K.F.C Strategy

The need for strategy, in order to expand its existing product in very promising markets for KFC is very essential. KFC, along with McDonalds, and other major fast food chains have dominated the American continent as well as else where. Since the 1950's when the founder of KFC had a dream, of building an empire in the fast food market, the company has undergone lots of changes. The company has changed ownership, it has taken over from Pepsi and passed over to Tricon, which owns Pizza hut, Taco bell and others. Nowadays, KFC, still dominates the chicken fast food industry while has stores in more than 100 countries operating vast profits. (De Witt 'et al.2004a) Although, due to increased conditions of life, and differentiation of the life style of the population around the world, there is still a lots of room for expansion, especially in countries with large population, and high development rate. One of the most significant locations for expansion is considered the Latin American countries, which the geographical proximity to U.S.A., along with their development rate, and amount of population seem to be very attractive for many companies. ( Washington Times, The (DC), Aug 09, 2005Item: 4KB20050809110639 a) Countries like Mexico, Brazil, and Argentina have a sum of 3 hundred million population, amount equal to the United States. Such resources, regarding population and natural benefits couldn't miss the attention of any company, while the demographics shown very suitable conditions for development. ( Chesterton Blumenauer (Binswager)by Steve Bergsman )

Those countries after difficult times, struggling to establish an economic and governmental stability, seem to find their way and create favourable conditions for progress. ( Washington Times, The (DC b), Aug 09, 2005Item: 4KB20050809110639) So far KFC, is well established in Mexico, but doesn't do so well in the rest of the countries coming third in total restaurants in Latin America. (De Witt 'et al 2004 b) KFC Company has to make the analogous research in the markets of these countries, in order to identify the most suitable ones, to establish its brand among the biggest fast food chains.

Using the B.C.G. matrix and S.W.O.T. analysis we will try to analyse what is the current position of the company and identify the potentials that the company has in the market. B.C.G. is a tool that analyse the position of the business in the market at some moment in time, and reveals the potential market share and market growth that the company hold's. This doesn't mean's that all these figures and allocation of the company between the matrixes is truth. The matrix analysis allocates the company as one unit, and doesn't reveal the share and growth of all of its products. So using this technique for planning, is essential, but not reaches in great depth of the market and company's information.(http://www.marketingteacher.com) As has been mentioned and above, SWOT is and internal analysis of strengths and weaknesses, and an external one of opportunities and threats. This should be kept simple, and realistic regarding the businesses conditions. The people conducting the SWOT should be very careful while this can be very subjective, and mislead in wrong conclusions. This matrix can be used for diagnosis of the present condition of the business, and use the information to draw the plans for the future. (http://www.marketingteacher.com)

BCG Matrix

Relative Market Share in the Industry

20 1 0.5 0

KFC

Industry

Sales 0

Growth

-20

KFC Growth rate:4%

KFC R.M.Share :55.2%

(De Witt & et al 2004 c)

Regarding to the BCG Matrix analysis system, the KFC, at the particular moment were the information's been gathered, considered as star. Which means that the conditions are favourable for market penetration and product development. Analysing that little more thorough, we will see that KFC has the opportunity to penetrate the Latin America market using their existing products along with a range of products suitable for the nutrition habits of these countries. Before doing so tough, the company has to make a very good research regarding the culture of the countries, in order to identify which are the dishes that sell the most in those countries, which is the daily schedule of the potential clients, how much they are willing to spend in food, how much profit they likely to make and so on. A very reliable method of identifying all these information's is the pest analysis, which can reveal all the political, economic, socio-cultural, and technological factors involved, and affecting the market. In the particular situation though, SWOT analysis should take place first, while pest it requires more thorough examination of details involved, whereas SWOT is more subjective, and broad.

Strengths : A firms strengths are its current resources and capabilities that can be used for a developing a competitive advantage.

* Good reputation among the customers & Strong brand name.

* Competitive advantages such as patents in fried chicken.

* Resources such as assets and people.

* Experience in expansion, and knowledge how to apply data.

* Financial gains, and profits form its current operation.

* Location and geographical suitability - Technology systems, communications within the company.

* Isomorphism of each outlet, which standardize the processes of operation and quality of product, strong culture.

Weaknesses: A firms certain absent strengths.

* The mass market in Latin America is under economic crisis.

* People make a turn in more healthy options.

* The elements of culture: *Language *Religion *Values *Attitudes *Manners and Customs *Material culture *Aesthetics *Education