TASK 1

For an organization of your choice analyse the governance structures, the organization structure
and the marketing strategies pursued by companies towards growth. Examine how the
organization has adopted IT to enhance its operations.

Word Limit – 2500 words

 INTRODUCTION

KFC, also known as Kentucky Fried Chicken is an American fast food restaurant chain
headquartered in Louisville, Kentucky, that specializes in fried chicken. It is the world's second-
largest restaurant chain after McDonald's, with 22,621 locations globally in 136 countries . The
chain is a subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut, Taco
Bell, and Wing Street chains.

KFC was founded by Colonel Harland Sanders, an entrepreneur who began selling fried chicken
from his roadside restaurant in Corbin, Kentucky, during the Great Depression. Sanders
identified the potential of the restaurant franchising concept, and the first "Kentucky Fried
Chicken" franchise opened in Utah in 1952. KFC popularized chicken in the fast food industry,
diversifying the market by challenging the established dominance of the hamburger. By branding
himself as "Colonel Sanders", Harland became a prominent figure of American cultural history,
and his image remains widely used in KFC advertising to this day. However, the company's
rapid expansion overwhelmed the aging Sanders, and he sold it to a group of investors led
by John Y. Brown Jr. and Jack C. Massey in 1964.

KFC's original product is pressure-fried chicken pieces, seasoned with Sanders' recipe of 11
herbs and spices. The constituents of the recipe represent a notable trade secret. Larger portions
of fried chicken are served in a cardboard "bucket", which has become a well-known feature of
the chain since it was first introduced by franchisee Pete Harman in 1957. Since the early-1990s,
KFC has expanded its menu to offer other chicken products such as chicken fillet
sandwiches and wraps, as well as salads and side dishes such as French fries and coleslaw,
desserts, and soft drinks; the latter often supplied by PepsiCo. KFC is known for its slogans "It's
Finger Lickin' Good!", "Nobody does chicken like KFC", and "So good".
 CORPORATE GOVERNANCE

Kentucky Fried Chicken (KFC) is a subsidiary of Yum! Brands. Therefore, KFC’s corporate
governance framework is the corporate governance framework that Yum! Brands follows. Yum!
Brands have a dedicated section of their website which provides detailed information about their
corporate governance practices and principles. The corporation published a Worldwide Code of
Conduct in 1997 which guides all employees on how to report ethical issues to the corporation
confidentially. This corporation’s corporate governance objectives are focused towards aligning
the interests of management and shareholders.

The corporation has a board of directors and sets out in its ‘Corporate Governance Principles’
document that the optimum size for the board is between 10 and 15 members. The majority of
this board must be ‘independent directors’, and the board meets a minimum of 5 times per year.
The independent directors in the board elect a lead director and this lead director has a number of
responsibilities; for example, reporting back to the CEO about any decisions taken and
consulting with shareholders when needed. Having only one board of directors, which are
focused on shareholder interests, is known as the ‘Anglo-American model’ of corporate
governance. However, unlike the typical ‘Anglo-American model’ where shareholders elect the
board members, new board members at Yum! Brands are selected by the current members of the
full board.

Another feature of the corporate governance framework of Yum! Brands is that they have a
series of committees that review practices in their organizations, for example KFC. Yum! Brands
have the following committees: Audit, Compensation and Nominating and Governance. These
committees have a variety of responsibilities, for example, the Nominating and Governance
committee nominates new board members to be elected by the full board. Ultimately, the
responsibility for enforcing good corporate governance at KFC rests with the board of directors
of Yum! Brands.
 MARKETING STRATEGIES OF KFC

 Segmentation: - The primary objective of any marketing strategy is to understand the

market and satisfy the needs of customers in a better way that competitors would find
difficult to imitate (Anderson, Narus& Van, 2006). Business organizations understand
that two customers are never the same and different strategies must be utilized to ensure
that their expectations are met at the right time by providing the right quality of products
at the right place. A business organization can only achieve this by implementing
effective business marketing strategies. Identification of the right market segments is the
initial step that a firm can use to create value for its products. Therefore, market
segmentation is the process where a market is divided into different distinct groups where
consumers exhibit the same characteristics. The individuals who have similar traits or
tastes are classified in a particular market segment. Market segmentation is used by firms
to determine the requirements of the potential customers in a given market segment. In
this case, the business will determine the suitable products for particular market segment.
Today most consumers are well educated and better informed. As such their demands
keep on changing. Therefore, it is necessary for producers and other business
organizations to pay attention to issues on market segmentation. For firms to succeed in a
highly competitive market, they should chose on the best segmentation approach which
will add value to the products. Most firms always implement two types of segmentation
namely post hoc and priori segmentation. The segmentation approaches are usually
implemented depending on the product positioning of the firm. A priori market
segmentation is implemented without conducting thorough market research to identify
the market segments that are most appropriate. It is based on the already existing
techniques of market segmentation. On the other hand, post hoc segmentation is based on
extensive research where the firm has to determine the most appropriate market for its
products. The firm must obtain evidence from the customers concerning their needs and
wants. The customers’ evidences are then used as a background for market segmentation.
Firms should always perform a comprehensive analysis to determine the best
segmentation approach which would add value to the organization. The major variables
which should be considered in market segmentation includes the benefits of the product,
the brand preference, brand loyalty, brand usage pattern, the purchase pattern of the
product, the lifestyle and status of the consumers, and the opinion and attitude of the
customers about the effects of the brand on the environment. Market segmentation is an
important issue for every business organization. The firms should take into account the
different preferences of consumers. The consumer preferences are what form the
segmentation variables which every firm should consider. Therefore, during
segmentation the firm identifies the possible clusters of the consumers depending on their
preferences. The consumers are then grouped according to their needs, requirements, and
demands among other characteristics.
 The 4Ps Marketing Strategy of KFC:-KFC operates in a competitive market
and must utilize 4ps marketing mix to allow it remain ahead of its competitors in
the industry. KFC serves fried chicken as its fried product. Other chicken
products include crispy chicken and barrel chicken. The firm serves different
types of chicken to appeal to its customers in various geographical locations. For
instance, in Malaysia KFC serves barrel chicken this consists of 21 pieces of
chicken. Besides, KFC has also introduced porridge made of cereals and grains to
meet the demands of the Malaysian who love having porridge in the morning

Price is another marketing mix strategy used by the firm to remain competitive in
the market. KFC utilizes market skimming to determine price for its products.
Most products of KFC are priced highly and majorly target the major class and
middle class individuals. However, the company has introduced economy foods
whose prices are relatively low to suit the demands and needs of the lower class
people. The prices of the foods provided by KFC are always inclusive of the
variable and fix costs. Such costs include exercise duty and the tax imposed by the
government in various regions where it operates. The company compares its price
with those of the competitors such a McDonalds and Subway before deciding on
the appropriate price to settle on. For instance, if McDonald’s provides similar
product at a lower price, KFC will also lower the price to retain its customers.

Place is another factor that plays a critical role in market competition. It refers to
the channels of distribution, location and the intermediaries involved before the
final product reaches the consumer. Most of the outlets of KFC can be accessed
easily by the consumers. Most outlets are located in the major cities at strategic
locations where customers can easily access. KFC also locates its outlets next to
schools, market areas, colleges, and cinemas so as to attract more customers.
 Promotion also plays an important role in ensuring that the products reach the
intended customers in the market. Promotion is also used to educate the customers
about the existence of a product and their usage. KFC uses reminder
advertisements to inform consumers about the different products they offer in the
market to encourage repeat purchase. The company utilizes a slogan known as
finger lickin to promote its products in various market segments. Finger lickin is
an advert that is used to remind consumers of their previous experience about
their products. This encourages to do repeat purchase. The company also utilizes
sponsorship as a promotional strategy to increase the image of its brand in the
market. For instance, it sponsors a cricket team in Australia. Besides, KFC uses
sales promotion to reach potential customers. Other promotional strategies utilized
by the firm include coupons, exhibits and entertainment to promote its products
and increase its sales.

 BCG Matrix in the Marketing strategy of KFC:- It’s Hot wings, Sandwiches
and Grilled chicken are stars since majority of its sales comes from these menu
items. Other menu items those in veg, desserts & in chicken (even burgers) are
question marks since KFC is not able to differentiate itself on these menu items
from others like McDonalds or local fast food joints.
 Distribution strategy: - With 18000 restaurants delivering finger licking
delicious fast food across the world, KFC has evolved itself through the years and
having strong tie-ups or strategic partnership with the supply chain partners is
helping them in serving its customers in a better way.KFC always believes in
keeping its outlet in premium areas as well as in malls and shopping complexes.
These KFC outlets can also carry out delivery for online orders of KFC. As a
result, KFC covers both – online and offline deliveries.

INFORMATION TECHNOLOGY OPERATIONS

KFC uses ROS (restaurant based ordering system) technology at Operational Level of its outlets
for taking in orders and informing its chefs inside the kitchen to work on the order placed this
type of technology is an example of intranet Service that most of the fast food restaurants today
use.The ROS technology is used for cutting the time between the taking in order and informing
the chef. In this case orders are taken on the counter and the computer automatically sends
information to the chef’s computer which is placed in the kitchen for the chefs to process the
order.

KFC has leveraged the database technology for meeting its sales, customer service, and overall
organizational goals. It has implemented a Point-of-Sale system in its restaurants. It helps the
restaurant management to track the daily and even hourly sales, inflow and outflow of cash,
orders of raw material, and sales of specific food product etc. Since KFC had to deal with lots of
cash and credit card transactions, therefore, it was important for the management to have a
system which could keep the record of every single dollar entering in the organization as a result
of sales. A through coordination between the customer service representatives and kitchen staff
was also required for delivering the best-in-class and fastest service to the customers. Moreover,
the sales and cash flow records could either be changed or some of the transactions could be
missed in the manual system. POS system was found as a single and sustainable solution for all
these problems. 

KFC is fully equipped with the latest technologies, which have helped it in moving ahead of
others and maintaining its customer service. However, there is still some room for pursuing
opportunities. It can employ the automated purchasing tool at its Drive-Thru window. The
system could deliver the order without any human involvement.  The customer could either place
the order by an interactive screen or through the mobile app of KFC or get the food served by the
system at the window. The system would reduce the human resource cost and give a competitive
edge to KFC over others. However, it demands a huge capital and time for effective
implementation and customer training
.