Subjects:
Heublein, Inc. acquired KFC in 1971. Problems arose in service quality and restaurant cleanliness as well as quality control and new restaurant openings.
In 1977, Heublein sent in a new management team to redirect KFC’s strategy. They immediately implemented a back-to-the-basics strategy and discontinued new-unit construction until existing restaurants could be upgraded and operating problems eliminated. They refurbished restaurants, placing emphasis on cleanliness and service. They cut out marginal products and re-established product consistency. By 1982, KFC’s strategic focus had proven successful and the company was again aggressively building new units.
In 1982, R.J. Reynolds Industries, Inc merged Heublein into a wholly owned subsidiary. R.J. Reynolds took a hands-off approach to managing KFC, where Heublein had not. They believed that KFC managers were better qualified to run the restaurant business than it’s own managers were. The strategy worked, and KFC continued to expand profitably under R.J. Reynolds’ ownership.
In 1985, R.J. Reynolds acquired Nabisco, a
. . .
KFC’s foreign stores have risks of monetary devaluation and inflation, labor problems due to unskilled workers and low wages, labor unrest, low job retention, high absenteeism, and poor punctuality.
Market Analysis
In 1998 KFC was the world’s largest chicken restaurant chain and third largest fast-food chain. Political problems are also of concern. This marked a fourth consecutive year that fast-food sales have matched or exceeded sales in full-service restaurants.
In 1997 KFC’s US share of the chicken segment fell 1.
KFC dominated chicken segment of the fast-food market in 1998. The company’s soft drinks and restaurants could be marketed together in the same radio and television segments, providing higher returns for each advertising dollar.
Problems in 1980’s due to limited menu selections and inability to quickly bring new products to market. KFC develops one of the world’s most recognizable brands. Those stores that implemented the Neighborhood Program saw an increase in sales from 5% to 30%. This included a revision of KFC’s crew training programs and operating standards. Second, it experimented with home delivery and explored other nontraditional outlets such as drive-thru and carry-out service only, snack shops in cafeterias, scaled-down outlets in supermarkets and mobile units that could be transported to outdoor concerts and events. The company experimented with other types of chicken products in its stores with varying degrees of success.
Essay's Topics
All research is for reference purposes only.