A Case Study of Kentucky Fried Chicken

In order to illustrate the concept of creating a fast food chain, we use the example of Kentucky Fried Chicken, which began as a roadside restaurant in Corbin, Kentucky, selling fried chicken and later developed into a fast food chain with locations all over the world. By adding chicken to the menu of fast meals, founder Harland Sanders threatened the monopoly of hamburgers in the fast food sector. The business had to be sold to investors with the ability to handle a sizable market in the food industry as a result of its rapid expansion (Bassett, Mary, et al). Sanders was unsettled by how long it took to prepare chicken in the normal frying pan. He did not opt for deep frying since doing so would leave the chicken crusty and dry. Sanders converted a vegetable steaming pan into a pressure cooker, and thus was able to cook chicken faster and to the texture he wanted without compromising the quality of the chicken. His final recipe for his chicken was a mixture of 11 herbs. Despite the fact that Sanders never revealed the whole recipe, he revolutionized the course of fried chicken in the fast food business. Sanders, however, sold the business to Mr. Brown, having decided not to run it as a joint venture. Brown did not have enough money to buy the business himself so he sought help from financier Jack Massey to provide 60% of the acquisition. Kentucky Fried Chicken now had new owners, including a franchise agreement by other financiers. Sanders retained control of quality and trademark as well as a guaranteed lifetime salary.

KFC now operates mainly through franchising agreements, where a store owner signs an agreement to sell fried chicken exclusively and has to operate under standardization of Kentucky Fried Chicken in all its operations (Finkelstein, Strombotne and Chan).

KFC Mode of Operation.

Kentucky Fried Chicken started in Corbin, Kentucky and later grew to have branches in several states in the United States of America. Franchising (a business mode of operation where one party pays another party, i.e. the franchisee, to conduct business using their brand names) agreements saw to its brand name carried across several continents.

Lessons Learned from Kentucky Fried Chicken as A Fast Food Chain

Entry Strategy

Colonel Sanders used penetrating strategy to enter the already established fast-food industry. The market penetration strategy implies the entrepreneur identifying a gap in an already existing market that needs to be filled. Identification of a niche in the market is paramount to the success of a business idea or innovation.

Growth Strategy

After entry into the market, a business has to figure out a way to curb the competition by having the competitive edge. In the case of Kentucky Fried Chicken, improving the quality of the chicken by the introduction of chicken nuggets caught the curiosity of customers. Additionally, mergers and franchises played a big part in the spread of the brand name. An idea requires support and platform in order to be catapulted to success (Kfc.com).

Mode of Financing

Brown could not afford to buy the company solely from the original owner (Colonel Sanders). He, therefore, sought the help of Massey who agreed to own 60% of the company’s shares. This is called a partnership agreement where two or more parties share the ownership of the company according to the shares owned. Responsibilities and liabilities are also shared between the parties.

Works Cited

Bassett, Mary T., et al. "Purchasing behavior and calorie information at fast-food chains

in New York City, 2007." American Journal of Public Health, vol. 98, no. 8, 2008, pp. 1457-9.

Finkelstein , A. E., et al. "Mandatory menu labeling in one fast-food chain in King County, Washington." PubMed, vol. xl.2, 2011, pp. 122-7.

Kfc.com. Kentucky Fried chicken, 28 February 2017. Kfc.com. Accessed 28 April 2017.