Kentucky Fried Chicken (KFC) is the most successful chicken fast food operator in the United States, and it has made significant inroads in the international market. Begun by Harland Sanders when franchising was just beginning in the United States, KFC combines corporate-owned stores with franchise outlets and offers a variety of fried chicken products, as well as chicken sandwiches. The company recently began experimenting with grilled chicken in response to demand for healthier food from consumers.
KFC has had several owners since Sanders, including Heublein (a manufacturer of beverages), and is currently owned by PepsiCo, which also owns the Taco Bell fast food operation. Where Heublein recognized that it had little experience in fast food and permitted senior KFC managers to remain, PepsiCo has installed its own managers in senior positions. The match is a synergetic one, with KFC providing a strong outlet for Pepsi products, and with the financial strength of PepsiCo helping to drive the expansion that is key to KFC's success.
At this juncture, the company is faced with how to maintain growth that has outstripped the fast food industry as a whole. KFC, and McDonald's, have been successful in expanding their operations in to foreign markets, and KFC has had particular success in Mexico. Although franchising is not a popular method of doing business in Mexico, KFC has had success with corporate owned stores. The country's precarious economic situation offers some challenges, and KFC could choose to slow its Mexican expansion plans. Regardless of whether KFC matches the plans of its American competitors in Mexico, other international growth remains open to the company because of the strong financial position of its parent company.
Chief among KFC's strengths is its dominant position in the marketplace. KFC is the lead supplier of chicken in the fast food industry; Church's Chicken is the second largest competitor, b...