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Kentucky Fried Chicken Case

Is "Global" an arena where KFC should continue to be active? Why, or why not?
What will be KFC's status in the industry in five years? Why?

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Please refer to response file attached, which is also presented below. I hope this helps and take care.

RESPONSE:

1. Is "Global" an arena where KFC should continue to be active? Why, or why not?

Unequivocally, yes. To offset the real and significant threat and high levels of competitive rivalry in the fast food industry and the growth of the sandwich market, an opportunity for leverage for KFC includes taking market share from major burger companies (i.e., Burger King, McDonald's) as a result of the wider pressures of the global Fast Food Industry. Chicken is likewise. For example, to keep ahead of their competitors, KFC expanded into Jamaica. As chicken remains Jamaica's most popular protein, it's not surprising that competition in the chicken product segment of the quick-service restaurant sector is rife. KFC says ahead of the competition through regular surveys to determine exactly what their customers want and part of what the customers have told KFC is that they want to see KFC in more locations so that they have easier access to their product.

To target the customer in Jamaica, for example, the new stores will employ 230 workers, bringing to 2,207 the total number of Jamaicans employed throughout KFC Jamaica and Pizza Hut operations. But Charles Davidson, the company's manager for warehouse, commissary & purchasing, points to deeper economic benefits through the backward linkages to Jamaica's agricultural and agri-processing sector. For example, Davidson estimates that the new restaurants will increase the demand for chicken and other farm products like cabbage, tomatoes, lettuce and carrots by 10-15 per cent. "Discussions with several of our suppliers have revealed that, in the case of some agricultural products, additional acreage will have to be planted," says Davidson. "Opportunities are also being opened up for other farmers of some produce to ...

Solution Summary

This solution explains whether or not "Global" is an arena where KFC should continue to be active, and what KFC's status in the industry might be in five years.

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