Kfc's Big Game of Chicken
Executive Brief for
To: David Novak, chairman, president and CEO Re: Strategic Growth Plan From: Date: April 18, 2012
Executive Summary
As a long-standing leader of fast food industry, KFC has gained a substantial global recognition and developed multinational operation in past decades. Although KFC has successfully entered Asian and African markets, the domestic operation has faced lots of challenges such as declining market share, industry competition and franchisees dissatisfaction and so on. President Novak would like to keep how the company is doing well now, which is to focus more on foreign market. The domestic franchisees are disappointed to KFC management team due to lots of restrictions, and neglect. Therefore, they are ending up with selling off the KFC units, and changing their careers. The issue of KFC Company is to either focus solely on the foreign markets, or focus both with restructure the domestic market. Two recommendations are need to take into steps to create values for the Company’s future development: expansion the foreign market and restructure the domestic market.
Creating Value Through Expansion and Restructuring
Strategic Area: Accounting-Categorize the Profits into Geographic Locations. Opportunities to Create Value Complement and categorize the profits of new stores into different geographic locations. Challenges to Create Value Extra resources and relevant personnel are required to complete the financial statements. Related tax information and avoidance should be considered. The distinct culture and dietary habits may influence the implementation of the strategy. The food tastes and customers are not match. The declining market share, franchisee and raising competition may reduce the numbers of customers. Innovation may also have risks. Merger and acquisition may involve a few risks. Economic, political and environmental issues may also influence the Company’s share price. The interests of shareholders and
To: David Novak, chairman, president and CEO Re: Strategic Growth Plan From: Date: April 18, 2012
Executive Summary
As a long-standing leader of fast food industry, KFC has gained a substantial global recognition and developed multinational operation in past decades. Although KFC has successfully entered Asian and African markets, the domestic operation has faced lots of challenges such as declining market share, industry competition and franchisees dissatisfaction and so on. President Novak would like to keep how the company is doing well now, which is to focus more on foreign market. The domestic franchisees are disappointed to KFC management team due to lots of restrictions, and neglect. Therefore, they are ending up with selling off the KFC units, and changing their careers. The issue of KFC Company is to either focus solely on the foreign markets, or focus both with restructure the domestic market. Two recommendations are need to take into steps to create values for the Company’s future development: expansion the foreign market and restructure the domestic market.
Creating Value Through Expansion and Restructuring
Strategic Area: Accounting-Categorize the Profits into Geographic Locations. Opportunities to Create Value Complement and categorize the profits of new stores into different geographic locations. Challenges to Create Value Extra resources and relevant personnel are required to complete the financial statements. Related tax information and avoidance should be considered. The distinct culture and dietary habits may influence the implementation of the strategy. The food tastes and customers are not match. The declining market share, franchisee and raising competition may reduce the numbers of customers. Innovation may also have risks. Merger and acquisition may involve a few risks. Economic, political and environmental issues may also influence the Company’s share price. The interests of shareholders and