Kentucky Fried-Chicken SWOT Analysis
Conduct SWOT analysis and discuss the components — Strengths, Weaknesses, Opportunities, Threats.
By the mid 1950s, fast food franchising was still in its infancy when Harland Sanders began his cross–country travels to market “Colonel Sanders’ Recipe Kentucky Fried Chicken.” He had developed a secret chicken recipe with eleven herbs and spices. By 1963, the number of KFC franchises has crossed 300. Colonel Sanders, at 74 years of age, was tired of running the daily operations and sold the business in 1964 to two Louisville businessmen—Jack Massey and John Young Brown, Jr.—for $2 million. Brown, who later became the governor of Kentucky, was named president, and Massey was named chairman. Colonel Sanders stayed in a public relations capacity.In 1966, Massey and Brown made KFC public, and the company was enlisted on the New York Stock Exchange. During the late 1960s, Massey and Brown turned their attention to international markets and signed a joint venture with Mitsuoishi Shoji Kaisha Ltd. In Japan. Subsidiaries were also established in Great Britain, Hong Kong, South Africa, Australia, New Zealand, and Mexico in the late 1970s. Brown’s desire to seek a political career led him to seek a buyer for KFC. Soon after, KFC merged with Heublein, Inc., a producer of alcoholic beverages with little restaurant experience and conflicts quickly arose between the Heublein management and Colonel Sanders, who was quite concerned about the quality control issues in restaurant cleanliness. In 1977, Heublein sent in a new management team to redirect KFC’s strategy. New unit construction was discontinued until existing restaurants could be upgraded and operating problems eliminated. The overhaul emphasized cleanliness, service, profitability, and product consistency. By 1982, KFC was again aggressively building new restaurant units.In October 1986, KFC was sold to PepsiCo. PepsiCo had acquired Frito–Lay in 1965, Pizza Hut in 1977 with its 300 units, and Taco Bell in 1978.
PepsiCo created one of the largest consumer companies in the United States. Marketing fast food complemented PepsiCo’s consumer product orientation and followed much the same pattern as marketing soft drinks and snack foods. Pepsi soft drinks and fast food products could be marketed together inthe same restaurants and through coordinated national advertising.The Kentucky Fried Chicken acquisition gave PepsiCo the leading market share in three of the four largest and fastest growing segments in the U.S., quick–service industry. By the end of 1995, Pizza Hut held 28% of the $18.5 billion, U.S. pizza segment. Taco Bell held 75% of &5.7 billion Mexican food segment, and KFC held 49% of the $7.7 billion U.S. chicken fast food segment.Japan, Australia, and the United Kingdom accounted for thegreatest share of the KFC’s international expansion during the 1970s and 1980s. During the 1990s, other markets became attractive.China with a population of over 1 billion, Europeand Latin America offered expansion opportunities. By 1996, KFC had established 158 company–owned restaurants and franchises in Mexico. In addition to Mexico, KFC was operating 220 restaurants in the Caribbean, and in Central and South America