Kentucky Fried Chicken and The Global Fast Food Market
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PEPSICO AND KFC:
2) What added value was transferred from PepsiCo to KFC? What synergies existed between these two companies?
3) What negative effects did PepsiCo have on KFC?
4) Why did PepsiCo spin off its KFC, Pizza Hut, and Taco Bell businesses into a separate corporation?
5) Why is Mexico an attractive market for KFC? What are the major strategic issues they face in Mexico?
6) Identify three major strategic alternatives that KFC can pursue internationally? What are the pros and cons of each alternative?
Please see attached.
1) Describe PepsiCo's evolving corporate strategy (including their rationale for its acquisitions and divestments) from the 1960s through the early 1990s.
Pepsi-Cola manufactures and sells soft drink concentrate to company-owned and independent franchised bottlers. Pepsi-Cola products are sold in some 150 countries and territories throughout the world. Pepsi originated the marketing strategy known as "The Pepsi Generation" in the 1960's. This strategy was a constant repetitious advertising of Pepsi aimed at young people. It worked under the assumption that there are new consumers coming of age every day and if one stops marketing to the newest consumers, one will have a shrinking base of established consumers of one's product. At the same time Pepsi worked with its bottlers to modernize plants and improve store delivery services.
With the aging of the baby boomer generation, the advertising of Pepsi changed into the drink that keeps your youth. In Taiwan, the slogan "Come Alive with the Pepsi Generation" came out as "Pepsi will bring your ancestors back from the dead." In 1964, Diet Pepsi was introduced. The 1960s and 1970s brought acquisitions and diversification for Pepsi-Cola. Pepsi-Cola merged with Frito-Lay in 1965, changing its name to PepsiCo but maintaining its beverage division under the name Pepsi-Cola. PepsiCo soon ventured into food service and snack foods with the acquisition of Pizza Hut, Taco Bell, and Kentucky Fried Chicken restaurants. Pepsi also started producing and selling a number of brands under license with its business partners including Lipton ready-to-drink tea (Unilever) and Starbucks ready-to-drink coffee.
In the early 1980s, Pepsi began a series of advertisements called the "Pepsi Challenge", in which it directly compared its product to that of Coca-Cola, showing that people preferred their product over the competitor's. During the 1980s, as consumers became more interested in health and fitness, the soft drink industry faced stiff competition from the makers of bottled water. In response, Pepsi developed low-calorie and caffeine-free beverages like Diet Pepsi. In the late 1980's Pepsi also acquired MEI bottling, Grand Metropolitan's bottling operations and General Cinema's bottling operations.
During the early 1990s Pepsi bottlers employed a low-price strategy in the supermarket channel in order to compete more effectively with ...
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"The 1960s and 1970s brought acquisitions and diversification for Pepsi-Cola. Pepsi-Cola merged with Frito-Lay in 1965, changing its name to PepsiCo but maintaining its beverage division under the name Pepsi-Cola. PepsiCo soon ventured into food service and..."