With what critical issues are Kyle Craig and KFC-USA faced in 1994?

Question

What will be an ideal response?

Answer 1

• Restaurant growth in the U.S. market is becoming more difficult (fewer sites are available and those
available are more expensive to acquire).*
• KFC’s international operations are taking over a greater and greater portion of KFC’s overall growth.
How can KFC’s U.S. operations continue to grow?*
• How can KFC continue to grow the KFC brand in light of industry trends (e.g., consumers are eating fewer fried foods)?*
• KFC’s image needs to be updated (fried chicken).*
• How can KFC improve its margins in light of higher operating costs and consumer pressure to lower prices?*
• Sandwich chains such as Hardee’s and McDonald’s have introduced fried chicken to their menus, thereby cutting into KFC’s traditional business.*
• New chains such as Boston Chicken and Kenny Rogers Roasters have entered the market by
emphasizing non-fried chicken products such as broiled and roasted chicken, thereby making it more difficult
for KFC to break into these market segments.*
• Consumers are demanding more value for their dollar. At the same time, they are demanding greater
variety in menu offerings. This has led to pressure for KFC to reduce prices and to introduce new products.
Both actions are squeezing profit margins.****
• Customer service is a problem (KFC’s franchises are independent and KFC is having problems maintaining
consistency in customer service across its franchises).****
• KFC’s relationship with its franchises is strained. In fact, KFC’s franchise association has sued KFC over
its new contract, which it considers to be too restrictive.*