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KFC management found itself struggling with critical issues in1994.
1. A major share approximately 87% of its growth was by its global operations.
2. The severe competition faced by KFC in its home country, by Church’s, Popeye’s, Bo jangles, stunted
its US expansion. (Rivalry in industry)
Apart from them, new high end, chicken chains like Kenny Roger’s Roasters and Boston Chicken also
came up in US and started offering non fry chicken delicacies by targeting elite customers. This became
huge threat for KFC. (Threat from New entrants)
3. Property prices rose high and so the rents too hiked. That was reducing the profit margins of
company. (Bargaining powers of suppliers)
4. Marketing campaigns and rebranding was raising the expenses and resulted in low profits
5. Consumers demand for slashing prices was taking a toll on its income. (Bargaining power of
consumers)
6. New Competitors such as Hardee’s and McDonald’s were emerging that were offering variety in food
menu. To beat them it was introducing new products but at high operating cost that was also pushing
down the profits (Substitute products)
The above can be related to Michael Porter five forces model.
• Talking about the fast food industry, it is one of the fast growing sector of the current industry since
almost past 20 years in United States of America. However, it still account only 10% of the overall
market, in term of numbers and the kind of diversity it has, it’s really been exploding across the
