BCG Matrix of KFC
BCG Matrix of KFC
BCG Matrix of KFC
product in very promisingmar kets for KFC is very essential. KFC, along
the American continent as well as else where. Since the1950s when the founder of
KFC had a dream, of building an empire in the fast foodmarket, the company
has undergone lots of changes. The company has changedowne rship; it has
taken over from Pepsi and passed over to Tricon, which owns Pizza hut,Taco bell
and others. Nowad ays, KFC, still dominates the chicken fast food industry while has
stores inmore than 100 countries operating vast profits. (De Witt 'et al.2004a)
Although, due toincreased conditions of life, and differentiation of the life style of the
population aroundthe world, there is still a lots of room for expansion, especially in
countries with large populati on, and high development rate. KFC using the BCG matrix
and SWOT analysisto analyze what is the current position of the company and identify that
the company hasthe potentials to growth in fast food market.In the late 1960s the
businessesacc ording to relative market share and market growth.The BCG Matrix
companyso that the management can determine the strengths and the needs of all sectors
measure is the business;sRel ative Market share. The environmental measure is the
industry attractiveness. Becausefor the case of YUM Brand, all SBUs ( KFC, Taco
Bell, Pizza Hut, Long John Silvers, A&W) are located in the same fast-
against the SBUs growth rate. The underlying theory for examining
market growth rate is the industry life cycle. The BCG assumes that growthrates (
life cycle stages) affect a firms finances.Placi ng products in the BCG matrixresults
Use large amounts of cash and are leaders in the business so they
Frequently roughly in
made to hold share, because the rewards will be a cashcow if market share is kept.
high, and because of the low growth,invest ments needed should be low. Keep profits
EuropeU S A A m e r i c a s
of all, because high demands and lowreturns due to low market share
If nothing is done to change the market share, question marks will simplyabsorb
great amounts of cash and later, as the growth stops, a dog.The Characteristic s of each
FlowS T A R H o l d / I n c r e a s e H i g h H i g h -
o a C H d g o
r + C s h o w o l H i h L w H
Highor+D O G H a r v e s t o r D i v e s t L o w o r -
for each SBU. The business strength dimension, relative market share,
is included to measure competitivead vantage. The KFC is falling on cash cow where a low
growth and high market share is.So, the profit and cash generation is high and
because of low growth, investments neededshould be low. The funds received from cash
cows are often used to help other businesseswit hin the company, to allow the
stockholders. So the KFC should hold on what it has doing now.Three Paths to
cows and use the cash throw-up by the cash cows toinvest in the question
and as the market matures, stars will degenerateinto cash cows and the process
nurse the dogs to health or manage for cashThree Paths to Failure (starquestion
mark-dog, cash cow-dog) Over invest in cash cows and under invest