Kfc strengths and weaknesses 2018

Business Strategy

Group B

Case Study- KFC Business Analysis

Abstract

Introduced in 1952 by Colonel Sanders

Second largest restaurant chain today in terms of popularity

Annual revenue of $23 billion

Diversified its menu to suit cultural needs of people across different countries

Hindering factors in KFC’s growth are growing consumer health consciousness, animal welfare criticism, environmental criticism

Introduction

KFC was born in 1952 and its founder was Colonel Sanders

First franchise to grow globally over international market

By the 1960s – 1980s the market was booming in countries like England, Mexico, China

Management and ownership transferred over the years to Heublin, Yum Brands and PepsiCo.

Annual revenue of $23 billion in 2013

KFC had expanded its menu to suit cultural needs of people across different countries

Hindering factors in KFC’s growth are growing consumer health consciousness, animal welfare criticism, environmental criticism, logistic management issue in UK, cultural differences in Asian countries towards accepting the fried chicken menu.

Factors contributing to KFC’s global success

The core reason for KFCs success is it’s mandate to follow strict franchise protocols that have continuously satisfied customers demands:

The quality of the chicken cooked in KFC has certain specific guidelines

The size of the restaurant should be 24x60 feet.

The restaurant washrooms and ktichen has certain cleanliness standards

Food that is not sold off needs to be trashed

The workers need to have a specific clothing and uniform.

A certain % of the gross earnings should be used for advertisement and R&D

Air conditioning is mandatory in the outlets

Global number of KFC restaurants in the past decade

Importance of cultural factors to KFC’s sales success in India and China

Culture is the collective programming of the human mind that distinguishes the members of one human group from those of another. Culture in this sense is a system of collectively held values

“Culture is everything that people have, think, and do as members of their society”, which demonstrating that culture is made up of (1) material objects; (2) ideas, values, attitudes and beliefs; and (3) specified, or expected behavior.

Many scholars have theorized and studied the notion of cross-cultural adaptation, which tends to move from one culture to another one, by learning the elements such as rules, norms, customs, and language of the new culture (Oberg 1960, Keefe and Padilla 1987, Kealey 1989). According to Ady (1995),

“Cultural adaptation is the evolutionary process by which an individual modifies his personal habits and customs to fit into a particular culture. It can also refer to gradual changes within a culture or society that occur as people from different backgrounds participating in the culture and sharing their perspectives and practices.”

Cultural factors in India that go against KFC’s original recipe.

There are few important factors affect to change KFC’s recipe

Restaurants, traditionally employed for formal celebrations, are increasingly becoming hangouts for young, working, middle-class Indians with money to splurge.

A very important factor that can draw our attention is that people are eating dinner out more frequently

Research say 30 years ago, you invite someone [over], and you would fix dinner at home. But not much at present.

Many consumers looking for a quick, tasty, and relatively inexpensive meal are venturing out to KFC, that is considered one of the trendiest restaurants in India.

Why did Kentucky Fried Chicken change its name to KFC?

Maybe because KFC is simply to say full name. Or perhaps KFC fits better on signs. We wished to let our customers know that people had more for them to enjoy than simply fried chicken, and many were already calling us KFC, since it was much easier to say.

Truth is, we didn't do a best wishes at explaining the KFC name change, which left the doorway open for individuals to get creative with the reason. And boy did they! Shortly following the name change, an email chain letter—it absolutely was 1991, remember—begun to spread the rumor that Kentucky Fried Chicken used genetically modified chickens and was forced to get rid of the word “chicken” from its name.

KFC Strengths And Weaknesses

It is a worldwide market leading company which has chicken as the primary product (Omer 2018).

It has a strong market upcoming in China

Has a strong partnership combination which is KFC pizza hut, and KFC taco bell

Weakness that KFC faces is their unhealthy food menu

Lack of good management skills

They face a lot of negative publicity which significantly affects their future

KFC opportunities And Threats

KFC has created an opportunity for increasing their demand for healthy food

They also plan on introducing new products besides their chicken

Main threats that KFC has faced is a bad trend towards healthy eating

KFC has faced currency fluctuations (Omer 2018).

Competition with local fast food chains creates tension for KFC

KFC has had to deal with multiple law suits from different individuals and groups

There is saturated fast food market , which threatens the growth of KFC

Factors That Made KFC A Successful Global Business

KFC has ben able to come up with significant international marketing strategies

KFC has focused on good service provision which allows for customer maintenance (Rahman 2019).

Product constituency is another factor that has made the company go international

Partnership strategies allowed KFC the opportunity to grow and become international

KFC has created a brand for itself so its not so hard to become international

Cultural Factors In India

Large Indian families demand a variety of foods, instead of the monotonous chicken (Manideep & Yeshwanth 2018).

Indian families believed that KFC was too expensive for them

Indians wanted KFC to resemble a family restaurant

KFC was forced to replace coleslaws with green salads

They also changed their positioning to fit the Indian family style

The reason that KFC changed its name, is to do way with the name “ fried “ in their name, for heath precaution

References

Manideep, K., Mythili, G. Y., Gowtham, K., Gowtham, V., CH, S. V., & Yeshwanth, S. (2018). Study on eating habits among different age group in south India. International Journal for Advance Research and Development, 3(4), 47-49.

Omer, S. K. (2018). SWOT analysis: The tool of organizations stability (KFC) as a case study. Journal of Process Management. New Technologies, 6(4), 27-34.

Rahman, M. M. (2019). Cultural Differences, Strengths, Weaknesses and Challenges of Kentucky Fried Chicken (KFC)–A Comparison between and United Kingdom (UK) Malaysia. Global Journal of Management And Business Research.