Reference no: EM131285541

If there is no bread, is it really a sandwich? That's the question that many customers have been asking the Kentucky Fried Chicken (KFC) fast-food retail chain. In 2010, KFC released its latest addition to its menu, the "Double Down." KFC promotes the new item in its advertisements, stating that it is "so much 100-per-cent premium chicken, we didn't have room for a bun." The sandwich is an attempt to grow revenue in a very competitive business. The United States has the largest fastfood market in the world. Many competitors offer products that are considered the same, and the rivalry compels prices that constrain profit margins. KFC began in a gas station in North Corbin, Kentucky, during the Great Depression.

The success of the eating establishment called Sanders Court & Café led to expansion. The first Kentucky Fried Chicken retail store opened in 1952 in South Salt Lake, Utah. Eventually expanding to Canada, by the early 1960s, Kentucky Fried Chicken was sold in over 600 franchised outlets. Since that time, the fast-food restaurant has changed ownership multiple times. Today the brand is owned by Yum! Brands and is based in Louisville, Kentucky. There are more than 14,000 KFC outlets in more than 80 countries and territories around the world, serving some 12 million customers each day.

According to KFC.com, the Double Down "features two thick and juicy boneless white meat chicken filets (Original Recipe® or Grilled), two pieces of bacon, two melted slices of Monterey Jack and pepper jack cheese and Colonel's Sauce." Although it was initially offered on a limited-time basis, KFC decided to add the item to its menu permanently. The company's change of course was related to strong sales driven in part by people eating the sandwich on YouTube and popular television personality Stephen Colbert consuming one on The Colbert Report television show. KFC reports that the launch is one of their most successful ever.

From a nutritional standpoint, the Double Down is 540 calories, 32 grams of fat, and 1,380 milligrams of sodium. The grilled version is 460 calories, 23 grams of fat and 1,430 milligrams of sodium. The level of sodium in the sandwich is drawing a great deal of concern from customers and health advocacy organizations. Many critics are questioning why KFC introduced this option in the midst of building its brand image as a fast-food restaurant offering healthier menu choices. Lona Sandon, a registered dietitian and spokesperson for the American Dietetic Association, says, "You are getting large amounts of total fat and saturated fat by eating a sandwich like this, and this is very detrimental to your overall heart health."

The fast-food retail market is in a constant state of competitive fervor. Are sandwiches like the Double Down the future of fast-food chains? The dilemma for companies like KFC is, how do you appeal to both the healthy market and the indulgent market? Many customers prefer healthy choices when considering fast food. However, there are also numerous diners to whom the appeal of fat, salt, and processed carbs is irresistible. But the general issue of obesity as an epidemic leading to major health problems has become front page news. The choice of menu items must lead to long-term profitability and competitive market advantage, but KFC will have to find a way to balance potential public relations concerns and still maintain its bottom line. You Make the Call

1. What is the decision facing KFC?

2. What factors are important in understanding this decision situation?

3. What are the alternatives?

4. What decision(s) do you recommend?

5. What are some ways to implement your recommendation?