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Kentucky Fried Chicken (KFC) is the world’s largest chicken restaurant chain and ranks as the sixth largest quick service restaurant (QSR). KFC is owned by Yum! Brands, formerly Tricon Global Restaurants, Inc., which also owns Taco Bell, Pizza Hut, Long John Silver’s, and A&W All American Food. KFC is one of the world’s most recognizable brands and has always been a leader in foreign expansion. However, KFC has seen a decline in its market share and has not yet penetrated the Latin American market. In this analysis, I intend to highlight the strengths and weaknesses of KFC and recommend a strategy to increase market share and expand into Latin America. Industry Analysis The QSR industry is a multibillion dollar industry that includes the Mexican, sandwich, pizza, burger, seafood, and chicken segments. KFC is in the chicken segment, which produced sales of over $8.48 billion. The QSR industry has an international scope of rivalry, with several competitors firmly established in foreign countries. The market growth rate of the QSR industry is very segmented, with the burger and pizza segment showing very little growth, while the chicken segment experienced moderate growth: Chain Change in system wide sales(2000 - 2001) KFC 6.8% Chick-Fil-A 14.4% Popeye’s 9.5% Church’s 3.2% Boston Market -11.9% The distribution channels for the QSR industry are eat in restaurants, drive thrus, and stores. Services of rivals are weakly differentiated among the segments and the ease of entry into the industry is low. The profitability of the QSR industry is average to above average. The competitive structure of the QSR industry is favorable, market position and strategy provide good defense against competitive forces and firms can earn above average profits. Rivalry is a highly competitive force, potential for new entry is relatively weak.
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