty feet.

• Uniform are provided for the employees and strict uniform rules are to be followed.

3.2 The key to KFC's success in China: They have been adopting their menu to local tastes.

Based on statistics shown from 2011 to 2014, KFC has been the leading fast food chain restaurant brands in China. Comparing to its rival, KFC owns more than 11.6% of the market share in China as of 2016. (Statista WebSite, 2018)

KFC's success in China is because of their aggressive adaptation to the Chinese tastes. With the signature recipe of their original chicken, they also serve variety of local dishes such as egg tarts, congee, and “Dragon Twister.” As a healthier option, salads with pan seared chicken were introduced to consumers to replace the deep fried chicken for consumers who are willing to eat healthier choices. (Jason, 2018)

3.3 Technology has improved the quality of speed and quality of service

In 1939 a new technology was introduced, it is known as a pressure cooker. It allows the boiling point from 100 degrees Celsius to 120 degrees Celsius. This is because the sealed lid on the cooker prevents air or liquid from escaping hence enabling it to boil at a higher boiling point. After just a few weeks that pressure cooker was introduced, Colonel spotted the potential in it and decided to take the pressure cooker into the business.

3.4 KFC ceases usage of chicken that has been raised with antibiotics for healthier food

In 2017 KFC made an announcement that they would not be serving chickens that has been raised with certain antibiotics. As antibiotics have side effects that may lead to mainly diarrhoea and mild stomach upsets. (eMedicineHealth, 2018) Due to the growth of health concern to the public, KFC said that changes will be applied completely by the end of 2018 for more than 4,000 restaurants in the United States.

4. Negative Factors (2)

4.1 KFC Chicken Crisis

This accident happened in United Kingdom February 2018. In the national news KFC was saying “the fried chicken shop had run out of chicken”. The reason was KFC switched the suppliers of chicken. The first day of the crisis, this company was put under intense scrutiny for their failure to deliver chicken to KFC. The problem was a huge car accident in the city named Rugby. That is why the police occupied the area where the DHL's warehouse was located. Due to the traffic, long waiting of ingredients, after two days, on February 16, KFC decided to tell people, that they were out of products. (Flora Carr, 2018)

Only 266 out of the 870 KFC's chains were working in England and Ireland on February 18. So they closed over three quarters in two days. The shortage affected the standards, so the process was long and not so great. (The Guardian News, Matthew Weaver, 2018)

The reputation of KFC in England was nearby the collapse. However, the fast food company decided to build a new advertisement and new public from this disaster. After this Add more and more people started to be interested in this situation and in KFC food itself. How smart KFC managers should be to create such a great add using this disaster? (NY Times, Michael Wolgelenter, 2018)

4.1 Sugar Rush in KFC

Based on the website Statistics, at least once in a week each child under 15 years old eats in Singapore KFC. Everyone knows that Fast Food is not the best choice for any person in the world, but especially for children.

All the children love sweets and in KFC you can find many products with sugar. After “chicken crisis”, English Government decided to inspect the whole KFC Company.

24g – is an average amount of sugar for children daily, which is 6 teaspoons, according to NHS guidelines. The milkshake served in KFC consists of 59.9g per serving; even for adult the quantity is too high. But that not just one product contains such a huge amount of sugar. Chocolate Korean Balls and Caramel Fudge Cream Ball also contain nearly 12 teaspoons of sugar per serving. (Apex Tribune, Jakob Nielsen, 2018)

After this revelation, Milkshakes sells decreased a lot. Healthy food is a real concern now, so more and more people are trying to eat better. When the news about the sugar were published on the internet, most of parents started to educate their children about healthy food more and KFC in UK now has less underage customers than before.

5. KFS's Problem's analysis

One of the most popular quality tool is the Fishbone (Ishikawa) diagram. It was introduced by Karou Ishikawa in the industry. It is also called the Cause–and–Effect Analysis Diagram and it is mainly used to identify the possible causes for any problems in the organization. It can be used by managers to structure a brainstorming session with all the members of their teams.

3 steps to follow:

1. You have to agree on a problem statement. The description of the issue needs to be very specific in order to find a sustainable solution.

 Write it at the center right of the flipchart or whiteboard. Draw a box around it and draw a horizontal arrow running to it.

2. Brainstorm the major causes of the problem (at least 10).

3. Put the causes in different categories. You can use generic headings or specific categories applied to your hospitality sector or your issue.

4. Ask yourselves: “Why does this happen?” As each idea is given, the facilitator writes it as a branch from the appropriate category. Causes can be written in several places if they relate to several categories. You can go very deep in details to find causes.

5. When you found the main category of causes, you can focus on finding solutions and recommendations.

Illustration: The lack of KFC outlet in the CBD of Singapore

Problem: There is no KFC outlet in Singapore's CBD

Causes brainstormed:

- Rents are too expensive

- No franchisee identified or no franchisee strong enough

- No support to franchisees who want to open a restaurant

- No locations available in this prime market

- Bad prospection from the Head Quarter (property management)

- Bad marketing to understand the needs of Singaporeans customers

- Competitors try to stop them from opening

- No clients interested (?)

- Difficulties for the supply chain to reach some central location

- Very difficult to open small outlets due to standards

- Bad image of fast food in CBD

Categories of causes:

- Management: bad real estate prospection, bad marketing, no support to franchisees, difficulties of supply chain,

- Marketing: bad strategy to develop local market,

- Environment: no space available, expensive rents, hard competition with other fast-food chains, no clients interested

- Equipment: difficulties to open small outlets

6. Recommendations

Analysis to find solutions/recommendations thanks to the detection of causes:

The main issue could be a bad management in prospection and marketing that probably led to a bad visibility of KFC in central Singapore. KFC has a good image of proximity and it can't be close to its clients in Central Singapore if it doesn't open an outlet in Central Singapore.

1. The company needs the support of the property management team of the Head Quarter (HQ) because managing real estate is difficult in Singapore (environment).

2. They can also hire some real estate brokers. If the solution can't be solved internly, it has to be outsourced.

3. The HQ in the US can issue guidelines to their affiliates in Singapore. KFC is very popular but they don't have ptime locations like other fast food chains.

4. If they want to maintain their visibility, KFC should invest directly and not leave franchisee to open an outlet in the CBD. Franchise gives a lot of freedom to franchisees but empowering them is sometime not enough. For exemple, Mc Donalds in France realize franchisees can't invest to open outlets on prime locations like Champs Elysees in Paris. To maintain their image and their visibility, they own the shop. It is the largest outlet in the world by revenue.

References

- “Business Insider”, KFC founder Colonel Sanders did not achieve his remarkable rise to success until his 60s, by Richard Feloni, 25th June 2015. Available at:  https://www.businessinsider.com/how-kfc-founder-colonel-sanders-achieved-success-in-his-60s-2015-6/?IR=T

- CBC. (2018). KFC to stop using chickens raised with human antibiotics | CBC News. [online] Available at: https://www.cbc.ca/news/health/kfc-antibiotics-1.4060126  [Accessed 7 Dec. 2018].

- eMedicineHealth. (2018). Antibiotic Side Effects, Types & Drug Interactions. [online] Available at: https://www.emedicinehealth.com/antibiotics/article_em.htm#what_are_the_side_effects_of_antibiotics  [Accessed 7 Dec. 2018].

- Jacob, H. (2018). KFC is by far the most popular fast food chain in China and it's nothing like the US brand — here's what it's like. [online] Business Insider Singapore. Available at: https://www.businessinsider.sg/most-popular-fast-food-chain-in-china-kfc-photos-2018-4/?r=US&IR=T  [Accessed 5 Dec. 2018].

- KFC US Website

https://www.kfc.com

- “Star Daily Sunday”, UK magazine, KFC slammed for serving milkshakes that contain up to 15 teaspoons of sugar, by Joe Hinton, 4th March 2018. Available at: https://www.dailystar.co.uk/news/latest-news/686285/KFC-fast-food-chain-milkshakes-15-teaspoons-sugar-slammed-health-diet

- Statista. (2018). China: leading fast food brands market share 2014 | Statistic. [online] Available at: https://www.statista.com/statistics/429950/market-share-of-leading-fast-food-brands-china/  [Accessed 5 Dec. 2018].

- Tech Wire Asia. (2018). How KFC is using technology to wow China - Tech Wire Asia. [online] Available at: https://techwireasia.com/2018/10/how-kfc-is-using-technology-to-wow-china/  [Accessed 7 Dec. 2018].

- Ukessays.com. (2018). The secret of Kentucky Fried Chicken (KFC) success. [online] Available at: https://www.ukessays.com/essays/business/the-secret-of-kfc-sucess.php   [Accessed 4 Dec. 2018].

- “Wired”, UK Magazine, The inside story of the great KFC chicken shortage of 2018, by Richard Priday, 21st February 2018. Available at:

https://www.wired.co.uk/article/kfc-chicken-crisis-shortage-supply-chain-logistics-experts

- Zappedia. (2018). How Many People Use the Internet? Internet Usage Stats. [online] Available at: https://zappedia.com/global-internet-access/  [Accessed 30 Sep. 2018].

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