Kentucky Fried Chicken (Japan) Limited
Background • Harland Sanders – 6th grade dropout – casual cook. Late 40’s – developed a recipe for chicken based on a pressure-cooking method and secret seasoning mix of 11 herbs and spices. • Sold 700 franchises < 9 years. • Sander’s management style – relied on basic goodness of people around him and trusted the franchises to play fairly. There were no formal management systems or strategic controls in place. • Sanders in his 70’s – Jack Massey offered him $2 million, lifetime salary, and position in control of business. • Explosive growth – revenues increased from $7 million to $200 million. • Loy Weston took the challenge to open the first store in Japan.
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They lacked operating experience and received little staff support. They had to learn from scratch. The only attention received was from Sanders himself.
Headquarters wanted a decentralized management system. o Japan store management felt that they knew what was best for their stores because they had done the research and knew what worked and what did not work. • Management wanted a divisional structure within the organization. • Stores were replicas of the U.S. stores and were not recognized overseas. • McDonalds major threat in Japan to KFC. • No additional funds available to Japan due to the problems in the U.S. operations.
Issues for U.S. Operations
• Consistency was a problem. • Cleanliness was lacking in many stores. • Extremely high turnover. • Country in a recession in the late 70’s. • Stock price declined. • Competition more intense.
Decision Makers • Dick Mayer, currently head of the company’s U.S. operations – chairman and CEO. • Loy Weston, president of Japan operations • Gary Burhow, vice president of strategic planning
Decision Problem • What is the best way to correct the problems that the international stores are experiencing, such as stalled expansion, poor financial results and inconsistent strategies? • Loy Weston, current
Because of this rapid growth several challenges can present themselves. A primary challenge that can present itself is the lost of the boutique feel because of the hundreds of locations. Even though each boutique is different and personalized, opening too many locations may cause the retailer to lose its niche in the market. Another challenge is the many changes the company has gone through in upper level management. Because of the changes investors have been discouraged, as mentioned before, and shares were down 16% after the changes.
Wal-Mart failed to grasp the consumer and retail environment in Japan. With a population of 127 million, the highest per capita income and the second largest economy in the world, Japan is a very smart market for retailers. The opportunity exists, but there is much more research and planning that needed to be done before expansion began. Instead of adapting business operations to the Japanese culture, the company essentially assumed the Japanese would readily adjust to Wal-Mart’s. For example, in Japan there is a much larger need for local store customization. Consumer buyer behavior is much different than in the United States, with purchasing patterns and product selection varying greatly between regions. They have a trend to buy smaller quantities in regular intervals rather than the more American idea of “stocking up.” Similarly, the concept of large retail stores is foreign. Retailers with the highest growth rate are small specialty stores; quite the opposite of Wal-Mart. The culture tends to buy more fresh produce than pre-packaged goods as well. Lastly, the Japanese view high price as equaling high quality. This mentality causes them to purchase forty percent of the world’s luxury goods annually. Packaging and appearance of goods play a huge role in their purchasing decisions. When looking at Wal-Mart’s product selection, it is obvious they do not usually cater to luxury-brand customers. All of these cultural misunderstandings lead Wal-Mart
This report provides a comprehensive analysis of JB Hi Fi (JB)’s strategic management and operations. The current global uncertainty over recent months have provided a challenge for the retail sector and this report will address strategies JB implemented which allows them to continue growing. Section 2, strategic analysis focuses on the external and internal environments, using the PESTEL and Porters 5 forces
In 2009 and forward, Loblaw Companies were up against aggressive competitive markets while still dealing with the backlash from the 2008 world economic crisis. Same store sales were on the decline and Loblaw’s was in desperate need to change their store strategies. By 2011, Loblaw’s had come up with the idea to diversify and expand their operations with new upgrades to in store departments as well as expanding upon their leading brands, President’s Choice and No Name. This case study underlines the premise of national and global strategies, which is a key subject matter and general broad topic when studying International Business. The main concerns of this case study would be to identify if Loblaw’s new strategies gave them a leading edge in the ever-expanding market, as well as seeing if these new strategies will hold up to market standards in the near future.
Some of the areas that get affected by global economic circumstances include investment, access to supplies, compensation of employees, hiring of employees, operations, social issues, labor practices, output, marketing, and expansion to new markets. This paper examines the impact of the current global economic and financial conditions on staffing, compensation, operations management, social issues, and labor practices of Costco. The business reality is that the current global economic and financial conditions have not led to cuts in compensation of employees and the slimming down of some of Costco’s outlets as it is the case with other stores such as Wal-Mart. Hiring has also not stalled and labor practices are now being carefully observed to minimize litigation costs. Additionally, contentious cultural and social issues are steered clear of as a way of avoiding any disturbances to an already unpredictable business climate. Costco’s operations management has assumed a leaner outlook with emphasis on quality services from smaller workforces.
The first KFC was opened in Tiananmen Square, China 1987; it struggled as western food was unknown to the east. This was still a very conservative nation, not prepared for the “Fast Food” takeover. The restaurant did pretty well, but grew slowly. The Harvard business review, stated that “in 1992 the Chinese government granted foreign companies greater access to markets, KFC China’s managers gradually developed the blueprint that would transform the chain.” (Yums' China, 2017) Although they have done well for themselves they struggled, as growth was steady but slow and their customer base was shrinking. “In November 2016 Yum China Holdings, Inc. became a licensee of Yum brands in Mainland China; they have exclusive rights to KFC.” (Yums' China, 2017) Yum controls approximately 7,300 restaurants and more than 400,000 employees in more than 1, 100 cities. YUMS generated over $8bln in sales in 2015.
As specified in the weaknesses, Macy’s Department Stores Inc. has very little geographic presence in the countries where the growth ratio is much higher. Among the possible list of opportunities available to the company, the company can expand its business operations and portfolio in the emerging markets of Asia like China, India etc. these markets represents the great potential of success and profitability to the large numbers of companies. Business expansion can also be done by having strategic alliance in the form of mergers with
To better understand their declining performance, the company then launched an internal review of their operations and determined that the main reasons for their recent struggles were: a decline in department store sales, the rise of fast fashion retailers, the company’s own out-of-date supply chain model, and that the company’s focus was diluted over too many brands and too many initiatives. (“The
(My Macy’s localization, Omnichannel integration, and Magic Selling customer engagement) strategy. For instance, by placing a focus on strengthening and increasing productivity across all their stores and rationalizing underperforming locations. In addition, engage in a more a customer-centric organization that embraces localization, a seamless omnichannel blend of stores, online and mobile, and more meaningful customer engagement on the selling floor as well as other customer interactions. As a result, the business model will help implement the engagement of talent, technology, omnichannel infrastructure and fulfillment capability” (Business Wire 2016) which Macy’s has failed to do in the past years. Therefore, I believe the root causes in declining sales has been due to lack of investment and the ability to restructure the business model. With that being said, I also think the previously mentioned attributes will help integrate and add to the sales and growth of the
Macy's Inc. is one of the nation's largest and well known department store chains. Started over 150 years ago, Macy's has continually generated excellent returns for its shareholders and employees. Currently, in the midst of a global recession, Macy's has generated huge profits with same store sales increasing 5.3% year to date. In 2012 same store sales increased 4.6% in the month of February alone (Macy's Inc., 2012). In fact, throughout the duration of 2012, Macy's is projecting even larger profits for its underlying business operations. Even though Macy's has experienced success with both its assortments and brand, its competitors haven't faired so well. Sears, due in part to part to a lackluster holiday season, has been forced to close nearly 120 locations to generate excess liquidity in an effort to shore up its balance sheet (Isidore, 2011).Other competitors who cater specifically to the middle class consumer have also lost significant amounts of market share as consumers trade down due to the economy. This performance is primarily due to the core functions and operations of the business. Planning, organizing, leading, and controlling. Macy's excels at these forms of management, which has allowed the company to perform at a higher level relative to its peers in the industry.
The company had ambitious objectives with their own retail units, having as an objective to open three hundred stores, but the company realized that retail stores were a distraction to management making harder to focus in their core business and damaging the relationship with their main retailers, making clear that the company was struggling on creating profits in products that were not part of their core business, the strategies and objectives needed to be adjusted in order to turnaround the decrease in sales and profits of the
Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in
One of the industries main weaknesses is the fact that they have a low industry ratio. Furthermore, one of their issues in past years was being geographically impotent in their retail locations, but as mentioned before, this issue is declining due to the fact that more locations are being opened worldwide.
The procedure begins with an online screening test to ensure that the candidate is fit for the business, and the actual work preview allows the candidate to personally experience the job and then decides to join KFC.
In order to further illustrate this management issue, this article investigates into the successful competitive positioning of a leading Hong Kong imported food and daily necessity retailer, the 759 Store 阿信屋. Despite 759 Store has a diversified range of business, this article focuses on