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    Project Dissertation ON KFC'S Operation Strategies

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    Project Dissertation ON KFC'S Operation Strategies

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    KFC Operational Staregy 17122020

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    329 views32 pages

    Project Dissertation ON KFC'S Operation Strategies

    Uploaded by

    Tv

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    PROJECT DISSERTATION

    ON
    KFC’S OPERATION STRATEGIES

    DELHI SCHOOL OF MANAGEMENT


    Delhi Technological University
    Bawana Road, Delhi 110042
    Sept - Dec 2020

    Under the Guidance of: Submitted By:


    ❖ Dhiraj Kumar Pal ❖ Piyush Raj Gandhi
    (Professor) (2K20/EMBA/28)
    Productions & Operations Management ❖ Pushp Ranjan Mishra
    (2K20/EMBA/29)
    KFC’s Operation Strategies

    2
    Introduction
    • Based in Louisville, KFC Corporation is the
    franchisor of the world's most popular chicken
    restaurant chain.
    • KFC has been serving customers complete,
    freshly prepared, family meals since Colonel
    Harland Sanders founded the concept in 1952.
    • There are more than 18,000 KFC outlets in 118
    countries and territories around the world.
    • There were 380 KFC outlets in India as of
    December ,2018 and was also aimed to have 500
    outlets by 2020 year end.
    3
    VISION AND MISSION

    VISION:
    To be leading integrated food services group
    in ASEAN region delivering consistent
    quality products and excellent customer focused

    MISSION:
    To maximize profitability, improve shareholder
    value and deliver sustainable growth year
    after year.

    4
    Logo

    Tag Line

    5
    Products of KFC

    6
    7
    SWOT Analysis
    Strengths Weakness

    •World's second largest restaurant chain. • Most KFC items have close substitutes in
    • Famous for its Original Recipe® fried market.
    chicken, made with secret blend of 11 • Unhealthy food menu.
    herbs and spices. • Increase in food price (unaffordable by
    •Well recognized brand logo. middle class people).
    • Market leader in the world among • Having very few own activities in KFC
    companies featuring chicken as their franchisees (copying other ides).
    primary product.
    Opportunities Threats

    • Cross culture: There is a good • Saturated fast food markets in


    acceptance of American culture of fast developed economies.
    food in India. • Competition from McDonalds,(world’s
    • Increased 18-25 age group. largest restaurant chain) and from other
    • Increasing trends to take meal out of players.
    homes. •High calorie food.
    •Bird flu. 7
    Michel Porter Analysis
     Buyer Power  Supplier Power
    • Large number of buyers (+). • Large no. of suppliers are available
    • Switching cost is low(+), because for KFC’s raw material.(-)
    there are other fast food • Switching cost is high, as
    restaurants (McDonalds, burger suppliers can’t switch easily
     king etc)that are offered more because there are others suppliers(
    affordable price. big suppliers, local market) too in
    • KFC started decreasing their the market, supplying to
    prices & offering discount to competitors of KFC.(-)
    attract customer back.(-) • KFC also terminated contract with
    • Buyers are able to influence the
     the supplier , as suppliers are found
    price , as they are having many
    with doing the raw something
    choices.(+)
    horrible chicken. So KFC decided
    to replace its supplier.
    Cont..

    ➢ Threat of New entrants ➢ Threat of Substitute


    Products
    • Easy to enter the • Substitute are available
    market, as large no. of in the market, offering
    suppliers & resources chicken product same
    are available.(+) as KFC.(+)
    • Low entry barriers.(+) • Substitutes available at
    • New entrants may lower price.(+)
    attract the existing
    customer of KFC.(+)
    Cont.

    ➢ The Rivalry among the existing firm in


    the Industry
    • There are too many big giants in the market
    like McDonalds, Burger king, Dominos, Pizza
    hut etc. (+)
    • McDonalds is giving a huge competition to
    KFC, as the prices of McDonalds is
    comparatively lower than KFC and more
    varieties in menu card of McDonalds is
    available.(+)
    STRATEGIC MAP

    Service

    No. of outlets

    Price

    Extensive Menu
    Order winners and Order qualifiers
    Order winners and order qualifiers are the competitive features
    of any organization that the customers examine before making
    a purchase. So it is necessary for a company to analyse the
    same.

    Order Winners Potential Order loss Order qualifiers


    •Unique taste of chicken. •Poor quality of food. •Quality of the food.
    •Regional Menu. •High cost than the •Taste of the food.
    •Dependable supply. competitors. •Take away.
    •Restaurant location. •High lead time. •Lead time
    •Opening/Closing time •Poor customer service. •Hygiene.
    • Wide range of veg & non- • unethical.
    veg items.

    KFC’s order winners and Order qualifiers


    Delights

    • Adding value to customer experience is


    considered to be very significant component
    in today’s business.

    • Delights are novel and also adds value to the


    customers there by improving customer
    satisfaction.
    Cont..

    KFC’s Order winners, qualifiers and delights


    The four -stage model of operation
    contribution

    The four stage model of operations contribution applied to KFC


    Supply Chain Management of KFC
    Cont.

    KFC has a very simple supply chain. As the operations are on a relatively
    small scale, all the operations are performed by the company (i.e. Cupola)
    itself. The supply chain process can be summed up as a 3 step process:

    Step 1:
    Raw materials procured from various suppliers and stored at two
    warehouses; the normal-storage and the cold-storage.

    Step 2:
    All product preparation is done at the branch except for the marination of
    chicken and sold to customers at the branch itself or delivered at
    the desired locations.

    Step 3:
    Warehouses replenish each branch according to their requirement (usually
    three times a week)using company’s own vehicles and drivers upon the
    request of the branch manage
    STORAGE AND INVENTORY MANAGEMENT

    Chicken
    Inventory of chicken is for 15 days. The storage area for
    chicken is not in the warehouse itself but in a separate cold
    storage area built right beside the warehouse in each region.
    Before marinating, the chicken is stored in an organized form
    in six separate cold storage rooms whose area is around 45 to
    50 square feet, having a height of around 7 feet. The chicken is
    stored in the same baskets which it comes in and stays there
    till its turn for marinating .Marination is done in a separate
    room in the same cold storage facility where the chicken is
    first washed and mixed with the herbs and spices it needs. The
    mixture is fed into a machine known as ‘Tumbler’ which
    marinates it. After this is done the chicken is re packed into
    labeled clear storage room again in organized form.
    Assembly Line
    Store Layout & Location
    Cont.

    Factors kept in mind while


    Facility location analysis:

    •Proximity to Customers.
    •Business Climate.
    •Total Costs.
    •Infrastructure.
    •Quality of Labor.
    •Host Community.
    KFC vs McDonald’s
    Value Chain
    Value Chain of McDonald’s
    COMPARISON/FAST FOOD KFC MCDONALD’S
    RESTAURANT

    SPECIALIZES FRIED CHICKEN HAMBURGER

    ESTABLISHMENT 1890 1940

    AMOUNT OF OUTLET IN 380 : dec, 2019 250+


    INDIA

    TOTAL OUTLETS 18875: dec,2020 38695: dec,2019

    COUNTRIES 120 119


    COMPARISON/FAST FOOD KFC MCDONALDS
    ERSTAURANT

    WIFI AVAILABLE AVAILABLE

    DRIVE-THRU AVAILABLE AVAILABLE

    SERVICE DELIVERY SYSTEM AVAILABLE AVAILABLE

    THEME (COLOURS) RED & WHITE RED & YELLOW

    FIRST OUTLET IN INDIA BRIGADE ROAD IN BASANT LOK IN NEW


    BANGLORE DELHI
    KFC Menu
    McDonald’s Menu
    Conclusion

    •KFC is second largest fast food chain after McDonald’s,


    prices of KFC are high and it targets to middle and upper
    class people , where as McDonald’s targets to all class
    people because of their low prices.

    •KFC is specialized in chicken and till now no one can


    beat it in chicken.

    • To be the market leader KFC has to lower its price and


    should widen its menu card in terms of variety of
    choices as McDonald's have.

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