History

Harland Sanders, founder of the original Kentucky Fried Chicken, born in 1890,
just outside Henryville, Indiana. After a series of jobs, in the mid 1930s at the age
of forty, Colonel Sanders bought a service station, motel and cafe at Corbin, a town
in Kentucky. He began serving meals to travelers on the dining table in the living
quarters of his service station because he did not have a restaurant. It is here that
Sanders began experimenting with different seasonings to flavor his chicken which
travelers loved and for which he soon became famous. He then moved across the
street to a motel and restaurant, which seated 142 people. During the next nine
years he developed his secret recipe of 11 herbs and spices and the basic cooking
technique which is still used today. Sander’s fame grew. In 1939, his establishment
was first listed in Duncan Hines’ “Adventures in Good Eating”.

Internationalisation Process

In 1952 the Colonel Harland Sanders begins actively franchising his chicken
business by traveling from town to town and cooking batches of chicken for
restaurant owners and employees. When the reaction was favourable 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.

In 1957, Kentucky Fried Chicken first sold in buckets. During 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. Later that year 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.
In 1966 the Kentucky Fried Chicken Corporation then goes public.

In 1971 more than 3,500 franchised and company-owned restaurants are in

worldwide operation when Heublein Inc. acquires KFC Corporation. In 1979 KFC
cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC
restaurants doing there operations worldwide.

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

1982 (now RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds. In
1986 PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc. In 1997 PepsiCo, Inc.
announces the spin-off of its quick service restaurants – KFC, Taco Bell and Pizza
Hut – into Tricon Global Restaurants, Inc. Tricon Global Restaurants, Inc., the
world’s largest restaurant company, in 2002 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.

In 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. In 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.

There are over 14,000 KFC outlets in 105 countries and territories around the
world. And every day, nearly eight million customers are served around the world.

As a global company with a diverse and ever-changing workforce, we face

significant challenges. For example, our rapid growth in emerging markets like
India and Russia requires us to adapt our policies to these markets, and to learn
from our new partners. Building a diverse foundation at all of our brands gives us
a competitive edge and helps us operate as a local business in international
markets.

http://www.kfc.com/about/history.aspv

http://www.yum.com/responsibility/diversity.asp

What are the aims and objectives of KFC?

The aims and objectives of KFC are not only to sell chicken to make money and
make a profit, they are to expand as a business whether that’s to be a world wide
business or just to open up a few more restaurants around the country to provide
a better and faster service for the customer, to beat competitors/rivals such as
McDonalds, burger king, pizza hut etc.

Mission

To sell food in a fast, friendly environment that appeals to pride conscious, health
minded consumers.

Stated Objectives

 Product development
 Increase variety on menu
 Introduce desert menu

Increase profitability of KFC through the following:

  Reduced overhead costs
 Increased efficiencies
 Improved customer service
 Cleaner restaurants
 Faster and friendlier service
 Continued high quality products
 Resolve franchise problems in the United States.

Implied Objectives

1. Expansion of international operations to provide the following:

1. Increased percentage of overall sales growth
2. Increased percentage of profit growth
2. Increased expansion of franchises into Mexico
3. Expansion of franchise operation beyond Central America
4. Continued promotion of healthier image through removal of the word “fried” from
the name
5. Improve menu selection of rotisserie

http://wiki.answers.com/Q/What_is_the_aims_and_objectives_fo_KFC

http://www.Kfc.com/

World famous Menu of KFC

KFC offers world famous menus in there restaurants, which work as there main
motives in doing business in the world. Every day, nearly eight million customers
are served around the world. KFC’s menu includes Original Recipe® chicken —
made with the same great taste Colonel Harland Sanders created more than a
half-century ago. Whether you’re taking back lunch or bringing back dinner, KFC
has all your favorite chicken, salads, sandwiches, snacks, sweets and sides.
Globalization of KFC

Reasons for going overseas KFC moves beyond domestic markets into
international markets for the following reasons:

* Potential demand in foreign market

* Saturation of domestic markets

* Follow domestic customers that go abroad

* Bandwagon effect

* Comparative advantage – some countries possess unique natural or human

resources that give them an edge when it comes to producing particular products.
This factor, for example, explains South Africa’s dominance in diamonds, and the
ability of developing countries in Asia with low wage rates to compete successfully
in products assembled by hand. Technological advantage – In one country a
particular industry, often encouraged by government and spurred by the efforts of
a few firms, develops a technological advantage over the rest of the world. For
example, the United Sates dominated the computer industry for many years
because of technology developed by companies such as IBM.
“We plan to expand to wherever our customers are and there is no limit to our
expansion”, said Sandeep Kohli, managing director (Indian subcontinent) of Yum!
Restaurants International (YRI), whose flagship brand is KFC.

As KFC expanded their operation in various countries in the world market; so it is

impossible to cover all the operations of KFC in this report. So we focused on its
operational strategy, motive behind operations etc in selected countries.

KFC in China

KFC location strategy in China

KFC aims China as the most promising market and succeeds in its localization
strategies in the huge China market. The most prominent success of KFC in China
is not only the outcome of KFC’s persistent tenets “quality, service and cleanliness”
but also the achievements of its keen perception of cross-cultural marketing and
its understanding of Chinese culture.

There is no doubt that China has become the highest-growth market of Kentucky
Fried Chicken. Seventeen years after opening the first KFC outlet in China, KFC
has celebrated its 1000th restaurant milestone in Beijing on January 16, 2004
(business wire, 2004). As the Yum! Brands, Inc., the parent company of KFC,
states in the 2003 annual customer mania report , “China continues to be our
Rising Star, driving double digit sales growth for the fifth consecutive year and
record operating profit up over 42% in 2003.” The number is the best annotation
for the announcement–in the year of 2003 China has accounted for $157 million in
KFC’s operating profit.

The economic reform opened China market to the outside world and improved the
standard of living of average Chinese people. The boost of national wealth and the
consequent increase in individual’s income has led to steady changes in Chinese
consumer patterns prevalent in pre-Mao era. China, the world’s most populous
country with a population of more than 1.3 billion, has become the largest potential
consumer market on multinational companies’ blueprints for global expansion thus
can never be ignored. In the mid of 1980, the acquisition of KFC by PepsiCo
provides KFC with heavy financial backing for further growth. In terms of the
potential of market, chicken is already familiar in China and much cheaper and
more widely available than beef. Chicken has long been regarded as a kind of
nutritious food which is especially good for the patients, the elders and children.
An increase in health conscious consumers also raises the consumption of
chicken.

http://www.franchisetochina.com/h52.htm

http/www.franchisetochina.com/franchisinginchina.html

KFC in Philippines

KFC started its operation in the Philippines in 1967; it was managed by different
franchisees. On June 1994, Manuel U. Agustines obtained the sole franchise over
the sale and distribution of KFC products in the Philippines, under the corporate
name of Quick Service Restaurants (QSR) Corporation. At present, the
management of KFC Philippines is working hard to maintain the standards and
excellence that made KFC one of the fastest growing Quick Service Restaurants
in the Industry. It is embarking on a major expansion program not only in Metro
Manila area but also in the provincial areas of the country to meet its growing
customer demand.

http://www.franchise.nfo.ph/detail/KFC-Philippines/onecat/0.html

KFC in India

KFC, the world’s largest chicken restaurant chain, set its sights on one of the
largest markets in the world, that is India with a population of 1.1 billion, the
company will have good prospects for organic growth, say analysts.52 KFC outlets
currently operating in the whole of India (under other local franchisees), Sandeep
Kohli, managing director (Indian subcontinent) of Yum! Restaurants International
(YRI), whose flagship brand is KFC, said “We plan to expand to wherever our
customers are and there is no limit to our expansion”.

http://in.answers.yahoo.com/question/index?qid=20060623020331AAZbIQj

KFC in UK
With over 750 restaurants in the UK and an annual growth rate of 15% KFC
continues to be the fastest growing restaurant brand in the UK. During the last 5
years we have opened over 200 new restaurants and want to increase this level
of opening even further over the next 5 years.

We are particularly interested in drive thru sites and food court units; we will also
consider drive to/stand alone units

http://www.kfcukdevelopment.co.uk/

KFC in Bangladesh

KFC stands for high quality fast food in a popular array of complete meals to enrich
the consumer’s everyday life. KFC strives to serve great tasting, “finger lickin good”
chicken meals that enable the whole family to share a fun. Uninhibited and
thoroughly satisfying eating experience, with same convenience and affordability
of ordinary Quick Service Restaurants.

Transcom Foods Limited, a concern of Transcom Group is the franchisee of KFC

in Bangladesh. The first ever KFC restaurant has been opened in September at
Gulshan, Dhaka with a seating capacity of 178 persons. In the coming days, KFC
plans roll out more restaurants in Bangladesh.

Different types of Activities

There’s more to KFC than great food. We promote education, diversity and animal
welfare in a number of positive ways.
Colonel’s Scholars

“The KFC Colonel’s Scholars Program is about you, your dreams and aspirations,
and the perseverance to succeed. This program is offered to high school seniors
planning to attend a public in-state college or university.

The KFC Colonel’s Scholars Program® is looking for high school seniors with
entrepreneurial drive, strong perseverance, demonstrated financial need, and who
want to pursue a college education at an accredited public institution in the state
they reside. Students who meet the criteria may apply online to become a KFC’s
Colonel’s Scholar. Students selected for this scholarship are eligible to receive up
to $20,000 to complete a bachelor’s degree program.”

http://www.kfc.com/about/responsibility.asp

http://www.kfcscholars.org/

Social diversity

“Diversity is more than a philosophy at KFC; it is part of our founding “How We

Work Together” principles. KFC’s global culture is actively developing a workforce
that is diverse in style and background, where everyone can make a difference.

We can know more about KFC’s diversification system from there Yum! Global
Diversity.

For us, diversity is not a target – it’s a way of life and a way of doing business.
Everyone can and does make a difference in our organization. One of our
HWWT2principles – Believe in all People – underscores the importance of actively
seeking diversity in others; believing everyone has the potential to make a
difference; and coaching and supporting every individual to grow to their full
capacity. This adds perspective and depth to everything KFC do. KFC’ve also
found that a diverse team makes for better problem solvers, services all KFC’s
customers more effectively, and creates a richer culture for all of us to enjoy.

KFC are also increasing the representation of African Americans, Hispanics and
women among our key talent/decision makers, and growing the pipeline of
diversity in their mid-level manager ranks. All of KFC’s brands have leadership
initiatives focused on high-potential diversity talent, and all leaders serve as
mentors. In addition, last year each of the brand presidents went into their
communities to provide business-growth coaching for local networks of minority
businesses.
Making progress in diversity is a business priority and the work of everyone in our
system. This commitment is reflected in David Novak’s annual goals, or “Blue
Chips.” KFC also have a dedicated Global Diversity and Inclusion Officer who
guides their strategy and a number of initiatives that enhance their inclusive
workplace.

Part of KFC’s growth strategy will be to ensure that our leadership team, company
workforce and culture are as diverse as our customers around the world.”

“Diversity, inclusion and engagement are simply part of KFC’s core values at
Yum.’Believe In All People’ means tapping into the diverse skills, cultures,
perspectives and experiences of each of our associates to drive great marketplace
performance. Our strategic diversity and inclusion vision is to grow leadership,
franchisee and supplier pipelines that increasingly reflect our diverse customer and
investor base.” Said by Terrian Barnes (Yum! Global Diversity and Inclusion
Officer)

http://www.kfc.com/about/responsibility.asp

http://www.yum.com/responsibility/diversity.asp

Supplier Code of Conduct

“Yum! Brands are committed to conducting business in an ethical and responsible

manner. To encourage compliance with all legal requirements and ethical business
practices, Yum has established a Supplier Code of Conduct for its U.S. suppliers

 Compliance with Laws and Regulations:

Suppliers are required to abide by all applicable laws, codes or regulations

including, but not limited to, any local, state or federal laws regarding wages and
benefits, workmen’s compensation, working hours, equal opportunity, worker and
product safety. Yum also expects that Suppliers will conform their practices to the
published standards for their industry.

 Employment Practices:

KFC follows some rules and regulations in performing there operations, which
leads a good relations with their suppliers.

 Working Hours & Conditions:

In compliance with applicable laws, regulations, codes and industry standards,

Suppliers are expected to ensure that their employees have safe and healthy
working conditions and reasonable daily and weekly work schedules. Employees
should not be required to work more than the number of hours allowed for regular
and overtime work periods under applicable local, state and federal law.

 Non-Discrimination:

Suppliers should implement a policy to effectuate all applicable local and federal
laws prohibiting discrimination in hiring and employment on the grounds of race,
color, religion, sex, age, physical disability, national origin, creed or any other basis
prohibited by law.

 Child Labor:

Suppliers should not use workers under the legal age for employment for the type
of work being performed in any facility in which the Supplier is doing work for Yum.
In no event should Suppliers use employees younger than 14 years of age.

Besides above rules KFC also have other rules such as Forced and Indentured
Labor and Notification to Employees.

 Audits and Inspections:

Each Supplier should conduct audits and inspections to insure their compliance
with this Code and applicable legal and contractual standards. In addition to any
contractual rights of Yum or Unified Foodservice Purchasing Co-op, LLC (“UFPC”),
the Supplier’s failure to observe the Code may subject them to disciplinary action,
which could include termination of the Supplier relationship.

http://www.kfc.com/about/responsibility.asp

http://www.kfc.com/about/supplier.asp

Animal Welfare program

“Yum! A brand, parent company of KFC, is committed to the humane treatment of

animals. Yum! A brand is the owner of Restaurant Company’s and as a major
purchaser of food products, Yum have the opportunity and responsibility, and to
influence the way animals supplied to us are treated.

Yum take that responsibility very seriously, and they are monitoring their suppliers
on an ongoing basis to determine whether their suppliers are using humane
procedures for caring for and handling animals they supply to us. As a
consequence, it is Yum’s goal to only deal with suppliers who promise to maintain
our high standards and share their commitment to animal welfare.
To assist us in that effort, Yum! Brands formed the KFC Animal Welfare Advisory
Council, which consists of highly regarded experts in the field. The Council
provides Yum with information and advice based on relevant data and scientific
research. The Animal Welfare Advisory Council has been a key factor in
formulating our animal welfare program.

KFC has implemented a farm level audit program – a program which is industry-
leading in the areas of poultry care and handling.”

Other services or activities done by KFC are –

KFC’s news room services, where they provide updated news of KFC. From where
we can know about KFC’s new launch menus, prices of new menus, there social
service activities and many other activities.

http://www.kfc.com/about/responsibility.asp

http://www.kfc.com/about/animalwelfare.asp

http://www.kfc.com/about/newsroom/default.asp

Criticism of KFC

KFC has been criticized for different things; Critics accuse KFC offences against
animal protection regulations. Those disputed animal protection organization
PeTA (People for the Ethical Treatment OF Animals) started for its part 2003 a
world-wide action with the name “Kentucky Fried Cruelty” ,2003 joined Pamela
Anderson PeTA and the campaign against KFC, which pushed consumers to
boycott KFC until a better treatment of the “chickens”.PETA undercover
investigations and videos of these and other KFC suppliers purport to show
chickens being beaten, ripped apart, and thrown against walls contradict KFC’s
claims. PETA has criticized some of the practices of chicken breeders, such as
beak trimming and overcrowding, PETA states that they have held more than
12,000 demonstrations at KFC outlets since 2003 because of this alleged
mistreatment of chickens by KFC suppliers.

Greenpeace accused KFC of destroying the Amazon Rainforest. This is because

KFC bought their soy they use for chicken food from Cargill. The soy has been
traced back to the European KFC. Cargill has reportedly been exporting soy
illegally for several years. The Greenpeace organization researched the issue and
brought it to the attention of the parent company YUM! Brands, Inc.
KFC has a long time to market with new products. Because of the nature of the
chicken segment of the fast food industry, innovation was never a primary strategy
for KFC. However, during the late 1980’s, other fast food chains, such as
McDonald’s, began to offer chicken as a menu option. During this time,
McDonald’s had already introduced the McChicken while KFC was still testing its
own chicken sandwich. This delay significantly increased the cost of developing
consumer awareness for the KFC sandwich.

Conflicting cultures of KFC and Pepsi Co, While KFC’s culture was largely based
on the Colonel’s laid back approach to management, while PepsiCo’s culture is
more of a “fast track” attitude. Employees do not have the same level of job security
that they enjoyed before the PepsiCo acquisition.

The advertising campaign of KFC does not specifically appeal to any segment. It
does not appear to have a consistent long-term approach. The U.S. has enormous
changes in its demographics. Single-person households have increased from 12%
in 1970 to 25% in 1995. With this kind of dramatic change, KFC does not have a
proper approach to its target market.

http://www.economy-point.org/k/kentucky-fried-chicken.html

http://simple.wikipedia.org/wiki/Kentucky_Fried_Chicken

RECOMMENDATIONS

KFC should meet all legal business requirements to enhance their survival
competence. The Department for Environment, Food and Rural Affairs
recommends a maximum stocking density of 34 kg—around 30 chickens—per
square meter, and say that in circumstances where beak trimming needs to be
carried out to prevent the birds injuring each other, only one third of the beak
should be trimmed “measured from the tip towards the entrance of the nostrils”.

http://simple.wikipedia.org/wiki/Kentucky_Fried_Chicken

KFC should stop purchasing soy from Cargill, to avoid contributing to the
destruction of the Amazon.

KFC should give more emphasis on products innovation strategy and should
launch new products rapidly to keep pace with the competitive market.

KFC should conform its culture to PepsiCo.

KFC should have a defined target market.

CONCLUSION

KFC is a global company with a diverse and ever-changing workforce, faces

significant challenges in operating their businesses internationally but they faces
those challenges strategically, adapt with policies to these markets. KFC Built a
diverse foundation to operate as a local business in international markets.Criticism
work as a motive toward success. Though criticism rose about KFC but it could not
hinder its success because of their policy and strategy. A proverb goes on
“prosperity’s right hand is industry”, by expanding its operations globally KFC
facilitated its success and become famous to worldwide, which proves that “Fame
is the perfume of heroic deeds”.