...Kentucky Fried Chicken and the Global Fast-Food Industry Case Analysis 1.0 Source Problem The change in demographic trends in the past two decades has seen an overall increase in costs for KFC and other fast food chains. Due to immense price competition and saturation of the US market, KFC is unable to raise its prices to cover the increased costs. The slower US population growth rate, oversupply of fast food chains and the minuscule 1% growth in the US restaurant industry per year has resulted in KFC¡¦s focus on expansion of their international markets. 2.0 Secondary Problems 2.1 Short Term - New product introductions are slow. - Market research inefficiency. Eg. Germans were not accustomed to buying takeout or ordering over the counter. McDonalds performed better in this aspect. - Crispy strips and chicken sandwiches cannibalized the fried chicken sales. 2.2 Long Term - Differences between the PepsiCo and KFC corporate strategy and culture. - PepsiCo/KFC poor relationship with franchisees. - Increased competition from direct and indirect competitors. - Reduction in market share in the US market. - Risks involved in international operations: long distances made it difficult to control quality and service, increased transportation and other resource costs, and time, culture and language differences increased communication and operational problems. - Fast food sales grew at a slower rate (5%) in comparison to other sectors in the restaurant industry. ...
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...Fast Food Promotional and Advertising Strategies xxxx BUS 508 – Contemporary Business xxxx xxxx Strayer University Fast Food Promotional and Advertising Strategies The purpose of this paper is to compare and contrast the promotional strategies of two quick service restaurants (QSR), McDonald’s and Domino’s Pizza, which both sell fast food. The paper will also recommend two ways in which a company within the fast food industry could use marketing information to differentiate itself in the marketplace to gain an advantage over its competitors. Two uses for consumer-oriented promotions that could assist a fast food company in both the short and long term are proposed in this paper. The leading fast food company, McDonald’s, has made pricing decisions to meet their competitors’ prices so that price is a nonissue and focus rather on adding value to attract customers. When their prices are equal, fast food companies can take alternate actions in order to differentiate themselves and gain competitive advantage. Lastly, the most effective advertising medium for a company in the fast food industry, which is television advertising, is examined in this paper. Promotional Strategies: McDonald’s vs Domino’s Pizza McDonald’s is the largest global fast foodservice retailer with more than 35,000 restaurants in over 100 countries offering a substantially uniform menu with some geographic variations. McDonald’s restaurants serve about 70 million people each day (Fast Food Industry...
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...Globalization Paper - Fast Food in China Anastasia Allen, Terry Clevenger, Robert Combs, Kirk Dickerson, Cassie Sherlin April 28, 2013 China is a country that prides themselves on history and tradition. China has possibly been the greatest country to contribute to modern day society. But not even the ever so powerful China can resist a bucket of Kentucky Fried Chicken or a juicy hamburger from Burger King. The majority of fast food began in the United States, but now has spread across the globe. Besides the United States, China is one of the biggest contributors to fast food business. The fast food market from China contributes an estimated $29 billion alone (Economist). This is big money business for any genre of an organization. With the proper techniques, skills, and drive, any sort of organization can succeed anywhere in the world. How does an American business work and succeed across the world? Does the business incorporate China’s culture into manufacturing and marketing? What strategies do businesses take in advancing the opportunity in China? These questions along with others will be answered to find out how and what is done to allow fast food businesses to be successful in the fast-pace, culture rich, and tradition loving China. Cultural considerations in terms of product manufacture and marketing in relation to fast foods in China. A successful product launch demands a better understanding of the market in terms of both culture and consumption...
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...1. Second best global brand in fast food industry in terms of value 2. Original 11 herbs and spices recipe 3. KFC is the market leader in the world among companies featuring chicken as their primary product offering 4. KFC in Malaysia operates in urban in each state. | WEAKNESSES 1. Use plastic bag; cannot be recycle 2. Free Wi-Fi- limited area and capacity 3. Unhealthy Food | OPPORTUNITIES 1. Operates in fast growing industry 2. Going green 3. Competitors (PIZZA HUT & BURGER KING) 4. Demand for free Wi-Fi 5. Demand for more ‘natural ‘choices of menu 6. Demand for healthier and fun for children: happy meal 7. Location | 1. KFC should take the strategy to open more franchise 2. produce new foods product 3. KFC should diversify its products which suit to the Malaysian customer. 4. Open more franchise in rural area | 1. Using paper bags, box 2. to increase the capacity of connection 3. balancing its set of kids meal | SO STRATEGIES 1. Strength of KFC is the second best global brands in fast food industry in term of value. The opportunity is fast food nowadays is fast growing industry. KFC should take the strategy to open more franchise over the world to increase their profit and to achieve first global fast food industry. 2. KFC also have original 11 herbs and spices recipe. The opportunity is when KFC have many competitors such as Pizza Hut and Burger King where KFC can be the best fast food who used secret...
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...Jollibee Phenomenon 4 Overseas Expansion and Modes of Entries 4 Company Analysis 5 Values – Mission – Vision 5 Distinctive competence 8 Foreign Market Analysis 9 The Australian Economy 9 Legal and Political Environment 9 Entry mode selection 11 Conclusion and recommendations 14 Reference list 17 Executive Summary Jollibee Foods Corporation (JFC) is a highly successful Philippines’ based food services company that operates over 1,700 stores locally and internationally. JFC has developed its international business over three distinct strategies. Its corporate strategy is one of related diversification into the fast food, restaurant and bakery sectors of the food industry. Its international business strategy focuses on establishing market share by acquisition, joint venture and franchising, often by initially targeting high Filipino population centres, and also in differentiation by localizing their menus to suit various cultural tastes in all their overseas markets (Jollibee 2009a). JFC has successfully adopted a transnational strategy being able to combine the benefits of global scale efficiencies in its regional management business model with the benefits of local responsiveness by adapting for local tastes. It depends on an integrated network and teamwork to drive the needs of the marketplace and the need to be competitive (Jollibee 2008). JFC’s early success is built on adopting McDonald’s business model, and tailoring its menu to local...
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...the Company develops, operates, franchises and licenses a worldwide system of restaurants which prepare, package and sell a menu of competitively priced food items. Their restaurant brands – KFC, Pizza Hut and Taco Bell – are the global leaders of the chicken, pizza and Mexican-style food categories. Their goal is to continue to build three global, iconic brands that people trust and champion. They are evolving KFC, Pizza Hut and Taco Bell into more relevant, engaged, connected and caring global brands. Industry/Strategy analysis Industry Analysis Demand Even though US encounters cautions consumer spending, sluggish economic growth in the first quarter of 2014, customers’ demand in the restaurant industry is still stabilizing after years of declines, which can be found from the recent US sales trends. According to S&P industry surveys, the largest US restaurants as a group continued to recover in 2013 from the great recession. There are a number of reasons discussed as following: First, fast-food restaurant consumption is an important lifestyle for each individual. Restaurants are offering products and services that consumers actively seek out and enjoy; an activity in which consumers is selecting to engage despite cash-on-hand restraints because it is an important component of their lifestyle. Second, fast food restaurants’ pricing practices and product design target people who are lower-income, are driven by cost and taste more than nutrition concerns, and have...
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...States Phone: +949-863-4500 Fax: +949-863-2252 Attention: Mr Greg Creed Dear Sir, As a member of the Global Strategy Team, I am presenting an expansion strategy which is in accordance to Taco Bell’s ideas and image. Our team is pleased to offer the documents entitled ‘Internationalisation of Taco Bell in Malaysia’ as a growth prospect. The report has undertaken all aspects of analyzing the climate for Taco Bell in Malaysia. We have studied the environment and the business strategies to propose a plan that fits the company’s policy and purpose of internationalization. Our team would like to thank you for this opportunity and hope that we have clarified all areas of the proposal. We are grateful for this opportunity and anticipate to working with you in the future. We hope that this proposal will meet your approval. Yours sincerely, Sehr Ali Jafri Table of Contents 1. Executive Summary 3 2. Introduction 3 3. Methodology 3 4. Motives for Internationalisation 4 5. Malaysia Economy Profile 5 5.1 Malaysian Fast-food Business Environment 6 6. Taco Bell’s Global Strategy 6 6.1 Entry Mode 7 7. Conclusion 7 8. Recommendations 7 1. Executive Summary The purpose of this study is to critically analyse the investment opportunities prevalent in the Malaysian market by taking into consideration the significant macroeconomic factors, food industry trends, political environment and other socioeconomic trends that can affect business competitiveness...
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...divided into five sections. The first section is the background to Jollibee and its international operations. The second section is the environmental analysis of Jollibee through the external analysis--- PESTEL and internal analysis---the value chain in terms of market trends, customers, competitors and current position along with the SWOT analysis. The third section is the strategic concerns faced by Jollibee in the UK market. The recommendations based on the previous discussion will be given for the UK market in the fourth section. In the final section, the conclusion will be given out. 1. Introduction: Jollibee Foods Corporation was an ice cream parlor named magnolia, started by Chinese-Filipino Tony Tan Caktiong in 1975 as a family-based business in the Philippines. And Jollibee then began offering hot meals and sandwiches in 1977, which are unique Filipino food that meet with local tastes. This home-style Philippine recipe appeals to the customers and make Jollibee expand quickly throughout the Philippines. And Jollibee’s success in the Philippines had brought...
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...SWOT ANALYSIS S – Strengths or Core Competencies * Strong global presence, considered a market leader in all markets. McDonald’s is a global company that “operates more than 23,500 restaurants in 109 countries.”1 The company’s strong global presence is an significant advantage for them, because it gives them the ability to “play” with economic fluctuations of each country. By being spread out in different regions, the company is able to contest the economic fluctuations which are localized by country. McDonald’s has an advantage as it can operate effectively even in an economic downturn as at such times people seek out comfort food more. * Relies upon economies of scale for cost reduction. Any corporation registered and operating in more than one country at a time, usually with its headquarters in a single country. A firm's advantages in establishing itself multinationally include both vertical and horizontal economies of scale (reductions in cost that result from an expanded level of output). Critics usually regard the multinational corporation as destructive of local economies abroad and as prone to monopolistic practices * Very loyal employees and management monopolistic practices The company has known to have very loyal employees and management. The twenty of its fifty top employees started as low level restaurant employees at McDonald’s. The caring attitude of the company towards its employees is also shown by the fact that around its 67,000...
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...Business and Administration Degree Programme Degree Programme in International Business Author(s) Wei Hu & Yuanyuan Xie Title of Thesis Comparative Study of McDonald's and Kentucky Fried Chicken (KFC) development in China Date 28.04.2013 Pages/Appendices 53+2 Supervisor(s) Jari Niemelä &Heikki Likitalo Client Organization/Partners McDonald's Corporation & Kentucky Fried Chicken Corporation Abstract McDonald's and KFC are two international fast food restaurants. They both expended their businesses in global scale. It is obvious that McDonald surpassed KFC in terms of sales and fame in international level. However, in China, KFC performs better than McDonald's. The aim of this study is to find out how these two companies developed differently in Chinese market. By making a comparative study of McDonald's and KFC, different operation and competitive strategy theory will be integrated with their development situation. Research is made based on strategy theory, Internet sources and interviews. The thesis is started with general information, Chinese fast food industrial situation introduction and thesis structure. After having introduced the two companies background, we illustrated strategy theory as thesis theoretical basis. Next, by comparing McDonald’s and KFC’s core competitive power, we analyzed the main difference and some similarities comprehensively of McDonald’s and KFC’s business and competition strategy. In research finding chapter, we introduced qualitative finding, it is the...
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...urban sprawl. There are some solutions to determine the urban sprawl issues called ecological modernization. According to AEP 9 lecture one, ecological modernization is a scientific research to find the answer to how the world can be sustain economically and socially at the same time without damaging the environment. Some business groups are trying to find a solution for the urban sprawl issues based on ecological modernization. According to Gonzalez (2006), there are two business groups who support this approach. The first business group is the World Business Council for Sustainable Development (WBCSD) and the second is the International Chamber of Commerce (ICC). These two groups are supporting global warming issue with providing some technology solutions to control the global warming effect caused by urban sprawl. Gonzalez (2006)...
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...the nature. Thegreen color logo and packaging can make customerseasily associate to nature, and feel very close to nature so that they can get a closely linked from theirbrand to nature, and easily memorize the brand, and what kind of product they sold.In addition, those people who want or need to purchase outside sports items also easilyrecall L.L BEAN’s brand and products thus facilitate final purchase behavior. 2. Should a global firm like McDonald’s or General Mills change the colors of its logo or packaging depending on the country in which it is marketing? Why or why not? How might this affect consumer attitudes toward the company and its products? Answer:I think a global firm should not change the colors for theirlogos. As a global firm, logo representsits unique enterprise culture and brand.The unified logo is necessary because itnot only protects the brand and prevents counterfeits, but it also helps company build their unified brand image in order to improve the popularity of an enterprise in costumers. As the packaging, I think global firmsshould be in line with local market preference. It can make customer get intimacy from the produces.For example, McDonald’s change its packaging into red color when the LunarNew Year comes in china because red means jubilation for Chinese. Principals of Marketing Chapter 9 Page306-307...
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...Product (Service) Offering 2.5 Keys to Success 2.6 Critical Issues 3.0 Marketing Strategy 3.1 Mission 3.2 Marketing Objectives 3.3 Financial Objectives 3.4 Target Markets 3.5 Positioning 3.6 Strategies 3.7 Marketing Mix 3.8 Marketing Research 4.0 Controls 4.1 Implementation 4.2 Marketing Organization 4.3 Contingency Planning 5.0 Conclusion 2.0 Situation Analysis McDonald’s is a late entrant to the healthy food choice market for kid’s meals, even though they have added healthy food items like premium salads and wraps to their menu for adults within the last five years. Competitors like Chick-Fil-A, Arby’s and Subway have made more penetration into this market by offering kid’s meal choices to its customers that are lower in calories and fat content. McDonald’s can leverage the prime position it occupies in the $236 billion fast food industry in the US to strategically position itself to compete for this market through innovation and creativity. It is currently re-branding as part of a marketing initiative to dispel the image of corporate evil and greed. This initiative provides it an ample opportunity to profitably serve healthy meals to the niche market of 2 – 10 year olds. 2.1 Market Summary McDonald’s market includes people around the world ages 2 – 100, but we are focusing on the target market specific to purchasing kid’s meals which would be children...
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...Established in 1975 as an ice-cream parlor at Cubao, Jollibee is now the largest fast food chain in the Philippines, operating a nationwide network of over 750 stores. A dominant market leader in the Philippines, Jollibee enjoys the lion’s share of the local market that is more than all the other multinational brands combined. The company has also embarked on an aggressive international expansion plan in the USA, Vietnam, Hong Kong, Saudi Arabia, Qatar and Brunei, firmly establishing itself as a growing international QSR player. Jollibee Foundation believes in harnessing the strengths of its parent company, Jollibee Foods Corporation (JFC), and those of its partners, for community development. Operating since 2005, Jollibee Foundation’s service to the community is exemplified by building into the design of its various programs the relevant strengths of JFC as a foodservice company so that program sustainability would have a fairly good chance. Jollibee is now to take the opportunity to move into the future and maximize the brand’s potential through a strong and effective coordinated promotional campaign. Executive Diary Jollibee desires to have an ability that allows the company to be far more responsive to the needs and expectations of consumers, providing the foods that directly meet the taste and preferences of the target market. Jollibee aims to maintain its position as the leading fast-food chain. The plan proposes to achieve this objective by having direct-response...
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...Date of Incorporation: 1965 Franchising Since: 1974 Headquarters: Miami Springs, Florida Business Description: Subway Restaurants sell foot-long and numerous other kinds of healthy sandwiches, salads, etc. in its franchise. Franchise Offer: Subway offers highly qualified purchasers the right to operate and establish from a single location, a franchise selling specialty sandwiches, salads and other healthy edibles. Term of Agreement and Renewal The length of the franchise term will be 20 years and as per the contract, Subway has all the rights to refuse the renewal in case the franchisee does not generate profits of fulfil compliance. Investment Tables: Initial Investment: For a Traditional Location: | Low | High | Midium | Franchise Fee | $15,000 | $15,000 | $15,000 | Property | $2,000 | $12,000 | $5,000 | Improvements in lease | $59,500 | $134,500 | $102,100 | Security deposit | $4,500 | $7,500 | $6,500 | Security system (Optional) | $2,000 | $6,000 | $3,500 | Freight charges | $3,300 | $5,500 | $4,000 | Outside signage | $2,000 | $8,000 | $4,000 | Opening inventory | $4,400 | $6,050 | $5,225 | Insurance | $800 | $5,000 | $1,500 | Office Supplies | $500 | $1,300 | $900 | Training expenses (including travel & lodging) | $2,500 | $4,500 | $3,500 | Legal | $1,000 | $3,500 | $2,000 | Advertising | $2,500 | $4,000 | $3,250 | Miscellaneous Expenses | $4,000 | $8,000 | $6,000 | Additional Funds...
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