Strategic ManagementCase Study – Kentucky Fried Chicken & The Global Fast-Food Industry in De Wit & Meyer (2004:909-927)

THE GLOBAL FAST-FOOD INDUSTRY - KENTUCKY FRIED CHICKEN

Fast food also known as Quick Service Restaurant (QSR) is the term given to food that can be prepared and served very quickly. The global fast food market grew by 3.1% in 2009 to reach a value of $201.1 billion. Americas accounts for 47.4% of the global fast food market value. The global fast food market is forecast to have a value of $239.7 billion by 2014, an increase of 19.2% since 2009. Kentucky Fried Chicken (KFC) Corporation, is a chain of fast food restaurants based in Kentucky, in the United States. The company primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, it also offers a line of grilled and 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 (http://www.kfc.co.uk/ ).

Instructions:

·         ANSWER ALL THREE QUESTIONS

• You are expected to use the information in the case study ‘Kentucky Fried Chicken and the global fast-food industry’ by Jeffrey A. Krug cited in De Wit, B. and Meyer, R. (2004) Strategy: Process, Content, Context. An International Perspective: Thomson Learning, London, Third Edition, pp. 909-927, and your own understanding of the process of strategy, strategy content and strategy context.

·         Your answer should be based on critical ‘internal’ and ‘external’ environmental analyses using appropriate analytical techniques.             

Question One:

a)   In the context of the process of strategic thinking and strategy formation, outline what SWOT and Porter’s Value Chain techniques are, and explain their practical relevance to strategic planners at Kentucky Fried Chicken (KFC) Corporation.  (15 marks)

(a)    Use Porter’s Five Forces framework to critically evaluate the opportunities and threats that faced KFC Corporation from the mid-1990s to the year 2000. (15 marks)

c)   Explain the ‘pressures for global integration of activities’ and the ‘pressures for local responsiveness’ facing KFC Corporation in the context of current developments in the global fast-food industry. (10 marks) [40 % marks]

Question Two:

a)      In the context of strategy development at KFC Corporation, explain your understanding of Whittington’s ‘Evolutionary’ and ‘Systemic’ Schools of Thought. (10 marks)

b)      Critically evaluate how you might apply the two Schools of Thought to KFC. Explain and explore which school of thought you prefer, and why? (15 marks) (25 marks)

Question Three:

“Hofstede’s (1993) theory of cultural dimensions implies that although not all the individuals within a country’s population will have exactly the same characteristics, the cultural dimensions will colour the institutional and administrative arrangements that are made within the country, and will set the norms for behaviour.”

Hofstede, G. (1993) ‘Cultural constraints in management theories’, in De Wit, B. and Meyer, R. (2004) Strategy Process, Content, Context, 3rd Edition, Thomson, London; cited in SIM336 Module Workbook, 2011, Unit 7, page 203.

Using your understanding of Whittington’s (2000) ‘Systemic School of Thought’, critically evaluate the implications of these cultural dimensions for international strategic managers at KFC in building productive relationships with the outside world.   (25 marks)

Note: 10% of marks are allocated to report style

Suggested Reading:

Textbooks:

De Wit, B. and Meyer, R. (2004) – Strategy Process, Content, and Context: An International Perspective, 3rd Edition, Thomson Learning

Hofstede, G. (1993) ‘Cultural constraints in management theories’, in De Wit, B. and Meyer, R. (2004) Strategy Process, Content, Context, 3rd Edition, Thomson, London; cited in SIM336 Module Workbook, 2011, Unit 7, page 203).

Johnson, G., Scholes, K. and Whittington, R. (2005) Exploring Corporate Strategy: Text and Cases, 7^th Edition, Financial Times, Prentice Hall.

Lynch, R. (2006) Corporate Strategy, Fourth Edition, Financial Times, Prentice Hall.

Mintzberg, H., Ahlstrand, B. and Lampel, J. (1998) Strategy Safari, Financial Times, Prentice Hall

Whittington, R. (2000) What is Strategy and does it matter? Thompson Learning.