Quick Chain Restaurants Im

8/8/2019 Quick Chain Restaurants Im

1/48

FAST FOOD INDUSTRY

Introduction

Fast food is the term given to food that can be prepared and served very

quickly. While any meal with low preparation time can be considered to be

fast food, typically the term refers to food sold in a restaurant or store

with low quality preparation and served to the customer in a packaged

form for take-out/take-away.

Outlets may be stands or kiosks, which may provide no shelter or seating,

or fast food restaurants (also known as quick service restaurants).

Franchise operations which are part of restaurant chains have

standardized foodstuffs shipped to each restaurant from central locations.

The capital requirements involved in opening up a fast food restaurant are

relatively low. Restaurants with much higher sit-in ratios, where

customers tend to sit and have their orders brought to them in aseemingly more upscale atmosphere may be known in some areas as fast

casual restaurants.

History

The concept of ready-cooked food for sale is closely connected with urban

development. In Ancient Rome cities had street stands that sold bread

and wine. A fixture ofEast Asian cities is the noodle shop. Flatbread and

falafel are today ubiquitous in the Middle East. Popular Indian fast food

dishes include vada pav, panipuri and dahi vada. In the French-speaking

nations of West Africa, roadside stands in and around the larger cities

continue to sellas they have done for generationsa range of ready-to-

eat, char-grilled meat sticks known locally as brochettes.

The Start of Fast Food Culture
http://en.wikipedia.org/wiki/Restauranthttp://en.wikipedia.org/wiki/Take-outhttp://en.wikipedia.org/wiki/Kioskhttp://en.wikipedia.org/wiki/Fast_food_restauranthttp://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Chain_storehttp://en.wikipedia.org/wiki/Capital_(economics)http://en.wikipedia.org/wiki/Fast_casual_restauranthttp://en.wikipedia.org/wiki/Fast_casual_restauranthttp://en.wikipedia.org/wiki/Ancient_Romehttp://en.wikipedia.org/wiki/East_Asiahttp://en.wikipedia.org/wiki/Noodlehttp://en.wikipedia.org/wiki/Flatbreadhttp://en.wikipedia.org/wiki/Falafelhttp://en.wikipedia.org/wiki/Middle_Easthttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Vada_pavhttp://en.wikipedia.org/wiki/Panipurihttp://en.wikipedia.org/wiki/Dahi_vadahttp://en.wikipedia.org/wiki/West_Africahttp://en.wikipedia.org/wiki/Street_foodhttp://en.wikipedia.org/wiki/Brochettehttp://en.wikipedia.org/wiki/Restauranthttp://en.wikipedia.org/wiki/Take-outhttp://en.wikipedia.org/wiki/Kioskhttp://en.wikipedia.org/wiki/Fast_food_restauranthttp://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Chain_storehttp://en.wikipedia.org/wiki/Capital_(economics)http://en.wikipedia.org/wiki/Fast_casual_restauranthttp://en.wikipedia.org/wiki/Fast_casual_restauranthttp://en.wikipedia.org/wiki/Ancient_Romehttp://en.wikipedia.org/wiki/East_Asiahttp://en.wikipedia.org/wiki/Noodlehttp://en.wikipedia.org/wiki/Flatbreadhttp://en.wikipedia.org/wiki/Falafelhttp://en.wikipedia.org/wiki/Middle_Easthttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Vada_pavhttp://en.wikipedia.org/wiki/Panipurihttp://en.wikipedia.org/wiki/Dahi_vadahttp://en.wikipedia.org/wiki/West_Africahttp://en.wikipedia.org/wiki/Street_foodhttp://en.wikipedia.org/wiki/Brochette


2/48

The concept of fast food pops up during 1920s.The 1950s first witnessed their

rapid proliferation. Several factors that contributed to this explosive growth in

50s were:

(1) Americas love affair with the automobiles.

(2) The construction of a major new highway system.

(3) The development of sub-urban communities.

(4) The baby boom subsequent to world war second.

Fast-food chains initially catered to automobile owners in suburbia.

On the go

Fast food outlets are take-awayor take-outproviders, often with a "drive-through" service which allows customers to order and pick up food from

their cars; but most also have a seating area in which customers can eat

the food on the premises. People eat there more than five times a week

and often, one or more of those five times is at a fast food restaurant.

Nearly from its inception, fast food has been designed to be eaten "on the

go", often does not require traditional cutlery, and is eaten as a finger

food. Common menu items at fast food outlets include fish and chips,

sandwiches, pitas, hamburgers, fried chicken, French fries, chicken

nuggets, tacos, pizza, hot dogs, and ice cream, although many fast food

restaurants offer "slower" foods like chili, mashed potatoes, and salads.

Variants

Although fast food often brings to mind traditional American fast foodsuch as hamburgers and fries, there are many other forms of fast food

that enjoy widespread popularity in the West.

Chinese takeaways/takeout restaurants are particularly popular. They

normally offer a wide variety ofAsian food which has normally been fried.

Most options are some form of noodles, rice, or meat.
http://en.wikipedia.org/wiki/Cutleryhttp://en.wikipedia.org/wiki/Finger_foodhttp://en.wikipedia.org/wiki/Finger_foodhttp://en.wikipedia.org/wiki/Pitahttp://en.wikipedia.org/wiki/Fried_chickenhttp://en.wikipedia.org/wiki/Chicken_nuggethttp://en.wikipedia.org/wiki/Chicken_nuggethttp://en.wikipedia.org/wiki/Tacohttp://en.wikipedia.org/wiki/Ice_creamhttp://en.wikipedia.org/wiki/Chili_con_carnehttp://en.wikipedia.org/wiki/Mashed_potatohttp://en.wikipedia.org/wiki/Saladhttp://en.wikipedia.org/wiki/Western_worldhttp://en.wikipedia.org/wiki/Asian_cuisinehttp://en.wikipedia.org/wiki/Ricehttp://en.wikipedia.org/wiki/Meathttp://en.wikipedia.org/wiki/Cutleryhttp://en.wikipedia.org/wiki/Finger_foodhttp://en.wikipedia.org/wiki/Finger_foodhttp://en.wikipedia.org/wiki/Pitahttp://en.wikipedia.org/wiki/Fried_chickenhttp://en.wikipedia.org/wiki/Chicken_nuggethttp://en.wikipedia.org/wiki/Chicken_nuggethttp://en.wikipedia.org/wiki/Tacohttp://en.wikipedia.org/wiki/Ice_creamhttp://en.wikipedia.org/wiki/Chili_con_carnehttp://en.wikipedia.org/wiki/Mashed_potatohttp://en.wikipedia.org/wiki/Saladhttp://en.wikipedia.org/wiki/Western_worldhttp://en.wikipedia.org/wiki/Asian_cuisinehttp://en.wikipedia.org/wiki/Ricehttp://en.wikipedia.org/wiki/Meat


3/48

Sushi has seen rapidly rising popularity in recent times. A form of fast food

created in Japan. sushi is normally cold sticky rice served with raw

fish.Pizza is a common fast food category in the United States, with chains

such as Domino's Pizza, Sbarro and Pizza Hut. Menus are more limited andstandardized than in traditional pizzerias, and pizza delivery, often with a

time commitment, is offered.

Fish and chip shops are a form of fast food popular in the United Kingdom,

Australia and New Zealand. Fish is battered and then deep fried.The Dutch

have their own types of fast food. A Dutch fast food meal often consists of

a portion of French fries .

Business

In the United States alone, consumers spent about US$110 billion on fast

food in 2000 (which increased from US$6 billion in 1970). The National

Restaurant Association forecasted that fast food restaurants in the U.S.

would reach US$142 billion in sales in 2006, a 5% increase over 2005. In

comparison, the full-service restaurant segment of the food industry isexpected to generate $173 billion in sales.

Jobs and labor issues

Today, more than 10 million workers are employed in the areas of food

preparation and food servicing including fast food in the world.

Employees are the backbone of the fast food industry. Proper training iscrucial to the orderly and quick service customers expect. Yet, employee

turnover can be as high as 200% per year. With such a turnover, owner-

operators of franchise and non-franchise restaurants have the daunting

task of constantly training an entirely new workforce. Policies and

procedures need to be explained to each new employee.

Globalization
http://en.wikipedia.org/wiki/Sushihttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Fishhttp://en.wikipedia.org/wiki/Domino's_Pizzahttp://en.wikipedia.org/wiki/Sbarrohttp://en.wikipedia.org/wiki/Pizza_Huthttp://en.wikipedia.org/wiki/Pizza_deliveryhttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/National_Restaurant_Associationhttp://en.wikipedia.org/wiki/National_Restaurant_Associationhttp://en.wikipedia.org/wiki/Turnover_(employment)http://en.wikipedia.org/wiki/Turnover_(employment)http://en.wikipedia.org/wiki/Sushihttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Fishhttp://en.wikipedia.org/wiki/Domino's_Pizzahttp://en.wikipedia.org/wiki/Sbarrohttp://en.wikipedia.org/wiki/Pizza_Huthttp://en.wikipedia.org/wiki/Pizza_deliveryhttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/National_Restaurant_Associationhttp://en.wikipedia.org/wiki/National_Restaurant_Associationhttp://en.wikipedia.org/wiki/Turnover_(employment)http://en.wikipedia.org/wiki/Turnover_(employment)


4/48

In 2006, the global fast food market grew by 4.8% and reached a value of

102.4 billion and a volume of 80.3 billion transactions. In India alone the

fast food industry is growing by 40% a year. McDonald's is located in 120

countries and on 6 continents and operates over 31,000 restaurantsworldwide.

KFC is located in 25 countries. Subway has 29,186 restaurants located in

86 countries, Pizza Hut is located in 26 countries, Taco Bell has 278

restaurants located in 12 countries besides the United States.

Health issue

Trans fats which are commonly found in fast food have been shown in

many tests to have a negative health effect on the body.

The fast food consumption has been shown to increase calorie intake,

promote weight gain, and elevate risk for diabetes. The Centers for

Disease Control and Prevention ranked obesity as the number one health

threat for Americans in 2004. It is the second leading cause of

preventable death in the United States and results in 400,000 deaths each

year.

FAST FOOD INDUSTRY IN INDIA

INDIA EMERGING MARKET FOR GLOBAL PLAYERS

The percentage share held by foodservice of total consumer expenditure on

food has increased from a very low base to stand at 2.6% in 2001. Eating at

home remains very much ingrained in Indian culture and changes in eating

habits are very slow moving with barriers to eating out entrenched in certain

sectors of Indian society.. The growth in nuclear families, particularly in urban

India, exposure to global media and Western cuisine and an increasing

number of women joining the workforce have had an impact on eating out

trends.
http://en.wikipedia.org/wiki/KFChttp://en.wikipedia.org/wiki/Subway_(restaurant)http://en.wikipedia.org/wiki/Taco_Bellhttp://en.wikipedia.org/wiki/Weight_gainhttp://en.wikipedia.org/wiki/Centers_for_Disease_Control_and_Preventionhttp://en.wikipedia.org/wiki/Centers_for_Disease_Control_and_Preventionhttp://en.wikipedia.org/wiki/KFChttp://en.wikipedia.org/wiki/Subway_(restaurant)http://en.wikipedia.org/wiki/Taco_Bellhttp://en.wikipedia.org/wiki/Weight_gainhttp://en.wikipedia.org/wiki/Centers_for_Disease_Control_and_Preventionhttp://en.wikipedia.org/wiki/Centers_for_Disease_Control_and_Prevention


5/48

FACTS AND FIGURES

Fast food is one of the worlds largest growing food type. Indias fast food

industry is growing by 40% a year and is expected to generate a billion

dollars in sales by 2005.The multinational segment of Indian fast food

industry is up to Rs. 6 billion, a figure expected to zoom to Rs.70 billion by

2005. By 2005, the value of Indian dairy products is expected to be Rs.1,

00,000 million. In last 6 years, foreign investment in this sector stood at Rs.

3600 million which is about one-fourth of total investment made in this

sector. Because of the availability of raw material for fast food, Global chains

are flooding into the country.

MARKET SIZE & MAJOR PLAYERSa) Dominated by McDonalds having as many as 75 outlets.

b) Dominos pizza is present in around 100 locations.

c) Pizza hut is also catching up and it has planned to establish 125

outlets at the end of 2005.

d) Subways have established around 40 outlets.

e) Nirulas is established at Delhi and Noida only. However, it claims to

cater 50,000 guests every day.

Major players in fast food are:

MCDONALDS

KFC

PIZZA HUT

DOMINOS PIZZA.

COFFEE DAY

BARISTA.

The main reason behind the success of the multinational chains is their

expertise in product development, sourcing practices, quality standards,

service levels and standardized operating procedures in their restaurants, a

strength that they have developed over years of experience around the

world. The home grown chains have in the past few years of competition with

the MNCs, learnt a few things but there is still a lot of scope for improvement.


6/48

REASON FOR EMERGENCE

Gender Roles: gender roles are now changing. Females have started

working outside. So, they have no time for their home and cooking food. Fastfood is an easy way out because these can be prepared easily.

Customer Sophistication and Confidence: consumers are becoming

more sophisticated now. They do not want to prepare food and spend their

time and energy in house hold works. They are building their confidence

more on ready to eat and easy to serve kind of foods

Paucity of Time: people have no time for cooking. Because of emergence of

working women and also number of other entertainment items. Most of the

time either people work or want to enjoy with their family.

Double Income Group: emergence of double income group leads to

increase in disposable income. Now people have more disposable income so

they can spend easily in fast food and other activities.

Working Women: working women have no time for cooking, and if they

have then also they dont want to cook. Because they want to come out of

the traditionally defined gender roles. They do not want to confine

themselves to household work and upbringing of childrens.Large population: India being a second largest country in terms of

population possesses large potential market for all the products/services. This

results into entry of large number of fast food players in the country.

Relaxation in rules and regulations: with the economic liberalization of

1991, most of the tariff and non tariff barriers from the Indian boundaries are

either removed or minimized. This helped significantly the MNCs to enter in

the country.

Menu diversification: increase in consumption of pizzas, burgers and other

type of fast foods.

CHALLENGES FOR THE INDUSTRY

Social and cultural implications of Indians switching to western

breakfast food: Generally, Hindus avoid all foods that are believed to inhibit

physical and spiritual development. Eating meat is not explicitly prohibited,

but many Hindus are vegetarian because they adhere to the concept of


7/48

ahimsa. Those seeking spiritual unity may avoid garlic and onions. The

concept of purity influences Hindu food practices. Products from cows (e.g.,

milk, yogurt, ghee-clarified butter) are considered pure. Pure foods can

improve the purity of impure foods when they are prepared together. Some

foods, such as beef or alcohol, are innately polluted and can never be made

pure. But now, Indians are switching to fast food that contain all those things

that are considered impure or against there beliefs. Some traditional and

fundamentalist are against this transformation of food habit and number of

times they provoke their counterparts to revolt against such foods. And that

is what happened when McDonalds decided to enter the complexity of Indian

business landscape, counting only on its fast food global formula, without

any apparent previous cultural training.

Emphasis on the usage of bio-degradable products: Glasses,

silverware, plates and cloth napkins are never provided with fast food.

Instead, paper plates and napkins, polyurethane containers, plastic cups and

tableware, drinking cartons or PET (polyethylene terephthalate) bottles are

used, and these are all disposable. Many of these items are tossed in the

garbage instead of being recycled, or even worse, merely thrown on the

ground. This burdens nature unnecessarily and squanders raw materials. Inorder to reduce soil and water pollution, government now emphasis more on

the usage of bio-degradable products.

Retrenchment of employees: Most of new industries will be capital

intensive and may drive local competitors, which have more workers, out of

business.

Profit repatriation: Repatriation of profits is another area of concern for

Indian economy. As when multinational enters the any countries, people and

government hope that it will increase the employment rate and result in

economic growth. However, with the multinational operation, host country

experiences these benefits for a short time period. In long run neither

employment increases (because of capital intensive nature of MNCs) nor it

increases the GDP or GNP because whatever MNCs earn they repatriate that

profit back to their home country.

PROBLEMS OF INDUSTRY


8/48

Environmental friendly products cost high: government is legislating

laws in order to keep check on the fast food industry and it is emphasizing

more on the usage of bio-degradable and environment friendly products. But

associated with this issue is the problem that fast food player faces - the cost

associated with the environment friendly product. They cost much higher

than the normal products that companies uses for packaging or wrapping

their products.

Balance between societal expectation and companies economic

objectives: To balance a societys expectation regarding environment with

the economic burden of protecting the environment. Thus, one can see that

one side pushes for higher standards and other side tries to beat the

standard back, thereby making it a arm wrestling and mind boggling

exercise.

Health related issues: obesity:

I. Studies have shown that a typical fast food has very high density and

food with high density causes people to eat more then they usually

need. \

II. Low calories food: Emphasis is now more on low calorie food. In this

line McDonald has a plan to introduce all white meat chicken

Mcnuugget with less fat and fewer calories.

TRENDS IN INDIAN MARKET

Marketing to children's: fast food outlets in India target childrens as

their major customers. They introduce varieties of things that will attract

the childrens attention and by targeting childrens they automatically

target their parents because Childrens are always accompanied by their

parents.


9/48

Low level customer commitment: Because of the large number of food

retail outlets and also because of the tendency of customer to switch from

one product to other, this industry faces low level customer commitment.

Value added technology services: There is continuous improvement in

the technology as far as fast food market in India is considered. The

reason behind that is food is a perishable item and in order to ensure that

it remain fresh for a longer period of time. Earlier, Indian people prefer

eating at home but now with the change in trend there is also need for

improvement and up gradation of technology in food sector.

Attracting different segments of the market: Fast food outlets are

introducing varieties of products in order to cater the demands of each

and every segment of the market. They are introducing all categories of

product so that people of all age, sex, class, income group etc can come

and become a customer of their food line.

The success of fast foods arose from the changes in our living conditions:

1. Many women or both parents now work2. There are increased numbers of single-parent households

3. Long distances to school and work are common

4. Usually, lunch times are short

5. There's often not enough time or opportunity to shop carefully for

groceries, or to cook and eat with one's family. Especially on

weekdays, fast food outside the home is the only solution.

Kentucky Fried ChickenAbout the Company


10/48

KFC Corporation, or KFC, founded and also known as Kentucky Fried

Chicken, is a chain offast food restaurants based in Louisville, Kentucky.

KFC is a brand and operating segment, called a "concept" ofYum! Brands

since 1997 when that company was spun off from PepsiCo as TriconGlobal Restaurants Inc. The restaurants are known as Poulet Frit

Kentucky or PFK in the province of Quebec in Canada. In France,

however, the chain is known as KFC.

KFC primarily sells chicken in form of pieces, wraps, salads and

sandwiches. While its primary focus is fried chicken, KFC also offers a line

of roasted chicken products, side dishes and desserts. Outside North

America, KFC offers beef based products such as hamburgers or kebabs,

pork based products such as ribs and other regional fare.

The company was founded as Kentucky Fried Chicken by Colonel

Harland Sanders in 1952, though the idea of KFC's fried chicken actually

goes back to 1930. The company adopted the abbreviated form of its

name in 1991. Starting in April 2007, the company began using its original

name, Kentucky Fried Chicken, for its signage, packaging andadvertisements in the United States as part of a new corporate re-

branding program newer and remodeled restaurants will have the new

logo and name while older stores will continue to use the 1980s signage.

Additionally, Yum! Continues to use the abbreviated name freely in its

advertising.

Products

The famous paper bucket that KFC uses for its larger sized orders of

chicken and has come to signify the company was originally created by

Wendy's restaurants founder Dave Thomas. Thomas was originally a

franchisee of the original Kentucky Fried Chicken and operated several

outlets in the Columbus, Ohio area. His reasoning behind using the paper

packaging was that it helped keep the chicken crispy by wicking away

excess moisture. Thomas was also responsible for the creation of the
http://en.wikipedia.org/wiki/Fast_food_restauranthttp://en.wikipedia.org/wiki/Louisville,_Kentuckyhttp://en.wikipedia.org/wiki/Yum!_Brandshttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/Quebechttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Chicken_(food)http://en.wikipedia.org/wiki/Wrap_(food)http://en.wikipedia.org/wiki/Saladhttp://en.wikipedia.org/wiki/Sandwichhttp://en.wikipedia.org/wiki/Fried_chickenhttp://en.wikipedia.org/wiki/Side_dishhttp://en.wikipedia.org/wiki/Desserthttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Hamburgerhttp://en.wikipedia.org/wiki/Harland_Sandershttp://en.wikipedia.org/wiki/Harland_Sandershttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Wendy'shttp://en.wikipedia.org/wiki/Dave_Thomas_(American_businessman)http://en.wikipedia.org/wiki/Columbus,_Ohiohttp://en.wiktionary.org/wiki/wickhttp://en.wikipedia.org/wiki/Fast_food_restauranthttp://en.wikipedia.org/wiki/Louisville,_Kentuckyhttp://en.wikipedia.org/wiki/Yum!_Brandshttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/Quebechttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Chicken_(food)http://en.wikipedia.org/wiki/Wrap_(food)http://en.wikipedia.org/wiki/Saladhttp://en.wikipedia.org/wiki/Sandwichhttp://en.wikipedia.org/wiki/Fried_chickenhttp://en.wikipedia.org/wiki/Side_dishhttp://en.wikipedia.org/wiki/Desserthttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Hamburgerhttp://en.wikipedia.org/wiki/Harland_Sandershttp://en.wikipedia.org/wiki/Harland_Sandershttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Wendy'shttp://en.wikipedia.org/wiki/Dave_Thomas_(American_businessman)http://en.wikipedia.org/wiki/Columbus,_Ohiohttp://en.wiktionary.org/wiki/wick


11/48

famous rotating bucket sign that came to be used at most KFC locations in

the US.

Menu items

KFC's specialty is fried chicken served in various forms. KFC's primary

product is pressure-fried pieces of chicken made with original recipe. The

other chicken offering, extra crispy, is made using a garlic marinade and

double dipping the chicken in flour before deep frying in a standard

industrial kitchen type machine.

Kentucky Grilled Chicken - This marinated grilled chicken is targeted

towards health-conscious customers. It features marinated breasts,

thighs, drumsticks, and wings that are coated with the Original Recipe

seasonings before being grilled. It has less fat, calories, and sodium than

the Original Recipe fried chicken. Introduced in April 2009.

Discontinued products

The Colonel's Rotisserie Gold This product was introduced in the 1990s as a

response to the Boston Market chain's roasted chicken products, and a healthier

mindset of the general public avoiding fried food. Purportedly made from a "lost"

Col. Sanders recipe, it was sold as a whole roaster or a half bird. [28]

Tender Roast Chicken This product was an off-shoot of 'The Colonel's Rotisserie

Gold'. Instead of whole and half birds, customers were given quarter roasted

chicken pieces. For a time, customers could request chicken "original", "Extra

Tasty Crispy", or "Tender Roast".

Smokey Chipotle Introduced in April 2008. The chicken was dipped in chipotle

sauce then doubled breaded and fried. It has been discontinued since August2008.

Nutritional value

KFC formerly used partially hydrogenated oil in its fried foods. This oil

contains relatively high levels of trans fat, which increases the risk of

heart disease. The Center for Science in the Public Interest (CSPI) filed a

court case against KFC, with the aim of making it use other types of oils or
http://en.wikipedia.org/wiki/Boston_Markethttp://en.wikipedia.org/wiki/KFC#cite_note-27http://en.wikipedia.org/wiki/Trans_fathttp://en.wikipedia.org/wiki/Heart_diseasehttp://en.wikipedia.org/wiki/Center_for_Science_in_the_Public_Interesthttp://en.wikipedia.org/wiki/Boston_Markethttp://en.wikipedia.org/wiki/KFC#cite_note-27http://en.wikipedia.org/wiki/Trans_fathttp://en.wikipedia.org/wiki/Heart_diseasehttp://en.wikipedia.org/wiki/Center_for_Science_in_the_Public_Interest


12/48

make sure customers know about Trans fat content immediately before

they buy food.

In October 2006, KFC announced that it would begin frying its chicken in

trans fat-free oil. This would also apply to their potato wedges and other

fried foods, however, the biscuits.

Advertising

One of KFC's latest advertisements is a commercial advertising its "wickedcrunch box meal". The commercial features a fictional black metal band

called "Hellvetica" performing live, the lead singer then swallows fire. The

commercial then shows the lead singer at a KFC eating the "wicked

crunch box meal" and saying "Oh man that is hot".

In 2007, the original, non-acronymic Kentucky Fried Chicken name was

resurrected and began to reappear on company marketing literature and

food packaging, as well as some restaurant signage.

KFC Business Strategy

KFC fast-food chains are currently under the restaurant division of PepsiCo

Incorporated. Some major threats include the changing attitudes of

society toward healthier eating habits, KFC has more than 9,800 outlets

located in 77 countries. In marketing, KFC restaurants are not restrictedfrom locating within close proximity of other KFC restaurants. There are

two alternative strategies for KFC. The first strategy involves keeping

PepsiCo beverage division and snack foods division together, and a

divestiture of PepsiCo restaurant division; selling Taco Bell, Pizza Hut, and

KFC.

Present Situation
http://en.wikipedia.org/wiki/Black_metalhttp://www.collegeresearch.us/free_search/KFC+Business+Strategy/1.htmlhttp://en.wikipedia.org/wiki/Black_metalhttp://www.collegeresearch.us/free_search/KFC+Business+Strategy/1.html


13/48

The organization is currently structured with two divisions under PepsiCo.

David Novak is president of KFC. John Hill is Chief Financial Officer and

Colin Moore is the head of Marketing. Peter Waller is head of franchising

while Olden Lee is head of Human Resources. KFC is part of the twoPepsiCo divisions, which are PepsiCo Worldwide Restaurants and PepsiCo

Restaurants International. Both of these divisions of PepsiCo are based in

Dallas.

Strengths

Strengths can be found internally in a company and can be used to the

companys advantage. The strengths identified are as follows:

1. KFC's secret recipe.

The secret recipe has long been a source of advertising, and allowed KFC

to set itself apart. Also, KFC was the first chain to enter the fast-food

industry, just before McDonald's, which opened its first store a year later,

and the "secret recipe" was the initial home replacement strategy.

2. Name recognition and reputation.

KFC's early entrance into the fast-food industry in 1954 allowed KFC to

develop strong brand name recognition and a strong foothold in the

industry. The Colonel is KFC's original owner and a very recognizable

figure, both in the U.S. and internationally, in their new logo. In fact, in the

fourth annual LogoValue Survey, done by The Schecter Group, the KFC

logo was the only one which significantly enhance the brand's image .

3. PepsiCo's success with the management of fast food chains.

PepsiCo acquired Pizza Hut in 1977, and Taco Bell in 1978. PepsiCo used

many of the same promotional strategies that it has used to market soft

drinks and snack food. By the time PepsiCo bought KFC in 1986, the


14/48

company already dominated two of the four largest and fastest-growing

segments of the fast food industry.

4. Traditional employee loyalty.

"KFC's culture was built largely on Colonel Sanders' laid back approach to

management" (Wright, p.433). Before the acquisition of KFC by PepsiCo,

employees at KFC enjoyed good benefits, a pension, and could receive

help with other non-income needs. This kind of "personal" human

resources management makes for a loyal workforce.

5. Improving operating efficiencies by reducing overhead and

other operating costs can directly affect operating profit.

Due to the strong competition in the US, the fast-food chains are reluctant

to raise prices to increase profit. Many of the chains are turning to

operating efficiencies to increase profit. For many companies, operating

efficiencies are achieved through improvements in customer service,

cleaner restaurants, faster and friendlier service, and continued high-

quality products.

Weaknesses

Weaknesses are also found internally like strengths. Weaknesses,

however, can limit a companys potential. The weaknesses for KFC are

identified as follows:

1. The many sales of KFC lead to a confusing corporate direction.

Between 1971 and 1986, KFC was sold three times. The first two sales, to

Heublein, Inc and to R.J. Reynolds, left the company largely autonomous.

It wasn't until the sale to PepsiCo in 1986 that changes in top

management started to take place. These changes happened almost

immediately after the sale.

2. KFC has a long time to market with new products.


15/48

Because of the nature of the chicken segment of the fast food industry,

innovation was never a primary strategy for KFC. However, during the late

1980's, other fast food chains, such as McDonald's, began to offer chicken

as a

Menu option. During this time, McDonald's had already introduced the

McChicken while KFC was still testing its own chicken sandwich. This delay

significantly increased the cost of developing consumer awareness for the

KFC sandwich.

3. Conflicting cultures of KFC and Pepsi Co.

While KFC's culture was largely based on the Colonel's laid back approach

to management, while PepsiCo's culture is more of a "fast track" attitude.

Employees do not have the same level of job security that they enjoyed

before the PepsiCo acquisition

Problems

Through an analysis of the strengths, weaknesses, opportunities, andthreats of KFC, the following potential problem areas were identified:

1. No defined target market.

The advertising campaign of KFC does not specifically appeal to any

segment. It does not appear to have a consistent long-term approach. TheU.S. has enormous changes in its demographics. Single-person

households have increased from 12% in 1970 to 25% in 1995. With this

kind of dramatic change, KFC does not have a proper approach to its

target market.

2. Health Conscious Consumers.


16/48

There has been a trend toward an increasingly healthy diet in America.

This put KFC at an extreme disadvantage due to its fried product offering.

3. Increased Start Up Costs.

Prime locations have increased in cost due to limited room for expansion.

New technology has increased efficiencies, but resulted in greater

increased start up costs. Restaurant and equipment packages range from

$500,000 to $1,000,000.

Achievements:

KFC is one of the most renowned world gastronomic brand names.

Kentucky Fried Chicken products are currently offered in 80 countries

worldwide and in more than 11,000 restaurants which are visited on a

daily basis by almost 8 million customers. Globally, KFC employs

approximately 290,000 people, Worldwide, a new KFC restaurant is

opened almost every day.

In 2004 the KFC Excellent range - three types of salad (Caesar, Garden

and Mandarin) obtained the prize for Worldwide Best Practice Award

2004 in the category of best product and best marketing campaign and

its implementation in the restaurants. This prize is distributed each year

by YUM Restaurants International.According to the ratings for Most

expensive world brands 2004 conducted by the American weekly

Business Week, KFC was positioned 54th place; currently valued at 5.1

billion USD.

DOMINOS

SIZE OF THE MARKET


17/48

Domino's Pizza is one of the biggest and fastest growing international

food joints in South Asia. The very first Domino's Pizza outlet in India

opened in Jan, 1996 at New Delhi. Today, Domino's Pizza India has

become a wide network of Pizza delivery and food chain. There are closeto 220 outlets in 42 cities of India and the brand is the top most among

the food delivery business. Dominos Pizza outlets can be seen at major

locations of Delhi and NCR. Their home delivery is free with a guarantee of

Thirty Minutes Nahi to Free. Although they are expert in delivering

Pizzas on time, their eating joints and outlets are also good. We plan to

have a total of 500 stores in 75-80 cities by 2010 to 2011. It would entail

an investment of Rs 200 million during the period

MARKET GROWTH

During last four months, dominoes have opened outlets in Jammu,

Panipat, Surat, Baroda, Nashik, Trivandum, Meerut and Patiala. While

earlier, 70 percent of our business used to be in metros and mini-metros,

now the ratio is 50:50 between big cities and smaller Tier II and III cities.

Dominos Pizza is expanding its base in India by opening 500 outlets toadd to its current tally of 156 outlets, across 50 cities in India by 2011

with an investment of Rs.1, 000 crore.

MARKET STRATEGIES

Promotional and Advertisement Campaigns(Coupons and discounts)

The '30 Minutes' Promise

Use of Technology(Digital interactive Television, Internet on the PC,

Mobile telephony)

Premium Pricing Strategy

Indian fast food industry and entry of multinational players

Distribution strategies of fast food chains in India

MARKET SHARE


18/48

The organized pizza market in India is worth Rs.500 crore and Dominos

has a substantial 45% market share, and registered a healthy growth of

60% over last year. The main target for new outlets shall be metro cities

though Tier II cities would also receive a fair amount of attention.Currently Dominos sells around 35,000 pizza every day, of which around

1% are given free on account of its 30 minutes or free model. 65

percent of its revenue comes from home delivery service; around 35

percent is from sales in premise.

COMPETITORS

Fast food is one of the world's fastest growing food types. It now accountsfor roughly half of all restaurant revenues in the developed countries and

continues to expand there and in many other industrial countries in the

coming years. But some of the most rapid growth is occurring in the

developing world; where it's radically changing the way people eat. People

buy fast food because it's cheap, easy to prepare, and heavily promoted.

This paper aims at providing information about fast food industry, its

trend, reason for its emergence and several other factors that areresponsible for its growth. India is a developing country with 2 percent of

organized and 98 percent of unorganized sector. So most of the fast foods

came into Indian market as India has a high growth in every sector. Some

of the competitors of dominos are

McDonald's

Pizza Hut

Barista

Coffee Day


19/48

MC Donalds

McDonald's is the leading global foodservice retailer with more than

31,000 local restaurants serving more than 58 million people in 118

countries each day. More than 75% of McDonald's restaurants

worldwide are owned and operated by independent local men and

women.

The strong foundation that he built continues today with McDonald's

vision and the commitment of our talented executives to keep the

shine on McDonald's Arches for years to come. To read more about

McDonald's history, vision and executives, click on their links in the

left menu.

We drive our business momentum by focusing on what matters most to

customers. Our owner/operators, suppliers and employees work

together to meet customer needs in uniquely McDonald's ways. The

powerful combination of entrepreneurial spirit and System wide

alignment around our Plan to Win enables us to execute the best

ideas with both large-scale efficiency and local flair.

Products

McDonald's predominantly sells hamburgers, various types of chicken

sandwiches and products, French fries, soft drinks, breakfast

items, and desserts. In most markets, McDonald's offers salads and

vegetarian items, wraps and other localized fare. Portugal is the

only country with McDonald's restaurants serving soup. This local

deviation from the standard menu is a characteristic for which the

chain is particularly known, and one which is employed either to

abide by regional food taboos (such as the religious prohibition of

beef consumption in India) or to make available foods with which the
http://en.wikipedia.org/wiki/Hamburgershttp://en.wikipedia.org/wiki/Chickenhttp://en.wikipedia.org/wiki/Sandwicheshttp://en.wikipedia.org/wiki/French_frieshttp://en.wikipedia.org/wiki/Soft_drinkshttp://en.wikipedia.org/wiki/Breakfasthttp://en.wikipedia.org/wiki/Dessertshttp://en.wikipedia.org/wiki/Saladshttp://en.wikipedia.org/wiki/Vegetarianhttp://en.wikipedia.org/wiki/Wrap_(food)http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Hamburgershttp://en.wikipedia.org/wiki/Chickenhttp://en.wikipedia.org/wiki/Sandwicheshttp://en.wikipedia.org/wiki/French_frieshttp://en.wikipedia.org/wiki/Soft_drinkshttp://en.wikipedia.org/wiki/Breakfasthttp://en.wikipedia.org/wiki/Dessertshttp://en.wikipedia.org/wiki/Saladshttp://en.wikipedia.org/wiki/Vegetarianhttp://en.wikipedia.org/wiki/Wrap_(food)http://en.wikipedia.org/wiki/India


20/48

regional market is more familiar (such as the sale of McRice in

Indonesia).

Advertising

McDonald's has for decades maintained an extensive advertising

campaign. In addition to the usual media (television, radio, and

newspaper), the company makes significant use of billboards and signage,sponsors sporting events ranging from Little League to the Olympic

Games, and makes coolers of orange drink with their logo available for

local events of all kinds. Nonetheless, television has always played a

central role in the company's advertising strategy.

To date, McDonald's has used 23 different slogans in United States

advertising, as well as a few other slogans for select countries and

regions. At times, it has run into trouble with its campaigns.
http://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Little_Leaguehttp://en.wikipedia.org/wiki/Olympic_Gameshttp://en.wikipedia.org/wiki/Olympic_Gameshttp://en.wikipedia.org/wiki/Orange_drinkhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Little_Leaguehttp://en.wikipedia.org/wiki/Olympic_Gameshttp://en.wikipedia.org/wiki/Olympic_Gameshttp://en.wikipedia.org/wiki/Orange_drinkhttp://en.wikipedia.org/wiki/United_States


21/48

BARISTA

Barista coffee was establishes in 1999 with the aim of identifying growth

opportunities in

the coffee business. Increasing disposable incomes and global trends in

coffee indicate

immense growth potential in one particular segment.

Barista Coffee is a chain of espresso bars in India. Headquartered in

Delhi, Barista currently has espresso bars across India, Sri Lanka and the

Middle East. It was founded in 1997 by Amit Judge and was part of his

group of companies. He sold part of the equity to first Tata Coffee. Then

after he and Tata Coffee fell apart, Sterling then bought over the firm. In2007, Sterling divested all their stake to Lavazza. Barista Coffee Company

is currently owned by Lavazza, Italys largest coffee company

At Barista Lavazza, we do all we can to make every guest feel comfortable

and welcome. We serve nothing but the finest Arabica coffees and cuisine

at great value prices. We have friendly and efficient brew masters who

believe in service with a smile. And provide a cheerful, interactive

ambience that makes guests wish their coffee breaks lasted just a little bit

longer.

To share our cup of joy, we have always stuck to our Italian roots,

guarding them zealously to ensure that our espresso bars reflect the

warmth and character of traditional Italian coffee houses. And in the

process, make Barista Lavazza the place where the world meets.


22/48

Our aim is to passionately deliver the highest levels of experiential

services. Maintain consistency in serving the highest quality products and

become a globally competitive organization one that is driven by an

insatiable thirst for excellence.

CAF COFFEE DAY

Caf Coffee Day is a chain of coffee shops in India having its

headquarters in Chikkamagaluru, Karnataka. A division of Amalgamated

Bean Coffee Trading Company Ltd. (ABCTCL), it is commonly known as

Coffee Day or CCD. It opened its first cafe in 1996 on Brigade Road in

Bangalore, and today has the largest cafe retail chain in India with over

800 cafes in 112 cities.

Large number of coffee day cafes are located in Bangalore. The cafe chain

has had much success riding, and to some extent creating, the cafe

culture wave that swept across metropolitan India following strong

economic growth resulting in an increase in youth spending power. It has

even tied up with World Space and Micro sense to enable its cafes withsatellite radio and Wi-Fi, respectively. Its first Wi-Fi cafe was opened on

Lavelle Road, Bangalore.

Caf Coffee Day sources coffee from 5000 acres of coffee estates, the

second largest in Asia, that is owned by a sister concern and from 11,000

small growers. It is one of Indias leading coffee exporters, with clients

across the USA, Middle East, Europe and Japan.


23/48

With its roots in Chikmagalur, the home to some of the best Indian

coffees, Coffee Day has its business spanning the entire value chain of

coffee consumption in India. Its different divisions include: Coffee Day

Fresh 'n' Ground (which owns 450 coffee bean and powder retail outlets),Coffee Day Xpress (which owns 730 Coffee Day kiosks), Coffee Day

Takeaway (which owns 9000 vending machines), Coffee Day Exports and

Coffee Day Perfect (FMCG Packaged Coffee) division. It is entering the

European market by opening two Cafs in Austria as well, making forays

into Pakistan and Germany to set up cafes abroad. The strategy CCD has

adapted is to place a cafe in every possible location where some business

can be generated. So in Bangalore, in the main shopping district, there

are six outlets in a 2 km radius and overall 120 cafes in Bangalore alone.

Another model which CCD has adapted is to be present in educational

institutions and corporate campuses either in the form of detailed cafes or

its economical model of CCD express.

These innovative strategies have ensured that the competition is at bay

and ensured CCD's dominance in the Indian market though many of itsoutlets are incurring losses.

Cafe Coffee Day competitors include but are not limited to

Barista

Cafe Mocha

Costa Coffee

The Coffee Bean & Tea Leaf


24/48

LITERATURE REVIEW

Zenk, S. et al. Neighborhood Racial Composition, Neighborhood

Poverty and the Spatial Accessibility of Fast Food Stores in

Metropolitan Detroit. American Journal of Public (2005); 95(4).

Abstract: Residential environment is clearly related to health, specifically

dietary health. In fact, many of the most serious chronic illnesses in the

United States are associated with dietary deficiencies. Proper access to

nutritious foods is essential to decreasing dietary related chronic illness.Supermarkets provide dietary health resources through higher quality and

lower costs of nutritious foods. This study examines the spatial

accessibility of supermarkets for 869 neighborhoods within Metropolitan

Detroit with relation to community's poverty and racial composition. The

percentage of residents below the poverty line serves as the measure of

neighborhood poverty for the study. Supermarkets are defined as either a

Supercenter such as Super Kmart or a full-line grocery store associatedwith a national or regional grocery chain such as Kroger. Spatial


25/48

accessibility is equivalent to a Manhattan block. The study found that the

distance to the nearest Supermarket increased with increasing levels of

neighborhood poverty. While the distance to the nearest Supermarket was

similar among the most impoverished neighborhoods, African Americancommunities averaged 1.1 mile greater distance to the nearest

supermarket than predominantly white neighborhoods.

Relevant Data:

Literature now associates residence in economically disadvantaged

neighborhoods, after controlling for socioeconomic status, with a variety

of adverse diet-related health outcomes.

Disparities in Supermarket accessibility on the basis of race were evident

among the most impoverished neighborhoods: the most impoverished

neighborhoods, in which African-Americans resided, were on average were

1.1 miles farther from the nearest supermarket than the most

impoverished white neighborhoods.

Mean distance to the nearest supermarket increased with each successive

tertile of percentage poor for neighborhoods with a high proportion of

African Americans but remained approximately the same across all tertiles

of percentage poor for neighborhoods with a low proportion of African

Americans (predominantly white) .

Inadequate accessibility to supermarkets may contribute to less nutritious

diets and hence to greater risk for chronic diet related disease.

Affordable public transportation needs to be improved integrating

transportation routes with supermarket locations .

Powell, Lisa M. et al. Food store availability and neighborhood

characteristics in the United States. American lifestyle(2007

Mar); 44(3):189-195.

Abstract: A 2006 study of the United States linked zip codes to census

data, finding various statistics about the availability of grocery stores in

accordance to neighborhood descriptions and demographics. There are

distinct disparities between the access of blacks, whites and Hispanics to


26/48

supermarkets, with a definite correlation in location, socioeconomic

status, and race.

Relevant Data:

Low-income neighborhoods have fewer chain supermarkets with only 75%

(p < 0.01) of that available in middle-income neighborhoods .

Even after controlling for income and other covariates, the availability of

chain supermarkets in African American neighborhoods is only 52% (p

Quick Chain Restaurants Im

Documents

Transcript of Quick Chain Restaurants Im