Kentucky Fried Chicken

“Report based on study of structure and culture of KFC”

Submitted to:

Prof. SHUMAILA GUL

IBIT, University of the Punjab

Submitted by:

MARYAM SHEHZADI*F08MD148

KASHIF HANIF F08MD147

SALMAN BAIGF08MD116

HINA MEHMOODF08MD149

ZUBAIR RAFIQ F08MD124

INSTITUTE OF BUSINESS & INFORMATION TECHNOLOGY

UNIVERSITY OF THE PUNJAB

Transmittal Letter

Research Associates

MBIT Students

IBIT, University of the Punjab.

January 20, 2009

Prof. SHUMAILA GUL

IBIT, University of the Punjab

Respected Prof. SHUMAILA GUL,

We are thankful to you that you have assigned a project last month. we observed all structure and culture of KFC and we highlights those points which is necessary for the organization.

We also appreciate you that you guide us very well in observational study. The report has been prepared in systematic manner according to the requirements. While studying the report you will come to know about structure and culture of the organization.

The SWOT analysis of KFC reveals their strength, weakness opportunities and threats. Followed by the suggestion, that will definitely work if considered.

We will hope that you will like and appreciate our report and gives credit in future.

Yours Obediently,

Group Leader

Sign: (leader)

Table of Contents

Executive Summary 1

Introduction 2

KFC Saloogan 2

History 3

KFC in Pakistan 4

Some Facts 4

Vision 5

Mission Statement 5

Culture 6

Organizational Structure and Design 6

Hierarchy of KFC in Pakistan 7

Structure in Branch 7

Major Departments 8

Human Resource Management 8

Nutritional Information & Specific Ingredients 9

Social Responsibility 10

Strategy 10

International Expansion 10 Multi brand Innovation & Expansion: 10 Global Franchise Fees 10 Strong Cash Generation and Returns 10

International Operations 11

Founding Truths 12

External Environment 13

Competitors 13 Suppliers 13 Customers 13

The principal Of KFC 14

Analysis 15

Hdfh 16

Bibliography 18

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Executive Summary:

From the project we study many topics some of these topics are:

Structure Culture Symbol Slogan Behavior External environment

These points describe about the KFC internal and external environment. The KFC culture has important aspects. They co-ordinate and co-operate with employees very well.

They give awards and held ceremonies for employees. Upper level management is the role model for all employees. They cooperate with operatives and work in a team structure. New employees are treated very well. The important aspect is that the external environment like wars, trends, emergencies influenced their plans

The top management takes decisions with the suggestions of employees. There is no misunderstanding among employees and management. They exit in clan culture.

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INTRODUCTION:

The Global Company that serves you with same quality and care

throughout the world.

KFC is based in Kentucky, and is the

world’s most popular chicken

restaurant chain.

8 million customers each day.

KFC is part of Yum! Brands, Inc.,

which is the world's largest restaurant system with over 32,500 KFC,

A&W All-American Food™,Taco Bell, Long John Silver's and Pizza Hut

restaurants in more than 100 countries and territories.

KFC has more than 13,700 restaurants in more than 100 countries and

territories around the world.

Food, fun & Festivity, this is what KFC is all leading the market since its

inception.

Be it colonel sanders secret original recipe chicken or the hot & spicy

version, every bite brings a yum on our face.

KFC SALOGAN:

At KFC we can proudly say……….

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HISTORY:

1890 – Colonel Harland Sanders, the founder of the KFC Corporation, was born.

1932 – Colonel Sanders developed his special blend of 11 spices and herbs, which marked the beginning of his famous Original Recipe chicken.

1935 – The Colonel became known as the Kentucky Colonel, this name is what later became incorporated in the name Kentucky Fried Chicken.

1952, Col. Sanders started franchising his recipe door to door financed by his $105.00 SS Check

1966 – KFC went public with its franchises and special chicken recipe. 1976 – Colonel Sanders received an award for becoming the world’s

second most recognizable celebrity. 1980 – Sadly, Colonel Sanders passed away. However, his legacy

carried on and is still widely recognized today. 1997-Frist KFC restaurant opens in Pakistan in January at Karachi. 1997-Frist KFC in Lahore in June at Barket market. 2000 – KFC founded the Colonel’s Kids Charity to help kids afford

education and get a good start in life. 2002 – Tricon Global became Yum! Brands, Inc., which it remains to

this day. 2002 – Tricon Global became Yum! Brands, Inc., which it remains to

this day. 2008 – Today there are 13,266 KFC franchises around the world, 5,525

in the U.S. alone.

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KFC IN PAKISTAN:

Cupola is a Dubai based multinational company involved in several business including, oil gas exploration, plastic cards, retail markets and food franchising. Cupola holds the master franchise rights to operate KFC in Pakistan.

SOME FACTS:

These are some fact and figures of KFC for the economy of our country.

Apart from fulfilling our commitment of serving delicious, fresh and hygienic

food and at the same time providing our customer with the ultimate

entertainment; KFC also plays in the economics development of our country.

Presently KFC has provided to over 1200 Pakistanis, which adds up to 6000

individuals directly dependent in KFC Pakistan.

The Government of Pakistan receives over Rs.10 million per month from KFC

Pakistan as direct taxes.

95% of all food and packing material used in KFC Pakistan is procured locally,

which sums up to a purchase of over Rs.35 million per month.

Promoting the local supplier industry (construction related, paper and packaging,

cooking oil, machinery, poultry products, bakery and confectionary items).

Sales tax @ 15% being paid to the Government.

Each new outlet developed by KFC Pakistan costs approximately Rs.40

million, which is a huge amount for our construction industry, KFC and

Pakistan…Growing Together.

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VISION STSTEMENT:

Quoted from Yum! Brands, Inc., KFC’s parent corporation.

“Our passion, as a restaurant company, is to put a YUM on people's faces

around the world, satisfying customers every time they eat our food and

doing it better than any other restaurant company. A&W, KFC, Long John

Silver's, Pizza Hut, and Taco Bell offer customers food they crave, comeback

value, and customer-focused teams. The unique eating experience at each of

our restaurants make our customers smile and inspire their loyalty for life.

Toward that end, our 750,000 associates around the world are trained to be

customer maniacs.”

MISSION STATEMENT:

These are the basic mission of KFC.

“Recognition: we find reasons to celebrate the achievements of others and

have fun doing it,” is right up there with “Customer Focus” and “Belief In

People.” "Recognition is everybody's responsibility," says Chicago restaurant

manager Adonis Chapel. He explains that since KFC started encouraging

informal recognition, things have really changed. "You keep employees

longer, they are happier, they work better for you."

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CULTURE:

The set of key values, beliefs, understandings and norms that members of

organization share. Employees deeply follow the culture at surface level and

higher level of organization.

Big on diversity in the workplace.

Promotes differences in background, ethnic cultures, and values.

Team-oriented environment.

Focuses on teaching everybody something

new .

Promotes unity in the workplace

Focuses on building relationships and

creating diversity and commitment within

the company and amongst employees and

customers.

ORGANIZATIONAL STRUCTURE AND DESIGN:

Kentucky Fried Chicken exhibits culture through employees by having a wide range of diversity. People and employees belonging to an ethnic group often bring their cultures with them, sometimes creating subcultures. These subcultures are often derived from different customs, values, languages, traditions, and beliefs. Since Kentucky Fried Chicken values diversity, their management looks for ways to create benefits for the entire organization.

KFC is part of a divisional structure, which is Yum! Brands, Inc. Long John Silver’s, A&W, Taco Bell, and Pizza Hut are the other

divisions. Offers positions to many people; good for senior executives. Willing, responsive, and flexible to change and growth. KFC works to bring recognition and money to Yum! Brands, Inc.

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HIERARCHY OF KFC IN PAKISTAN:

STRUCTURE IN BRANCH:

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MAJOR DEPARTMENTS:

CEO

REGIONAL HEAD

GENRAL MANAGERS

OF DIFFERENT DEPARTMENTS

BRANCH MANAGE

RS

BRANCH MANAGER

ASSISTENT MANAGER

SUPERVISORS

DISPATCHERS

RIDERS

ASSISTENT MANAGER

SUPERVISORS

CASHIERS

SUPPLY MNAS

Organization has the following major departments;

Human Resource Accounts Administration I.T Marketing Finance

HUMAN RESOURCE MANAGEMENT:

“We won’t make you wing it” is KFC’s motto when it comes to training

employees.

Training includes: Workbooks Quizzes On-the-job competency based training

Employees are encouraged to work together as a team KFC is committed to making sure their

people grow to their highest potential KFC does their best to make the job

interesting and exciting for worker.

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HEAD OF DEPARTMENTS

HUMAN RESOURCE MANAGER

ACCOUNTC MANAGER

ADMINISTRATION MANAGER

I.T MANAGER

MARKETING MANAGER

FINANCE MANAGER

NUTRITIONAL INFORMATION AND SPECIFIC INGREDIENTS

Zero Grams of Trans Fat:

The taste you love just got better. Starting in April 2007, KFC proudly introduced a new recipe that maintains all the delicious finger-lickin' flavor of the Colonel's 11 herbs and spices, but with Zero Grams of Trans Fat per serving.

Food Allergies and Sensitivities:

The allergen information is based on standard product formulations and is current as of November 2008. Variations may occur due to differences in suppliers, ingredient substitutions, recipe revisions, and/or product production at the restaurant.

Keep It Balance:

Mix together daily activity, a sensible diet, and a little fun. What do you get? A recipe for keeping your body balanced. The exchange list is a meal planning system developed by dietitians primarily for people with diabetes. It groups together foods that have similar carbohydrate, protein, fat, and calories, and can be used as a guide for planning balanced meals.

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SOCIAL RESPONSIBILITY:

KFC has made it their responsibility to consumers that they will provide quality chicken in a fast, efficient way.

KFC sponsors a reward for senior citizens, those who live life to the fullest and are recognized in their community

KFC also has the Colonel’s Kids program, a charity organization that helps kids become educated and grow up in a better world than that which they have known.

STRATEGY:

KFC has created a strategy that is focuses on strength and opportunity. They want to expand internationally, offer consumers more choices at their restaurants, and provide good services to their customers. They have incorporated a growth strategy into their company because they fully intend to be the largest fast food chicken corporation in the world; they seem to have already accomplished this goal, but also intend to stay well ahead in the game by franchising KFC buildings throughout every country in the world.

International Expansion:

KFC number-one goal is to drive global expansion with its category-leading brands.

Multi brand Innovation & Expansion:

KFC is the worldwide leader in multi branding, offering consumers more choice and convenience at one restaurant location from a combination of two of the company's brands.

Global Franchise Fees:

Global franchise fees, a significant factor in annual profits and cash flow, grew 6% to $866 million.

Strong Cash Generation and Returns:

KFC generated over $1.3 billion in cash from all sources in 2008, more than fully funding capital expenditure needs, allowing free cash flow for share repurchase, and some repayment of debt. Return on invested capital is 18%, in the restaurant industry's top tier.

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11

INTERNATIONAL OPERATIONS:

These are some international operations of KFC.

KFC opened its first franchise overseas in January 1997 in Pakistan at

Karachi.

KFC is a very diverse company and has 750,000 people employed

around the world.

KFC is devoted to Fried Chicken franchises are in countries other than

the United States.

The incredible success of this company has given it the opportunity to

compete globally with other corporations and gain in popularity

worldwide.

KFC franchises are located diversity and are willing to give just about

anyone a chance to begin their career by working at one of their

locations.

Expanding their global business is one of Yum! Brands, Inc.’s key

growth strategies.

KFC (as a division of Yum! Brands) continues to grow substantially

throughout the world as a fast food enterprise, and there is much more

success and growth in the future.

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12

FOUNDING TRUTHS:

The founding truths are:

1) People Capability first…Satisfied customers and profitability

follow.

2) Respond to the Voice of The Customer…Not just listen.

3) The Restaurant General Manager Is Our #1 Leader…Not senior

management.

4) Run Each Restaurant As If It’s Our Only One…Avoid the trap of the

averages.

5) Recognition Shows You Care…People leave when you don’t.

6) Great Operations and Marketing Innovation Drive Sales…No finger

pointing.

7) Operation Discipline through Process and Standards…Consistency,

not “program of the month”.

8) Franchisees Are Vital Assets…Operate as one system, not two.

9) Quality In Everything We Do…Especially the food.

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13

EXTERNAL ENVIRONMENT:

Customers

Consumers continue to return to KFC because of the quality

and good prices of their food. KFC has a lot of fans and continues to

grow to provide better customer service

Suppliers

Companies provide KFC with raw materials and chicken In

Pakistan KFC purchases the chicken from K & N chicken. Over 95%

items. KFC Pakistan has helped develop the local economy from

restaurant construction to pap packaging. Important items produced

and bought locally include poultry products, cooking oil, bakery

products and raw materials.

Competitors

Chick Fila is KFC’s biggest competitor, and quickly growing in

popularity. Other competitors include AFC Enterprises and

McDonald’s. KFC has more then 80 percent share in the market.

82%

18%

MARKET SHARE

KFC shareOthers

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14

THE PRINCIPAL OF KFC:

Credibility: Being regarded by our stakeholders as being a reliable source of knowledge.

Character: Conducting ourselves with honesty, integrity, and spirit.

Communication: Facilitating free flow of information about our activities. Always voicing our opinion and sharing our concerns.

Creditworthiness: Total honesty in our business dealing, as financially responsible partners, advisors and employers.

Commitment: Always seeking to be true to our word, but doing what we do with energy and determination.

Capacity: Constantly seeking to reinforce and build our capabilities to the point of always exceeding the exceptions of others, but always doing so as part of a team.

Coherence: Being clear to the point of transparency at all times.

Conscientiousness: Striving for excellent- we believe that there is no shortcut to hard work.

Charisma: Seeking to stand from the rest and employing people who do.

Conceptual: Thinking with clarity, imagination and communicating this clearly.

Caring: Doing what we do with a deep commitment to quality and bearing in mind the opinions of others.

Community: Believing that we have a deeper role to play than just being business people and returning some of the rewards that we reap.

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15

ANALYSIS:

The Kentucky Fried Chicken Corporation is a very successful company that has grown to be the fast food giant it is today through good management practices and good planning. Their mission statement is very clear: recognition is key. They are all about diversity and helping people growing in any way they can, and focus on customer satisfaction as well. Their goals include being the best in the business, which they have definitely accomplished, and focusing on customer satisfaction as a major part of their environment.KFC desires to offer good food, comeback value, and customer-focused teams to consumers throughout the world; they want to have loyal customers who will come back time and time again to enjoy their food.

As a result of this project, we have learned a lot about the company about the history and background of KFC as a whole. There is a lot that goes on in the franchising world that we never really knew anything about until doing the research that went into preparing for this project/presentation. KFC’s grand strategy and the organization as a whole is very impressive; through all this research I (Sally) have gained a lot of respect and admiration for what they’ve been through to

become the giant, amazingly popular franchising company they are today.

The Kentucky Fried Chicken Corporation has done an excellent job in the consumer market, both domestically and abroad. Not only do they do a wonderful job of planning, organizing, staffing, leading, and controlling, but they have been very successful at achieving their goals as well. Having done extensive research on the company and its parent corporation, I feel like KFC has been pretty successful overall and has done a good job with hiring and retaining good employees and taking care of their consumer base in every way possible.

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16

1) What does KFC stand for?

Kentucky Fried Chicken.

2) Is KFC an American Company?

KFC is an American brand. The local franchisee/investment and

management is Pakistani.

3) Which company operates KFC in Pakistan?

Cupola Pakistan Ltd (CPL) owns and operates KFC in Pakistan.

4) What does KFC’s Colonel stand for?

He was he founder of KFC concept and now only his visual image is

associated with KFC. He was an American who died in 1980.

5) Does KFC sell 100% Halal chicken?

Yes.

6) Does KFC buy Chicken from Pakistan?

Yes from local suppliers K & N’S and thus promoters the local poultry

industry.

7) Does KFC buy all its supplies from Pakistan?

Over 95% items. KFC Pakistan has helped develop the local economy from

restaurant construction to pap packaging. Important items produced and

bought locally include poultry products, cooking oil, bakery products and

raw materials.

8) How is KFC Pakistan promoting the local economy?

Employing over 1200 people in various capacities and thus providing them

with the livelihood. If each person directly or indirectly contributes to

support 05 family members, the total number of depending on KFC is 6,000

souls; this is other than the suppliers associated with KFC Pakistan.

Promoting the local supplier industry (construction related, paper and

packaging, cooking oil, machinery, poultry products, bakery and

confectionary items).

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17

Sales tax @ 15% being paid to the Government. Corporate and individual

Income tax. With holding tax on al payments made to the suppliers, making

them a part of the documented economy. Payment to local Government

departments for licenses and taxes. Foreign investment coming into

Pakistan.

9) Has KFC contributed in improving the standards of Restaurant business in

Pakistan?

KFC Pakistan has contributed in providing Halal and Hygienic products to its

customers and managed this through proper training of its human

resources. It has created competitive level for other thus improving the

overall industry standards.

10) What has KFC Pakistan done for children?

It provides a family like environment where children can also come with

their families or alone and enjoy the healthy and hygienic food. Play areas

are also provided for enjoyment.

KFC Pakistan team makes frequent school visit and educates the children

about different social issues. KFC Pakistan also designs programs especially

for children in order to involve them in healthy activities. (Kiddy Fun Camp

as an example)

11) Does KFC Pakistan support and social concerns?

Participating in social concerns like protecting the environment. It also

supports various social organizations like “Care and Kindness Society” and

visits handicapped children (SOS and Fountain House) on occasions.

Also contributes an amount to celebrate the National Occasions by

sponsoring events arranged by the Government.

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Bibliography:

The information about KFC is collected from

KFC Kentucky Fried Chicken | restaurants

Yum! Brands

www.kfcpakistan.com

www.kfc.com

Mr. M. ASIF the Assistant manager

Phone No.

We also go to visit and ask detail information about the structure and culture of KFC Branch and there Regional Head Office at Barket market Ali Block New Garden Town Lahore.

Special Thanks:

Mr. Atif Nasir (Finance Manager)

Miss Asma (Operation Manager)