Introduction

To analyse the impact of information management within KFC, it is necessary to understand and
apply various theories. This essay will begin by applying the five force models established by to
KFC's competitive position in the relevant market. This will assist in determining KFC's influence
and strategy in the market place, whilst acknowledging the limitations to the theory. Next the value
chain model theorised by will assess how KFC's organisational structure assists in adding value to its
various activities. Hence, these models determine the input of computer management that is required
to satisfy KFC's requirements, to compete against its rivals over a long period of time. Finally, the
use of ICT within KFC's management will be discussed to determine the competitive advantage that
is achieved and defended using the Strategic thrust model that has been advanced by Whilst
discussing the current uses of information technology within KFC, the essay will conclude by
suggesting improvements to information management practices, which could add to the
organisation's efficiency and competitiveness.

Management information system (MIS) become a pivotal to an organization in supporting as

a tool to achieve its vision and mission. Information systems gain their importance by processing the
data from company inputs to generate information that is useful for managing the operations. MIS
not only include software systems, but the entire set of business processes and resources that are
used to pull together information from functional or tactical systems. The available data from the
system is used by the organization in various way to help the business in managing, executing,
delivering and maintaining all the activities involved in the business. The entire system is designed
to assist the organization take the right decision and actions to meet its strategic and tactical goals.
MIS combines information from multiple systems. These help management staffers better
understand their own departments’ contributions. Manager who’s aiming to improve has to establish
a broader perspective with the help of a great MIS.

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A. Firm Profile

In 2011, KFC Malaysia revenue jumped to RM 1,655.3 million, 10.6% up on the RM1,496.9
million recorded the year before. The Malaysian team achieved this success with a combination of
compelling marketing and promotional campaigns and irresistible new products to draw customers
into the outlets. Simultaneously, a range of service enhancements and facilities upgrades improved
comfort and efficiency, whether customers are eating in, taking away or driving through. The
division initiated three projects during the year to increase operational efficiency. A new Kitchen
Display System (KDS) had its trial run at Wisma KFC. The KDS is effectively a packing monitor,
and its use has resulted in much improved service time, especially during lunch and dinner time.
Having packers at each cash counter during peak periods have meant shorter queues and higher
transaction counts. In early 2012, the KDS will be rolled out to our high-sales volume restaurants in
Malaysia KFC also installed a Self-Order Service Kiosk on a trial basis at Wisma KFC, which
further cuts queue time by allowing customers to use the kiosk to place their orders, then collect their
food and pay at the counter.

Initial results have been encouraging. The Group’s third quality initiative was the
development of two customer service ‘squads’. This concept clarified managerial roles in the
restaurants by establishing the Customer Mania Squad, involving cashiers and dining staff, and the
Product Champion Squad for the cooks and backup staff. Each manager is accountable for
recruiting, training, engaging and energizing his or her squad to deliver the most effective service.
The goal is to achieve higher training levels and a better working environment in the restaurants. To
keep the menu vibrant, eight new items were introduced throughout the year, each product launch
celebrated with a well-advertised promotion. Offerings such as the Fish Donut, Chicken Chop with
Mushroom Gravy, Quarter Chicken with Black Pepper Sauce, Olè Pocketful, Tom Yum Crunch,
Double Zinger Burger and Krushers with new flavours enticed customers eager for variety. The
Group implemented a comprehensive marketing programme in 2011.

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 The large number of promotions throughout the year meant that customers could always find
something exciting happening at KFC, and via several channels, customers were informed of the
latest events. The year kicked off with a celebration to mark the opening of KFC’s 500th restaurant.
As an expression of gratitude to loyal customers, KFC Malaysia offered a Celebration Combo,
which came with a limited edition 24-karat gold-inscribed Celebration Mug. Chinese New Year
followed soon after, and the outlets introduced the Fish Donut, either a la carte or in a combo meal
with two pieces of chicken. This was a very successful limited time offer, accounting for about 10%
of the total sales for the promotional period. In April 2011, the spotlight shone on the new ‘So Good’
tagline. But this is not just a tagline – the objective is for customers to be so delighted with KFC’s
food and service that they cannot help but exclaim that it is ‘So Good’!

The marketing team pitched a 5-star campaign to spread the word, and a new Chicken Chop
with Mushroom Gravy was the anchor product. The Group also focused its attention on breakfast,
offering customers a different experience during the morning hours by providing a Breakfast Corner
with free coffee refills, daily newspaper and radio playing in the background. The breakfast menu
was rejuvenated by the introduction of the new a.m. Cheezy Egg Bun Combo, an improved a.m.
Chicken Porridge Combo, and an a.m. Riser Combo. KFC Malaysia honoured the fasting month of
Ramadan and the Hari Raya holidays in July and August 2011 by offering a delectable Quarter
Chicken with Black Pepper Sauce. In November, the team kicked off a season of kids’ marketing
efforts and got into the spirit of the Happy Feet 2 movie release. As parents and children flocked to
the cinemas, they also celebrated the beginning of the school holidays by feasting on the KFC Happy
Feet 2 Combo. In mid-December, promotional offers continued to entice parents and children with
the Ben 10 and PowerPuff Girls Chicky Meals. Both offerings included movie-themed buckets and
collectible figurines. Reflecting the commitment to provide customers a fresh and inviting dining
ambience, the Group renovated 18 restaurants during the year. 24 new outlets expanded the
network’s reach further, and KFC aimed to better accommodate the needs of busy customers by
increasing the number of outlets offering drive-thru service. With 539 restaurants in total – 455 in
Peninsular Malaysia and 84 in East Malaysia – the Group retained its market dominance. KFC
remains Malaysia’s largest restaurant chain. Another 15 new restaurants are planned in 2012.

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B. Business Start-up

KFC is a multinational organisation that provides fast food to 12 million customers in 109
countries. Kentucky Fried Chicken was originally founded in 1930 and changed its name in 1952.
Globally, KFC is ranked amongst the top 10 fast food restaurants in the world and has a worldwide
annual turnover of $11 billion. Although KFC has performed extraordinarily well over a sustained
period of time, the franchise ranks behind McDonalds and Chicken Cottage, Burger King, which
illustrates that the industry is competitive." The Fast Food industry is in a competitive market
especially in the UK. KFC has numerous branches within the UK and the branch located in Southall
will be analysed. Southall is in West London and is a vibrant industrial area. KFC provide a diverse
range of products ranging from chicken, to salads, which increases their scope in the market place.

The first restaurant opened in Jalan Tuanku Abdul Rahman, Kuala Lumpur, in 1973, and
from just that one store, the company has expanded to more than 480 outlets in four countries so far
– Malaysia, Brunei, Singapore and Cambodia. KFC Malaysia celebrates its 35th anniversary this
year and has much reason to rejoice. It is a milestone achievement for the company that has built its
reputation on the “finger-licking good” fried chicken that young and old alike have come to love.
The catchy song aired on television and the ubiquitous advertisements have nonetheless helped make
KFC Malaysia a household name and position it as Malaysia's foremost food service enterprise with
fully integrated operations in poultry breeding, processing, and retailing. But more than just
promotions and traditional media branding, the company is constantly reinventing itself by
introducing new items to complement the old favourites.

KFC Holdings (Malaysia) Bhd, through its subsidiaries, engages in restaurant, integrated
poultry, education, and ancillary businesses in Malaysia and internationally. It operates a chain of
KFC restaurants, including 539 in Malaysia, 80 in Singapore, 12 in Brunei, and 13 in India; a chain

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of RasaMas restaurants comprising 25 in Malaysia and 2 in Brunei; and a network of 75 Kedai
Ayamas convenience stores and poultry retail outlets. The company is also involved in integrated
poultry operations that include operation of a feedmill, breeder and broiler farms, a hatchery, and
poultry processing. Its poultry processing activities consist of slaughtering and production of chicken
and chicken parts; and processing of poultry products into convenience foods, such as burgers,
nuggets, bologna, smoked chicken, satay, sausages, and chicken balls to sell under the Ayamas
brand name.

In addition, the company operates the KFCH International College with two campuses in
Puchong and Johor Bahru that provides various diploma programs, including hospitality related
disciplines, early childhood education, business administration, and information technology; and
engages in property holding activities. Further, it engages in various ancillary businesses that include
the manufacture and supply of tomato ketchup and chilli sauce under the Life brand name to fast
food operators, supermarkets, hypermarkets, and provision stores; operation of a vegetable
commissary that produces and sells coleslaw, salads, vegetables, fruits, and other fresh products to
restaurants; operation of a network of bakeries; and production, marketing, and sale of beverages and
nutritional drinks, including tea products and carbonated drinks. The company is based in Kuala
Lumpur, Malaysia. As of January 21, 2013, KFC Holdings (Malaysia) Bhd operates as a subsidiary
of Johor Corporation.

Major key milestones of its development and achievements.

1973

 The 1st KFC restaurant opened on Jalan Tunku Abdul Rahma

1986
 The first Speech & Hearing-Impaired restaurant was opened on Jalan Imbi, KL

1998
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  KFC opened its 250th restaurant in KLCC

2011
 The 500th KFC restaurant opened in Subang 2

2015
Malaysia's first ECO friendly KFC restaurant opened in Nilai Square, Negeri Sembilan. The
restaurant received three certifications:

 Leadership in Energy & Environmental Design - USA (Gold)

 Green Mark - Singapore (Platinum)

 Green Building Index - Malaysia (Gold)

2016
A big year for KFC Malaysia as we were recognised and awarded with major accolades.

 Putra Brand Awards

The People’s Choice Award : Gold, Restaurants & Fast Food Brand

 Malaysia’s Strongest Brands Award

Best of 2016, Food

 KFC Asia Franchise Business Unit (AFBU)

Golden Rooster Award

 Google Hall of Fame, Malaysia

 APPIES Malaysia, Gold

 Asian Marketing Effectiveness and Strategy (AMES Singapore)

- Food & Beverage, Gold
- Data Driven Marketing, Silver

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Page 7 of 16
C. Business Problem

Differentiation.

KFC have differentiated their manufacturing process to ensure that they retain a competitive
advantage by using information system and have created their own unique requirements, which is
different from their main rivals. Primary activity involves creating products that are unique. The
strong distribution channels enable them to procure or produce within a short space of time and for
discounted rates, in accordance with quality assurance. KFC have integrated with some aspects of its
supply chain i.e. owning farms within the UK, which allows the organisation to control quality. This
unifies produce across all the branches including Southall, thus justifying its prices and perceived
consumer benefits. Innovation in new products requires maximising the use of technological
developments.

Innovation

KFC new products innovation is "Popcorn Variety Bucket Chicken, ITWIST with two flavours and
All Stars Box Meal," which creates an identity that can be differentiated from their main rivals.

Growth

KFC is the largest worldwide fast food organisation and runs a globally successful business. The
international growth of KFC is recognised through the location of restaurants across 100 countries.
KFC have 700 restaurants in UK alone.

Cost

KFC restaurants are well renowned for offering products at affordable prices, which links in with
efficiency and streamlining information management. Particularly, KFC are able to offer special
deals, which provide value for money and enable the organisation to compete with its rivals.

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 By analyzing KFC's information management systems in the context of the current market,
there is room for improvement. The marketing strategy i.e. advertising, planning and direction is
currently inadequate to compete with the likes of McDonalds and Pizza Hut. KFC should introduce
more promotional materials i.e. reward cards for customers, which has been adopted by other fast
food resturants. Alternatively, KFC can introduce coupons or souvenirs, which consists of all
customers' related information.

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D. Technology-based solution

KFC have a wide range of fierce competitors within this industry with the market share being
shared. KFC's direct rivals in Southall are McDonalds, Chicken Cottage, Burger King and The Fried
and Grill. Innovation and competitive prices become the focal point for KFC in their strategy.
However, any competition based solely on price can be dangerous in an Oligopoly market, as
responses from competitors are likely to be swift and can trigger a price war. There is an
understanding within the industry to not compete on price. The indirect rivals to KFC are Subway
and Pizza hut. These fast food branches result in the requirement for KFC to innovate and diversify
their product range, to negate the effect that their indirect rivals have on them.

KFC's innovations such as the bargain bucket have ensured that customers are provided with
diverse products to differentiate them from their main rivals. Also, the use of information
management systems to communicate secret recipes (old or new) and intellectual property rights to
the Southall branch from headquarters ensures efficiency and profitability. The bargaining power of
customers is determined by a range of factors and also depends on the product range. KFC's
customers are likely to be consumers i.e. families or individuals. Customers are likely to change
preferences over increase of price. Also, since there is fierce competition, this provides customers
with choices and gives the impression of strong bargaining power. However, KFC is globally
recognisable and face to face interaction with customers increases brand loyalty. KFC's slogan
"finger licking chicken" sums up their identity and uniqueness. Also the diverse range of products
means that there is a decreased scope for substitutability, which weakens bargaining power.

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 KFC's use of economies of scale to purchase their raw materials increases dependency of the
suppliers on them. Hence, suppliers receive a good proportion of their business from KFC and are
required to remain loyal and to offer the best possible deal to retain the fast food restaurant as their
customers. This reduces the bargaining power of customers. However, the competition in Southall is
fierce with limited range of suppliers in the area. KFC can cover the delivery costs from other parts
of the UK, which enables it to weaken the bargaining position of its suppliers in the local area. Plus,
the franchise would require quality raw materials to maintain the standard and reputation of its
brand.

KFC have a large market share in Southall, which is achieved through efficient information
management of their accounts, products, suppliers and marketing. This enables them to streamline
their operations and to maximise their profitability. Also, brand image and marketing enable KFC to
increase brand loyalty amongst customers, which creates difficultly for new companies to enter the
market place. KFC's logo is protected by intellectual property rights and this prevents other
companies copying or keeping a similar name or slogan. Already the market for fast food is
saturated, which diminishes the opportunities to enter the market.

All these factors minimize the risk of new entrants entering the market place. Despite this,
there are smaller companies that can enter the market and offer lower prices. The substitutability
from KFC products to other products is determined through market research, which is conducted
each year by the organisation. KFC have diversified their product range, which enables them to
control the transition from one product to another. This is clearly evident from the transition from
fast food to more healthy food i.e. the introduction of salads and reduction in salt in their food. urrent
trends suggest that customers within the UK are becoming more health conscious and KFC have
responded accordingly by expanding their product range.

Despite this, there remains a risk that customers will change from one product to another i.e.
from chicken to pizza, however the costs for this to occur remain high. Instead the threat of
substituting similar products remains the biggest danger, due to the high level of competition

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E. Addressing the challenges

A formal IT internal governance structure is in place in KFC. The company is adopting a

strategic approach to governing IS in that will complement current MIS practices. Key issues are
governed by framework and the management team is responsible to make strategic decisions for IT,
the availability of an IT vision and a comprehensive IT plan. The accessibility to a comprehensive
set of IT policies, the setting of service targets to measure IS performance, rigorous risk management
practices. As IT becomes increasingly crucial to the support, sustainability and growth of business,
it is imperative for KFC management team to understand how to effectively measure IT
performance. The responsibility to control the formulation and implementation of IT strategy to
ensure the fusion of business and IT is called IT governance. The purpose of IT governance is to
direct IT endeavors to ensure that MIS’s performance of KFC meets the following objectives:

IT is aligned with the Council’s businesses and realizes the expected benefit. All of the
application systems used by the company have been aligned with the objective of the company.
None of the application system used by the company is fail to deliver its functions in supporting the
efficiency of the business. Business gains the expected benefits from the application system that has
been invested by the company. For example, the ordering system from customers is very informative
database that register every details of ordering and custom request made by the customers. IT risks
are managed appropriately. Internet fraud has grown even faster than internet use itself. Every
company is exposed with the downstream liability where innocent and unsuspecting organizations
that have their networked computers hijacked for use as pawns in attacks against other companies’
network. Therefore, the company has considered its legal obligation to keep the system secure. The
company ensure with the laws governing statutory requirements, liability avoidance and legal
facilitation of prosecution for unauthorized access and use. KFC has put its greatest effort to protect
themselves against such liability with using appropriate antivirus defenses. The company always
aware and ensuring the systems must be kept secure, not only from a legal standpoint, but for its
commercial dealings as well.

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Management team.

The business environment is the combination of social, legal, economic, physical and political
factors that affect business activities. Significant changes in any of these factors are likely to create
business pressures. KFC has IT support systems that enables the management team to respond to
these pressures. The system in place such as strategic systems and customer-focus are developed for
this purpose. The management team has satisfied with the functional of the systems. It would lead
the management team make right decision as their respond to the business environment pressures.

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F. Lesson for Manager

By implementing the Retail Information System (RIS), KFC seeks to address the following forces
which are ease of entry, bargaining power of buyers, bargaining power of suppliers and industry
rivalry. The RIS has ensured that KFC has raised the bar thus increasing the capital input for new
entrants into the market and prevent other competitors from coming into the market. Also, the quality
of service expected by consumers is much higher, so new entrants will have a difficult time drawing
KFC existing customers away. The technical knowledge for these new entrants must be up-to-date and
the learning curve may slow them down.

With the RIS the bargaining power of buyers will be less as customers will be more loyal to
KFC who knows what their needs and meets them. The RIS ensures that products meeting the
customers demand are always in stock, which makes the customer feel valued and important, which in
turn ensures their loyalty. KFC has always set the price for their products and even though it is slightly
higher than the hypermarkets, customers still go to the stores because of its 24-hour service which they
tradeoff against the price. The RIS allows KFC to be customer focused by selecting the niche market
and achieving cost leader ship and product differentiation by considering customer taste, choices and
preferences.

Having the RIS allows KFC to have more power to control the bargaining power of suppliers
where the technology gives KFC the advantage to dictate the price ensuring that they are getting the
best price and service. Thus, suppliers do not have a monopoly on the products, even big suppliers
such as F&N or Coca-Cola will not be able to raise their price. In industry rivalry, being the larger
convenience store franchise, implementing the RIS gives KFC a huge advantage over its competitors
by setting the industry standard. This will allow KFC to have a high intensity of rivalry between itself
and its competitors. Customers instinctively still turn to the KFC brand or logo when they require any
purchases showing that KFC is still the preferred store thus it is considered the dominant player in the
industry.

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Conclusion

Overall it is clear that the five forces model, value chain and strategic thrust have been used
by KFC to attain a competitive advantage over its rivals. The theories assist in establishing the
information management requirements for the organisation to operate efficiently and effectively i.e.
the use of the ARMs system. The five forces model enables KFC to analyse its competitive position
within the fast food market and to formulate a competitive strategy to increase its influence in the
market. For example, KFC has strengthened its bargaining position with suppliers by integrating
with some aspects of its supply chain.

The value chain enables KFC to add value to its activities to justify the prices it charges
customers and the perceived benefits. The primary and secondary activities link with each other to
provide insight into how to increase efficiency within the value chain. The strategic thrust provides
an insight into how KFC is able to differentiate itself and its processes from its rivals to gain a
competitive advantage. Reducing costs and providing unique products are the focal point for
distinguishing KFC in the fast food market by utilising its brand reputation. Information
management systems such as effective communication between headquarters and the franchise in
Southall enable analysis of marketing strategy. Also the use of new technology, such as chip and pin
systems have benefited the branch in the area of Southall, as more payment methods are covered.
However, it is evident that there is still room for improvement through using coupons and/or
souvenirs to attract customers.

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Reference

Website

 https://www.thestar.com.my/news/community/2008/04/07/kfc-malaysia-now-has-more-than-
480-outlets-in-four-countries/
 https://www.linkedin.com/pulse/20140901121616-270946654-role-impact-and-importance-of-
mis
 https://www.thestar.com.my/news/community/2008/04/07/kfc-malaysia-now-has-more-than-
480-outlets-in-four-countries/#6UCGDXpm5rxRHAWs.99
 www.kfcholding.com.my

Book

 KFC HOLDINGS (MALAYSIA) BHD 65787-T Annual Report 2012

 KFC HOLDINGS (MALAYSIA) BHD 65787-T Annual Report 2013

 KFC HOLDINGS (MALAYSIA) BHD 65787-T Annual Report 2014

 Poh Joo Pei (1999/2000), “Perusahaan makanan segera: Satu Kajian Kes Ke Atas Mc
Donald’s Dan Kentucky Fried Chicken (KFC), di Bandar Maharani, Muar Johor.” Universiti
Malaya, Jabatan Antropologi dan Sosiologi, Fakulti Sastera dan Sains Sosial, h. 71

 Joe Schwarcz and Fran Berkoff, (2004), Foods That Harm,FoodsThat Heal. The Reader’s
Digest Association, Inc. Pleasantville, New York. Montreal, h. 151

 5The risk to the American food industry of obesity litigation, downloaded from
http://cqx.sagepub.com

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