COMPETITIVE ADVANTAGE OF ‘KFC’ CHAIN OF RESTAURANTS
Jan 24, 2015
COMPETITIVE ADVANTAGE OF
‘KFC’ CHAIN OF
RESTAURANTS
Something that places a companyor a person above the competition
COMPETITIVEADVANTAGE
COSTADVANTAGE
DIFFERENTIATIONADVANTAGE
SIMILAR PRODUCT, LOWER COST
HIGHER PRICE, UNIQUE PRODUCT
COMPETITIVEADVANTAGE
DifferentiationAdvantage
Market Segmentation & Targeting
Geographic segmentation : In India KFC focuses how geographically its customers demand different products.
Demographic Segmentation: In demographic segmentation, the market is divided into groups based on an age, gender, family size, income, occupation, religion, race and nationality.
Psychographic segmentation: in this segmentation ,the market is divided into middle class & upper class.
As the outlets of KFC are in posh area and prices are too high (overhead expenses-rent, air-conditioning, employees), so KFC targets upper and middle classes. Target market depends upon size and growth rate of population, Company resources and structural attractiveness of market segment.
• For a product to occupy a clear, distinctive and desirable place relative to “Competing products in the minds of target consumer.”
• In KFC feedback is taken from the customer in order to know the customer demands and then improvements are made in products.
• KFC focuses on pure and fresh food in order to create a distinct and clear position in the minds of customers KFC has a strong brand name and they are leading the market in fried chicken.
Market Positioning
Business Model
Video
PESTLE Analysis
POLITICAL ECONOMICAL
SOCIAL TECHNOLOGICAL
LEGAL ENVIRONMENTAL
PORTER’S 5 Force Model
LOW MEDIUM
MEDIU
M
MEDIUM
HIGH
Threat of buyers bargaining power• Highly Elasticity (high demand fried
chicken)• Too many options and substitutes
FMCG, McDonald etc
Threat of suppliers bargaining power• Bargaining power of suppliers is low.• Fixed rates Threat of intense segment rivalry
• Low entry barriers• Too many big giants in the market like McDonalds, Subway, etc
Threat of substitute products
There are a lot of competitors in the market making substitute chicken products in the market
Threat of new entrantsLow entry barriers
KSF’s:
Location/Number of Outlets
Extensive Menu Price Service/
Ambience Taste
Threshold Factors: Operations Quality
Standards
KFC’sKey Success
Factors
Chicken specialist/ experts
Innovation
Buckets
Variety of product in the
chickenKids meal
PRODUCT
Location Target market
Free home delivery
Mobile units
35 outlets in the
countryInternet
PLACE
Their products are priced high and target the middle to upper class people
KFC adopted the Cost-based Pricing strategy
Pricing of the product includes the govt. tax and excise duty
The products are bit high priced according the market segment and it is also comparable to the standard of their product
In the cost based method we include the variable and fixed cost.
PRICE
• Bill boards
• News papers
• TVC
• Pop-ups on internet
• Special packages
PROMOTION
Cruel treatment of chickens
1 billion chickens killed each year
Unsafe chicken/Bird flu
Unhealthy food
Ethical Issues- KFC Products
Yum! Environm
ent
Waste management
Sustainable building design
Packaging
Yum! Animal Welfare
Partnership with industry experts
Ongoing training and education
Animal treatment
Ethical Issues- KFC Products –Steps Taken
KFC’sCompetencies
Ladder
Specifications KFC Mc Donald’s
Core Target Group
Youth Kids
Pricing Strategy Cost-based Pricing
EDLP
USP Differentiation through variants in product range
Pricing + Value Provided
2011
2013
CUSTOMER FEEDBACK
VIDEO
Short Term Introduce new recipes suited to local taste Introduce cheaper items in the menu Introduce healthier recipes Differentiate through good service Work on the image of a healthy fast food chain through
Advertising
Long Term Change the image of KFC from fried to ‘healthy’ Open up new outlets in Urban locations Engage is CSR activities related to animals & environment Develop a strong culture of good service
Recommendations for KFC
to sustain Competitive Advantage
THANK YOU!