QUESTION 1

In 1991, Kentucky Fried Chicken changed its name to KFC in an attempt to broaden its image away from fried chicken. KFC management had noted the societal trend toward healthier eating and was worried that its signature item was in decline. The company responded to this trend by introducing (Colonel’s Rotiserie Gold) chicken but was forced to drop it after the roasters kept breaking down. Not wanting to give up, management later think we come out of the box in the roasted line of chicken. After promoting the product for only three months, CEO David Novak admitted that the roasted line was a disappointment “ we don’t think we came out of the box in the roasted category with the best effort that we could have” explained Novak. Deciding to focus on its signature fried chicken items, management aired a new pool of television commercials extolling the health benefits of its fried chicken-only to be charged by the Federal Trade Commission of making fales claims. Nevertheless, the company continues its preparations for a new line of salads being introduced later in 2004.

What would you recommend to the management of KFC? Should it continue to experiment with healthier menu items? What resources and competencies are needed to adopt a health food strategy?

QUESTION 2

Discuss how a development in a corporation’s social environment can effect the corporation through its task environment. How can a decision maker identify strategic factors in a corporation’s external international environment?

QUESTION 3

It is possible for a company to be the lowest cost producer in its industry and simultaneously have an output that is the most valued by customers. Why or Why not?

QUESTION 4

Are functional strategies interdependent, or can they be formulated independently of other functions? What is the relationship of policies to strategies?

QUESTION 5

Is it possible for a company to have a sustainable competitive advantage when it industry becomes hyper competitive? Why or Why not ?