Kfc Sample Executive Summary

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Category: Business and Industry

Date Submitted: 09/26/2012 10:23 PM

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Executive Summary

KFC, one of the largest chains of fast food restaurants faces all these forces and tends to eliminate them to strengthen market position. KFC has been in the fast food industry since the 1930’s. It entered Pakistan in 1907 and has carried out successful business. It is a well established multinational offering premium experience of value added chicken meals and other fast food to its customers.KFC has put up moderate barriers to entry for potential entrants. Hence, although it is not very difficult to enter the fast food industry, it is extremely difficult to enter as KFC’s competitor. Well established brand name, higheconomies of scale, a moderate level of product differentiation, high capital requirements and access to distribution channels make it a successfulbusiness altogether and thus makes it difficult for a new entrant to enter theindustry and compete with it.Rivalry among existing competitors is moderate, since all major players havea prominent position in the market. Price competition exists, but KFC focusesmore on differentiating and marketing efforts to raise sales than bitter pricewars and advertising battles. Exit barriers for the firm are high due toaccountability to not only its loyal customers but its suppliers, employeesand the band name itself. High exit and entry barriers promise high returnsbut make the firm risky at the same time. A new entrant promising KFC’sspecial recipe at a lower price will definitely hurt the company.Substitute products for KFC have gained power due to renewed health andobesity concerns. In Pakistan, issues like not using Halal chicken haveseriously damaged the brand, but KFC has overcome this by effectivemarketing and branding efforts. However, during the process it lost some of the trust people placed upon it and has given space to substitutes like madeto order and ready made recipes. KFC loyal customers will however not shiftto substitutes due to high switching costs which can be both monetary...