Kentucky fried chicken, a renowned American chain of fast food restaurant; commonly known by the masses, as KFC. It’s headquarter is located in Louisville. KFC is the subsidiary of yum! Brands, which owns Pizza hut and Taco bell chains of fast food restaurants as well. It has 20,000 franchises in 123 countries, which makes it, second largest chain of fast food restaurant in the world, following McDonalds. This imminent fast food restaurant was founded by, Harland sander; in 1936.
BCG matrix of KFC
BCG matrix is the representation of company different divisions, on a four quadrant graph. Category of segments dimension can be identified with the help of market share and industrial growth rate. It helps the companies to identify the suitable strategies for the segments. Each profit center requires distinct strategies from other, according to the financial standing of segment. Companies can identify that, where the company’s each segment stands and which strategy should be adopted for each? With the help of four dimensional BCG matrix. Following are the four dimensions of BCG matrix, Question mark, Cash cows, Dogs and Stars. We will focus on, KFC four profit centers which are as follow; franchising and licensing, KFC china, KFC India and KFC USA.
Question Mark
Question mark are those segments, which market share is low and competing in high growth industry. KFC India comes into the category of Question Mark, India market has huge potential it is one of the most populated countries in the word. Unfortunately its sales are declining every year, KFC India should use the product development strategy like McDonald adopted in India.
Stars
Those segment which have high market share in high industry sales growth rate, comes in to the category of stars. KFC china fall in to the category of stars with high market share in high industry sales growth rate. For such segments, market development, product development and market penetration strategies should be formulated and executed. KFC China market development strategy is very aggressive, is exploring new market segments and establishing 1 restaurant on average every day. In 2015; 743 restaurants were opened in China, and planned to open 600 more in 2016. It has also used the strategy of product development by offering traditional food items in menu. KFC china offer 50 food item to their costumer which are twice, compare to US menu.
Cash Cows
Cash cows are those segments which have high market share in low industry growth rate. KFC franchising and licensing comes into the grouping of cash cows segment. Franchising and licensing have generated 16 billion of revenue in 2015. Total system growth rate was 11%, however, Russia system growth rate was impressive in 2015, it has generated 40 % system growth rate. Such segment should formulate and execute divestiture strategy, which KFC is currently executing, in US chains of KFC restaurants.
Dogs
Segments which have low market share in low industry growth rate. KFC target audience in US are African American people and its menu contains only 26 food items and emphasis on low price and take out. Such segment should use divesture strategy, which KFC US has already executed and have mostly franchised and licensed KFC US.
Yum! Brands reports 6% Y-o-Y decline in sales of Pizza Hut; KFC drops 1%. Retrieved from.
References
Financial Highlights. Retrieved from.
http://www.yum.com/annualreport/pdf/2015ARfinancials.pdf
KFC radical approach to the China. Retrieved from.
https://hbr.org/2011/11/kfcs-radical-approach-to-china
Annual report of Yum Brands. Retrieved from.
http://www.yum.com/annualreport/pdf/2015YumBrands_AnnualReport.pdf
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