KFC has a very long history and has the most recognizable brand in chicken. With over 50% of the market share it becomes very difficult for new companies who may want to enter the market. KFC has name recognition around the world and has been globally positioned for many years. KFC’s secret recipe of 11 herbs and spices has made it the leader in chicken for the last fifty years. KFC sells three recipes: Original recipe, Extra Crispy, and Tender Roast.
The many sales of KFC during the 1970’s and 1980’s lead to a very confusing direction and took the focus of the company off of its original strategy. During the 1980’s and 1990’s KFC struggles were much do to the inability to bring new products to the market quickly and it’s innovation of new products. KFC fell behind the market in new products and was copying other fast food chains to stay competitive. KFC changed its strategy in the late 1990’s, which included adding items to its menu. KFC then in an effort to address its declining market share began building smaller restaurants in non-traditional outlets, airports, shopping malls, and hospitals. They offered drive thru and carry out units only. KFC established units that sold both Taco Bell and KFC or KFC and Pizza Hut.
The loss of market share and slowing growth also was due to the many mergers they went through during a limited time period. The merger with PepsiCo was met with large cultural issues as the KFC employees were used to the previous strategy of a laid-back, self-governing environment, to an environment who demanded tighter control over operations. PepsiCo strategy was to take over the franchisees and make them company owned and operated. The cultural differences took the focus away from the chicken business.
After PepsiCo spinned off KFC and Tricon Global Restaurants took over, Tricon’s top management recognized some of the problems with KFC and began to sell company-