Kfc and Global Fast Food Industry
Kentucky Fried
Chicken and the
Global Fast-Food
Industry
Jeffrey A. Krug
University of Illinois at Urbana-Champaign Copyright © 2001 by Jeffrey A. Krug. Used with permission. Kentucky Fried Chicken Corporation (KFC) was the world's largest chicken restaurant chain and third largest fast-food chain in 2000. KFC had a 55 percent share of the U.S. chicken restaurant market in terms of sales and operated more than 10,800 restaurants in 85 countries. KFC was one of the first fast-food chains to go international in the late 1950s and was one of the world's most recognizable brands. KFC's early international strategy was to grow its company and franchise restaurant base throughout the world. By early 2000, however, KFC had refocused its international strategy on several high-growth markets, including Canada, Australia, the United Kingdom, China, Korea, Thailand, Puerto Rico, and Mexico. KFC planned to base much of its growth in these markets on company-owned restaurants, which gave KFC greater control over product quality, service, and restaurant cleanliness. In other international markets, KFC planned to grow primarily through franchises, which were operated by local business-people who understood the local market better than KFC. Franchises enabled KFC to more rapidly expand into smaller countries that could only support a small number of restaurants. KFC planned to aggressively expand its company-owned restaurants into other major international markets in Europe and Latin America in the future. Latin America was an appealing area for investment because of the size of its markets, its common language and culture, and its geographical proximity to the United States. Mexico was of particular interest because of the North American Free Trade Agreement (NAFTA), which went into effect in 1994 and created a free-trade zone between Canada, the United States, and Mexico. However, other fast-food chains such as McDonald's, Burger King, and Wendy's were rapidly
Chicken and the
Global Fast-Food
Industry
Jeffrey A. Krug
University of Illinois at Urbana-Champaign Copyright © 2001 by Jeffrey A. Krug. Used with permission. Kentucky Fried Chicken Corporation (KFC) was the world's largest chicken restaurant chain and third largest fast-food chain in 2000. KFC had a 55 percent share of the U.S. chicken restaurant market in terms of sales and operated more than 10,800 restaurants in 85 countries. KFC was one of the first fast-food chains to go international in the late 1950s and was one of the world's most recognizable brands. KFC's early international strategy was to grow its company and franchise restaurant base throughout the world. By early 2000, however, KFC had refocused its international strategy on several high-growth markets, including Canada, Australia, the United Kingdom, China, Korea, Thailand, Puerto Rico, and Mexico. KFC planned to base much of its growth in these markets on company-owned restaurants, which gave KFC greater control over product quality, service, and restaurant cleanliness. In other international markets, KFC planned to grow primarily through franchises, which were operated by local business-people who understood the local market better than KFC. Franchises enabled KFC to more rapidly expand into smaller countries that could only support a small number of restaurants. KFC planned to aggressively expand its company-owned restaurants into other major international markets in Europe and Latin America in the future. Latin America was an appealing area for investment because of the size of its markets, its common language and culture, and its geographical proximity to the United States. Mexico was of particular interest because of the North American Free Trade Agreement (NAFTA), which went into effect in 1994 and created a free-trade zone between Canada, the United States, and Mexico. However, other fast-food chains such as McDonald's, Burger King, and Wendy's were rapidly