Kfc Business Environments

Colonel Harland Sanders was an entrepreneur who operated a service station in Corbin, Kentucky where he prepared food for travellers. When Sanders was 40, he began to serve food items which were perfected by his secret blend of 11 herbs and spices along with a special cooking technique of his. Soon enough, Sanders station had become so famous that it had spread throughout Kentucky and was then named “Kentucky Fried Chicken of Harland Sanders”. He prepared chicken and many other dishes. Colonel Sanders initially perfected his menu with the recipes and techniques he learnt as a child. KFC apart from offering Fried Chicken offered other dishes such as steaks and local Utah Ham. The KFC brand was founded during the era of Americas great economic depression. (Ozersky Josh, April 2012)

By 1952, Colonel had seen a possibility for the restaurants franchising notion and therefore had begun to actively franchise his chicken business by preparing batches of chicken for several restaurant owners and employees in towns that he’d travel too. Pete Harman was soon after awarded with the first ever KFC franchise which was established in Utah. Thereafter by 1964, Yum! Brands have bought the company and are still currently owned by them. (wikipedia.org, 2017)

“To be the leading integrated food services group in the ASEAN region, delivering consistent quality products and excellent customer focus” happens to now be the vision of the fast-food outlet whilst “To see food in a fast friendly environment that appeals to pride conscious, health minded consumers” is their mission. As off today, there happens to be around 19,952 KFC outlets in approximately 123 countries across the world making it the world’s second largest restaurant chain. There about 828 KFC outlets in South Africa and about 10% of the outlets happen to be company owned while the standing 90% are franchised owned. 4,563 outlets exist in China whilst 4,491 in the United States. The KFC system serves more than 12 million customers around the world. (wikipedia.org, 2017)

It is a known that KFC seasons their chicken with a secret blend of their 11 herbs and spices which also happens to be their main product. KFC essentially offers their chicken in portions of 2-3, wraps, salads and burgers but had soon enough started with their sides and desserts. In 1957, Colonel and Pete had invented their first KFC bucket, which is known as the family bucket containing 16 pieces of chicken along with gravy. Another special product of theirs happens to be a variant that was made mainly for the Asian market as they had preferred their spicy pallets, and is called Zinger (wings/burgers, etc). The Zinger variety is now served worldwide. (wikipedia.org, 2017)

“Box meals” or “streetwise” meals are also being offered as a result to bundle pricing which in other words is gathering items on the menu into one meal which allows the prices to drop compared to when the items are being sold individually. Items are also priced psychologically e.g. $19.99.

The KFC current headquarters is in Louisville, Kentucky. As of 2015 the current Chief Executive Officer of KFC is Roger Eaton and is subordinate to Yum Brands CEO, Muktesh Pant. The company uses a Top Down organisational structure regarding strategic decision making whereas the lower management making all the operational decisions of the company, middle-management makes the diplomatic decisions whilst the top management makes mainly and most importantly, the strategic decisions of the company. Due to 89% of the stores being franchised, it does not allow other board directors to have any power over the stores but overall, all stores are equally maintained by rules of the franchise agreement. KFC outlets are mainly franchised with only 11% of franchises are owned by the corporation. (Whithworth William, 2016)

SECTION (B)

STRENGTHS

Strong Market Presents Across The World - As KFC is well known across the global, due to it being fast-food brand behind McDonald’s, the brand has a good market presents in this saturated fast-food market. This is good as KFC will be seen as trustworthy brand and will be the first choice for many when in doubt, it also means potentially customers are able to identify KFC cover many other brands when choosing where to eat. This therefore gives KFC a competitive edge. KFC is a well-known brand due to them being in countries all over the world, and having entered different markets at a very early time.

Market Leaders in the Fried Chicken (Variety Product Offering) - KFC products are seen as competitive due to their secret recipe which is known as the trade secret thus not having any other business to have the same unique taste as theirs. This is seen as a huge advantage for the company. The 11 herbs and spices in their meals have allowed their trademark to be made strong as well as the fact that they were able to use these herbs and spices to make new meals such as their burgers, zingers and wraps. To also introduce salads into their menus allowing a veg classification gives them an even greater advantage. KFC chicken has also been made Halaal and now caters for different statistics. of all demographics, for example, all of the food items are Halaal.

WEAKNESSES

Unhealthy Food Menus - Healthy meals such as salads have now become a trend which leaves KFC in a disadvantaged position due to the fact that KFC menu consists of a high fat content which is penetrating. This therefore drops the marketability of the business. It is manifested that all their meals are friend hence their name resulting in the risk of numerous health problems such as a high cholesterol, obesity, diabetes, etc.

Control Issues Due To Franchises - Having 89% of KFC stores franchised and only 11% owned by the company leaves the companies disadvantaged due to the fact that they are unable to control issues such as changes on the menu and how the business should be ran. Franchises have a bigger say in management which causes the companies to react to their decisions creating a series of dispute. (Whithworth William, 2016)

MARKET ENVIRONMENT

SECTION (C)

Porter’s Five Force Model

Availability of Substitute Goods

Power of buyers

Power of Supplier

Level of Rivalry

Threat of New Entrant

Availability of Substitute Goods: Whilst KFC is a successful fast-food outlet but still faces challenges such as threats like Chicken Licken due to the fact that this outlets main product