Fatma Al-Balushi

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Executive Summary

KFC was founded by Harland sanders in 1930. KFC was initially named Kentucky Seared
Chicken invented by Pete Harman in 1952, who also founded Can O'Chicken in the year
1957. Herman was to be crowned for the tagline “its finger lickin good”

KFC Corp. is sited in Louisville, Kentucky, and is a subsidiary company of Yum! Brands,
which additionally possesses Pizza Hovel and Taco Ringer. Yum! Brands has very nearly
42,000 eateries in more than 125 nations and regions, making it one of the world's biggest
eatery organizations. Throughout the years, KFC franchisees have had the choice to co-mark
with Taco Chime or Pizza Cottage.

KFC crop.

As indicated by organization figures, the KFC framework serves more than 12 million clients
every day. Most buys are take out or to-go, in spite of the fact that the stores additionally
offer in-store feasting. In 2015, Yum! Brands declared that KFC would start conveyances by
2016, additionally growing its range to clients. KFC is likewise a pioneer in the utilization of
web-based social networking to pull in and connect with clients.
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Introduction

KFC or Kentucky Fried Chicken is one of the most famous and major quick service
restaurant around the globe, KFC c has been in operation from the past 20 years. It is mostly
famous for chicken related items and also offers side dishes to the customers.in the recent
years there have been speculation of healthy eating which is the most chosen option by the
customers. Mc Donald’s came up with heathy eating products which indirectly KFC top
competitor. This report will explain the internal external analysis with the strategies that KFC
uses and recommend strategies that could make it a better fast food joint.

Internal Analysis

In this competitive market Kfc has many competitors from other top notch franchises like
Burger King Mc Donald’s, there are many indirect competitors who serve Italian fast food
like Dominos and Pizza hut. The internal analysis will explain the strength and weakness of
the organization, moreover with some important strategic measures taken by KFC.

Strength analysis of KFC

KFC is a subsidiary company of an Organization Yum! Brands, which has many other sub
brands like Taco Bell and Pizza Hut. it owns more than 41,000 restaurants and is one of the
world’s largest fast food joint as it is being named in the Fortune 500 Companies list for its
most number of units. It also supports other independent brands in order to improve
resources. KFC is the world 2nd largest chain of restaurant amongst all the fast food joint, as
there are more than 18000 outlets in about 120 countries around the world. Kfc is one of the
market leader for all the meat and chicken lover’s dishes in most of the countries Kfc have
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opened their franchise. Kfc are also increasing their menu and adding more vegetarian items
as it is increasing KFC’s customer base for both Vegetarians and Non-Vegetarians. Kfc has
one of the highest goodwill as it is the oldest and the best in business. KFC serves a lot
different items in one big menu, KFC has the most number of loyal customer base, as the
biggest advantage For KFC as it is a Multinational Organization. KFC till date has its original
chicken recipe signed by Sanders, the creator in a safe in KFC’s Louisville office alongside
other 11 spices and herbs used in the recipe.

Weaknesses analysis of KFC

KFC has been using unhealthy fats and food items that would increase a person’s calorie as
almost all the fast food joint are facing and KFC is not exempted. There have been
speculation regarding the issue of Franchise management as it is one of the most serious issue
when it comes to the successful running of a fast food joint. As a result of fights with the
franchisee over the operational problems of KFC there have been many outlets in different
areas been closed down. As KFC is a huge organization, KFC have many suppliers out of
which some of the suppliers turned out to be bad, as these suppliers were supplying
contaminated poultry products in addition a couple of the suppliers were supplying chicken
which were mistreated which indirectly affected the sales and reputation of KFC. As Kfc
were been cheated by the suppliers, the government organization too were criticizing KFC, as
questions were raised on the upbringing of the chicken that KFC were selling, moreover there
were many issues, as KFC were selling Chicken Wings with kidney, in other instances there
were cases where a mouse was found. These cases collectively harmed the reputation of KFC
considerably.

External Analysis

External Analysis is used to recognize the important external issues which is not in control of
the KFC or the management. There are many factors that affect the whole fast food industry
and a particular single organization. it can be found out by using the PESTEL analysis.

Political factors: In this it involves all the modifications made in government policies which
could change the way the business is performing. The main aim of political issues for KFC
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are the labelling and the animal rights and also regarding KFC following safety and heath
guidelines.
Economic factors: The Economic issues are mostly related to issues like exchange rates
foreign currency policy, in value currency, interest rate and the economic growth. The main
issue related with the increasing disposal income marketing, publicity and market growth.
(UK Food Retail Industry, 2013).
Social Factor: Social issues relate to the societal benefits, lifestyles, beliefs and always
working toward working towards the betterment of the society. However based on the current
scenario for KFC, the major issues to focus on is healthy eating, increasing the vegetarian
items on the menu and societal activities. (French, 2009).

Technological Factors: Technological factors mainly focuses on the effect of the use of new
technologies integrated with the business management of KFC. However, it is important for
KFC to improve the online ordering as many people are inclined towards using online food
sites to order food, as it could increase the online marketing campaign as it could give KFC a
comparative advantage over its competitors
Legal factors: Legal factors have different issues from country to country. KFC has many
have their business in many different countries as they have to deal with different legal duties
regarding their government rules and regulations, as many other important legal issues.
(Grant, 2008).
Environmental factors: Environmental factors are mostly affecting the business from time
to time as KFC have been under the radar for the animal rights campaign. The pother
environmental factors are issues that KFC is doing to safeguard the environment and KFC
should focus more on their Corporate Social Responsibility

STRATEGIES OPTIONS

The generic strategies of KFC helps to decide the different methods to deal with evolving its
business as the greatest fast food joint network on the planet, KFC's uses the intensive growth
strategy in order to make some serious development systems to strengthen its business
improvement and extension. The strategic goals direct the organization's operational
exercises, particularly to financial changes and keeps track of activities of its competitors.
Changes in economic situations forces the weight the business to implement it or change its
systems. In that ability, KFC's intensive growth and generic strategies change on a long-term
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time basis to guarantee business feasibility. The overall approach of KFC’s Generic strategy
explains the business approach in order to maintain healthy competition. KFC’ intensive
growth strategy approaches main idea is to grow its business network in the global market of
the fast food industry.

KFC’s Generic Strategy

The main generic strategy for KFC is to focus on the cost leadership. According to model,
generic strategy incorporates reducing expenses as a result of selling item at a low. As per
KFC’s low cost approach, KFC reduces the prices of its items on the menu are relatively less
expensive as compared to KFC’s competitors. Nonetheless, the organization additionally
KFC uses another strategy like the broad differentiation strategy in order to make its generic
strategies stronger. the main aim of the broad differentiation strategy includes building up the
business as the KFC aims to make the organization unique from its competitors. For example,
the new addition to KFC’s product line is the chillichizza, which is a unique item on the
menu and no other fast food joint has come up with the idea.

KFC’s cost leadership strategy has been linked to the vertical integration which is a strategic
objective. For instances, if KFC owns services that manufactured identical combinations of
ingredients. The minimization of cost comes under the financial strategy as per the generic
strategy of cost leadership. Moreover, the originality of the product comes under generic
strategy of broad differentiation

KFC’s Intensive Growth Strategies

Market Penetration. KFC’s main intensive strategy which is KFC’s primary strategy for the
growth of the organization is Market penetration. As KFC applies these strategies it increases
the organizations customer base in the market, places where the operations are going on. For
instance, as KFC seeks to increase the organizations franchise, corporate ownership or having
joint ventures in other different parts of the world like Asia and Europe. As a result of the
expansion plan, the main strategic rule connected to this is the global expansion by opening
KFC branches in new locations. This intensive growth strategy is successful for KFC because
of the low set up cost, and reasonably low employment cost which makes it easier for KFC to
enter new markets.
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Market Development. When compared to the market development of KFC a few years ago,
it was its main strategy as it was growing and expanding its operation in different parts of the
world. With the recent development in the market, it’s the second most important strategy as
KFC has already setted up their franchisee in most part of the world, like in most parts of
Africa, Asia and Middle Eastern region. The growth development mainly focuses on different
ways to open KFC franchisee in new locations. KFC should be focusing to open more venues
in African countries as one of the advantage that KFC could use efficiently, which is low cost
in order to compete in the market

Product Development. KFC’s uses product development as its tertiary or supporting

intensive strategy for growth. In applying this intensive growth strategy, KFC’s develops new
products over time, such as new chillichizza, the mojitos, the mash potatoes, chicken strip
and rice and many other products. There are many items on the menu that KFC has invented
new and some are changes made to the current items on the menu. This is important as it
attracts many customers and is one of the main aim of this strategy. This strategy confines
with the broad differentiation strategy of KFC, in order to have a comparative advantage over
its competitors

Recommendation for KFC’s

The generic strategies used by KFC regarding the cost leadership helps the organization
structure to stay on the top position in the market. the strategy that could be used by KFC in
order to continue the growth is to enter market whose economies are developing and the
presence of market is low. The recommended strategy that KFC could implement is market
development and the market penetration strategy. KFC should use these strategy as a balance
in an integrated promotion. KFC could use modern and traditional way of promotion the
organization, KFC should focus on digital marketing as it is important in order to increase
KFC’s online customer base.

KFC can offer additional product and service features such as food on demand and better
home delivery so as to provide convenience to customers. Product quality can be further
enhanced with fresh ingredients. KFC should continue to invest in menu customization and
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menu standardization strategies to attract and connect with target customers in diverse
geographical markets.

Kfc can also work on the quality of items that could be improved by using ingredient that are
fresh. KFC should also start working on the look of the menu and have a standardized menu
as it would be easy for KFC to increase their loyal customer base in different in other
different countries.

KFC is a multinational organization as its foreign direct investment system is to reach all the
market around the world in the international business. KFC already has as many as 15000
franchisee in almost 100-200 countries around the globe and KFC is still looking forward to
increase its market structure in other countries aswell.KFC could use reduction in price
strategy, distribution expansion in the market currently, which will increase the sales and also
promote the organization in a way where all the customers are reached and market
penetration strategy could be applied.

Conclusion

In conclusion, in order for KFC to succeed, marketing is one of the most integral part of the
organization. KFC should be using innovation and aggressive strategies in promoting and
marketing it their franchisee as it will attract more customers and increase the customer base,
as a result KFC could also have a comparative advantage over its competitors. The intensive
growth Strategies used by KFC, market development and market penetration are the two
main strategies for KFC in order to remain as one of the most successful organization in the
market.
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