KFC’S
GLOBAL
STRATEGY
Instructor: Miss Hoàng Thị Quế Hương
and Miss Trần Mỹ Linh
Class: 231KD0303
Group perform: LOGINATOR
LOGINATOR’s members
Trần Huỳnh Quang Huy
Lê Hoàng Băng Trinh
K214020124
Trần Nguyễn Thiên Phú
K214020165
Trần Quốc Hưng
K214020125
K214020140
Phạm Ngọc Trí Nhân
K214020137
Table of Content
01
Introduction of the local firm
02
The industry’s level of
globalization
03
The global strategic direction
of KFC
04
Operations in Vietnam
05
Recommendations to solve
KFC's problems.
1. Introduction of the local firm.
1.1.Business information and business
model strategy.
KFC holds a prominent position in the fast-food industry,
with a presence in over 145 countries and an extensive
network of 25,000 outlets, earning it the rank of the thirdlargest global fast-food chain. It was one of the 1st American
fast-food chains to venture into international markets. As of
2023, the brand boasts a substantial estimated brand value
of approximately $17,662 million.
1.1.1. Business model of KFC
KFC’s management cannot oversee all
the operations of its outlets over the
world by sitting in one city. Thus, KFC
adopted the Franchise Model as its
Business Model just like the other fastfood restaurant joint did.
1.1.2. KFC’s Value Proposition
High-quality food
Prices
Ambiance and staff
Variety of options
Brand name and loyalty
1.1.3. KFC’s key Partners
Franchise Partners
Suppliers and Vendors
Marketing Partners
Delivery and Distribution Partners
1.1.4. Business model of KFCchannels
KFC primarily caters to its customer base
through a vast network consisting of over
25,000
outlets
strategically
located
worldwide.
In addition to this, KFC offers the
convenience of online ordering through
their website or app.
1.2. Product.
KFC's core product offering is pressure fried on-the-bone chicken pieces seasoned with Colonel Harland Sanders' "Original Recipe" of 11
herbs and spices.
McCormick & Company is KFC's largest supplier of sauces, seasonings and marinades and is a long-term partner in new product
development.
2. The industry’s level of globalization.
2.1. Pressures for cost reduction: Low
The KFC industry is characterized by a high degree of standardization and
economies of scale.
Economies of scale
Global sourcing
Standardization
2.2. Pressures for localization: High
Despite the pressures for cost reduction, there are also strong pressures for
KFC to localize its operations. This is because KFC's customers have
different tastes and preferences in different countries.
Cultural differences
Regulatory differences
Political differences
2.3. Balancing the pressures for cost
reduction and localization
KFC must carefully balance the pressures for cost reduction and localization
in order to be successful.
KFC has a number of strategies for balancing the pressures for cost
reduction and localization.
The KFC industry is likely to continue to globalize in the future.
Overall, the KFC industry is characterized by a moderate level of globalization.
There are pressures for both cost reduction and localization, and KFC must
strike a balance between the two.
On the overview of the business model of KFC, we
can clearly see that the company utilized its
business model very well and has been growing at a
wide range.
3. The global strategic direction of the firm.
3.1. Pressures for Cost Reductions
1. Chicken has become a
global demand
With it being a source of protein that
is affordable and easy to prepare.
Moreover, with its secret recipe and
strong brand, KFC fried chicken has
become a global demand.
3. Facing with major local
competitors located in
low-cost locations
Labor costs
Real estate costs
Supply chain costs
Regulatory compliance costs
Pressure for maintaining product
and
service
quality
with
an
affordable price
2. Excess capacity when
entering new markets
Fixed cost burden
Pricing pressure
Reduced efficiency
Inventory management
4. Powerful customer and low
switching cost
Price - competitive customer
Many copetitors which means
customers have high bargaining
power
Customer loyal to local brand
Have access to information about
prices and services leads to more
choices
3.2. Pressure for local responsiveness.
Each country and territory has its own culinary culture and unique social
factors, and these factors create the characteristics of consumers in that
area:
Rising consumer expectations: Consumers are increasingly
demanding products and services that are tailored to their local needs
and preferences.
Growing competition: increasing competition from both local and
international chains.
Changing consumer demographics: The global consumer base is
becoming more diverse, with a growing number of consumers from
emerging markets. These consumers have different tastes and
preferences than consumers in developed markets.
Therefore, KFC must ensure its operations. its operations comply with local
laws and adapt its business model to local market structures and consumer
behavior
3.3. KFC’s international strategy.
The main method by which KFC penetrates worldwide is a
mix between franchising, joint ventures and localization. KFC
franchise with consistent global store chains but with
American-style fast food mixed in flavors, a special menu list
with bold flavors is of the local hometown where KFC is
present.
KFC is also one of the world's most famous franchising
companies with a series of strict standards to build
consistent and quality restaurant chains. With 145 countries
and territories around the world - each country with KFC has
a localized menu that caters primarily to unique local tastes
and preferences. Moreover, KFC's marketing campaigns are
tailored to local audiences, using language, imagery, local
celebrities and influencers to reach a wider audience.
3.3. KFC’s international strategy.
Beijing chicken wrap
Vegitarian menu
4. Operations in Vietnam.
4.1. R&D.
Target market selection: Because of KFC's market
targeting young people, the Vietnamese market is
considered a promising market.
=> 17 restaurants compared to more than 34 restaurants
in the KFC chain worldwide.
Market Research:
+ Market Segmentation by Geography
+ Demographic Segmentation
+ Segmentation by psychology and consumer behavior
R&D planning: focus on improving new products,
improving existing products and apply new
technologies in KFC production.
Improving
existing products
Diversifies KFC
products, creating an
extremely rich menu
Updating newest KFC
dishes continously
Investing new healthy
frying oil
Improving new
products
Updating number of
additional dishes to
serve KFC food that suit
Vietnam tastes
Differentiate themselves
from other products by
mixing 11 different
spices,
Applying new
technologies
3D printing technology
Robot technology
Developing a mobile
application system
4.2. Marketing.
KFC's Marketing 4P Mix Strategy: "Localization" is a great success
Product-East and West
combine perfectly
KFC still maintains its traditional products of
original fried chicken and hamburgers. In
addition, the brand also innovates many
unique dishes to meet the tastes and eating
customs of Vietnamese consumers.
Place - Success with
distribution channel
Choosing Ho Chi Minh City as its first
destination in the Vietnamese market.
Operated its stores in airy locations with
large spaces and eye-catching. To date, KFC
has expanded its presence in 21 cities in
Vietnam.
(Price) - Minimalist to suit
Vietnamese spending
Using low prices to make customers more
familiar with the brand.
Make promotional programs and special
prices for VIP card members.
Promotion - Strong
advertising on the media
Presenting in all forms of media such as
television, billboards and online advertising.
Built a two-way communication channel.
Make impressive campaigns, slogans to
improve brand value.
4.3. Production.
The production layout method of KFC production process is group layout:
Chicken Processing Area:
Burger processing area:
4.4. HRM.
Organizational structure:
KFC in Vietnam operates under the franchise method, managed by a regional director > management under
> customer service team.
=> The company's organizational structure according to departments and decentralized groups.
Besides, KFC's HRM activities also need to have such as: Forecasting human resource needs, Forecasting resource
supply, Recruitment strategy
4.5. KFC's supply chain.
Supply chain model of KFC.
Analysis of KFC's supply chain model indicates that
core suppliers can be classified into two categories.
Type 1 is providing processed products such as chili
sauce, sauce. Category 2 mainly provides fresh,
unprocessed foods such as chicken, beef, and potatoes.
Supply chain management
Supplier
Quantity and Time
Usage Cost Management
How to manage
KFC builds a sustainable supply chain by using
Distribution Resource Planning (DRP)
5. Recommendations to solve KFC's problems.
5.1. Adjustments in the global
management structure.
KFC should have a combination of
centralized
and
decentralized
organizational structure in its digital
transformation process.
5.2. Digital
transformation.
5.3. Improve product
healthiness.
Especially for multinational companies
like KFC, there is a need for clarity and
transparency of information on the
management system.
Big data also helps KFC identify useful
information for administrators to make
effective decisions.
KFC should take advantage of raw
materials
available
in
agricultural
countries, such as vegetable oil, a type of
natural fat that has health benefits, or
frying
techniques
at
the
right
temperature to help Limit substances
that are not good for health.
5. Recommendations to solve KFC's problems.
5.4. Promote competitive
advantage.
KFC, in addition to product improvements,
also needs to have campaigns to enhance
its reputation to boost market share and
gain a certain position in the hearts of
consumers.
5.5. Plan to stabilize the
supply of raw materials.
5.6. Overcome
advertising restrictions.
Due to example in the UK, this is also a
lesson for KFC about the need to
stabilize the supply of raw materials
with specific plans, in addition they
need to have alternative options to
prevent risks.
KFC needs to make smart choices and
careful consideration when implementing
promotional campaigns and different
types of advertising for its brand as it is a
multinational enterprise doing business
in many countries. different cultures.
References
1. The Digital School - IIDE, Aditya Shastri, Detailing the Business Model Of KFC
from End-to-End <https://iide.co/case-studies/business-model-of-kfc/>
2. FINMODELSLAB <https://finmodelslab.com/products/kfc-franchise-valueproposition-canvas>
3. MASHED, 9 Ways KFC Is Completely Different In Other Countries
<https://www.mashed.com/29305/9-ways-kfc-completely-different-countries/>
4. STUDOCU, Phân tích bên trong KFC,
<https://www.studocu.com/vn/document/dai-hoc-hue/phan-tich-thiet-ke-he-thong/phan
-tich-ben-trong-kfc-tai-lieu-thuc-hien-boi-sing-vien/20758018>
5. STANDARDIZATION VERSUS ADAPTATION STRATEGY IN INTERNATIONAL MARKETING
MIX, The case of KFC in Vietnamese market
<https://www.utupub.fi/bitstream/handle/10024/149717/Bui_Mai_Thesis.pdf;jsessionid=
8B2BEEC8F2FBFA741DC1D4037DE20D19?sequence=1>
6. Marketing AI, Chiến lược Marketing của KFC - Đi đến đâu "bản địa hóa" đến đó
<https://marketingai.vn/chien-luoc-marketing-cua-kfc-di-den-dau-ban-dia-hoa-den-do-19441732.html>
7. UTLOGSCLUB, The Layout of Production at KFC <https://utlogsclub.com/the-layout-of-production
-at-kfc/>
8. KFC Việt Nam - Ứng dụng nhà hàng đặt đồ ăn uống <https://zinpro.vn/vn/kfc-vietnam-ung-dung-nhahang-dat-do-an-uong_d83.html>
9. A REPORT ON FAST FOOD RESTAURANT SERVICES OPERATIONS OF KFC
<https://www.studocu.com/vn/document/dai-hoc-quoc-gia-ha-noi/operating-system/group-9-fkcins202306-2-quan-ytij-hooatj-d/33397608>
10. VnExpress - KFC chế quảng cáo theo pha ăn vạ lăn lộn của Neymar <https://vnexpress.net/kfc-chequang-cao-theo-pha-an-va-lan-lon-cua-neymar-3773307.html>
11. VnExpress - Hãng đồ ăn nhanh nhại lời khoe nút bấm hạt nhân của Trump
<https://vnexpress.net/hang-do-an-nhanh-nhai-loi-khoe-nut-bam-hat-nhan-cua-trump-3695458.html>
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