solution
SECTION A: CASE STUDY
THIS SECTION IS COMPULSORY (20 MARKS)
Use the case information to answer the questions that follow.
KFC is the world’s most popular chicken restaurant chain with over 23,000 KFC outlets in more than 140 countries and territories around the world including Ghana. Its original recipe chicken, cole slaw and fries can be found in KFC outlets all over the world and tastes basically the same wherever you go. The globalization of KFC’s supply chain has offered tremendous opportunity, as well as increased risk, in its development. In the 1970s and 1980s, Japan, Australia, and United Kingdom accounted for the greatest share of the KFC’s international expansion. Following these, other markets such as China, Europe and Latin America became attractive, offering expansion opportunities. By 1996, KFC was operating in Mexico, the Caribbean, and in the Central and South America.
Many of these cultures were difficult to penetrate because of strong culinary traditions. KFC previously failed in German markets because Germans were not accustomed to take-out food or to ordering food over the counter. However, in the Asian markets, where chicken is a staple dish, KFC was more successful. In some countries of the world such as, Malaysia, Indonesia and some others, it is illegal to import poultry, a situation that has led to product shortages. KFC also faced challenges with quality control of individual franchises due to long distances between headquarters and foreign franchises. Quality control was of great concern to the franchise which overhauled its operations in 1977 to emphasise cleanliness, service, profitability and product consistency.
Over the years, KFC has had to respond to changing customer demands. An example was the need to change its limited menu consisting mainly of fried foods in response to customers’ demand for healthier options. Another response by KFC was to change its name and logo from Kentucky Fried Chicken to KFC. Furthermore, it responded to consumer demands for greater variety by introducing several new products, such as Oriental Wings, Popcorn Chicken, and Honey BBQ Chicken as alternatives to its Original Recipe fried chicken. The company went as far as to introduce menus specific to the different cultures in which they operate e.g. In India, Cole Slaw was replaced with green fresh salads. A fierier burger called Zinger Burger was also introduced. During the Navaratri festival, KFC offered a new range of nine vegetarian products, which included Paneer burgers; Chinese tea was introduced in Chinese outlets whilst French outlets offered more deserts.
KFC Corporation, based in Louisville, Kentucky, is one of the few brands in America that can boast a rich, decades-long history of success and innovation.
a. What will you describe as the competitive strategy of KFC?
b. Is KFC more of an efficient or responsive supply chain?
c. The Accenture survey categorized risk in global supply chains. Which of the risk factors identified in
the survey was KFC affected by (mention 2)?
d. Which risk mitigation strategies (mention 2) do you see KFC employing in its global supply chain?
THIS SECTION IS COMPULSORY (20 MARKS)
Use the case information to answer the questions that follow.
KFC is the world’s most popular chicken restaurant chain with over 23,000 KFC outlets in more than 140 countries and territories around the world including Ghana. Its original recipe chicken, cole slaw and fries can be found in KFC outlets all over the world and tastes basically the same wherever you go. The globalization of KFC’s supply chain has offered tremendous opportunity, as well as increased risk, in its development. In the 1970s and 1980s, Japan, Australia, and United Kingdom accounted for the greatest share of the KFC’s international expansion. Following these, other markets such as China, Europe and Latin America became attractive, offering expansion opportunities. By 1996, KFC was operating in Mexico, the Caribbean, and in the Central and South America.
Many of these cultures were difficult to penetrate because of strong culinary traditions. KFC previously failed in German markets because Germans were not accustomed to take-out food or to ordering food over the counter. However, in the Asian markets, where chicken is a staple dish, KFC was more successful. In some countries of the world such as, Malaysia, Indonesia and some others, it is illegal to import poultry, a situation that has led to product shortages. KFC also faced challenges with quality control of individual franchises due to long distances between headquarters and foreign franchises. Quality control was of great concern to the franchise which overhauled its operations in 1977 to emphasise cleanliness, service, profitability and product consistency.
Over the years, KFC has had to respond to changing customer demands. An example was the need to change its limited menu consisting mainly of fried foods in response to customers’ demand for healthier options. Another response by KFC was to change its name and logo from Kentucky Fried Chicken to KFC. Furthermore, it responded to consumer demands for greater variety by introducing several new products, such as Oriental Wings, Popcorn Chicken, and Honey BBQ Chicken as alternatives to its Original Recipe fried chicken. The company went as far as to introduce menus specific to the different cultures in which they operate e.g. In India, Cole Slaw was replaced with green fresh salads. A fierier burger called Zinger Burger was also introduced. During the Navaratri festival, KFC offered a new range of nine vegetarian products, which included Paneer burgers; Chinese tea was introduced in Chinese outlets whilst French outlets offered more deserts.
KFC Corporation, based in Louisville, Kentucky, is one of the few brands in America that can boast a rich, decades-long history of success and innovation.
a. What will you describe as the competitive strategy of KFC?
b. Is KFC more of an efficient or responsive supply chain?
c. The Accenture survey categorized risk in global supply chains. Which of the risk factors identified in
the survey was KFC affected by (mention 2)?
d. Which risk mitigation strategies (mention 2) do you see KFC employing in its global supply chain?
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