Learner Name: Ikotun Bright Michael

MBA Candidate Nexford University

BUS 6100 Global Business

Dr. Bill Reed

30th June 2022

Kentucky Fried Chicken (KFC) is ranked as the second-largest fast-food restaurant in the

world behind McDonald’s. KFC is also regarded as the world's largest fast-food chicken

restaurant. It is an American business that originated in Louisville, Kentucky in the year 1952.

Since its establishment by Colonel Harland Sanders, KFC has been able to extend its reach to

over 150 countries in the world. There are currently over 5000 KFC units in the United States

and over 17,700 units in other countries. The varying business entry strategy of KFC has been

identified as one of the major drivers of its success of KFC since its establishment. KFC has

adopted three main business entry strategies to extend its operations which are franchising, joint

ventures, and owned business. In the United State, 60 percent of the KFC units that are

established in the United States are franchises compared to two-thirds of other KFC branches in

the world. Since 2007, KFC became one of the subsidiaries of Yum! The Yum! brand has other
(Bediako, 2019; BobCut, 2022)
food businesses such as Pizza Hut, Habit Burger, and Taco Bell.

Innovation

The following innovation strategies will be recommended for KFC:

 Quality control such as the test of raw materials

 Supply chain innovation

 Staff technology adoption

In a competitive industry such as the fast-food industry, KFC must implement strategies that

will keep the company ahead in the race. The strategies that will keep KFC in the race in its

industry will require the adoption of innovative tools. One of the strategies KFC can adopt to

improve its customer service is by reducing the amount of time required to serve a customer
freshly prepared foods. Customers are said to get frustrated when they have to spend more than
(BobCut, 2022)
10 minutes waiting for the food they ordered to be served to them. Reducing the

serving period through the use of innovative designs can improve customer satisfaction with

KFC. The time it takes to serve customers can be reduced by using innovative kitchen tools and

management, KFC can prepare more chickens in a short period while ensuring that the chickens

are kept fresh.

KFC is known to provide the same type of chicken in every store irrespective of the

location. To provide consistent quality and standard, KFC source its chicken from local suppliers

who are required to follow certain standards that ensures that the chickens raised are healthy.

KFC must keep its image or standard secured by regularly inspecting the chickens that its

contract farmers are producing. The cost of regular investigation of the standard of chickens that

are produced can be reduced by setting up a body within the company for ensuring regular

checks. The company can also employ the service of independent parties or companies to ensure

that the quality of chickens provided to the company meets the standard requirement.
(NewsDesk, 2019)

The design of an efficient and effective supply chain by KFC is another method that can keep the

company in the lead in the fast-food industry. An innovative supply chain will help KFC to

generate new ideas that will help the company solve logistic problems and create new

efficiencies. KFC can unlock great value by adopting an innovative strategy for its supply chain.

By unlocking new values in its supply, KFC can unleash the potential of other sectors within the

company. According to senior leadership at C.H. Robinson, by directing passion to build an

efficient supply chain system, businesses will become stronger and will also grow at a

spontaneous rate. For instance, KFC can improve its supply chain coordination to improve the
company’s sustainability. Reducing the amount of waste that is deposited in the environment;

minimizing the cost of goods and materials distribution, and energy usage at all KFC units will

serve as a way to improve the company’s supply chain coordination.

Innovation management in KFC is even more important after these innovation strategies are

employed in the company. Creating scorecards where employees in the company can have

constant information about the required quality, sales, and other important results will be

important in managing innovations. This means that the staff of KFC must be trained to identify

the various data points on the scorecards, and how to use the data points to make corrections

when necessary. The staff of KFC will be involved in training sessions to promote the adoption

of technology tools, innovation tools, and communication channels to solve major problems.

Training of the employees might also require the hiring of external trainers who will be able to
(Greg Satell, 2017)
impact innovative management skills in the employees of KFC.

KFC will be able to improve its supply chain network, technologies, monitor quality, and

business culture. The micro-innovation in various sectors of KFC will improve its overall

process and allow the company to keep leading in the fast-food industry.

Economic Indicators

This section will provide details on the economic challenges, economic opportunities, and

cultural opportunities that KFC can have access to by extending its investment to South Korea.

The possible challenges that KFC might face while extending its investment to South Korea

includes the following:

 High competition in the Chicken fast-food industry

 Strick food regulation adherence in South Korea

The chicken fast-food industry is highly competitive in South Korea to the extent that KFC is

not ranked among the top 10 chicken fast-food restaurants in the country. However, the market

for chicken fast-food in South Korea is very huge. With over 50,000 chicken fast-food outlets in

South Korea, the industry is considered one of the biggest and most competitive in the country.

In 2019, research shows that the consumption of chicken in South Korea is one of the highest in

the world. According to the research, an average South Korean consumes about 15.4 Kg in a
(Bediako, 2019)
year, however, it is less than that of the United States which is 44.5 Kg.

KFC has struggled to establish itself in the country due to its inability to adapt to the

country’s culture, and beliefs effectively. In South Korea, the consumption of chicken is highest

among other animals. Although KFC has been able to establish itself and its image in other

countries effectively, the business has struggled to create a cultural magnet for its products.

Research shows that 40.57% and 31.77% of South Koreans order or eat fried chicken on Fridays

and Saturdays respectively. This same research also states that 48.87% of South Koreans buy
(Bediako, 2019)
chicken for their family consumption. These habit among South Koreans is an

opportunity for KFC to design its offers to suit these habits to become an attractive figure in the

industry. KFC can also design its packages, products, adverts, and restaurant setup to appease

family gatherings. By designing its packages, restaurant set-up, offers, advertisement channels,

and methods, KFC can gain consumers’ attention that can rank the company higher in the heart

of South Koreans. Hiring a South Korean business culture expert who can recommend the best

strategy to implement cultural beliefs into the company policies can serve as a way for the

company its integration into the country.

standard in the country is equivalent to the standard in the United States. According to the food

policy director of South Korea Mr. Su Jin Kong, “The purpose of the audit was to determine

whether the Republic of Korea’s food safety inspection system governing processed chicken

products remains equivalent to that of the United States, with the ability to export products that
(NewsDesk, 2019)
are safe, wholesome, unadulterated, and correctly labeled and packaged.” The

Food Safety and Inspection Service (FSIS) of South Korea equivalency audit focuses on the

following six elements:

 Government Oversight

 Government Statutory Authority and Food Safety

 Government Sanitation

 Government Hazard Analysis and Critical Control Point (HACCP) system

 Government Chemical Residue Testing programs

 Government Microbiological Testing program.

Government inspection agents are appointed in given geographical areas in South Korea to

ensure that different food processing or production units are made to adhere to the standard.

During visits by FSIS auditors and agents to food processing units, particular attention is given to

the control of hazards and the actions to prevent noncompliance that threatens food safety. To

ensure that KFC adheres to the rules provided by the South Korean food authority, the company

must set up a team that will be tasked with ensuring that every action of the company is up to

standard.
By having plans to address the possible challenges that KFC might face in South Korea, the

company will be well prepared for these challenges. These plans can also help the company to

improve several factors that can contribute to its integration in the highly competitive market in

South Korea.
 References:

Bediako, K. A. (2019). KFC’s sustainable competitive advantage KFC’s sustainable competitive advantage in the
international franchising.

BobCut. (2022). Where Does KFC Get its Chicken? - Bob Cut Magazine.
https://bobcutmag.com/2022/03/19/where-does-kfc-get-its-chicken/

FutureLearn. (2022). 6 examples of supply chain innovations.

Greg Satell. (2017, July 21). The 4 Types of Innovation and the Problems They Solve.
https://hbr.org/2017/06/the-4-types-of-innovation-and-the-problems-they-solve

Mike. S. (2017, September 29). 3 Benefits of Innovating Global Supply Chains - C.H. Robinson Blog.
https://www.chrobinson.com/blog/3-benefits-innovating-global-supply-chains/

NewsDesk. (2019, December 30). Korea’s food safety regulations for poultry found equivalent to U.S. | Food
Safety News. https://www.foodsafetynews.com/2019/12/koreas-food-safety-regulations-for-poultry-
found-equivalent-to-u-s/

Shantha. M. (2022, May 18). Essence of innovation in supply chain management. https://www.ceo-
worldwide.com/blog/essence-of-innovation-in-supply-chain-management/