The Worlds Largest Chicken Restaurant Chain Marketing Essay

3207 words (13 pages) Essay

1st Jan 1970 Marketing Reference this

Disclaimer: This work has been submitted by a university student. This is not an example of the work produced by our Essay Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

(Sun Tzu c. 490 BC, Chinese military strategist) – this quotation is something that every manager, officer and student must keep in mind while devising strategies for a company. This quotation is very simply and easy but reflects the truth that every corporate strategist must be aware of. Here the importance has been given to the environment i.e. the circumstances within which a company must survive. Therefore it is extremely vital that these environmental factors are considered in depth while taking any strategic decisions.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!

Find out more

As this report of mine is going to be focused on Kentucky Fried Chicken (KFC) -this quotation is also going to be relevant. This will be as such because even though KFC is one of the giants in the food industry by using various well developed strategies over the last few decades, it does not essentially imply that those strategies will be effective even at this particular stage of time and environment. With constant changes everywhere – external (outside the organization) or internal (within the organization) – the strategies must be kept in alignment with the company’s objectives and its long term goals. Also it must include the changes in the environment while making those strategic decisions.

In this report of mine, I have discussed KFC’s background and its existing strategies in much detail. I also highlighted the industry within which my company works and how the changes within and outside the industry is effecting KFC. Certain strategic analysis models have been used within this report to understand both the internal and external influences over KFC. Analytical models like Porters Five Forces, SWOT and PESTEL Analysis have also been done to illustrate the ‘circumstances’ effecting KFC. To conclude the report, certain future strategic recommendations have been made for KFC based on all those analysis.

Background

Kentucky Fried Chicken (KFC) is one of the largest fast food Franchise concepts of today; it is present in various countries around the world and it has been able to establish a renowned International reputation in multiple continents. Starting in the United States in the 1930s, it has grown to become a true multi-domestic company. The Kentucky Fried Chicken was founded by Colonel Harland Sanders in the United States of America. KFC is currently one of the largest businesses of the global food service industry and is widely known around the world as the face of Colonel Sanders.

It was in 1965 that KFC first started operating as an individual store in Preston, UK. In 1986, following the worldwide acquisition of KFC by PepsiCo, it was announced that the British operation, KFC GB Ltd had become a joint venture – a company owned by Trust house Forte and PepsiCo. In January 1997, PepsiCo Inc. announced the spin-off of its quick service restaurants into an independent restaurant company. Tricon Global Restaurants and Tricon Restaurants International were founded and KFC became part of the Tricon group. In 2002 Tricon changed its name to YUM! Brand Inc.

Despite these changes in ownership, the strength of the KFC brand has seen the expansion of the UK & Ireland restaurant network to its current level of over 700 locations. Some of these 700 stores are company operated from the head office and whilst most are franchised for better and focused management strategies adopted by the YUM! Brand Inc.

Vision & Mission Statement –

KFC’s vision is to bring people of all ages, races and backgrounds together to enjoy ‘Soul Food’ ‘proper food at reasonable prices’ within bright and fun interiors. KFC is designed to be perceived as a fun and inclusive brand.

Industry Competitiveness

The British food-service industry has always posted positive growth, increasing on average by 25% since 1999. Consumer expenditure on food and drinks was close to £173 billion in 2008 up 5.2% from 2007 even though this recession. At the beginning of 2000, KFC’s business was in a challenging situation. Its market was in decline, struggling in the face of increasing competition from pizza, ethnic takeaways, supermarket ready meals and a raft of sandwich retailers. Moreover, the media focus on the evils of fast food had fuelled concerns over healthy eating.

In order to rise to the challenge and keep its competitive advantages KFC needed to overhaul not only its product and high street presence, but also its image. Through a strategy named ‘Soul Food’, KFC has effectively changed public perception of its brand and built an emotional relationship with its consumers, without compromising the immediate sales requirements of retail marketing. Over the course of 2004 and 2008, KFC successfully launched various other campaigns to keep the new image.

KFC’s Low Cost and Differentiation approach to business from the very beginning has always been its key success factors, but with time and the changes within the industry, KFC had to and will have to continuously adapt to it. Both direct and indirect competitors like Burger King, McDonalds, Dominoes Pizza and even Subway are nowadays introducing differentiated chicken lines like Crispy strips and chicken sandwiches to cannibalize the fried chicken sales.

KFC’s position

Existing Strategies

Even through the recession, last year in 2009 KFC was awarded No 2 in sales growth. KFC achieved their target sales growth of 15% using various creative strategies. Their focus was mostly on cheap product and marketing. Dominoes Pizza – though not a direct competitor – had the highest sales growth in the UK good industry in 2008-2009.

Product and Price Strategy

The company’s core products are Buckets, Burgers and Twisters and Colonel’s Crispy Strips chicken with home-style side dishes. The ‘Soul Food’ strategy gave new focus to this product strategy. The new positioning also impacted on the pricing strategy. This was an offering for real people and as a result, it needed to be proper, wholesome food, offered at a reasonable price. Prior to repositioning the brand, the lowest priced item on KFC’s menu was £2.99, which was a barrier to purchase for many consumers. ‘Soul Food’ meant that pricing was looked at in a different way and the case for a value product at less than £1 was put forward. The Mini Fillet Burger launched in 2004 and has had a positive impact upon sales and perceptions of the KFC brand. This ‘Soul Food’ philosophy has also made a real impact upon KFC’s all aspects of communication, from window posters to the menu boards and staff uniforms.

Marketing Strategy

In marketing, one of the best strategies KFC has adopted is that KFC restaurants are not restricted from locating within close proximity of other KFC restaurants. This means that franchisees can locate their restaurants without geographical boundaries. This strategy ensures KFC as easily accessible local restaurants and take-away and also advertises on its own brand.

Price- base strategy

KFC focused on cheap products

Differentiation

Unique Fried Chicken with 11 herb recipe

Lock-in

Loyal customers

Market Dominance

Market Position

Market Growth Opportunities

Sustaining

Competitive

Advantage

KFC ‘s Pricing and Market Strategy

SWOT Analysis

This particular analysis model is a very well established technique used by strategists to analyse both the external and internal factors effecting an organization.

The internal – strengths and weaknesses and

The external – opportunities and threats can be combined to make or break any company’s future.

Usually a model like the one below is used to do this sort of analysis, but for KFC a more detailed approach has been adopted in this report for a better understanding of the factors involved.

Internal factors

Strength (s)

Weaknesses (w)

Opportunities (O)

SO Strategic options

WO Strategic option

Threats (T)

ST Strategic Option

WT Strategic Options

External

Factors

Strengths

Market leader: World’s largest chicken restaurant chain and third largest fast-food chain in 2000

Low price

Differentiation

Location

Effective store management

Hard-working and entrepreneurial managers and franchisees.

Weaknesses

Management Shift-Sweeping changes into the culture was initiated by the new management- this brings about demoralization to old KFC employees and even franchisees.

Several restructurings led to layoffs throughout KFC, replacement of KFC managers with PepsiCo managers

Conflicts between KFC and PepsiCo cultures- this is manifested with PepsiCo’s stronger emphasis on performance rather than loyalty expressed by Col. Sanders to KFC employees over the years.

KFC sales stagnated. There was widespread discontent among the franchisees, some of whom felt the new owners did not understand the chicken business and were not providing leadership expected from a franchisor.

Company stores floundered and become underperforming the franchised operations, further convincing franchisees that the company did not know its own business. (KFC HQ acquired them to company-owned)

KFC was losing market share as other Chicken chain increased sales at a faster rate.

KFC share of Chicken Segment sales fell from 71 percent 1989, to less than 56 percent in 1999, a 10-years drop of 15 percent.

Failed to rank in top 20 in growth in 2000.

Lack of knowledge about their customers.

Question of over franchising leads to loss of control and quality.

Lack of focus on R&D.

OPPORTUNITIES

McDonald’s accounted for 35 percent of the Sandwich Segment while Burger King ran a distant Second, with a 16 percent market share.

In family Segment, Friend’s and Shoney’s were forced to shut down restaurants because of declining profits.

Within the Pizza Segment, Pizza Hat and Little Caesars Closed underperforming restaurants.

Boston Market was a new restaurant chain that emphasized roasted rather than fried chicken.

Church’s broadened its menu to include buffalo chicken wings, macaroni and cheese, beans and rice and collard greens.

US market maturity- many restaurants expand to international markets as strategy for growing sales.

Demographic trends (demand for food eaten outside of the home)

THREATS

Consumer health food trend

Saturated fast food industry

McDonald’s with sales of more than 19 billion in 1999, accounted for 15 percent of the sales of the nation’s top 100 restaurant chains.

McDonald’s generated per store sale 1.5 million per year.

Much of the growth in dinner houses came from new unit construction in suburban market and small town.

In Family Segment, new chicken lines.

KFC nearest competitor Popeye, ran a distant second with sales of 1.0 billion.

PESTEL Analysis

Political

Economical

Social

Technological

Environmental

Legal

Porters Five Forces Model

By using the Porters 5 Forces model the company is able to determine where its business needs to change or improve in order to stay competitive in the fast food industry. Porter’s competitive forces model helps to achieve a competitive advantage.

Porter’s competitive forces model includes five forces that need to be analysed. These forces include –

The intensity of rivalry from traditional competitors

Threat of new market entrants

Threat of substitute products and services and

Bargaining power of customers and

Bargaining power of suppliers

Threat of entry

Potential Entrants

Subway

Suppliers

3663 supply chain

Competitive Rivalry

Buyers

Bargaining Power

Bargaining Power

Substitutes

Threat of Substitutes

Traditional Competitors (competitive rivalry)

KFC has traditional competitors which include many of the other fast food outlets across the country, i.e. Burger King, McDonalds, even Subway.   It has been shown by Professor Michael Waterson (2004) that the presence of a Burger King, for example, will increase the likelihood that McDonalds will open near by. Thus it can be seen that the threat of competition from traditional rivals is intense and should never be over looked.

Find out how UKEssays.com can help you!

Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.

View our services

Threat of New Market Entrants

There are many new market entrants emerging all the time but not on the same scale as KFC. Some of the newer entrants include chains of Sushi, chicken cottage, dexi chicken,

Recommended Strategies

After analyzing all the possible factors that may or may not affect KFC via various models, certain long and short term strategies can be recommended to KFC so that it retains its competitive advantage and satisfies its stakeholders. Using the SWOT, PESTEL and Porter’s 5 Forces Model, the factors that influences KFC’s actions, objectives, products and prices have been analyzed. All these in relation to the industry competitiveness, life cycle and market position of KFC will help devise the most suitable and effective strategy for the organization. The strategies recommended for KFC are as follows –

Market Developments

KFC should continue to introduce their present and new products into new geographic/ demographic areas. The Eastern European countries for example will be extremely attractive in the near future as it will be joining the European Union and provide above-average returns due to labour and local material costs. While KFC start working on new markets it should keep in mind to focus locally to avoid certain barriers such as language, law and a good understanding of needs.

Halal Market is another lucrative market that KFC is already trying to capture but new strategies to take it further must be devised. As there are 2 million Muslim populations in UK already and they contribute a hefty 33% towards the UK economy this niche market will surely increase sales and growth potential for KFC.

Partnership with supermarkets like Tesco and Sainsbury’s can also be another creative approach to increase the accessibility of KFC to the consumers. Similar to the existing strategy of partnering with Motorway petrol stations, this approach can capture a totally new market and give access to take away market even more.

Product Developments

Even though, KFC will always have an attachment to their original recipe that made their success, they definitely need to diverse and develop new products that customers want in order to increase their financial performance and value. By constantly expanding the menu and offering mouth watering chicken products will definitely keep the customers on their toes and retain them.

Public awareness for healthier choices is also another factor that KFC should consider while product development. With greater emphasis on healthy eating by the public and the government, healthy food category will surely open new opportunities for KFC.

As already mentioned by developing the Halal product line for the ever changing multicultural society of UK, KFC will be approaching new market segments that the competitors like McDonalds and Burger King still need to touch.

Corporate Responsibility Developments

Being socially responsible will put KFC in the list of the ‘environment and social friendly’ organisations, keeping the various activisit groups, trade unions and the government at bay. By being animal cruelty free and Other Welfare program, KFC has already taken the first step towards that but further developments in this field can be made.

KFC has responsibilities towards its employees beside the shareholders as well and by devising strategies like increasing profit sharing for employees KFC can reduce employee turnover rate and involve the employees with their organisational objectives further. Not only that, KFC has got their suppliers as stakeholders as well. With the unstable UK economy bad, KFC may help their suppliers by easier payment terms and better facilities. In return KFC will always get loyal, uninterrupted and reliable supplies of their produce.

Saying all these, it must also be said that KFC always need to stay close to their mission (provide customers with quality food, excellent service and restaurant cleanliness) and make sure that they achieve their long-term objectives. In summary they have to keep innovating and coming up with new items regularly. They have to follow the trend and go hand in hand with customers to satisfy their changing needs, as we have previously discussed with the current healthier food trend. They also have to keep an excellent image by treating employees fairly and keeping a good control over franchises to make sure they follow the company’s procedures.

They must constantly keep up with their low-cost/differentiation strategy by better taking advantage of their competitive forces such as economies of scales, bargaining power, image/brand worldwide recognition. Keeping an eye for new technology in order to improve their productivity and be able to compete more efficiently is also very important.

The key success factors are ever continuing cost savings through innovations of products and markets and use of new technology to work efficiently. These success techniques will surely lower costs, increase profits and keep up the competitive advantage of KFC.

Conclusion

Last but not the least it must be said that what KFC adopts from the suggested long and short term strategies will depend not only on these external and internal environmental analyses but also on their mission, vision and the management’s team’s objectives.

The stakeholders i.e. the shareholders and the management team will have to prioritize their future objectives and implement the suggested strategies accordingly.

One other issue that must be mentioned here is that, going through these analyses is not a static process but is extremely dynamic and volatile. The factors based on which strategies are created may change constantly – particularly given the vulnerable state of the economy in UK. Factors like inflation, public health opinions etc will constantly be altering the circumstances. This will therefore mean that these recommended strategies should always and always be reviewed and must be kept on top of the situation to achieve a permanent competitive advantage within the industry.

(Sun Tzu c. 490 BC, Chinese military strategist) – this quotation is something that every manager, officer and student must keep in mind while devising strategies for a company. This quotation is very simply and easy but reflects the truth that every corporate strategist must be aware of. Here the importance has been given to the environment i.e. the circumstances within which a company must survive. Therefore it is extremely vital that these environmental factors are considered in depth while taking any strategic decisions.

As this report of mine is going to be focused on Kentucky Fried Chicken (KFC) -this quotation is also going to be relevant. This will be as such because even though KFC is one of the giants in the food industry by using various well developed strategies over the last few decades, it does not essentially imply that those strategies will be effective even at this particular stage of time and environment. With constant changes everywhere – external (outside the organization) or internal (within the organization) – the strategies must be kept in alignment with the company’s objectives and its long term goals. Also it must include the changes in the environment while making those strategic decisions.

In this report of mine, I have discussed KFC’s background and its existing strategies in much detail. I also highlighted the industry within which my company works and how the changes within and outside the industry is effecting KFC. Certain strategic analysis models have been used within this report to understand both the internal and external influences over KFC. Analytical models like Porters Five Forces, SWOT and PESTEL Analysis have also been done to illustrate the ‘circumstances’ effecting KFC. To conclude the report, certain future strategic recommendations have been made for KFC based on all those analysis.

Background

Kentucky Fried Chicken (KFC) is one of the largest fast food Franchise concepts of today; it is present in various countries around the world and it has been able to establish a renowned International reputation in multiple continents. Starting in the United States in the 1930s, it has grown to become a true multi-domestic company. The Kentucky Fried Chicken was founded by Colonel Harland Sanders in the United States of America. KFC is currently one of the largest businesses of the global food service industry and is widely known around the world as the face of Colonel Sanders.

It was in 1965 that KFC first started operating as an individual store in Preston, UK. In 1986, following the worldwide acquisition of KFC by PepsiCo, it was announced that the British operation, KFC GB Ltd had become a joint venture – a company owned by Trust house Forte and PepsiCo. In January 1997, PepsiCo Inc. announced the spin-off of its quick service restaurants into an independent restaurant company. Tricon Global Restaurants and Tricon Restaurants International were founded and KFC became part of the Tricon group. In 2002 Tricon changed its name to YUM! Brand Inc.

Despite these changes in ownership, the strength of the KFC brand has seen the expansion of the UK & Ireland restaurant network to its current level of over 700 locations. Some of these 700 stores are company operated from the head office and whilst most are franchised for better and focused management strategies adopted by the YUM! Brand Inc.

Vision & Mission Statement –

KFC’s vision is to bring people of all ages, races and backgrounds together to enjoy ‘Soul Food’ ‘proper food at reasonable prices’ within bright and fun interiors. KFC is designed to be perceived as a fun and inclusive brand.

Industry Competitiveness

The British food-service industry has always posted positive growth, increasing on average by 25% since 1999. Consumer expenditure on food and drinks was close to £173 billion in 2008 up 5.2% from 2007 even though this recession. At the beginning of 2000, KFC’s business was in a challenging situation. Its market was in decline, struggling in the face of increasing competition from pizza, ethnic takeaways, supermarket ready meals and a raft of sandwich retailers. Moreover, the media focus on the evils of fast food had fuelled concerns over healthy eating.

In order to rise to the challenge and keep its competitive advantages KFC needed to overhaul not only its product and high street presence, but also its image. Through a strategy named ‘Soul Food’, KFC has effectively changed public perception of its brand and built an emotional relationship with its consumers, without compromising the immediate sales requirements of retail marketing. Over the course of 2004 and 2008, KFC successfully launched various other campaigns to keep the new image.

KFC’s Low Cost and Differentiation approach to business from the very beginning has always been its key success factors, but with time and the changes within the industry, KFC had to and will have to continuously adapt to it. Both direct and indirect competitors like Burger King, McDonalds, Dominoes Pizza and even Subway are nowadays introducing differentiated chicken lines like Crispy strips and chicken sandwiches to cannibalize the fried chicken sales.

KFC’s position

Existing Strategies

Even through the recession, last year in 2009 KFC was awarded No 2 in sales growth. KFC achieved their target sales growth of 15% using various creative strategies. Their focus was mostly on cheap product and marketing. Dominoes Pizza – though not a direct competitor – had the highest sales growth in the UK good industry in 2008-2009.

Product and Price Strategy

The company’s core products are Buckets, Burgers and Twisters and Colonel’s Crispy Strips chicken with home-style side dishes. The ‘Soul Food’ strategy gave new focus to this product strategy. The new positioning also impacted on the pricing strategy. This was an offering for real people and as a result, it needed to be proper, wholesome food, offered at a reasonable price. Prior to repositioning the brand, the lowest priced item on KFC’s menu was £2.99, which was a barrier to purchase for many consumers. ‘Soul Food’ meant that pricing was looked at in a different way and the case for a value product at less than £1 was put forward. The Mini Fillet Burger launched in 2004 and has had a positive impact upon sales and perceptions of the KFC brand. This ‘Soul Food’ philosophy has also made a real impact upon KFC’s all aspects of communication, from window posters to the menu boards and staff uniforms.

Marketing Strategy

In marketing, one of the best strategies KFC has adopted is that KFC restaurants are not restricted from locating within close proximity of other KFC restaurants. This means that franchisees can locate their restaurants without geographical boundaries. This strategy ensures KFC as easily accessible local restaurants and take-away and also advertises on its own brand.

Price- base strategy

KFC focused on cheap products

Differentiation

Unique Fried Chicken with 11 herb recipe

Lock-in

Loyal customers

Market Dominance

Market Position

Market Growth Opportunities

Sustaining

Competitive

Advantage

KFC ‘s Pricing and Market Strategy

SWOT Analysis

This particular analysis model is a very well established technique used by strategists to analyse both the external and internal factors effecting an organization.

The internal – strengths and weaknesses and

The external – opportunities and threats can be combined to make or break any company’s future.

Usually a model like the one below is used to do this sort of analysis, but for KFC a more detailed approach has been adopted in this report for a better understanding of the factors involved.

Internal factors

Strength (s)

Weaknesses (w)

Opportunities (O)

SO Strategic options

WO Strategic option

Threats (T)

ST Strategic Option

WT Strategic Options

External

Factors

Strengths

Market leader: World’s largest chicken restaurant chain and third largest fast-food chain in 2000

Low price

Differentiation

Location

Effective store management

Hard-working and entrepreneurial managers and franchisees.

Weaknesses

Management Shift-Sweeping changes into the culture was initiated by the new management- this brings about demoralization to old KFC employees and even franchisees.

Several restructurings led to layoffs throughout KFC, replacement of KFC managers with PepsiCo managers

Conflicts between KFC and PepsiCo cultures- this is manifested with PepsiCo’s stronger emphasis on performance rather than loyalty expressed by Col. Sanders to KFC employees over the years.

KFC sales stagnated. There was widespread discontent among the franchisees, some of whom felt the new owners did not understand the chicken business and were not providing leadership expected from a franchisor.

Company stores floundered and become underperforming the franchised operations, further convincing franchisees that the company did not know its own business. (KFC HQ acquired them to company-owned)

KFC was losing market share as other Chicken chain increased sales at a faster rate.

KFC share of Chicken Segment sales fell from 71 percent 1989, to less than 56 percent in 1999, a 10-years drop of 15 percent.

Failed to rank in top 20 in growth in 2000.

Lack of knowledge about their customers.

Question of over franchising leads to loss of control and quality.

Lack of focus on R&D.

OPPORTUNITIES

McDonald’s accounted for 35 percent of the Sandwich Segment while Burger King ran a distant Second, with a 16 percent market share.

In family Segment, Friend’s and Shoney’s were forced to shut down restaurants because of declining profits.

Within the Pizza Segment, Pizza Hat and Little Caesars Closed underperforming restaurants.

Boston Market was a new restaurant chain that emphasized roasted rather than fried chicken.

Church’s broadened its menu to include buffalo chicken wings, macaroni and cheese, beans and rice and collard greens.

US market maturity- many restaurants expand to international markets as strategy for growing sales.

Demographic trends (demand for food eaten outside of the home)

THREATS

Consumer health food trend

Saturated fast food industry

McDonald’s with sales of more than 19 billion in 1999, accounted for 15 percent of the sales of the nation’s top 100 restaurant chains.

McDonald’s generated per store sale 1.5 million per year.

Much of the growth in dinner houses came from new unit construction in suburban market and small town.

In Family Segment, new chicken lines.

KFC nearest competitor Popeye, ran a distant second with sales of 1.0 billion.

PESTEL Analysis

Political

Economical

Social

Technological

Environmental

Legal

Porters Five Forces Model

By using the Porters 5 Forces model the company is able to determine where its business needs to change or improve in order to stay competitive in the fast food industry. Porter’s competitive forces model helps to achieve a competitive advantage.

Porter’s competitive forces model includes five forces that need to be analysed. These forces include –

The intensity of rivalry from traditional competitors

Threat of new market entrants

Threat of substitute products and services and

Bargaining power of customers and

Bargaining power of suppliers

Threat of entry

Potential Entrants

Subway

Suppliers

3663 supply chain

Competitive Rivalry

Buyers

Bargaining Power

Bargaining Power

Substitutes

Threat of Substitutes

Traditional Competitors (competitive rivalry)

KFC has traditional competitors which include many of the other fast food outlets across the country, i.e. Burger King, McDonalds, even Subway.   It has been shown by Professor Michael Waterson (2004) that the presence of a Burger King, for example, will increase the likelihood that McDonalds will open near by. Thus it can be seen that the threat of competition from traditional rivals is intense and should never be over looked.

Threat of New Market Entrants

There are many new market entrants emerging all the time but not on the same scale as KFC. Some of the newer entrants include chains of Sushi, chicken cottage, dexi chicken,

Recommended Strategies

After analyzing all the possible factors that may or may not affect KFC via various models, certain long and short term strategies can be recommended to KFC so that it retains its competitive advantage and satisfies its stakeholders. Using the SWOT, PESTEL and Porter’s 5 Forces Model, the factors that influences KFC’s actions, objectives, products and prices have been analyzed. All these in relation to the industry competitiveness, life cycle and market position of KFC will help devise the most suitable and effective strategy for the organization. The strategies recommended for KFC are as follows –

Market Developments

KFC should continue to introduce their present and new products into new geographic/ demographic areas. The Eastern European countries for example will be extremely attractive in the near future as it will be joining the European Union and provide above-average returns due to labour and local material costs. While KFC start working on new markets it should keep in mind to focus locally to avoid certain barriers such as language, law and a good understanding of needs.

Halal Market is another lucrative market that KFC is already trying to capture but new strategies to take it further must be devised. As there are 2 million Muslim populations in UK already and they contribute a hefty 33% towards the UK economy this niche market will surely increase sales and growth potential for KFC.

Partnership with supermarkets like Tesco and Sainsbury’s can also be another creative approach to increase the accessibility of KFC to the consumers. Similar to the existing strategy of partnering with Motorway petrol stations, this approach can capture a totally new market and give access to take away market even more.

Product Developments

Even though, KFC will always have an attachment to their original recipe that made their success, they definitely need to diverse and develop new products that customers want in order to increase their financial performance and value. By constantly expanding the menu and offering mouth watering chicken products will definitely keep the customers on their toes and retain them.

Public awareness for healthier choices is also another factor that KFC should consider while product development. With greater emphasis on healthy eating by the public and the government, healthy food category will surely open new opportunities for KFC.

As already mentioned by developing the Halal product line for the ever changing multicultural society of UK, KFC will be approaching new market segments that the competitors like McDonalds and Burger King still need to touch.

Corporate Responsibility Developments

Being socially responsible will put KFC in the list of the ‘environment and social friendly’ organisations, keeping the various activisit groups, trade unions and the government at bay. By being animal cruelty free and Other Welfare program, KFC has already taken the first step towards that but further developments in this field can be made.

KFC has responsibilities towards its employees beside the shareholders as well and by devising strategies like increasing profit sharing for employees KFC can reduce employee turnover rate and involve the employees with their organisational objectives further. Not only that, KFC has got their suppliers as stakeholders as well. With the unstable UK economy bad, KFC may help their suppliers by easier payment terms and better facilities. In return KFC will always get loyal, uninterrupted and reliable supplies of their produce.

Saying all these, it must also be said that KFC always need to stay close to their mission (provide customers with quality food, excellent service and restaurant cleanliness) and make sure that they achieve their long-term objectives. In summary they have to keep innovating and coming up with new items regularly. They have to follow the trend and go hand in hand with customers to satisfy their changing needs, as we have previously discussed with the current healthier food trend. They also have to keep an excellent image by treating employees fairly and keeping a good control over franchises to make sure they follow the company’s procedures.

They must constantly keep up with their low-cost/differentiation strategy by better taking advantage of their competitive forces such as economies of scales, bargaining power, image/brand worldwide recognition. Keeping an eye for new technology in order to improve their productivity and be able to compete more efficiently is also very important.

The key success factors are ever continuing cost savings through innovations of products and markets and use of new technology to work efficiently. These success techniques will surely lower costs, increase profits and keep up the competitive advantage of KFC.

Conclusion

Last but not the least it must be said that what KFC adopts from the suggested long and short term strategies will depend not only on these external and internal environmental analyses but also on their mission, vision and the management’s team’s objectives.

The stakeholders i.e. the shareholders and the management team will have to prioritize their future objectives and implement the suggested strategies accordingly.

One other issue that must be mentioned here is that, going through these analyses is not a static process but is extremely dynamic and volatile. The factors based on which strategies are created may change constantly – particularly given the vulnerable state of the economy in UK. Factors like inflation, public health opinions etc will constantly be altering the circumstances. This will therefore mean that these recommended strategies should always and always be reviewed and must be kept on top of the situation to achieve a permanent competitive advantage within the industry.

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have your work published on the UKDiss.com website then please: