sravan kfc

8/10/2019 Sravan Kfc

1/47


2/47

costs must be lowered throughout the chain by driving out unnecessary

expenses, movements, and handling. The main focus is turned to efficiency and

added value, or the end-user's perception of value. Efficiency must be increased,

and bottlenecks removed. The measurement of performance focuses on total

system efficiency and the equitable monetary reward distribution to those within

the supply chain. The supply chain system must be responsive to customer

requirements.

Supply Chain Management (SCM)is the management of the relationship

between the supplier's supplier and the customer's customer through the supply

chain participants (Distributor/Wholesaler and Retailer) between them, mainly

using information flow and logistics activities to gainCompetitive advantage and

customer satisfaction.

OBJECTIVES OF THE STUDY

Primary Objectives

To study the supply chain process in kfc .

To know the efficiency of supply chain In kfc

SCOPE OF THE STUDY

To analyze the Supply chain process in kfc and to know the efficiency of kfc

RESEARCH METHODOLOGY

This study covers an in-depth analysis of the supply chain management in kfc

Sources of Data

Secondary Data

This study will be extensively using pre-existing data compiled from published in news

papers,journals , third party hosted web sites, magazines & year books.
http://en.wikipedia.org/wiki/Competitive_advantagehttp://en.wikipedia.org/wiki/Competitive_advantage


3/47

INTRODUCTION

ABOUT KFC

KFC(the name was originally aninitialism for Kentucky Fried

Chicken) is afast food restaurant chain that specializes infried chicken and isheadquartered inLouisville,Kentucky,in the United States. It is the world's second

largest restaurant chain (as measured by sales) afterMcDonald's,with 18,875 outlets in

118 countries and territories as of December 2013. The company is a subsidiary

ofYum! Brands,a restaurant company that also owns thePizza Hut andTaco

Bell chains.

KFC was founded byHarland Sanders,an entrepreneur who began selling fried chicken

from his roadside restaurant inCorbin, Kentucky,during theGreat Depression.Sanders

identified the potential of the restaurantfranchising concept, and the first "Kentucky

Fried Chicken" franchise opened inUtah in 1952. KFC popularized chicken in the fast

food industry, diversifying the market by challenging the established dominance of

thehamburger.By branding himself as "Colonel Sanders," Harland became a

prominent figure of American cultural history, and his image remains widely used in

KFC advertising. However, the company's rapid expansion saw it overwhelm the ageing

Sanders, and in 1964 he sold the company to a group of investors led by John Y.

Brown, Jr.andJack C. Massey.

KFC was one of the first fast food chains to expand internationally, opening outlets in

Canada, the United Kingdom, Mexico, and Jamaica by the mid-1960s. Throughout the

1970s and 1980s, KFC experienced mixed fortunes domestically, as it went through a

series of changes in corporate ownership with little or no experience in the restaurant

business. In the early 1970s, KFC was sold to thespirits distributorHeublein,who were

taken over by theR.J. Reynolds food andtobacco conglomerate, who sold the chain

toPepsiCo.The chain continued to expand overseas however, and in 1987 KFC

became the first Western restaurant chain to open in China. The chain has since

expanded rapidly in China, which is now the company's single largest market.

PepsiCospun off its restaurants division asTricon Global Restaurants,which later

changed its name to Yum! Brands.
http://en.wikipedia.org/wiki/Initialismhttp://en.wikipedia.org/wiki/Fast_food_restauranthttp://en.wikipedia.org/wiki/Fried_chickenhttp://en.wikipedia.org/wiki/Louisville,_Kentuckyhttp://en.wikipedia.org/wiki/Kentuckyhttp://en.wikipedia.org/wiki/McDonald%27shttp://en.wikipedia.org/wiki/Yum!_Brandshttp://en.wikipedia.org/wiki/Pizza_Huthttp://en.wikipedia.org/wiki/Taco_Bellhttp://en.wikipedia.org/wiki/Taco_Bellhttp://en.wikipedia.org/wiki/Colonel_Sandershttp://en.wikipedia.org/wiki/Corbin,_Kentuckyhttp://en.wikipedia.org/wiki/Great_Depressionhttp://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Utahhttp://en.wikipedia.org/wiki/Hamburgerhttp://en.wikipedia.org/wiki/John_Y._Brown,_Jr.http://en.wikipedia.org/wiki/John_Y._Brown,_Jr.http://en.wikipedia.org/wiki/Jack_C._Masseyhttp://en.wikipedia.org/wiki/Distilled_spirithttp://en.wikipedia.org/wiki/Heubleinhttp://en.wikipedia.org/wiki/R._J._Reynolds_Tobacco_Companyhttp://en.wikipedia.org/wiki/Tobaccohttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/Spin_outhttp://en.wikipedia.org/wiki/Tricon_Global_Restaurantshttp://en.wikipedia.org/wiki/Tricon_Global_Restaurantshttp://en.wikipedia.org/wiki/Spin_outhttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/Tobaccohttp://en.wikipedia.org/wiki/R._J._Reynolds_Tobacco_Companyhttp://en.wikipedia.org/wiki/Heubleinhttp://en.wikipedia.org/wiki/Distilled_spirithttp://en.wikipedia.org/wiki/Jack_C._Masseyhttp://en.wikipedia.org/wiki/John_Y._Brown,_Jr.http://en.wikipedia.org/wiki/John_Y._Brown,_Jr.http://en.wikipedia.org/wiki/Hamburgerhttp://en.wikipedia.org/wiki/Utahhttp://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Great_Depressionhttp://en.wikipedia.org/wiki/Corbin,_Kentuckyhttp://en.wikipedia.org/wiki/Colonel_Sandershttp://en.wikipedia.org/wiki/Taco_Bellhttp://en.wikipedia.org/wiki/Taco_Bellhttp://en.wikipedia.org/wiki/Pizza_Huthttp://en.wikipedia.org/wiki/Yum!_Brandshttp://en.wikipedia.org/wiki/McDonald%27shttp://en.wikipedia.org/wiki/Kentuckyhttp://en.wikipedia.org/wiki/Louisville,_Kentuckyhttp://en.wikipedia.org/wiki/Fried_chickenhttp://en.wikipedia.org/wiki/Fast_food_restauranthttp://en.wikipedia.org/wiki/Initialism


4/47

KFC's original product ispressure fried chicken pieces, seasoned with Sanders' recipe

of 11 herbs and spices. The constituents of the recipe represent a notable trade secret.

Larger portions of fried chicken are served in a cardboard "bucket," which has becomea well known feature of the chain since it was first introduced by franchisee Pete

Harman in 1957. Since the early 1990s, KFC has expanded its menu to offer other

chicken products such aschicken fillet burgers andwraps,as well assalads andside

dishes,such asFrench fries andcoleslaw,desserts, andsoft drinks,the latter often

supplied byPepsiCo.KFC is known for theslogan "finger lickin' good," which has since

been replaced by "Nobody does chicken like KFC" and "So good."

KFC IN INDIA

In December 2013, there were 361 KFC outlets in India. As well as the standard KFC

offerings, the chain sells achickpea burger, apaneer burger, hot wings with chilli lemon

sprinkles and other country-specific products. A major franchise holder is QSR Brands

(M) Holdings, which operated 26 outlets as of 2012.

The first Indian KFC was a two-storey outlet on the fashionableBrigade

Road inBangalore in June 1995. According to journalistMichael White,the company

could not have chosen a "more difficult venue for its maiden entre into thecountry." Bangalore housed the headquarters of theKarnataka Rajya Raitha Sangha,

one of the most influential, vocal and anti-foreign investment farmers' associations in the

country.

The first outlet suffered protests from leftwing ,anti globalisation and

environmental campaigners, as well as local farmers, who objected to the chain

bypassing local producers. Many Indians were concerned about the onslaught of

consumerism,the loss of national self-sufficiency, and the disruption of indigenoustraditions. The protests came to a head in August 1995, when the Bangalore outlet was

repeatedly ransacked. The KFC outlet in Bangalore demanded, and received, a police

van permanently parked outside for a year. The outlet was closed on September 13,

1995 by local authorities, who claimed the company used illegally high amounts

ofmonosodium glutamate (MSG) in its food. The outlet re-opened a few hours later as
http://en.wikipedia.org/wiki/Pressure_fryinghttp://en.wikipedia.org/wiki/Trade_secrethttp://en.wikipedia.org/wiki/Pete_Harmanhttp://en.wikipedia.org/wiki/Pete_Harmanhttp://en.wikipedia.org/wiki/Chicken_fillet_burgerhttp://en.wikipedia.org/wiki/Sandwich_wraphttp://en.wikipedia.org/wiki/Saladhttp://en.wikipedia.org/wiki/Side_dishhttp://en.wikipedia.org/wiki/Side_dishhttp://en.wikipedia.org/wiki/French_frieshttp://en.wikipedia.org/wiki/Coleslawhttp://en.wikipedia.org/wiki/Soft_drinkhttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/Sloganhttp://en.wikipedia.org/wiki/Chickpeahttp://en.wikipedia.org/wiki/Paneerhttp://en.wikipedia.org/wiki/Brigade_Roadhttp://en.wikipedia.org/wiki/Brigade_Roadhttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Michael_White_(journalist)http://en.wikipedia.org/wiki/Karnataka_Rajya_Raitha_Sanghahttp://en.wikipedia.org/wiki/Left-wing_politicshttp://en.wikipedia.org/wiki/Anti-globalisationhttp://en.wikipedia.org/wiki/Environmental_movementhttp://en.wikipedia.org/wiki/Consumerismhttp://en.wikipedia.org/wiki/Monosodium_glutamatehttp://en.wikipedia.org/wiki/Monosodium_glutamatehttp://en.wikipedia.org/wiki/Consumerismhttp://en.wikipedia.org/wiki/Environmental_movementhttp://en.wikipedia.org/wiki/Anti-globalisationhttp://en.wikipedia.org/wiki/Left-wing_politicshttp://en.wikipedia.org/wiki/Karnataka_Rajya_Raitha_Sanghahttp://en.wikipedia.org/wiki/Michael_White_(journalist)http://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Brigade_Roadhttp://en.wikipedia.org/wiki/Brigade_Roadhttp://en.wikipedia.org/wiki/Paneerhttp://en.wikipedia.org/wiki/Chickpeahttp://en.wikipedia.org/wiki/Sloganhttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/Soft_drinkhttp://en.wikipedia.org/wiki/Coleslawhttp://en.wikipedia.org/wiki/French_frieshttp://en.wikipedia.org/wiki/Side_dishhttp://en.wikipedia.org/wiki/Side_dishhttp://en.wikipedia.org/wiki/Saladhttp://en.wikipedia.org/wiki/Sandwich_wraphttp://en.wikipedia.org/wiki/Chicken_fillet_burgerhttp://en.wikipedia.org/wiki/Pete_Harmanhttp://en.wikipedia.org/wiki/Pete_Harmanhttp://en.wikipedia.org/wiki/Trade_secrethttp://en.wikipedia.org/wiki/Pressure_frying


5/47

the result of an appeal by KFC to theKarnataka High Court.The company stated the

recipe was no different than that used in any other KFC store. Rural activist M. D.

Nanjundaswamy claimed KFC would adversely affect the health of the impoverished, by

diverting grain from poor people to make the more profitable animal feed.[]Former

environment ministerManeka Gandhijoined the anti-KFC movement. A second outlet

opened inDelhi,but was closed by the authorities throughout November, purportedly for

health reasons, but more likely to avoid a repetition of the Bangalore incident.]The Delhi

outlet soon closed permanently.

KFC began to expand outside of Bangalore in 2004, with a localized menu that was the

most extensive meat-free menu across the chain's worldwide operations. It introduced a

vegetarian menu that included rice meals, wraps and side dishes and, like McDonald's,

served eggless mayonnaise and sauces. Unnat Varma, marketing director of KFC India,

states "The vegetarian offerings have made the brand more relevant to a larger section

of consumers and that is necessary for KFC's growth." KFC also began using Indian

spices and cooking techniques to localize its chicken dishes. By 200809, KFC

operated 34 outlets in India. In 2014, KFC launched the "So Veg, So Good" menu as

part of an India-specific promotional strategy focused on enhancing their vegetarian

range. Dhruv Kaul, marketing director of KFC India, stated, "The So Veg, So Good

menu launch does not mean that we are moving away from our core chicken offerings.It enhances and strengthens our existing vegetarian range and helps broaden the

brand's relevance in a diverse country such as India.
http://en.wikipedia.org/wiki/Karnataka_High_Courthttp://en.wikipedia.org/wiki/M._D._Nanjundaswamyhttp://en.wikipedia.org/wiki/M._D._Nanjundaswamyhttp://en.wikipedia.org/wiki/KFC#cite_note-Gupta1998-105http://en.wikipedia.org/wiki/Maneka_Gandhihttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/KFC#cite_note-106http://en.wikipedia.org/wiki/KFC#cite_note-106http://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Maneka_Gandhihttp://en.wikipedia.org/wiki/KFC#cite_note-Gupta1998-105http://en.wikipedia.org/wiki/M._D._Nanjundaswamyhttp://en.wikipedia.org/wiki/M._D._Nanjundaswamyhttp://en.wikipedia.org/wiki/Karnataka_High_Court


6/47

Supply Chain Management of KFC

KFC Corporation (KFC), founded and also known as Kentucky Fried Chicken, is a

chain of fast food restaurants based in Louisville, Kentucky, in the United States. KFC

has been a brand and operating segment, termed a concept of Yum! Brands since 1997

when that company was spun off from PepsiCo as Tricon Global Restaurants Inc.

KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary

focus is fried chicken, KFC also offers a line of grilled and roasted chicken products,

side dishes and desserts. Outside North America, KFC offers beef based products such

as hamburgers or kebabs, pork based products such as ribs and other regional fare.

The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in

1952, though the idea of KFC's fried chicken actually goes back to 1930. The company

adopted the abbreviated form of its name in 1991.[3] Starting in April 2007, the

company began using its original name, Kentucky Fried Chicken, for its signage,

packaging and advertisements in the U.S. as part of a new corporate re-branding

program; newer and remodeled restaurants will have the new logo and name while

older stores will continue to use the 1980s signage. Additionally, Yum! continues to use

the abbreviated name freely in its advertising.

Born and raised in Henryville, Indiana, Sanders passed through several professions in

his lifetime. Sanders first served his fried chicken in 1930 in the midst of the Great

Depression at a gas station he owned in North Corbin, Kentucky. The dining area was

named "Sanders Court & Caf" and was so successful that in 1936 Kentucky Governor

Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of

his contribution to the state's cuisine. The following year Sanders expanded his

restaurant to 142 seats, and added a motel he bought across the street.When Sanders

prepared his chicken in his original restaurant in North Corbin, he prepared the chicken

in an iron skillet, which took about 30 minutes to do, too long for a restaurant operation.

In 1939, Sanders altered the cooking process for his fried chicken to use a pressure

fryer, resulting in a greatly reduced cooking time comparable to that of deep frying.


7/47

In 1940 Sanders devised what came to be known as his Original Recipe.

The Sanders Court & Caf generally served travelers, often those headed to Florida, so

when the route planned in the 1950s for what would become Interstate 75 bypassed

Corbin, he sold his properties and traveled the U.S. to sell his chicken to restaurant

owners. The first to take him up on the offer was Pete Harman in South Salt Lake, Utah;

together, they opened the first "Kentucky Fried Chicken" outlet in 1952.By the early

1960s, Kentucky Fried Chicken was sold in over 600 franchised outlets in both the

United States and Canada. One of the longest-lived franchisees of the older Col.

Sanders' chicken concept, as opposed to the KFC chain, was the Kenny Kings chain.

The company owned many Northern Ohio diner-style restaurants, the last of which

closed in 2004.

Sanders sold the entire KFC franchising operation in 1964 for $2 million USD, equal to

$14,161,464 today Since that time, the chain has been sold three more times: to

Heublein in 1971, to R.J. Reynolds in 1982 and most recently to PepsiCo in 1986, which

made it part of its Tricon Global Restaurants division, which in turn was spun off in

1997, and has now been renamed to Yum! Brands. Additionally, Colonel Sanders'

nephew, Lee Cummings, took his own Kentucky Fried Chicken franchise

Long Run Growth/ Decline

Fast food franchising was still in its infancy in 1954 when Harland

Sandlers begun his travels across the United States to speak with prospective

franchises about his colonel sanders recipe Kentucky fried chicken. By 1960 colonel

Sandlers had granted KFC franchise to over 200 take home retail outlets and

restaurants across the unite states. They had also succeeded in establishing a number

of franchises in Canada by 1963, the number of KFC franchises had risen to over 300

and revenues had reached $500,000 per unit, on average.

By 1964, the colonel had tired of running the day to day operations of the business and

was eager to concentrate on public relations issue. He sold the business to two


8/47

Louisville business people Jack Massey and John Young Brown, Jr. for $2 million.

During the next five years, Massey and Brown concentrated on growing KFCs franchise

system across the U.S. in 1966 they took KFC public, and the company was listed on

the New York Stock Exchange. By late1960s a strong foothold had been established in

the United States, and Massey and Brown turned their attention to international

markets. In 1969, a joint venture was signed with Initsubishi shoji kaisha, Ltd., in Japan,

and the right to operate 14 existing KFC franchises in England were acquired.

Subsidiaries were also established in Hong Kong, South Africa, Australia, New Zealand,

and Mexico. By 1971, KFC had 2,450 franchises and 600 company owned restaurants

worldwide, and was operating in 48 countries.

2. Stability of Demand for Products

Many KFCs problems during the late 1980s surrounded its limited menu and its

inability to quickly bring new products to market. As KFC entered 1996, it grappled with

a number of important issues. During the 1980s, consumers began to demand healthier

foods, and KFC was faced with a limited menu consisting mainly of fried foods. In order

to reduce KFCs image as a fried-chicken chain, it change its logo from Kentucky Fried

Chicken to KFC in 1991. It responded to consumer demands for greater variety by

introducing a variety of new products. The increased popularity of healthier foods and

consumers-increasing demand for better variety led to a number of changes in KFCs

menu offerings.

3. Stage in Product Life Cycle

KFC is on its Maturity Stage; KFCs products have survived the earlier stages.

KFCs early entry into the fast-food industry in 1954 had allowed it to strong brand name

recognition and a strong foothold in the industry.

During the 1990s and 1970s, KFC pursued an aggressive strategy of restaurant

expansion quickly establishing itself as one of the largest fast-food restaurant chains in

the United States. By 1990, restaurants located outside of the United States were

generating over 50 percent of KFCs total profits. By 1995, KFC was one of the three

largest fast-food restaurant chains operating outside of the United States.


9/47

A. SUPPLY OF PRODUCTS AND SERVICES

1. Capacity of the Industry

KFC, being the worlds largest chicken restaurantchain and third largest fast-food

chain, with over 9,000 in both franchise and company-owned restaurants worldwide and

was operating in 68 countries, simply shows that KFC has the capacity to address the

needs of its customers no matter how old their facilities and product form was. However

KFCs significant service problem will probably push their customers away from them,

thus KFC must have to imply ways on how to meet there customers expectations. KFC

ought to think that customer goes to their establishment not just because of their

product but also their service, because nothing bits a quality service.

The continuous opening of new restaurants in 1995, approximately two restaurants in

every three days is one way of proving their competence when it comes to business

expansion, thereby providing a wide market segment not just local but worldwide.

2. Availability of Needed Resources

KFC has several problems when it comes to its resources, specially on the needed

materials, because there system is older when it comes to their facilities and product

forms and its one thing that needs an attention, since this is the key to success in terms

of production and it would be there competitive edge in the wide array of fast food chain

industry. KFC

Despite of the rivalries of employees and managers, KFC had surpassed this incident.

KFCs culture was built largely as the employees enjoyed relatively good employment

stability and security. Over the years, a strong loyalty had been created among KFC

employees, because of the benefits and pensions and other non-income needs.

Thereby, KFC has the ability to retain and manage its manpower.

As to the companys money, KFC has the enough profit on its recent operations as of

1994, worldwide on both company-owned and franchised restaurants. Whereby it

reaches $1.7 million in this regard KFC has the capacity to innovate their old system or

how to transform the old KFC into new one.


10/47

3. Volatility of Technology

Basically KFCs past technologies still existed at present, which means that their

families were durable enough because it works for years. However the main issue now

is how they could transform the existing facilities for them to be more competitive.

4. Social Constraints

KFC encountered several factors constraining KFCsinternational expansion plans such

as the social unrest, increasing trade and current account deficits and the uncertainty

surrounding the economic policy. Some incidents were directly attack of nationalist

against KFC and closure of the first restaurant in India by local authorities are to protest

of local farmers group allied with a campaign across India against foreign investment

which was occurring as part of the countries four year old program of economic

liberalization.

5. Inflation Vulnerability

As KFC entered business in Mexico. High tariff and other trades barriers restricted

imports in to Mexico, and foreign ownership of assets in Mexico was largely prohibited

or heavily restricted. After 1982, the Mexican government battled high inflation, high

interest rates, labor unrest, and lost consumers power. When Carlos Salinas de Gortari

seated as President, Mexico improved, top marginal tax rates were lowered, and the

new legislation eliminated many restriction for foreign investment.

President Salinas institutes a policy of allowing the peso to depreciate against the dollar

by one peso per day, it result a grossly overvalued peso, and this lowered price of

imports & led to an increase in imports of over 23 percent in 1989.

KFCs primary concern was the stability of Mexico labor markets. Labor was really

cheap in Mexico. While KFC benefits from lower labor costs, labor unrest, low job

absenteeism, & punctuality continued to be significant problems. These problems with

worker retention and labor unrest were mainly the result of workers frustration over the

loss of their purchasing power. Due to inflation & to past government controls on wages

increases. A slowdown in business activity brought about by higher interest rates &

lower government spending, lead many businesses to lay-off workers.


11/47

C. COMPETITIVE CONDITIONS IN THE INDUSTRY

1. Structure of the Industry

KFC remained the largest chicken restaurant chain and third largest fast-food chain. It

held over 50 percent of U.S. market in terms in sales and ended 1995 with over 9,000

restaurants worldwide. In 1995 KFC opened 234 new restaurants and operated in 68

countries. One of the first fast-food chains to go international during the late 1960s, KFC

had developed one of the worlds most recognizable brands.

2. Government Support and Regulation

The food industry does not get much support from government. However there are laws

regarding its operation on food sanitation and hygiene.

Advertisement:

KENTUCKY FRIED CHICKEN (KFC) IN INDIA:

PROBLEMS FACED BY KFC IN INDIA:-

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. Chickens contained nearly

three times more monosodium glutamate (popularly known as MSG, a flavor enhancing

ingredient) as allowed by the Act. 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.

RE-ENTRY OF KFC INTO INDIAN MARKET:-

A case in point is KFC. KFC entered India in 1995, but a controversy surrounding the

levels of MSG in its preparations and subsequent protests from farmers' groups and

animal rights activists spelt trouble for the company. Ultimately, the company had to

shut all but one outlet in the country. Only recently in 2003 it made a quiet re-entry into

the Indian market. Then came up with the strategies and menu that is desirable by the

Indian consumers. And since 2003 it is expanding successfully its business in India.


12/47

INITIAL STAGES OF KFC

KFC Corporation, based in Louisville, Kentucky, is the world's most popular chicken

restaurant chain, specializing in Original Recipe, Extra Crispy, Twister and Colonel's

Crispy Strips chicken with homestyle sides.

KFC is part of Yum! Brands, Inc., which is the world's largest restaurant system with

over 32,500 KFC, A&W All-American Food,Taco Bell, Long John Silver's and Pizza Hut

restaurants in more than 100 countries and territory.

1. Founded by Harland Sanders in 1950s when fast moving franchising was still in its

infancy. Colonel Sanders was able to tap a talent hunt.

2. Secret recipe of chicken with eleven herbs and spices.

3. His foreseeing seemed to be true which is less than 13 years the chain had crossed

the 300 mark.

4. His growing age promoted colonel sanders to sell off the business for $2million in

1964 to Jack Massey and John Brown Jr-two Louisville businessman.

5. In 1970 KFC merged with Heublien Inc, a producer of alcoholic beverages with little

restaurant experience.

6. However soon enough conflicts arose regarding quality control issues and restaurant

cleanliness.

7. In 1986 KFC was sold to Pepsico.

8. Next KFC turned their attention towards tapping into international markets and by

around 1980s it had entered Japan, Australia, Mexico and places in the Carribean and

UK.

9. In the 1990s it could foresee the virgin markets if INDIA and CHINA.


13/47

KFC HISTORY AT-A-GLANCE

9/9/1890

Harland Sanders is born just outside Henryville, Indiana.

1900-1924

Harland Sanders holds a variety of jobs including: farm hand, streetcar conductor, army

private in Cuba, blacksmith's helper, railyard fireman, insurance salesman, tire

salesman and service station operator for Standard Oil.

1930

In the midst of the depression, Harland Sanders opens his first restaurant in the small

front room of a gas station in Corbin, Kentucky. Sanders serves as station operator,

chief cook and cashier and names the dining area "Sanders Court & Caf."

1936

Kentucky Governor Ruby Laffoon makes Harland Sanders an honorary Kentucky

Colonel in recognition of his contributions to the state's cuisines

1937

The Sanders Court & Caf adds a motel and expands the restaurant to 142 seats.

1939

The Sanders Court & Caf is first listed in Duncan Hines' "Adventures in Good Eating."

Fire destroys The Sanders Court & Caf, but it is rebuilt and reopened. The pressure

cooker is introduced. Soon thereafter Colonel Sanders begins using it to fry his chicken

to give customers fresh chicken, faster.

1940

Birth date of the Original Recipe

1949

Sanders marries Claudia Price.

1952

The Colonel begins actively franchising his chicken business by traveling from town to

town and cooking batches of chicken for restaurant owners and employees. The

Colonel awards Pete Harman of Salt Lake City with the first KFC franchise. A

handshake agreement stipulates a payment of a nickel to Sanders for each chicken

sold.


14/47

1955

An interstate highway is built to bypass Corbin, Kentucky. Sanders sells the service

station on the same day that he receives his first social security check for $105. After

paying debts owed, he is virtually broke. He decides to go on the road to sell his Secret

Recipe to restaurants.

1957

Kentucky Fried Chicken first sold in buckets

1960

The Colonel's hard work on the road begins to pay off and there are 190 KFC

franchisees and 400 franchise units in the U.S. and Canada.

1964

Kentucky Fried Chicken has more than 600 franchised outlets in the United States,

Canada and the first overseas outlet, in England. Sanders sells his interest in the U.S.

company for $2 million to a group of investors headed by John Y. Brown Jr., future

governor of Kentucky. The Colonel remains a public spokesman for the company.

1965

Colonel Sanders receives the Horatio Alger Award from the American Schools and

Colleges Association.

1966

The Kentucky Fried Chicken Corporation goes public.

1969

The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange.

1971

More than 3,500 franchised and company-owned restaurants are in worldwide operation

when Heublein Inc. acquires KFC Corporation.

1976

An independent survey ranks the Colonel as the world's second most recognizable

celebrity.

1977

Colonel Sanders speaks before a U.S. Congressional Committee on Aging.

1979


15/47

KFC cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC

restaurants worldwide with sales of more than $2 billion.

12/16/1980

Colonel Harland Sanders, who came to symbolize quality in the food industry, dies after

being stricken with leukemia. Flags on all Kentucky state buildings fly at half-staff for

four days.

1982

Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries, Inc. (now

RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds.

1986

PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc.

1997

PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell

and Pizza Hut - into Tricon Global Restaurants, Inc

2002

Tricon Global Restaurants, Inc., the world's largest restaurant company, changes its

corporate name to YUM! Brands, Inc. In addition to KFC, the company owns A&W All-

American Food Restaurants, Long John Silvers, Pizza Hut and Taco Bell

restaurants.

2006

More than a billion of the Colonel's "finger lickin' good" chicken dinners are served

annually in more than 80 countries and territories around the world.

2007

KFC proudly introduces a new recipe that keeps the Colonel's 11 herbs and spices and

finger-lickin' flavor, but contains Zero Grams of Trans Fat per serving thanks to new

cooking oil.


16/47

KFCS SUCCESS STORY:

Colonel sanders commitment to quality and hygiene.

PepsiCo taking over KFC proved to be a turning point in its life cycle.

Being a leader in its field PepsiCo provided that extra edge to KFC whereby the soft

drinks were made available at KFC outlets along with their menu.

Coordinated through national advertising.

Consumers were able to relate the soft drinks with the snack foods.

Was able to foresee a huge untapped market in the Asian Countries.

Think like a local..not like an American Company. KFC gelled with the

people as the operations were in their hands.

Mellowed down their Fried chicken image by changing their name to KFC in 1991.

Were able to provide a wider variety to the customers to chosen from, thus

strengthens their market positions.

Customization in different countries. Different culture and customers preferences were

taken into account to attain GCTC [GETTING CLOSE TO THE CUSTOMERS].

KFC is also quite aware of its CSR.

Different relief programmes and other social undertakings have been well executed by

them.

CULTURAL FACTORS CONTRIBUTING TO KFCsSUCCESSIN INDIA

Reducing the psychic distance by handlingover of operations to local people so that

customers could relate to them more easily.

Able to adapt to cultural differences, tastes and preferences. For example keeping in

mind the Indian tastes buds KFC launched a fierier ZINGER BURGER.

Got an edge since chicken is a staple dish and is taken more frequently in Asian

countries.

More accustomed to take out food over the counter.

The target customer of KFC [upper, middle and above] are health conscious and

hence to cater to their interest Kentucky fried Chicken changed its name to KFC.

Price sensitivity of the two economies drove KFC to introduce menus that were easy

on the consumers pocket.


17/47

CULTURAL FACTORS IN INDIA THAT GO AGAINST KFCs ORIGINAL RECIPE:

KFC is perceived as a restaurant serving only chicken-Indian families obviously

wanted more varieties.

Believed to be expensive .. no value for money.

Wanted to position itself as a family restaurant , not as a teenage hangout

Ambience was missing.

Perceived differences in eating habits.

Tried to target the vegetarian segment. However this backfired as in India having veg

food cooked in a non veg kitchen doesnt come out well with the vegetarian segment.

ETHICAL FACTORS:

The regulatory authorities found that KFCs chicken did not adhere to the prevention of

FOOD ADULTRATION ACT, 1954. Chickens contained nearly three times more

monosodium glutamate (popularly known as MSG, a flavor enhancing ingredients) as

followed by the act. 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 KFCs poultry farms.

Hiring and retaining the right employees is critical to the success of your restaurant's

operation. Here you'll find news and research on getting the most from your human

resources processes.

Area Manager:

Area Managers are accountable for providing coaching, leadership and operational

support to 8-10 KFC Restaurants within a defined Area.

Restaurant General Managers:

The Restaurant General Manager is accountable for creating and running an energetic

and valuable work environment, which is committed to serving the best chicken at the

fastest speed and with a smile.

The Restaurant General Manager reports directly to an Area Manager and is

accountable for successfully implementing and maintaining all Company policies and

procedures in relation to operations, customer service, cash handling, marketing,

purchasing, human resources, health & safety, administration,training and development.


18/47

Assistant Managers:

The Assistant Manager is responsible for assisting the Restaurant General Manager

(RGM) in creating an energetic and valuable work environment, which is committed to

serving the best chicken at the fastest speed and with a smile.

Assistant Managers are also responsible for ensuring all Company policies and

procedures are followed in relation to operations, customer service, cash handling,

marketing, purchasing, human resources, health & safety, administration, training and

development.

Trainee Managers:

Responsible for assisting the Restaurant General Manager and Assistant Managers in

creating an energetic and valuable work environment, which is committed to serving the

best chicken at the fastest speed and with a smile.

Trainee Managers help with day-to-day running of the restaurant, and need to ensure

that all operations, customer service, cash handling, marketing, purchasing, human

resources, administration and training & development policies are followed.

Customer Service Team Members:

Responsible for working the service areas and ensuring quality product, service and

cleanliness is delivered to all customers at top speed and with a smile!

Food Service Team Members:

Responsible for putting the crunch in the coating and the zing in the Zingerthe cooks

main task is to prepare and cook the irresistible KFC products! The cook must also

maintain the cleanliness of the cooking area as well as the quality of product and speed

of preparation.

Recruitment and Selection at KFC

Part of KFCs recruitment strategy is to offer employees high-quality options such as

potential for advancement, company reputation, benefits package and salary scale.

When KFC was looking for senior executives who could run a business, for two years it

scoured the management teams across various industries and offered senior executives

of companies like Coca Cola attractive benefits and a better salary scale to get them on

the team. These executives were promised quick advancement on their jobs, and

apparently given such incentives to join that most of the people offered jobs joined KFC


19/47

even though they were told before hand that at immediate present, no senior position

was vacant. Hence, KFCs attractive salary and benefits package is an effective lure for

potential employees (Rigdon, 1991).

For example, among the benefits package that KFC offers, is a medical coverage and

prescription benefits, dental coverage, vision/hearing coverage, life and disability

insurance, a 410k plan (which helps employees save for their future), stock options, a

management incentive plan (under which everyone from assistant manager to senior

executive is rewarded for remarkable performance), adoption assistance, tuition

reimbursement plan, college-planning assistance, employee discount, paid vacation and

a group legal plan. KFC also believes in promoting from within, as it encourages

employees to perform well on their jobs, telling them that they in fact can go from being

just a team member to the restaurant manager and later area or region coach (KFC

Official site).

As far as selection is concerned, KFC management strongly believes that hiring young

people and later training them is the way to a successful organization. Hence, the age

factor is definitely an issue of concern for recruiters at KFC. The company also strongly

believes in diversification. According to Kyle Craig, president of Kentucky Fried

Chicken's U.S. operations, We want to bring in the best people but if there are two

equally qualified people, we'd clearly like to have diversity. From this, we can safely

assert that KFC believes in eliminating the glass ceiling, and hiring and keeping female

and minority-group executives. This seems to be working for the company and is an

effective policy: where in 1989, not even one of the company's 17 senior U.S. managers

were minority or female, the situation has improved today, with there being numerous

managers either female or part of a minority group. KFC admits that it actively tries to

recruit and promote women and minority members in middle and top management

ranks (Rigdon, 1991).


20/47

Retention Practice at KFC

KFC is a client of the O.C. Tanner Company, which specializes in helping companies

motivate employees through comprehensive recognition solutions. According to its

director, marketing and corporate communications, KFC has the lowest turnover rate in

the fast food industry because it is a fun place to work. The company ensures that

coming to work is not something employees dread by making the day as enjoyable for

its workers as possible. Employees have been given the autonomy to have fun on the

job: they can start standing ovations for they whenever they want, can sing songs for

birthdays etc. (Kufahl & Agoglia, 2003).

Staff retention should be a major concern for employers because it has been proven

time and again that if the company is ever in a financial mess, it has to deal with the

added loss of employees resigning and leaving the company, right when their energy

and work is needed the most. KFC is one of those companies which realizes this factor.

It has incorporated a lot of recognition programs in its culture, like Floppy Chicken, or

KFC President Charles Rawley's Bulldog Award to motivate employees and keep them

happy (Serving up a bucket of recognition, 2001).

Recommendations

The recommendations that I would offer KFC is to maintain its current low turnover rates

and incorporate even more practices in its culture which provide recognition to

employees and make them feel valued. As for selection and recruitment practices, age

should not be a bias factor and the principle of promotion from within should be adhered

to. This is because for companies like KFC, it is very important to promote a certain

employee culture; hence, it is better to promote older employees rather than hiring

people from external sources.


21/47

Training and Development are Priority!

On the path from Team Member to Restaurant General Manager, extensive

training and development is a priority. Nationally Recognised Training Programs are

available to employees*.

Certificate II in Retail Operations

Certificate III in Retail Supervision

Certificate IV in Retail Management

What do you need to become part of our team?

Good interpersonal skills, strong work ethic, commonsense and great customer service

skills. You must be prepared to work shiftwork, including nights and weekends.

Availability varies by area*

Corporate Culture

"Reward and Recognition"

"Promotion from within"

"Belief in People"

Our Restaurant General Managers are No. 1, and they are rewarded for their

achievements through competitive salary packages, incentive scheme and share

ownership programs for company employees.

We are an Employer of Choice

Yum!'s commitment to being an "Employer of Choice" is demonstated by Yum! being a

Registered Training Organisation and our:

Equal Opportunity Employment Policy

Executive Trainee Program

Family Friendly Policies

World Class Training Systems

Education Assistance Program

Product Discount Program

Performance based salary increases and

Employee franchising


22/47

KFC FAST FOOD INDUSTRY

QUESTIONNAIRE ON HUMAN RESOURCE

PLEASE READ THIS PAGE BEFORE STARTING THE QUESTIONNAIRE:

AIM:

The aim off the survey is to find out about the experiences and problems of young

people working in the fast food industry as part of the research study.

DEFINITIONS:

Fast food industry include businesses which primarily sell meals that are ready to eat

immediately and are packaged in take away containers or are packaged where no table

service is involved (that are eaten on the premises but there are not waiters or

waitresses).For example: KFC, MCDONALDS, etc.

Q1.Do you work, or have you worked, for one of the following fast food outlets (if

worked for more than one outlet pls fill in other questionnaire of each outlet)?

a.)Pizza hut

b.)Subway

c.)Subross

d.)McDonalds.

Q2.What suburb is the outlet located in?_________________________________

__________________________________________________ ____________.

Q3.What is your job title and duties at the fast food outlets? _________________

__________________________________________________ ___________.

Q4.What is for employment status?

a.) apprentice/training

b.) casual part-time

c.) casual full-time


23/47

d.) permanent full-time

e.) permanent part-time

f.) other (please specify) _______________________________________________

Q5.How long you have worked for the fast food outlets?

a.) less than one month

b.) less than three months

c.) 3 month to 6 months

d.) 6 months to 12 months

e.) more than 1 year.

Q6. Please list the days and shifts you have worked that?

Q7. On an average how many hours would you work a week? ________________

_________________________________________________.

Q8.Did you sign an employment contract when you started your job?

a.) yes

b.) no

c.) do not know.

Q9.what training did you receive for the job?

a.) training before commenced the job.

b.) on the job training

c.) no training

d.) do not know


24/47

Q10.Do you have a supervisor at a work place?

a.) yes

b.) no

c.) do not know

Q11.Did your employer pays you during your training period?

a.) yes

b.) no

c.) do not know

NAME:_________________________________

ADDRESS: __________________________________

PHONE NO.:____________________________

AGE:______________________________

SEX:______________________________

ETHNIC BACKGROUND:_____________________________________

THANK YOU FOR YOUR TIME AND ASSISTANCE IN TAKING PART IN THIS

SURVEY.


25/47

OPERATIONS STRATEGY

One of the first fast food multinationals to set foot in India was

Kentucky Fried Chicken (KFC), owned by PepsiCo. KFC received permission to open

30 new outlets across the country. It chose Bangalore as its launch pad because the

city had a substantial upper middle class population, with a trend of families eating out.

Also, it was considered Indias fast growing metropolis in the 1990. The Bangalore

outlet was opened in June 1995. Apart from Bangalore, PepsiCo planned to open 60

KFC and Pizza Hut outlets in the country over the next seven years. However, KFC

became embroiled in various controversies even before it started full-fledged business

in India.

ISSUES FACED BY KFC IN INDIA:-

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. Chickens contained nearly

three times more monosodium glutamate (popularly known as MSG, a flavor enhancing

ingredient) as allowed by the Act. Indian people 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. 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.

KFC did not appreciate the need for protecting animal rights in developed and

developing countries like India.

They did not understand the importance of ethics in doing business.

They did not examine the reasons for protests of PETA.

KFC did not add the flavours and spices in their menu which Indians favoured.

Major reason was KFC was targeting higher income group in India in order to

compete with the local chicken dhaba walas.


26/47

KFC Re-entry into Indian Market

KFC entered India in 1995, but a controversy surrounding the levels of MSG in its

preparations and subsequent protests from farmers' groups and animal rights activists

spelt trouble for the company. Ultimately, the company had to shut all but one outlet in

the country. Only recently in 2003 it made a quiet re-entry into the Indian market. Then it

came up with the strategies and menu that was desirable by the Indian consumers. And

since 2003 it is expanding successfully its business in India.

At the same time it provided menu items which can be afforded by the middle income

group level like KFCs Mini Burger for Rs. 25, Hot Crispy Chicken which contained

Indian spices that were liked by Indians. Now they are adhering to the rules of Food

Corporation of India and PETA, helping them to expand business successfully. The

company aimed at targeting cosmopolitan cities like Chandigarh, Pune, Kolkata,

Chennai and Hyderabad, where mall culture is 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. The expansion drive would take

Pizza Hut across 33 cities; KFC will set foot in Kolkata and Hyderabad after having

forayed into Pune recently.

Ms Sharanita Keswani, Director, KFC Marketing, says that KFC also operates on the

franchisee model. "We expect to scale up to 12-13 restaurants by the end of this year,

from six at present. KFC is looking at extending its presence across India to create a

national footprint." Both Pizza Hut and KFC have made various alterations to their

menus in India to attract more footfalls. It has developed a range of pure vegetarian

food. All the vegetarian products are stored, cooked and served separately, by a

separate crew distinctly identified by their colour-coded uniform, says Ms Keswani.

KFC has around 10,286 units worldwide, followed by Taco Bell with 7,111 restaurant

units world over. Long John Silver's is America's largest quick-service seafood chain

with more than 1,200 units worldwide. KFC caters to nearly 7 million customers in more

than 78 countries through 11,338 outlets. The company believes that India, owing to its

size and growing aspirations of an upwardly mobile middle class, is a critical market in


27/47

its overall scheme of things. Yum! is a fortune 500 corporation that operates or licenses

Taco Bell, KFC, Pizza Hut, and Long John Silvers restaurants worldwide.

YUM! Brands, Inc. is committed to conducting its business in an ethical, legal and

socially responsible manner. To encourage compliance with all legal requirements and

ethical business practices, Yum has established this Supplier Code of Conduct for

Yum's U.S. suppliers.

Yum! has adopted best operational practices to ensure high customer orientation, which

is demonstrated through C.H.A.M.P.S. This is the umbrella operation programme for

training, measuring and rewarding an employee's performance against customer

standards. C.H.A.M.P.S stands for: cleanliness, hospitality, accuracy, maintenance,

product quality and speed. KFCs challenge here isto make sure to meet our quality

standards in terms of food, facilities, people and the overall experience. KFC want to

ensure that the customers experience in India is no different from a Pizza Hut outlet

anywhere else in the world.

KFC caters to nearly 7 million customers in more than 78 countries through 11,338

outlets. The company believes that India, owing to its size and growing aspirations of an

upwardly mobile middle class, is a critical market in its overall scheme of things.

Stringent cleaning standards ensure that all tables, chairs, highchairs and trays are

sanitised several times each hour. Such meticulous attention to cleanliness extends

beyond the lobby and kitchen to even the pavement and immediate areas outside the

restaurant.

Did you know that every year, Rs. 50,000 crore worth of food produce is wasted in

India? This is mainly because of the lack of proper infrastructure for storage and

transportation under controlled conditions. KFC is committed to providing quality

products while supporting other Indian businesses. And so, KFC spent a few years

setting up a unique Supply Chain, even before they opened their first restaurant in

India.


28/47

KFCs Supply Chain

A Supply Chain is a network of facilities including - material flow from suppliers and their

"upstream" suppliers at all levels, transformation of materials into semi-finished and

finished products, and distribution of products to customers and their "downstream"

customers at all levels. So, raw material flows as follows: supplier - manufacturer

distributorretailerconsumer. Information and money flows in the reverse direction.

The balance between these 3 flows is what a Supply Chain is all about.

When there is a balance in the finished product ordering, the Supply Chain operates at

its best. Any major fluctuation in the product ordering pattern causes excess / fluctuating

inventories, shortages/stock outs, longer lead times, higher transportation and

manufacturing costs, and mistrust between supply chain partners. This is called the

Bullwhip Effect. Depending on the situation, the Supply Chain may include major

product elements, various suppliers, geographically dispersed activities, and both

upstream and downstream activities. It is critical to go beyond ones immediate

suppliers and customers to encompass the entire chain, since hidden value often

emerges once the entire chain is visualized. For example, a diesel engine manufacturer

may be able to integrate a GPS locator system into its engine control system. Its

immediate customer, a heavy truck manufacturer, may see no need for this

functionality. However, the downstream customer, a trucking company with a large fleet,

may be very interested in a locator system. Understanding the value to the downstream

customer is part of the supply chain management process.

Cold Chain

The Cold Chain is necessary to maintain the integrity of food products and retain their

freshness and nutritional value. The Cold Chain is an integral part of the Supply Chain.

Setting up the Cold Chain involves the transfer of state-of-the-art food processing

technology by KFC and its international suppliers to pioneering Indian entrepreneurs,

who have now become an integral part of the Cold Chain.

The term Cold Chain describes the network for the procurement, warehousing,

transportation and retailing of food products under controlled temperatures. KFCs

outlets store products to be used on a daily basis, within a temperature range of 18C


29/47

to 4C. About 52% of the food products need to be stored under these conditions before

they are used.

Vital Links in KFCs Cold Chain

All suppliers adhere to Indian government regulations on food, health and hygiene while

continuously maintaining KFC's recognized standards. As the ingredients move from

farms to processing plants to the restaurant, KFC's Quality Inspection Programme (QIP)

carries out quality checks at over 20 different points in the Cold Chain system. Setting

up of the Cold Chain has also enabled KFC to cut down on operational wastage.

Hazard Analysis Critical Control Point (HACCP) is a systematic approach to food safety

that emphasizes prevention of illness or presence of microbiological data within KFCs

supplier facilities and the outlets rather than its detection through inspection. Based on

HACCP guidelines, control points and critical control points for all KFC major food

processing plants and outlets in India have been identified. The HACCP verification is

done at least twice in a year and certified.

Triyaka AgricultureSupplier of Iceberg Lettuce

Implementation of advanced agricultural practices has enabled Trikaya to successfully

grow speciality crops like iceberg lettuce, special herbs and many oriental vegetables.

Farm infrastructure features:

A specialised nursery with a team of agricultural experts.

Drip and sprinkler irrigation in raised farm beds with fertiliser mixing plant.

Pre-cooling room and a large cold room for post harvest handling.

Refrigerated truck for transportation.

Vista Processed Foods Pvt. Ltd.- Supplier of Chicken & Vegetable

A joint venture with OSI Industries Inc., USA, and KFC India Pvt. Ltd. Vista Processed

Foods Pvt. Ltd. produces a range of frozen chicken and vegetable foods. A world class

infrastructure at its plant at Taloja, Maharashtra, has :

Separate processing lines for chicken and vegetable foods.

Capability to produce frozen foods at temperature as low as -35 Degree Celsius to

retain total freshness.

International standards, procedures and support services.

Dynamix DiarySupplier of Cheese


30/47

Dynamix has brought immense benefits to farmers in Baramati, Maharashtra by setting

up a network of milk collection centres equipped with bulk coolers. Easy accessibility

has enabled farmers augment their income by finding a new market for surplus milk.

The factory has:

Fully automatic international standard processing facility.

Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose,

casein & whey protein and humanised baby food.

Stringent quality control measures and continuous Research & Development

Amrit FoodSupplier of Milk & Milk Products( Frozen Desserts)

Amrit Food, an ISO 9000 company, manufactures widely popular brands - Gagan Milk

and Nandan Ghee at its factory at Ghaziabad, Uttar Pradesh. Its plant has:

State-of-the-art fully automatic machinery requiring no human contact with product, for

total hygiene.

Installed capacity of 6000 litres per hour for producing homogenized UHT (Ultra High

Temperature) processed milk and milk products.

Strict quality control supported by a fully equipped quality control laboratory.

Radhakrishna FoodlandDistribution Centre

An integral part of the Radhakrishna Group, Foodland specialises in handling large

volumes, providing the entire range of services including procurement, quality

inspection, storage, inventory management, deliveries, data collection, recording and

reporting. Salient strengths are:

A one-stop shop for all distribution management services.

Dry and cold storage facility to store and transport perishable products at temperatures

up to - 22 Degrees Celsius.

Effective process control for minimum distribution cost.

KFC take great pride and care to provide customers with the best food and dining

experience in the quick service outlet business. They believe eating sensibly, combined

with appropriate exercise, is the best solution for a healthy lifestyle. KFC offers a variety

of menu items for those that want lower fat and lower calorie choices in their menu.

Local Sourcing


31/47

KFC has always been committed to sourcing its requirements from local suppliers and

farmers. This assurance is rooted in the philosophy of our company's founder. He firmly

believed in mutual benefits arising from a partnership between KFC and the local

businesses, thus ensuring that KFC commitment to growth was mirrored by that of its

partners.

In keeping with this belief, KFC has carefully identified local Indian businesses that take

pride in satisfying customers by presenting them with the highest quality products.

Adherence to Indian Government regulations on food, health and hygiene is now a top

priority.

KFC India today purchases more than 96% of its products and supplies from Indian

suppliers. Even our restaurants are constructed using local architects, contractors,

labour and maximum local content in materials. The relationship between KFC and its

Indian suppliers is mutually beneficial. As KFC expands in India, the supplier gets the

opportunity to expand his business, has access to the latest in food technology, and

gets exposure to advanced agricultural practices and the ability to grow or to export.

All our raw materials too, have certifications from our suppliers to confirm that they

comply with halal requirements. All in all, our commitment to halal underscores our

commitment to putting Customers First in all that we do. To ensure that all our locally

manufactured products conform to halal requirements, we implement stringent internal

controls over raw materials, manufacturing and packaging. We are extremely careful to

prevent cross contamination with filth or dangerous contaminants during the storage,

preparation, handling, packaging and transport of our products. We also adhere to best

practices to maintain the highest standards of quality and hygiene.


32/47

KFC Operational Model

Problem

What is the perfect diet? An ideal diet would meet or exceed basic nutritional

requirements, be inexpensive, have variety, and be ``pleasing to the palate''. How can

we find such a diet?

Suppose the only foods in the world are as follows:

After consulting with nutitionists, we decree that a satisfactory diet has at least 2000

kcal of energy, 55 g of protein, and 800 mg of calcium (vitamins and iron are supplied

by pills). While some of us would be happy to subsist on 10 servings of pork and beans,

we have decided to impose variety by having a limit on the number of servings/day for

each of our six foods. What is the least cost satisfactory diet?

Formulation:-

First we decide on decision variables. Let us label the foods 1, 2, ...6, and let represent

the number of servings of food i in the diet.

Our objective is to minimize cost, which can be written

We have constraints for energy, protein, calcium, and for each serving/day limit. This

gives the formulation:


33/47

MARKETING STRATEGY

KFC as a Brand

KFC is one of the best-known brands worldwide Doing Integrated assignment we study

how KFC continually aims to build its brand by listening to its customer's also identifies

the various stages in the marketing process.

Branding develops a personality for an organization, product or service. Brand Image

represents how consumers view the organization.

Branding only works when behaves and presents itself in a consistent way, Marketing

communication methods, such as advertising and promotion, are used to created

colors, design and image which gives a recognizable face .At KFC this is represented

by its familiar logo-Colonel Harland Sanders is shedding his white suit jacket for a red

cook.

Marketing involves identifying customer's needs and requirements and meeting these

needs in better way then its competitors. In this way a company creates loyal

customers.

The stating point is to find out who are potential customers are-not everyone will want

what KFC has to offer. The people KFC identifies as likely customers are known as key

audiences.

The Marketing Mix and Marketing Research.

Having identified its key audiences a company has to ensure a marketing mix that

created that appeals specifically to those people. The marketing mix is a term used to

describe the four main marketing tools(4P's):

1.Product

2.Price

3.Place

4.Promotion


34/47

Using that detailed information about its customers. KFC's marketing department can

determine:

1. What products are well received?

2. What prices consumer willing to pay?

3. What T.V. Programmes, newspapers and advertising consumer read or view?

4. What restaurants are visited?

Market research is the format which enables KFC to identify this key information.

Accurate research is essential in creating the right mix to win customers loyalty.

In all its market KFC faces competition from other businesses. Additionally economic,

legal and technological changes, social factors retail environment and many other

elements affect KFC success in the market.

Market research identifies these factors and anticipates how they will affect peoples

willingness to buy. As the economy and social attitudes change, so do buying patterns.

KFC needs to identify whether the number of target customers is growing or shrinking

and whether their buying habits will change in the future.

Market research considers everything that affect buying decisions. These buying

decisions can often be affected by wider factors than just the products itself. Lf

psychological factors are important, e.g. what image does the product give or how the

consumer feels when purchasing it? Through marketing, McDonalds establishes a

prominent position in the minds of customers. This is known as Branding.

Meeting the needs of Key audience

There are a limited number of customers in the market. To build long-term business it is

essential to retain people once they have become customers. For example a parent

with two children might visit and visits KFC to give the children a treat. Children want to

visits as it is fun place to eat. A business customer visits KFC during the work day as


35/47

service is quick the food taste is great and can be eaten in the car without affecting a

busy work schedule. These examples represent just a few of KFC's possible customers

profile. Each has different reasons to come KFC.

Using this type of information KFC can tailor communication to the needs of specific

groups. It is to the needs of specific group. It is their needs that determine the type of

products and services offered, prices charged, promotions

Created and where restaurants are located. To meet the needs of the key market it is

important to analyses the internal marketing strengths the organization.

Strengths and weaknesses must be identified, so that a marketing strategy which is

right for the business can be decided upon.

The analysis will include the:

Companys products and how appropriate they are for the future .

Quality of employees and how well trained they are to these additional psychological

factors are significantly offer the best service to important to the customer. They can be

even more customers important than the products physical benefits.

Systems and how well they function in providing customer satisfaction e.g. marketing

databases and restaurant systems.

Financial resources available for marketing.

The business can then determine what it needs to do in identify different types of

customers. For example:

A parent with two children might visit Visits KFC to give the children treat.

A children wants to visit KFC As it is a fun place to eat

A business customer


36/47

Visits KFC during the work day as service is quick,the food taste is great can be eaten

in the car without affecting busy work schedule.

Teenager visits KFC

The Rupee saver menu is affordable and there is Internet access in some restaurant.

These examples represent just a few of KFC possible customer profiles each has

different reasons to come KFC. Using this type of information KFC can tailor

communication to the needs of specific groups. It is their needs that determine the type

of products and services offered, prices charged, promotions created and where

restaurants are located. To meet the needs of the key market it is important to analyze

the internal marketing strengths and weaknesses must be identified, so that a marketing

strategy which is right for the business can be decided upon. The analysis will include

the:

Companys products and how appropriate they are for the future

Quality of employees and how well trained they are to these additional psychological

factors are significantly offer the best service to important to the customer. They can be

even more customers important than the products physical benefits.

Systems and how well they function in providing customer satisfaction example

marekting database

Financial resources available for marketing

Once the strengths and weaknesses are determined, they are combined with the

opportunities and threats in the market place. This is known as SWOT analysis

(Strengths, Weaknesses, Opportunities, and Threats).

The business can then determine what it needs to do in order to increase its chances of

marketing successfully.


37/47

Swot Analysis

Strengths(Internal)

the brand detailed market research to create the right marketing mix.

Weaknesses (Internal)

Kfc has been for around long time.therefore they have to keep innovating.

Opportunities (External)

increasing number of customers looking for food that is served in quick and friendly

way.

Threats(External)

New competitors changing lifestyles.

More people day by day becoming Vegetarian day

by day.

Marketing Objectives

A marketing plan must be created to meet clear Objectives.

Objectives guide marketing actions and are used to measure how well a plan is

working. These can be related to market share, sales, and goals, reaching the target

audience and creating awareness in the marketplace.

The objectives communicate what marketers want to achieve Long-term objectives are

broken down into shorter-term measurable targets, which KFC uses as milestones

along the way.

Results can be analyzed regularly to see whether objectives are being met. This type of

feedback allows the company to change plans. It gives flexibility marketing objectives

are set the next stage is to define how they will be achieved. The marketing strategy is

the statement of how objectives will be delivered. It explains what marketing actions and

resources will be used and how they will work together.


38/47

4P's of Marketing

At this point the marketing mix is put together:

1. Product

It is important thing to remember when offering menu items to customers is that they

have a choice, they have a huge number of ways

of spending their money and places to spend it.

Therefore, KFC's places considerable emphasis on developing a menu which

customers want. Market research establishes exactly what this is.

However customers requirements change over time. What is fashionable and attractive

today may be discarded tomorrow. Marketing continuously monitors customers

preferences. In order to meet these changes KFC has introduced and phased out old

ones. And will continue to do so.

Care is taken not to adversely affect the sale of one choice by introducing another

choice

which will cannibalize the sale from the existing one( trade off).KFC knows that items on

its menu will vary in popularity. Their ability to generate profits will vary at different

points in their life cycle.

Products go through a life cycle which is illustrated below:

The type of marketing taken and amount invested will be different, depending upon the

stage product is reached. For example launching a new product involves automatically

television and other advertising support.


39/47

At any time company will have a portfolio of products each is in different stage of its life

cycle. Some of KFC's option growing tremendously but some Halal products is in its

maturity stage.

2. Price

The customers perception of value is an important determinant of the price charged.

Customers draw their own mental picture of what a product is worth. A product is more

than a physical item, it also has psychological connotations for the customer.

The danger of using low price as a marketing tool is that the customer may feel that

quality is being compromised. It is important when deciding on price to be fully aware of

the brands and integrity.

A further consequence of price reduction is that competitors match prices resulting in no

extra demand . This means the profit margin has been reduced without increasing

sales.

3. Promotion

The promotions aspect of the marketing mix covers all marketing communications. The

methods include advertising, sometimes known as above the line activity.

Advertisements conducted on T.V., Radio, news paper, on website, etc.

What distinguishes advertising from other marketing communications is that media

owners are paid before the advertiser can take space in the medium. Other promotional

methods include sales promotions, telemarketing, exhibitions, seminars, loyalty

schemes door drops, demonstrations, etc. The skill in marketing communications is to

develop a campaign which uses several of these methods in a way that provides the

most effective results.

For example, TV advertising makes people aware of a food item and press advertising

provides more detail. This may be supported by in store promotions to get people to try

the product and a collect able promotional device to encourage them to keep buying the

item support each other and do not confuse customers.

A thorough understanding of what the brand represents is the key to a consistent

message the purpose of most marketing communications is to move the target

audience to some type of action. This may be to buy the product, visit a restaurant, and


40/47

recommend the choice to a friend or increase, purchase of the menu item. Key

Objective of advertisement is to make people aware of an item feel positive about it and

remember it.

The more KFC knows about the people it is serving the more it is able to communicate

messages which appeal to them. Messages should gain customers attention and keep

their interest. The next stage is to get them to want what is offered. Showing the

benefits which they will obtain by taking action are usually sufficient, the right message

must be targeted to the right audience.

For example, to reach a single professional woman with income above a certain level, it

may be better to take an advertisement in Cosmopolitan than Woman Era. To advertise

to mothers with children, it may be more effective to take advertising space in cinemas

during Disney films.

The right media depends on who the viewers, readers or listeners are and how closely

they resemble the target audience.

4. Place

Place in the marketing mix, is not just about the physical location or distribution points

for products. It encompasses the management of range of processes involved in

bringing products to the end consumer.

In Delhi KFC has open its shop where middle and higher class family, teenagers will

come and enjoy the food.

What we have find about KFC , by preparing questionnaire and making a hypothesis on

the result of questionnaire.


41/47

Questionnaire

Please tell us what you liked and what you didn't about your visit. Help Us to prepare a

integrated assignment and improve KFC ,so that every visit to KFC will have you say ,it

finger licking good..!

Please rate on the following Criterion:

Ambience

Airline 1.excellent 2.good 3. ok 4.bad 5.worst Blue line

Dcor

Inviting 1.excellent 2.good 3. ok 4.bad 5.worst Frightening

Quick Service

Ferrari 1.excellent 2.good 3. ok 4.bad 5.worst Anari

Impressive

Gold 1.excellent 2.good 3. ok 4.bad 5.worst Cold

Complete

All there 1.excellent 2.good 3. ok 4.bad 5.worst What -when-where

Food

Hot 'n' Fresh

Mother's Kitchen 1.excellent 2.good 3. ok 4.bad 5.worst Hostel Mess

Taste

Tastes yummy 1.excellent 2.good 3. ok 4.bad 5.worst Tastes funny

Variety

Hazzar 1.excellent 2.good 3. ok 4.bad 5.worst N't again yaar

Price Not to much 1.excellent 2.good 3. ok 4.bad 5.worst Lets go dutch

Courtesy

Yahoooo 1.excellent 2.good 3. ok 4.bad 5.worst Dump


42/47

Cleanliness -Dining area

Can eat off the floor 1.excellent 2.good 3. ok 4.bad 5.worst Can't eat here anymore.

Washrooms

Soap se bhi saaf 1.excellent 2.good 3. ok 4.bad 5.worst Are bhai maaf Karo

Value For Money

I left happy 1.excellent 2.good 3. ok 4.bad 5.worst I left broke

How often do you visit KFC

1.Daily 2.weekly 3.Monthly 4.Occasionally

I done survey on 40 people, 30 people were showing result product oriented and 10

mainly on service oriented at.001 significance level 24.32 goodness of fit.

MANAGEMENT INFORMATION SYSTEMS STRATEGY

Management Information Systems (MIS) is the term given to the discipline focused on

the integration of computer systems with the aims and objectives on an organization.

Each KFC outlet use MIS in accounting, knowing production, and very useful in

formulating HR policies which helps them to rate their employees.

The development and management of information technology tools assists executives

and the general workforce in performing any tasks related to the processing of

information. MIS and business systems are especially useful in the collation of business

data and the production of reports to be used as tools for decision making.

With computers being as ubiquitous as they are today, there's hardly any large business


43/47

that does not rely extensively on their IT systems. However, there are several specific

fields in which MIS has become invaluable.

MIS systems can be used to transform data into information useful for decision making.

Computers can provide financial statements and performance reports to assist in the

planning, monitoring and implementation of strategy.

MIS systems provide a valuable function in that they can collate into coherent reports

unmanageable volumes of data that would otherwise be broadly useless to decision

makers. By studying these reports decision-makers can identify patterns and trends that

would have remained unseen if the raw data were consulted manually.

MIS systems can also use these raw data to run simulations hypothetical scenarios

that answer a range of what if questions regarding alterations in strategy. For instance,

MIS systems can provide predictions about the effect on sales that an alteration in price

would have on a product which is very useful for KFC future development. These

Decision Support Systems (DSS) enable more informed decision making within an

enterprise than would be possible without MIS systems.

Not only do MIS systems allow for the collation of vast amounts of business data, but

they also provide a valuable time saving benefit to the workforce. Where in the past

business information had to be manually processed for filing and analysis it can now be

entered quickly and easily onto a computer by a data processor, allowing for faster

decision making and quicker reflexes for the enterprise as a whole.


44/47

Management by Objectives

While MIS systems are extremely useful in generating statistical reports and data

analysis they can also be of use as a Management by Objectives (MBO) tool.

MBO is a management process by which managers and subordinates agree upon a

series of objectives for the subordinate to attempt to achieve within a set time frame.

Objectives are set using the SMART ratio: that is, objectives should be Specific,

Measurable, Agreed, Realistic and Time-Specific.

The aim of these objectives is to provide a set of key performance indicators by which

an enterprise can judge the performance of an employee or project.

Benefits of MIS

The field of MIS can deliver a great many benefits to enterprises in every industry.

Expert organizations such as the Institute of MIS along with peer reviewed journals such

as MIS Quarterly continue to find and report new ways to use MIS to achieve business

objectives.

KFC s Core Competencies

Every market leading enterprise will have at least one core competencythat is, a

function they perform better than their competition. By building an exceptional

management information system into the enterprise it is possible to push out ahead of

the competition. MIS systems provide the tools necessary to gain a better

understanding of the market as well as a better understanding of the enterprise itself.

Enhance Supply Chain Management

Improved reporting of business processes leads inevitably to a more streamlined


45/47

production process. With better information on the production process comes the ability

to improve the management of the supply chain, including everything from the sourcing

of materials to the manufacturing and distribution of the finished product.

Quick Reflexes

As a corollary to improved supply chain management comes an improved ability to react

to changes in the market. Better MIS systems enable an enterprise to react more

quickly to their environment, enabling them to push out ahead of the competition and

produce a better service and a larger piece of the pie.

These factors help KFC to work smoothly and efficiently as we already known that they

are the only fast food chain which is selling fried chicken in which they are specialized.

MIS systems let the KFC management:

To capture information and store it, whenever they are making bills it helps them to

count sales per day, per week and per month because a copy of the bill is stored in the

computer.

Access stored information easily and manipulate it for the needs of their clients while

billing or taking order they just enter the code of the product requested at that time and

the quantity demanded.

Product code Product name Product price (in Rs.)

01 Small Coke 20

02 Medium coke 35

03 Large coke 45

04 Small coke+ Lollipop Chicken 65

05 Fried Chicken tub(small) 105

06 Small French Fries 25

07 Large Fries 45

08 Chicken Burger 25

09 Fried Chicken tub(large) 145

10 Veg. Burger 20


46/47

In KFC the above mentioned kind of information is stored in each computer that they

use to maintain is SAP-sale module .They given codes to their 45 products just by

entering the code the product name comes out with cost on the screen.

NOTE: This is a hypothetical table and the prices mentioned may differ the actual

prices.

Control flow of information into, around and out of the systems.

Work within legislation such as the Data protection Act.

Manage resources this is a very important function as every day inventory is recorded

and therefore resources could be managed.

Produce reports for themselves so that they can compare their own performances with

their own and other.

Maintain records needed for quality control so that the success story of all the

employees can be appraised.

Respond confidently to the demands of the Common InspectionFramework MIS help

them because they now easily check when the last stocking was done.

Manage and track employee records of work, achievement and progression for

promotions.

Record and track outcomes.

Manage marketing information to further improve sales..

And a host of other information related functions.

If Management Information Systems are flexible, and relate to the needs of the

organization, the clients and the curriculum that they are delivering, then they work well

and effectively. One has to be sure that, whatever systems you use, they suit your

purposes and can be customized to do so, are easy to use and allow rapid data entry

with rapid and flexible access for reporting purposes.


47/47

BIBLIOGRAPHY

KFC is the Service sector company which we have chosen for our integrated

assignment. We got all the information about KFC group from various resources like

sravan kfc

Documents