Kfc - Japan

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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.…show more content…
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

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