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Kentucky fried chicken

David Nerici2005

(c) 2005 David Nerici

KFC History I

1939 First restaurant was founded by Colonel Harland D. Spencer (Corbin/Kentucky)

1952 First franchisee in Salt Lake City

1952 Sanders sells restaurant in Corbin/ first international franchisee in Canada

1969 KFC listed on the NY Stock Exchange

1980 Colonel Sanders dies (c) 2005 David Nerici

KFC History II

1982 KFC becomes a subsidiary of R.J. Reynolds Industries

1986 KFC becomes a subsidiary of Pepsi Co, Inc. for $ 840 mio.

1987 KFC opens first restaurant in China

1991 A new logo is introduced

1995 KFC opens its 9,000th restaurant


KFC – Current situation

Turnover (worldwide): 11.2 $ billion (9.35 € billion)

KFC is part of (Pizza Hut, Taco Bell / 45.9 % market share worldwide)

KFC europe: - 985 stores (29 countries) - 647 UK / 47 Germany


KFC AustriaKFC has already tried to get into the austrian market (80`s)

KFC aims to achieve (over the next 10 yrs.):

- € 100 million turnover

- 45 restaurants

- 20 % market share

KFC opens its first restaurant in may (millenium city)


Strengths 1

Products:

High quality standards: C.H.A.M.P.-concept

Secret recipe: blend of 11 herbs and spices

Pressure cooker

Variety of menu items (lower calorie choices, meals for vegetarians,…)


Strengths 2

Company:

Largest chicken fast food supplier in the world

Colonel Sanders was the first quick restaurant pioneer - “Sunday Meal, seven days a week”

Capital and expertise


Weaknesses

Already failed once in Austria

Little differentiation from Mc Donald’s and Burger King

Competition – especially Mc Donald’s

Distribution

Narrow product range


Opportunities

Fast Food market in Austria is growing – more accepted

People travel more and know KFC from abroad

Failures are not noticed by the population – KFC can start from the beginning on

KFC can work out a strong USP

Compared to other countries Austria has few Fast Food Chains


Threats

KFC has established competitors in Austrian market

Image has to be upgraded

With low investment: KFC could fail again!

With high investment: stronger chances to succeed but if failure big losses


Strategy - Introduction

For all alternatives it is of high importance to stress out the USP in order to have a differentiation from other fast food chains and especially from Wienerwald and Mc Donalds( KFC has failed in Austria before)


Alternative 1Extremly high financial investment

Distribution: a high number of KFC restaurants in Vienna = test market (expansion to other places in Austria later on) shopping centers and central locations, but also in the outer districts of Vienna and drive-throughs

Promotion: very intensive promotion strategy, events in KFC stores

Price: about the same as Mc Donalds and Wienerwald, definitely not higher!

Target group: everybody who likes chicken(c) 2005 David Nerici

Special offers: like Mc Donalds offering „special weeks“

Goal: „being everywhere“ (Burger King did the mistake of being to slow in the introduction, has very few locations)

Differentiation to Mc Donalds: offering totally different food, better personnel

Differentiation to Wienerwald: having the image of being a „high quality fast food chain“ Wienerwald has the image of a „cheap restaurant“

Alternative 1Extremly high financial investment


Alternative 2 Health line

Promotion and Distribution same as in alternative 1

Using the advantage of chicken as being the healthies meet

Offering also vegetarian products

Price: the same or a little bit above Mc Donalds and Wienerwald (food has to be very fresh and carefully prepared, this requires higher financial investment)


Promotion: same strenght as in alternative 1 but focusing also on health advantage

Target group: focused less on children than on people from 14 up who like chicken and are health concious

Differentiation to Mc Donalds and Wienerwald is very strong because of the “health factor”

But: Nordsee offers “healthy fast food” differentiation: KFC has younger and trendier image

Alternative 2 Health line


Alternative 3 Cost saving method

Distribution: instead of normal-sized restaurants like Mc Donalds satellite restaurants at train stations, in hospitals (AKH), universities, shopping center, airport… (similar to “Würstelstand”)

Offering just simplified products

cost saving introduction with low image factor

Target group: only really fast food junkies

Price: cheaper than Mc Donalds and Wienerwald(c) 2005 David Nerici

Recommendation

Has the strongest USP compared to the other

Possible to demand higher prices

Very unique promotion strategy and offer in Austria

Alternative 1 to close to Mc Donalds

Alternative 3 could damage image


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