KFC (Kentucky Fried Chicken) is a well-known chain of fast food restaurant that specializes in fried chicken. It was established on March 20, 1930, and its headquarters is situated in Louisville, Kentucky, in the United States (Denison, 2016). It is serving in around 123 countries at around 20,000 locations in the world and a world’s second-largest restaurant chain.
Before the 1960s, New Zealanders had a limited choice for the food they wanted to dine out and the venue anywhere. A more sophisticated culture of food and dining developed late in the 1950s. The first KFC outlet opened in New Zealand in 1971 followed by Pizza Hut in September 1974 and McDonalds.
Kentucky Fried Chicken restaurant is known for their fried chicken and various other products selling over the globe. In this report, this company is taken as an example for analysing the various aspects of change management and strategies needed to be done in a timely manner for satisfying the wants and need of the customers and to make a competitive stand in the market.
Colonel Harland Sanders founded KFC in 1952, but its rudiment should backwards to 1930. At that time, Colonel Age was 40 and he was working as an operator of a service station in Corbin, Kentucky. The love of cooking was so high that from his own living quarters, he started cooking and serving food to hungry travellers. In a short period, customers attracting and turning up towards the food, which makes Colonel, open a 142-seater restaurant across the street and the name of that restaurant was “Sander’s Court”. This also makes him study hard on various technologies used in making fried chicken and this helps him to invent around 11 spices with unique cooking technologies including the secret recipe (Walker, 2017). In a short span of time, his restaurant became so popular that the state government gives him the designation of “Colonel” due to his fine contribution to the state cuisine.
Eventually, the tremendous growth of business creates a difficulty for the Sanders and so he sold it to the people who formed the Kentucky Fried Chicken Corporation. However, the goodwill always lies with Colonel Harland Sanders. He died in 1980 but his philosophies of excellent service and hardworking will always be a part of KFC tradition. KFC restaurant adopted the traditional structure of the organization.
In the above diagram, the information and communication flow from the Manager to the junior employees. This structure follows the centralization pattern where the topmost management takes the decision.
Considering their products, they are majorly offering fried-on-the-bone pieces seasoned with the “Original Recipe”. One of the encouraging policy of the company was to discard chicken if it has not been sold within 90 minutes so that to ensure freshness. One of the executives of KFC stated that the chicken taste could differ according to the various regions and types of oil variety.
Other major products of KFC’s are chicken burgers (which also include tower burgers and Zinger), wraps, and different varieties of finger foods like crispy strips and hot wings.
One of the most widely eaten KFC food was Popcorn Chicken, which also includes small pieces of fried chicken (McCauley, 2017).
At some areas, chicken nuggets are also sold under the trademark of “Kentucky Nuggets”. Worldwide, there were over three hundred KFC menu items, which are sold. Their menu items are also divided by localities like in the US, they sell grilled chicken, Asia people like more of spicy foods like Zinger chicken burger, at some regions in the US, fried chicken lovers and gizzards are sold. In Asia, rice-based side dishes like kanji are also occasionally sold, chicken meatball soup was sold according to the preference of Malaysia and in the US and Greece, potato wedges are sold. Outside the USA, KFC also offers beef based products such as hamburgers or kebabs, poutine and pork based products. The KFC products are categorised into four dimensions, which includes chicken products, pork products, fish products and beef products.
“KFC” breakfast menu was also released internationally in the year 2012, which includes various items such as porridge and waffles, pancakes as well as fried chicken (Louisville, 2012).
The mission of KFC stands to be the leading chain of food restaurant in the ASEAN region by focusing on consistent quality products and leading customer-centric service. With the alignment of the vision, the company also has certain goals like maximization of profit, improving the value of shareholders (by giving them maximum return) and ensuring sustainable growth over the year (Waterman, 2011).
KFC (Kentucky Fried Chicken) had a PESTEL analysis which includes Political, Economic, Social, Technological, Environmental and legal factors and these have a direct or indirect impact on their management business strategy (Gillespie, 2016).
Political Factors – These factors include the government policies as the political systems of every country are different which can influence a business in many ways (DuBrin, 2009). As KFC is a foreign company but operating in many countries, they have to make their business strategy according to the government policies like, In India, the government have banned beef mixed food items due to the culture problems and this makes KFC follow every health and safety guidelines. In addition, the risk of doing business in New Zealand is very high as the new government applies new regulations and the labour force is very expensive in New Zealand.
Economic Factors – This is the next aspect, which includes money and income. Every effective business is connected with the country’s economy where many conditions needed to be undertaken like stock rates, the standard of living, capital flows and costs. The most important factor here is the buying ability of customer, which directly affects the sales of the company. KFC also estimated the consumption behaviour of the people through their like and dislikes and decisions are taken by them. According to various reports, New Zealand is suitable for those companies who produce luxurious products like car, diamond and fast food as their per capita incomes is very high.
Social Factors – For an international company, it is necessary to understand the social connection beside the company’s world. Dividing the target market on social class, culture and religion come under social factors (Lin H. , 2008). KFC adopt different culture for different locations. For example, In Pakistan, KFC provides Halal food to the customers, which show their acceptance of the Muslim region. Social factors also include various social activities like donations and charity. In India also, when KFC try to sell their products, many farmers, doctors and environmentalist opposed their stores due to their product core material made up of beef. At that time, many numbers of protestors also damage their stores, which leads to creating in the chaos (Tandon, 2016). In New Zealand, the majority of cultures are in the terms of Muslim and Christian’s religion. Therefore, during the festivals like Christmas, the consumption of foods and beverages increases.
Technological Factors – This includes the adoption of the latest modern technologies in every aspect i.e., production, advertising and distribution. By using advanced technology, they can minimize the costs of manufacturing and production. A company also need to handle the internet technology because one of the rumour damaged the company identity in a particular locality as according to the media; a news was spread of animal cruelty by KFCs.
Environmental Factors – It is one of the important analysis, which needs to be addressed by the company. KFC always had been in critics by the world environmentalist due to the consumption of beef, potatoes and chicken. The reason was that the consumption of beef contributes to the greenhouse effect by methane gasses coming from cow’s ranch. One of the disadvantages in New Zealand as they have less resource of water and which affect the cost of various businesses. KFC also being criticised for being insensitive to pollution as of using one based packaging for its food products.
Legal factors – Kentucky Fried Chicken is also a legal company and they grow under the Yum! Brands. Also, KFC is an international company and so have to comply with various laws and regulations. Their recipe also has a legal stamp and so no one can steal or copy it. Various legal formalities, which are needed to be followed according to the law, are operating hours, tax requirement, labour and employment laws and environmental certification. As the company is complying with these laws, the support of the government will also be with them in the form of rebates and subsidies.
The objective of doing this research on the company KFC are given below-
To identify the two transformational change implemented in KFC.
To recommend the various alternate change strategies help in these changes.
This research is purely based on secondary data where information is obtained from various journals, KFC’s official website and from in-house publications like newsletter and publications.
After getting relevant data from the secondary sources, the data will be analysed through various tools and techniques which change management tools like Balance scorecards (A performance metric used by the management to improve internal functions of the enterprise), TQM (Total Quality Management) and Benchmarking. It will also depend on various perspectives relating to change management and these perspectives are cultural and resource perspectives, political and system perspectives, etc. In this analysis, various change management models will also be included given by the researchers like John Kotter’s, Kurt Lewin’s and organizational development.
In this section, the findings will be based on various reports and the main objective of the discussion is to define the importance of the findings with relations with the investigation of the research problem. In addition, the idea here is to generate new insights or understanding about the problems taken into consideration.
Change is a complex dynamic, which results in new thinking and behaving. Managing change is a critical component of any transformation. It helps the organization successfully implement new strategies and policies. KFC New Zealand needs to understand certain perspectives, which affect their decision making, and policies and mould them in the direction of their mission and objectives.
Culture Perspective – An organization culture shows the belief and thinking of its owner and employees and how they feel and act. In the case of KFC, it is directly related to the company’s values and vision. For every enterprise, it is necessary to retain its best employees for achieving the long terms sustainability and profitability. However, the culture of an organization is determined by its way of decision-making and commitments (Peterson & Anand, 2008).
The ‘feel-good” culture at KFC was supportive and inclusive and it is across all the KFC brand rather than being restricted to a single store. The company is also particularly flexible for accommodating time off for the exams, events and extra-curricular activities.
Generally, the main aim of every new young employee is to earn an extra percentage of money but as they continue their employment for a period, they realize that they can here achieve excellent career opportunities. From an employment perspective, they can excel in their skills through on-the-job training and teamwork. This will provide future benefits to them at work.
KFC’s exclusive culture helps the company by providing excellent customer service through the employee’s engagement. KFC should always adopt this strategy in its every store where people from any culture or region can come and work together which can also lead to cultural diversity (Maritz, 2013).
Therefore, KFC has a profound respect for the cultures, values and traditions of all the countries where their stores have a presence (Chalmers, 2013). The organization is readily accepting social and cultural diversity by rejecting discriminations based on the religion, ethics and on various other grounds. The KFCs headquarter contain employees from more than 70 different countries but then also, the organization culture seems to be flexible and professional (Brown, 2018). The behaviour, attitude and the working environment are such flexible that it helps and encourages all employees to feel comfortable and work openly with full freedom. KFC people call themselves a family that help them to create positive working relations.
The company also willingly accept changes suggested by the employees, which shows that the company is adopting decentralization policy in their internal business environment. It also shows that the company was making employees included in the decision-making by using their feedbacks. From a long perspective, it can be proved to a fruitful strategy as employees will later achier organization goal prior to their specific goals and this will create a culture of harmony and peace. The rate of employee turnover will also be reduced and so the company social perspective will be stronger in the market (Bingham, 2016).
Psychological Perspective – It was said that KFCs serve the mind of the customer instead of their stomach. This shows an innovation and creativity in their strategic management (Zanger, 2018). These unique psychological characteristics make them the winner of their target market. This concept of KFCs has addressed the brand personality very efficiently, which help the company to rise in their market share. The visual aid colour their advertisement and franchise are red, which shows an out-flowing in the system of excitement (Grier, Mensinger, Huang, Kumanyika, & Stettler, 2007). Contradictory, this brand colour was very amusing for the youth and that is why KFC try to target the self-concept of consumers. On the other hand, McDonald uses yellow colour in their logo, which helps them to stimulate hunger in the customers. KFC also made an effort in their product named “Zinger Burger” which helps them to attract the valued customers.
For deeply understanding the behaviour of the consumers, these psychological factors are divided into several concepts:
Motivation – Various factors that are used by the organizations in motivating the customers includes providing good customer service, the smooth environment in the restaurant and maintaining a high quality of food (Abratt & Bendixen, 2018). In this aspect, the perception was the next process and KFC always ensures to leave a good impact on the mind of the customers by the help of effective advertisements and deals as it can manipulate the minds of the consumers, which aids to perception.
Buying behaviour – There are four types of buying behaviour which includes (Liao, Shen, & Chu, 2009):
Complex buying behaviour
Dissonance reducing buying behaviour
Habitual buying behaviour
Variety-seeking behaviour
The company focus on the consumer buying behaviour by classifying in these four heads and then balancing the difference between the high and the low involvement of the consumers in a particular situation.
Stimulus – It is called as a process through which the buyers go through to make the purchases. Stimulus is that thinking of consumer, which comes before they take any particular decision (Raab, Elger, Neuner, & Weber, 2011). KFC use various marketing strategies to influence the mind of the customers through this technique. Their business model is so strong, that they know before what the consumer will purchase and deliver it before the time.
The company segment the market based on psychographic factors such as social class, lifestyle and personality characteristics. Under social needs, the organization meets the needs of the people from the middle and upper class. This makes the consumers from these two social classes identify themselves with the brand created by KFC.
There are many available change management models; however, many companies prefer at least one change management model, which help them in their survival and success. The organization should focus on change to remain competitive and successful in the market.
The two-change models, which can be applied to the organization, are –
John Kotter’s change model – With the successful implementation of the Kotter’s model, KFC will be ascertained that it will attain its target objectives. In this model, the first step is to identify the underlying problem. In KFC case, it is struggling with two main issues – In the recent times, the company was getting bad reviews for its food and the cleanliness. So, there was a need to review the operations and employees so that to make it a competitive chain in the world.
There are eight processes that mentioned in Kotter’s model, which was shown in the diagram model –
The first steps in the Kotter’s model are to establish a sense of urgency (Kotter, 2008). In relation to the above-mentioned issue, the company need to first aware their intention of change to the employees. After this step, the company needs to focus on the establishment of new strategies to improve the quality of the products. In the next step, KFC needs to ensure and addressed an effective team who will oversee the process of change and thus the management will select team players who have different but collective skills that this process requires. In addition, the management will involve people from customer service, kitchen sections and human and finance resources.
For creating a vision, the company need to consider all those factors and aspects, which will help the restaurant to achieve their overall objectives. The vision statement should be customer centric which represent that high standards have been developed for quality food. In the next stage, this vision must be communicated to the overall employees so that they can also contribute to minimizing risk and conflicts and takes necessary initiatives (Reiss, 2012). Now, the actions and implementations will be incorporated. The management of KFC will ensure that the improvement of quality not must be in just of the product but also in the customer service. Here, training will also be given to the employees so that they can execute these changes easily. The next step focus on the creation of short-term wins as this will help the employees in gaining long-term aspect of the changed project. KFC will also find short-term strategies, which will help in the immediate improvement of the service. For the next stage, KFC will hire more employees to enrich the quality of services and products and will start a new set of training programmes which will enhance employee’s skills.
Therefore, following these pattern of series, KFC will implement the changes aligning with it other goals and objectives.
Kurt Lewin’s change model – The Kurt Lewin’s model has given a three-step process of change, which benefits the KFC by implementing a positive change in its working. These three steps include – unfreezing, changing and refreezing (Morrison, 2014).
Unfreezing – In this stage, the company set aside his old behaviour, which can cause harm to the growth of the company. At this stage, the company need to address the area, which was causing the actual problem. In KFC, the actual problem was of the quality of the food and cleanliness (Amini, 2015). For this, the manager can analyse the behaviour and working of the employees, which can show that whether they are fulfilling their responsibility, or not.
Changing – This was a crucial stage, as the management here need to incorporate the development of the individual employee, which will help in moulding new behaviour. For implementing this thing successfully, KFC can follow three guidelines so that to managed change effectively. The first guideline should relate to the improvement of overall performance, the second guideline includes employees need to take responsibility for their work and the third guideline should include motivation of the employees on the time so that they can work as a collective team.
Refreezing – This stage of Lewin’s requires the integration of learnings of the individual with the actual practices. In this stage, everyone has to follow new beliefs, feelings and behaviour. An individual from his/her superior learns these things at the time of changing phase. This will leads to the adoption of the new behaviour rather than returning to the old behaviour.
Change management plays a significant role in the company and the above model, tools and techniques can help the company to be in a competitive position always. The Lewin model can also bring various developments in the functioning of the employees by telling what actual measure needs to be adopted to cope-up with the problems. The only drawback of this model was its theoretical approach rather than the practical one. Whereas the Kotter’s model can help the company by stating, it is every single minute detail in the most effective manner but for using this model approach, a company need to do heavy investment in both money and time.
Balance Scorecards – It is a system, which uses performance metrics for the strategic management and thus improves the internal functions of the business (Lin & Chiang, 2009). It helps in viewing the organization from four perspectives –
Financial Perspective – This includes the setting of new financial targets for the company as KFC New Zealand was working for the objective of earning maximum profit. The company needs to measure their average margin, as according to the management, the margin data on each product was readily available. The company also need to set accurate revenue goals, which should focus on growth and sustainability. The top executives of the KFC New Zealand should also use any other relative efficient metrics like employee/revenue, employee/profit or restaurant/profit.
Customer Perspectives – This perspective involves measuring the customer satisfaction, rate of retention and repurchase rate (Niven, 2010). Top management of the team their do survey which includes customer satisfaction regarding the food, service and quality but the final data did not give any information that can help them to improve customer satisfaction. At those times, most of the customers are anonymous which creates difficulty for the company to analyse whether new or current customers made the purchase and that creates the need to improve their proposed Metris, which can give result about the transaction volume, average score, etc.
Learning and Growth Perspectives – This fast food industry mainly gives the job to the youth and students for its various positions. This gives them the insight of operational organizations and thus promotes career development. Also for improving the customer satisfaction in KFC New Zealand, they give training to the employees aligning with the incentives and the motivation so that it will benefit the staff as well as a restaurant. KFC New Zealand also adopts a different way of preventing waste treatment. They connect the reward system together with the waste reduction targets. These will leads to reduce the amount of food wasted and thus increase overall income in the company.
Internal business perspectives – KFC New Zealand was strictly controlled according to KFC guideline established by the KFC headquarter that has been passed by KFC Europe. Top executives state that sometimes they find difficult to find ways of improvement. Some suggestion was also be made regarding the customer service where the service was being provided slowly. The next suggestion was to improve the conversion rate of these complaints where if 50 customer complaints, around 40 need to be resolved effectively. Another suggestion was of separation of complaints by the customer consumption i.e., customer purchasing from the restaurant for immediate consumption or customer was purchasing for taking away.
Total Quality Management – It is also a management approach or strategy for customer satisfaction through long-term success. It includes Benchmarking, Employee Involvement and continuous improvement (Gutiérrez, Molina, & Torres, 2010).
Benchmarking is a process to compare one’s business process with the best out in the industry. It is set in terms of every aspect i.e. quality, culture, customer service etc. To be competitive in the market, KFC provides more consistent quality and value to the customers.
In TQM, the company KFC like uses various techniques –
Six Sigma – It helps the management to identify and measure the process of the organization before the work is done (Hemant, 2011). KFC MIS system is made of considering this model only.
JIT Model – It includes the cycle time, which refers to the steps taken for a particular process in the company like reservation processing of the order, payment system, etc. (Gupta, 2011). KFC in-house operating manufacturing system helps in control over the JIT model.
HACCP – It stands for Hazard Analysis Critical Control Point, which is related to the food safety. It means to identify and evaluate the various hazards of ensuring food safety (Mortimore & Wallace, 2013). It is used until getting of raw materials up to serving the customers.
ISO 9001 – For the very scale of organization, this certification is necessary and suitable and it helps in the management process globally compete (Tricker, 2016).
Therefore, TQM is a very important concept which can be used in the daily operations of the enterprise and it is necessary to support at all levels (Hashmi, 2018). KFC applied all the above methods in an efficient manner.
Conclusion
KFC is competent in all areas irrespective of its operations, scale and customer service. With the time, implementation of the change of organization is necessary for every enterprise so that to establish a competitive edge in the market. It can be also said that KFC has lots of loyal customer list, which are also sticking to the company from a very long period. One of the strategies, which can be adopted by KFC, is to increase the number of the franchise over the world, which is also the easiest way to expand its market, and this will help them to expand their market. With earning of big profit, it is also necessary to understand the cultural values and rituals of the society, which can help them to create a strong brand identity. It is also the most internalised fast food chain and as their market growth, the profitability will rise.
One of the negative sides of the company was lacking in the field of research and development, internal business control and the relationship with the franchise. In several countries, KFC has faced various cultural issues for using beef in the products, employment turnover and proper waste treatment. In the chain of the food industry, the entry of new competitors can as be proved as a threat, which creates the need to make new strategic alliances by adopting the renewed change of tastes and preference of the customers. As in some countries due to cultural issue, some of the government agencies will also not support the company and this will be a challenging task to deal with it.
Therefore, it can be understood from the case that very enterprise should understand the importance of change management, ethics and cultural issues, which help them to operate effectively and efficiently on a continuous basis.
Lastly, KFC can get success through the combination of offline and online campaign and they need to maximise their resources to achieve the strategic goal.
KFC is a market leader in providing Fried chicken and various dominant players like MC Donald and pizza hut surround it. It products menu items is really well but need improvement by making it dynamic and the introduction of new meals after time to time. The products of the prices in KFC are reasonable as compare to another food chain like pizza hut. However, they should adopt new pricing strategies to attract the consumers, as it will always be the core aspect from a customer perspective. For this, they can launch discount packages for families, students and regular customers.
KFC should work on the management issue for building good atmosphere for their employees to work in. They also need to sure about their product food quality and superior service. Also for increasing the market share, they need to target the right customers i.e. people who are comfortable with eating the beef. In commercial areas, they should also open new outlets, which will also be proven as an effective strategy. They should also focus on building solid marketing departments. The marketing team of the company also ensures about the advertisement campaigns, which should direct stimulate the hunger of the stomach. This can be proved as an incremental factor for the growth of their sales as they just need an efficient marketing department, which can easily handle the promotional activities.
KFC should also focus on making the healthier recipe and they can go through a promotional campaign, which can change their image from fried to ‘healthy’.
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