During 1980s, consumers began demanding healthier foods, and KFC’s limited menu consisting mainly of fried foods was a difficult liability. The purpose is to think like a local, not like an American company.Īs KFC entered 1996, it grappled with a number of important issues. The company has been most successful in foreign markets when local people operate restaurants. Another challenge facing KFC is to adapt to foreign cultures. In some countries of the world such as, Malaysia, Indonesia and some others, it is illegal to import poultry, a situation that has led to product shortages. Long distances between headquarters and foreign franchises often make it difficult to control the quality of individual franchises. Apart from the cultural factors, international business carries risks not present in the U.S. KFC has been more successful in the Asian markets, where chicken is a staple dish. KFC previously failed in German markets because Germans were not accustomed to take-out food or to ordering food over the counter. Many cultures have strong culinary traditions and have not been easy to penetrate.
In addition to Mexico, KFC was operating 220 restaurants in the Caribbean, and in the Central and South America. By 1996, KFC had established 158 company-owned restaurants and franchises in Mexico. China with a population of over 1 billion, Europe and Latin America offered expansion opportunities. During the 1990s, other markets became attractive. Japan, Australia, and United Kingdom accounted for the greatest share of the KFC’s international expansion during the 1970s and 1980s. Taco Bell held 75 per cent of $5.7 billion Mexican food segment, and KFC held 49 per cent of the $7.7 billion, U.S chicken fast food segment. By the end of 1995, Pizza Hut held 28 per cent share of $18.5 billion, U.S pizza segment. The Kentucky Fried Chicken acquisition gave PepsiCo the leading market share in three of the four largest and fastest growing segments in the U.S., quick-service industry. Pepsi soft drinks and fast food products could be marketed together in the same restaurants and through coordinated national advertising. Marketing fast food complemented PepsiCo’s consumer product orientation and followed much the same pattern as marketing soft drinks and snack foods. PepsiCo created one of the largest consumer companies in the United States. PepsiCo had acquired Frito-Lay in 1965, Pizza Hut in 1977 with its 300 units, and Taco Bell in 1978. In October 1986, KFC was sold to PepsiCo. By 1982, KFC was again aggressively building new restaurant units. The overhaul emphasised cleanliness, service, profitability, and product consistency. New unit construction was discontinued until existing restaurants could be upgraded and operating problems eliminated. In 1977, Heublein sent in a new management team to redirect KFC’s strategy. Soon after, KFC merged with Heublein, Inc., a producer of alcoholic beverages with little restaurant experience and conflicts quickly arose between the Heublein management and Colonel Sanders, who was quite concerned about the quality control issues in restaurant cleanliness. In the late 1970s, Brown’s desire to seek a political career led him to seek a buyer for KFC. Subsidiaries were also established in Great Britain, Hong Kong, South Africa, Australia, New Zealand, and Mexico. During late 1960s, Massey and Brown turned their attention to international markets and signed a joint venture with Mitsuoishi Shoji Kaisha Ltd. In 1966, Massey and Brown made KFC public, and the company was enlisted on New York Stock Exchange. Colonel Sanders stayed in a public relations capacity. Brown, who later became the governor of Kentucky, was named president, and Massey was named chairman. Colonel Sanders, at 74 years of age was tired of running the daily operations and sold the business in 1964 to two Louisville businessmen - Jack Massey and John Young Brown, Jr. By 1963, the number of KFC franchises had crossed 300. By mid 1950s, fast food franchising was still in its infancy when Harland Sanders began his cross-country travels to market “Colonel Sanders’ Recipe Kentucky Fried Chicken.” He had developed a secret chicken recipe with eleven herbs and spices.