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 Description
Kentucky Fried Chicken is one of the most
world-renowned fast food restaurants in the world, and remains the world’s most
popular chicken restaurant chain. Today there are more than 13,000 chains around
the world in 90 different countries and territories. The national KFC base is in
Louisville, Kentucky. Around 8 million people are served at a KFC every single
day.
Timeline
1890 – Colonel Harland Sanders, the founder
of the KFC Corporation, was born.
1932 – Colonel Sanders developed his
special blend of 11 spices and herbs, which marked the beginning of his famous
Original Recipe chicken.
1935 – The Colonel became known as the
Kentucky Colonel; this name is what later became incorporated in the name
Kentucky Fried Chicken.
1939 – After years spent improving the
quality of his products, the Colonel improved his chicken frying process
drastically by purchasing a pressure cooker.
1950 – A highway was built right through
the Colonel’s town where his chicken business was…so he shut the business down
and lived off his social security checks.
1952 – He couldn’t stay away…the chicken
was so good that Colonel Sanders began traveling across the country, selling his
chicken to restaurant patrons at a nickel apiece. This allowed his to begin
franchising his special blend of spices for his chicken.
 
1964 – Colonel Sanders sold the KFC
franchising corporation, now doing rather well, to John Brown Jr. for $2
million. At this point in time, there were more than 600 KFC franchises in the
USA.
1966 – KFC went public with its franchises
and special chicken recipe.
1969 – KFC was listed on the New York Stock
Exchange for the first time.
1971 – Heublin, Inc. acquired over 3,500
Kentucky Fried Chicken franchises for the petty sum of $285 million.
1973 – The first KFC opened overseas,
Malaysia being the first lucky recipient of the American owned and operated
corporation.
1976 – Colonel Sanders received an award
for becoming the world’s second most recognizable celebrity.
1980 – Sadly, Colonel Sanders passed away.
However, his legacy carried on and is still widely recognized today.
1982 – R.J. Reynolds bought Heublin Inc.,
and in turn KFC became a subsidiary of RJR.
1986 – PepsiCo acquired the KFC Corporation
from R.J. Reynolds for $840 million.
1995 – KFC started an award program, the
Colonel’s Way Award, to recognize senior citizens that are living life to the
fullest and do all they can despite their age.
1997 – PepsiCo announced its spin-off of
fast-food restaurants, KFC, Taco Bell, Pizza Hut, A&W, and Long John Silvers,
into a separate company entirely – Tricon Global Restaurants.
2000 – KFC founded the Colonel’s Kids
Charity to help kids afford education and get a good start in life
2002 – Tricon Global became Yum! Brands,
Inc., which it remains to this day.
2005 – Today there are 13,266 KFC
franchises around the world, 5,525 in the U.S. alone.
External Environment
-Owners
Gregg C. Dedrick, age 45, President of KFC Corp.
Many individual owners of franchises and establishments
around the globe
Yum! Brands, Inc. owns KFC Corp. today
-Customers
Consumers continue to return to KFC because of the quality
and good prices of their food
KFC has a lot of fans and continues to grow to provide
better customer service
-Suppliers
Companies who provide KFC with raw materials and chicken
-Competitors
Chick-fil-a is KFC’s biggest competitor, and quickly growing
in popularity
Other competitors include AFC Enterprises and McDonald’s
-Indirectly Interactive Forces
State and government taxes
Economic situation and food availability
Legal and political guidelines for animal treatment
Mission Statement
“Recognition: we find reasons to celebrate the achievements of others
and have fun doing it,” is right up there with “Customer Focus” and “Belief In
People.” "Recognition is everybody's responsibility," says Chicago restaurant
manager Adonis Chapel. He explains that since KFC started encouraging informal
recognition, things have really changed. "You keep employees longer, they are
happier, they work better for you."
 
Founding
Truths
“We at Yum! Brands, Inc.,
pledge to conduct our business according to this set of truths, which we believe
to be the foundation for building the best restaurant company in the world.”
The founding truths are:
People
Capability First…Satisfied customers and profitability follow.
Respond
To The Voice Of The Customer…Not just listen.
The
Restaurant General Manager Is Our #1 Leader…Not senior management.
Run
Each Restaurant As If It’s Our Only One…Avoid the trap of the averages.
Recognition Shows You Care…People leave when you don’t.
Great
Operations and Marketing Innovation Drive Sales…No finger pointing.
Operation Discipline Through Process and Standards…Consistency, not “program of
the month”.
Franchisees Are Vital Assets…Operate as one system, not two.
Quality
In Everything We Do…Especially the food.
Vision
Quoted from Yum! Brands, Inc., KFC’s parent corporation: “Our passion,
as a restaurant company, is to put a YUM on people's faces around the world,
satisfying customers every time they eat our food and doing it better than any
other restaurant company. A&W, KFC, Long John Silver's, Pizza Hut, and Taco Bell
offer customers food they crave, comeback value, and customer-focused teams. The
unique eating experience at each of our restaurants make our customers smile and
inspire their loyalty for life. Toward that end, our 750,000 associates around
the world are trained to be customer maniacs.”
Strategy
Quoted from Yum! Brands, Inc., KFC’s parent corporation: “The company's
long-term strategy is focused around key areas of strength and opportunity,
built on Yum! Brands' foundation as the franchisor of its brands: A&W
All-American Food, KFC, Long John Silver's, Pizza Hut, and Taco Bell worldwide.
The company operates with five long-term measures identified as essentials of
corporate growth and progress . . .”
1. International
Expansion
“Yum! Brands number-one goal is to drive global expansion with its
category-leading brands. In 2002, the company opened a record 1,051 new
international restaurants and increased international system sales 9% prior to
foreign currency conversion.”
2. Multibrand Innovation
& Expansion
“Yum! Brands is the worldwide leader in multibranding, offering
consumers more choice and convenience at one restaurant location from a
combination of two of the company's brands. The company and its franchisees
today operate over 1,975 multibrand restaurants, generating over $2 billion in
annual system sales. Approximately 350 new systemwide multibrand restaurants
were opened in 2002.”
3. Portfolio of
Category-Leading U.S. Brands
“U.S. systemwide same-store sales increased approximately 4% while
U.S. same-store sales at company restaurants increased approximately 2% in
2002.”
4. Global Franchise Fees
“Global franchise fees, a significant factor in annual profits and
cash flow, grew 6% to $866 million. Global franchise net restaurant growth was
2% in 2002.”
5. Strong Cash Generation
and Returns
“Yum! Brands generated over $1.3 billion in cash from all sources in
2002, more than fully funding capital expenditure needs, allowing free cash flow
for share repurchase, and some repayment of debt. Return on invested capital is
18%, in the restaurant industry's top tier.”
 
Culture
-
Big on diversity in the workplace
-
Promotes differences in background, ethnic cultures,
and values
-
Team-oriented environment
-
Focuses on teaching everybody something new
-
Promotes unity in the workplace
-
Focuses on building relationships and creating
diversity and commitment within the company and amongst employees and customers
 Organizational
Structure and Design
-
KFC is part of a divisional structure, which is Yum!
Brands, Inc.
-
Long John Silver’s, A&W, Taco Bell, and Pizza Hut are
the other divisions
-
Offers positions to many people; good for senior
executives
-
Willing, responsive, and flexible to change and growth
-
KFC works to
bring recognition and money to Yum! Brands, Inc.
Human Resource
Management
“We won’t make you wing it”
is KFC’s motto when it comes to training employees.
§
Training includes: 1)
Workbooks
2) Quizzes
3) On-the-job competency based
training
§
Employees are
encouraged to work together as a team
§
KFC is committed to
making sure their people grow to their highest potential
§
KFC does their best
to make the job interesting and exciting for workers
  
Social Responsibility
·
KFC has made it their
responsibility to consumers that they will provide quality chicken in a fast,
efficient way.
·
They also say that
their meat comes about ethically and through humane treatment. This has not
always proved true in the past, since the PETA has become involved with their
warehouses that “grow” the chickens. KFC has made statements to the patrons of
KFC,  though,
that the chickens will not be treated badly in the progression from birth to the
processing plant.
·
KFC sponsors a reward
for senior citizens, those who live life to the fullest and are recognized in
their community
·
KFC also has the
Colonel’s Kids program, a charity organization that helps kids become educated
and grow up in a better world than that which they have known. It addresses the
child care crisis and steps up to the plate to help out where possible.
·
Scholarships and
diversity programs are a part of KFC’s social responsibility as well
Recently, the PETA group
secretly recorded a worker at the Pilgrim’s Pride, one of the processing plants,
beating a live chicken against the wall in order to kill it. As soon as KFC was
notified of this treatment, they immediately submitted a written statement
saying that the treatment was “appalling” and took action immediately, placing
an animal welfare expert at the plant to ensure the ethical, humane treatment of
the chickens.
The statement said that: "We
do not tolerate animal abuse by any of our suppliers, under any circumstance.”
KFC also told the company Pilgrim's Pride that, "unless they can definitively
assure us there are absolutely no abuses taking place, we will not purchase from
this Moorefield, West Virginia, facility.” PETA says that more action should be
taken, but KFC has done all it can to ensure that people are happy with the
facilities and means by which their food comes about.
  
International
Operations
·
KFC opened its first
franchise overseas in 1973 in Malaysia
·
KFC is a very diverse
company and has 750,000 people employed around the world
·
7,741 of the Kentucky
in China, Japan, Korea, Germany, Italy, the Bahamas, etc.
·
KFC is devoted to
Fried Chicken franchises are in countries other than the United States
·
The incredible
success of this company has given it the opportunity to compete globally with
other corporations and gain in popularity worldwide
·
 KFC franchises are located diversity and is willing to give just about
anyone a chance to begin their career by working at one of their locations –
they are good at choosing a range of people to work at their stores, whether
different by race, religion, skin color, or heritage.
·
Expanding their
global business is one of Yum! Brands, Inc.’s key growth strategies
·
In 2001, KFC opened
their 500th store in China, the fastest growing and most profitable
country outside the U.S. KFC was rated the #1 brand in the entire country for
that year
·
KFC (as a division of
Yum! Brands) continues to grow substantially throughout the world as a fast food
enterprise, and there is much more success and growth in the future
Kentucky Fried Chicken is a
registered trademark of Yum! Brands, Inc.
Analysis
The Kentucky Fried Chicken
Corporation is a very successful company that has grown to be the fast food
giant it is today through good management practices and good planning. Their
mission statement is very clear: recognition is key. They are all about
diversity and helping people grow in any way they can, and focus on customer
satisfaction as well. Their parent corporation, Yum! Brands, Inc., states that
they want to put a Yum! on people’s faces around the world. Their goals include
being the best in the business, which they have definitely accomplished, and
focusing on customer satisfaction as a major part of their environment. KFC
desires to offer good food, comeback value, and customer-focused teams to
consumers throughout the world; they want to have loyal customers who will come
back time and time again to enjoy their food.
From its start in 1939 all
the way to the present date, KFC has been a hit in the fast food industry. Their
company history is pretty incredible, especially watching huge sums of money
accumulate for sale as the company passed from hand to hand from John Brown Jr.,
to RJR, to Heublin Inc, to PepsiCo, to Tricon Global Industries, and finally to
Yum! Brands, Inc. The company has done a lot for the community and kids all over
the world. KFC has grown to be a huge network of franchises around the globe;
there are a total of 13,266 KFC franchises around the world today – 5,525 of
those are in the United States alone.
KFC has created a strategy
that is focuses on strength and opportunity. They want to expand
internationally, offer consumers more choices at their restaurants, and provide
good services to their customers. They have incorporated a growth strategy into
their company because they fully intend to be the largest fast food chicken
corporation in the world; they seem to have already accomplished this goal, but
also intend to stay well ahead in the game by franchising KFC buildings
throughout every country in the world.
Kentucky Fried Chicken part
of a divisional structure, one in which departments are grouped together
according to the outputs of the organization and each separate division is
responsible for producing one single item or product. KFC is part of the
divisional structure of Yum! Brands, Inc., their parent corporation. It is one
huge organization that oversees several smaller companies, including Long John
Silvers, Taco Bell, Pizza Hut, and KFC. KFC shows that it is a divisional
structure through many aspects – first and foremost being through focusing the
attention of their managers and employees on the outcome and results for the
customer or the location. Because the environment can have a great deal to do
with a restaurant, they are willing and responsive to change, are quite flexible
within the organization. KFC’s structure within the individual companies is both
mechanistic and organic – they are very structured as far as rules and stuff
goes, but have a team environment where everyone works together and decides how
to solve a problem or work something out.
Kentucky Fried Chicken
exhibits culture through employees by having a wide range of diversity. There
are 7,741 KFC’s in other countries. People and employees belonging to an ethnic
group often bring their cultures with them, sometimes creating subcultures.
These subcultures are often derived from different customs, values, languages,
traditions, and beliefs. Since Kentucky Fried Chicken values diversity, their
management looks for ways to create benefits for the entire organization. Since
the employees shape the company’s culture, it is very important to KFC that
their employees have a chance to interact and grow with a lot of different
people, both through employee and customer relations.
There are many examples of
employee motivation that KFC and their parent company, Yum! Brands, have
incorporated to empower and stimulate their employees. Not only are the
employees offered an inspiring vision and mission statement, but they also have
a set of founding truths with which to adhere. Some of these truths include
working on people skills…that satisfied customers and profitability will follow;
responding to the voice of a customer instead of just listening; quality in
everything they do, especially the food; recognition shows that they care…and
customers leave when they don’t. They also have a good training program for new
employees and encourage diversity amongst their employees.
KFC has a supplier code of
ethics that they use for the ethical treatment of the chickens used in the food
they make. Ethical conduct is a big issue within the company; they place high
value on honest employees and ethical treatment of everyone, customer, manager,
and employee alike.
The Kentucky Fried Chicken
Corporation has done an excellent job in the consumer market, both domestically
and abroad. Not only do they do a wonderful job of planning, organizing,
staffing, leading, and controlling, but they have been very successful at
achieving their goals as well. Having done extensive research on the company and
its parent corporation, I feel like KFC has been pretty successful overall and
has done a good job with hiring and retaining good employees and taking care of
their consumer base in every way possible. As KFC reaches their goals, they
continue to set higher and higher standards for the company to attain one day;
this is a good business practice in order to maintain a lead over competitive
companies such as Chick-fil-a, KFC’s leading competitor.
As a result of
this project, we have learned a lot about the company itself as well as Yum!
Brands, Inc., and about the history and background of KFC as a whole. There is a
lot that goes on in the franchising world that we never really knew anything
about until doing the research that went into preparing for this
project/presentation. KFC’s grand strategy and the organization as a whole is
very impressive; through all this research I (Sally) have gained a lot of
respect and admiration for what they’ve been through to become the giant,
amazingly popular franchising company they are today.
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