McDonald’s versus

KFCBy: Mohammadreza Fallah, Yawei He, Kanat Kairatov, Archie Nelson

History

KFC(Kentucky Fried Chicken):• Founded in 1930• By Colonel Harland Sanders in Kentucky • Franchises restuarant• A brand of Yum! Brands (original PepsiCo)

History

McDonald’s:

• Founded in 1940

• By Dick and Mac

MacDonald in California

• Target market is children

and young people

Worldwide Market Share in the fast food industry

McDonald’s

KFC

Comparison

90

120

How many countries they entered into?

Comparison Restaurant numbers worldwide

11,000

31,000

Comparison

$11.2bn

$40.6bn

Company’s market value

Strengths Weakness

Opportunities Threats

Internal

external

posi

tive

negative

SWOT Analysis

Common Strengths:

• Fast

• Good location

• Good services

• Good environment

• Globalization

• Brand

SWOT Analysis

• Strengths of McDonald’s :

• Higher income and more capital

McDonald’s Yum!

(KFC, Pizza Hut and Taco Bell)

SWOT Analysis

• High-quality raw material (SQI)

• Standard products

• Welcomed by children

SWOT Analysis

Strengths of KFC:• Localization• Various products• Large products portfolio & long product

life cycle• Larger target market 6-65

SWOT Analysis

Weaknesses

KFC McDonald’s

Unhealthy Unhealthy

Poor food quality Changeless on menu worldwide

Lack of focus on R&D

(research & development)

Product failure

Slow speed of growth Taste of food is not good

The taste of hamburgers

SWOT Analysis

Opportunities:

• International markets:

Developing countries

• Small middle size cities

• Order online or by telephone

• New products

• Business alliance

SWOT Analysis

Key Threats ： Competition

• Restaurants are increasingly advertising low cost burgers on their menus …If you're not in a hurry, which one would you choose? (for example The Wilmslow Arms opposite my university halls offers a great burger for five pounds)

• Burger King is increasingly competing with both McDonald's and KFC with a market share of 9%.

SWOT Analysis

Key Threats: Change of consumers’ lifestyle:

• Social changes - Government, consumer groups encouraging balanced meals, 5 a day fruit and vegetables

• Health professionals and consumer activists accuse McDonald's of contributing to the country’s health issue of high cholesterol, heart attacks, diabetes, and obesity

• The film “Super-size Me” highlighted the dangers that excessive fast food consumption can have on a persons health

Solutions

For McDonald’s:Improve the taste of foodEnlarge the narrow product portfolioIncrease target market

For KFC:Improve the quality of foodIncrease the restaurant numbers

Reference• KFC (2012) History [Online]< http://www.kfc.co.uk/about-kfc/kfc-history >, [Date accessed

25/04/2012]

• McDonald’s (2012) History[Online] <http://www.mcdonalds.co.uk/ukhome/Aboutus/Development.html >, [Date accessed 25/04/2012]

• Markets.ft (2012) markets data of McDonald’s [Online] < http://markets.ft.com/Research/Markets/Tearsheets/Financials?s=MCD:NYQ >, [Date accessed 27/04/2012]

• Markets.ft (2012) markets data of KFC [Online] < http://markets.ft.com/Research/Markets/Tearsheets/Financials?s=YUM:NYQ >, [Date accessed 27/04/2012]

• Yahoo (2012) Consumers reports of burgers [Online] < http://shopping.yahoo.com/articles/yshoppingarticles/428/best-burgers/ >, [Date accessed 27/04/2012]

• Newscn (2005) KFC dressing contains “”Tonyred 1 [Online] < http://newscn.biz/Export/News6482.pdf >, [Date accessed 25/04/2012]

• MSN (2012) McDonald's meets expectations as profit jumps [Online] < http://www.msnbc.msn.com/id/47114485/ns/business-us_business/ >, [Date accessed 25/04/2012]