Franchising Strategy Adopted by KFC to Grow Their Business into a Global Organization - Essay Example

KFC has a presence in over 100 countries. Internationally, KFC has a stronghold in China, Canada, Britain, Malaysia, Indonesia, South Africa, Australia, the Philippines and South Korea.
KFC leadership at the moment is focusing efforts on expanding franchising opportunities in developing countries in Asia, Africa and South America. Competition, including McDonald's, Wendy’s and Burger King, has been opening a business in South American countries of Chile, Argentina and Brazil, while KFC intends to focus on Mexico (De Wit & Meyer 916).
A major issue in the expansion of franchising is the disconnection between the management and the franchisees: the latter feels that the management does not understand the chicken business and is not aware of the way fast-food restaurants are run. In the past, this has impacted sales as well as customers. A case in point is the strategy of the company to distance itself from its Southern deep-fried legacy in favor of healthier cooking options such as grilling. Helm (2010) writes that this strategy is actually hurting the brand and the traditional customers. However, there is an increasing number of people in the US and in countries where the company operates who are opting for healthier options, mostly refraining from deep-fried fast foods. This creates a big dilemma for the company as it does not have anything to offer this growing group of consumers.
Another issue is the management of the franchise cost of KFC, which is currently quite high, taking into account the increased food items prices and inflationary pressures in potential markets. The company needs to open doors in more locations after detailed research and testing. This testing should include culture testing to establish better pricing strategies in conjunction with local franchisees; besides, the company must be more locally entrenched. Traditionally, KFC has opted for a standard franchising strategy wherein standard menus and services have been offered to consumers irrespective of country or region. Competition such as McDonald's, however, has made effort to rework its tactics to make them more culturally entrenched and local. This means that the policy of standardization must not be used extensively, except for standards of cleanliness and quality.
Management needs to incorporate all of these points and offer a better plan to potential franchisees and customers. This will ensure that the company is able to best competition and establish long term relationships with stakeholders.

What is Skoda’s market positioning within VAG (Volkswagen Auto Group)? Please draw a diagram to show this positioning. Please explain how Skoda’s marketing strategy has led to the success of this positioning strategy.
Skoda represents one of the oldest European cars. Most of its consumers, over 95%, are located in Europe. The car brand is a part of the Volkswagen Auto Group, among other brands such as Bentley, Lamborghini, Bugatti, Audi and VW.
Skoda has been known to be a sturdy and solid car. However, it has never really been associated with high quality and luxury. The target consumer of the Skoda car was cost-conscious and not overly worried about its image. The range of Skoda cars was also small and compact cars rather than sleeker, bigger versions. When the VW Group took over the car in 2000, the management redrew the positioning strategy of the car.
Looking at the positioning mapping of the car portfolio of the VW group, we see that most of the cars in the company are positioned as high end, luxury cars with multiple SKUs, including sports cars, sedans and SUVs. Skoda has been low on price as well as low on perceived quality which places it far apart from the rest of the cars on the portfolio, but not in a good way as this position is not appealing to the customers. The positioning strategy of the company has been aimed at pushing the image of the car as a better quality vehicle, with a reasonable price tag, thus maintaining the current image of affordability.
The current positioning of the car is one that provides excellent value for money, with good quality and technologically advanced innovations. To set this positioning, the company has employed the best people as top leadership which includes multiple Board members to steer strategy. The company has expanded into many international locations such as India and Australia, where the brand has successfully placed itself as the value for money, innovative vehicle, making it a global brand.
In the product development phase, the company invests liberally to incorporate current technologies to create a top-notch quality product. The distribution strategy of the company is also aimed at enhancing brand image through sleek auto boutiques instead of the traditional, old school dealerships. The company has used well-planned advertising campaigns with modest budgets to achieve economies of scale (Doole & Lowe 82). Event marketing, trade shows, PR activities are all used extensively to establish confidence in the consumer and the investors of the brand.