A Case Study Analysis

on

Kentucky Fried Chicken (KFC) in India

In Partial Fulfillment for the Requirements of International Business and Trade

BA 423 (Friday and Saturday 6:00-7:30)

Submitted by:

Kathlyn C. Tajada

BSBA-MA 3B

Submited to:

Mr. Jhun L. Veril, CMITAP, MBA

BA 423 Instructor

September 11, 2020

Introduction:

KFC was founded by Colonel Harland Sanders in the early 1930’s by cooking
and serving food for hungry travelers. In 1952 Sanders started franchising his chicken
business and named it as a Kentucky Fried Chicken.

KFC was the first fast food multinational to enter India, after the economic
liberalization policy of the Indian Government in early 1990’s. It received permission to
open 30 new outlets across the country and opened first fast food outlet in Banglore in
June 1995 by targeting upper middle class population.

When KFC first entered the Indian market, there were a lot of protests, and the
Bangalore outlet was repeatedly ran snacked. Many Indians were worried that the
Western culture would seep into the Indian roots, leading to the dilution of indigenous
traditions.

KFC did not gain popularity because of the anti-KFC movements and
accusations. As a result, KFC did not reap sufficient revenue to continue its operations
in India and this pushes KFC to abandon the Indian market.

Once the Indian market cooled down, KFC returned to the country in 1999 and
set up one outlet in India. KFC has come a long way since its establishment in India in
1995. Despite facing rejection from consumers, KFC did not lose hope in the Indian
market. Instead of eliminating India from its venues of operation, it analyzed the
problems faced by KFC in India and worked hard to resolve them

It is this tenacity that won the hearts and stomachs of millions of Indians, who
finally decided to embrace KFC’s dishes and give them a second chance.

Problems Faced in India:

o Government was criticized for granting permission to multinational food

giant.
 o The regulatory authorities found that KFC’s chickens did not adhere to the
Prevention of Food Adulteration Act, 1954.
o KFC faced severe protests by People for Ethical Treatment of Animals
(PETA), an animal rights protection organization.
o PETA accused KFC of cruelty towards chickens and released a video tape
showing the ill-treatment of birds in KFC’s poultry farms.
o Anti-KFC movements that accused KFC of using illegally high amounts of
Monosodium Glutamate (MSG), which are harmful to health
o Another anti- KFC movement claimed that KFC sold food that was cooked
and fried in pork fat.
o Protests by farmers led by Karnataka Rajya Ryote Sangha(KRRS) and the
farmer leader Nanjundaswamy who used the term “junk food” against KFC

SWOT Analysis:

Strength

 World’s largest restaurant company in terms of systems restaurants

 KFC is World famous for its Original recipe fried chicken—made with the same
secret blend of 11 herbs and spices
 Ranks highest among all chicken restaurant

Weakness

 Lack of knowledge about their customers

 Non-Ethical Business Practice
 PETA Protest & KRRS Protest
 Monosodium Glutamate flavor in Chicken

Opportunity

 Retail boom in India

 Indian Youths are adopting Western culture
 Increasing trends to make meal out of homes
Threats

 High calorie food

 Changing health tends of customers
 Political parties protesting for junk food
 Protest support from famous personalities like Anil Kumble, Aditi Govithrikar,
John Abraham etc.

Target Markets:

As the outlets of KFC are in posh area and prices are too high (overhead
expenses-rent, air-conditioning, employees), KFC’s target are upper and middle
classes.

Market Segmentation:

 Geographic Segmentation: In India KFC focuses how geographically its

customers demand different products.
 Demographic Segmentation: The market is divided into groups based on age,
gender, family size, income, occupation, religion, race and nationality.
 Psychographic Segmentation: The market is divided into middle class and
upper class

Pricing Strategy:

 Their products are priced high

 KFC adopt cost base price strategy
 Pricing of the product includes the government tax and excise duty
 In the cost based method, they include the variable and fixed cost.
Recommendation:

It is shown in the above description that KFC has failed to give ethical
performance. In recent years, KFC has constantly been subject to criticisms for its
somewhat deceptive advertisements. Making a business of offering mainly fired food
which is high in calorie, it is obviously not honest to claim any slim benefit within its
products. It would be fine to inform consumers with nutrition and calorie information.

KFC should strive to make some adjustments according to its consumer’s

preference and takes appropriate measures to establish win-win relationships among
the company, suppliers and employees.

KFC should implement a farm level guideline and audit program – a program
which industry leading in the areas of poultry care and handling, mainly for their
suppliers in the broiler industry.

Conclusion:

To fathom everything, every business organization should understand the

importance of business ethics by understanding the culture, regulatory and ecological
issues in different countries.. It can help a business organization easily earned the
respect of client and win general acclaim.

References:

www.scribd.com/doc/105986864/A-Case-Study-on-KFC

www.mbarendezvous.com/genral-awareness/kfc-story-in-india

www.icmrindia.org./casestudies.com

slideshare.net/mobile/imeklavya/case-stud-ykfcfinal

slideshare.net/mobile/shivakumaranupama/ppt-of-kfc-case-study