Strategy Analysis Of KFC Company: PESTEL And Porter’s Five Forces Analysis

PESTEL Analysis of KFC Singapore

Discuss about the Strategy Analysis of KFC Company.

KFC (Kentucky’s Fried Chicken) was founded in the year 1929 and was a restaurant that served fast foods to the customers (Hawkes et al., 2013). The company was founded in Louisville, Kentucky and positioned itself as the world’s common chicken restaurant chain that only focuses on its original recipe for preparing food for its consumers. The food offerings of the company includes Kentucky grilled chicken, extra chicken, original recipe strips, honey BBQ wings and home-style side dishes along with freshly prepared chicken sandwiches (Chhabra & Kiran, 2015). In the recent years, more than 12 million consumers are served by KFC. Moreover, the restaurant has more than 5000 food chains in US and Singapore. The company also has more than 15000 business units all over the world. The secret blend having 11 spices and herbs made the original recipe of KFC fried chicken renowned all through the world. Consumers all through the world and in Singapore enjoy more than 300 food items from KFC (Dey, 2016). Moreover, Singapore KFC is recognized from NCSS’s disability campaign to be among the Singapore’s leading employers of people with disabilities. KFC Singapore has opened its 60^th restaurant in Singapore. The company offers best ingredients from sustainable suppliers along with adopting strict along with maintaining stringent quality control measures (Hawkes et al., 2013).

KFC conducted PESTEL analysis which can alter their global business strategy. PESTEL analysis for the company is explained under:

Political	·       KFC Singapore offers an effective fast food service to its target consumers. In order to attain their business goals the company has prepared a political system which guides them or can be considered as guides’ service (Fung, 2014) Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper ·       The company makes a contract with their staff along with making a pension fee. The company also provides the alternative in purchasing KFC (Hawkes et al., 2013) ·       The consumers feel better when KFC Company offers them superior services. KFC Cafeterias offers better food in comparison to its competitors.
Economical	·       Considering the economic factors, it can be stated that KFC has set low prices for all its products. ·       The company offers food in packets and provides people with the opportunity to attain discounts that motivates the consumers to purchase from KFC. ·       The company has the capability to success in Singapore market with lower price and highly satisfying service (Hawkes et al., 2013).
Social	·       KFC is positioned as one of the renowned global company that has initiated its business operations a long time ago and in the recent years has positioned itself among the largest companies in the world. ·       The company has successfully developed its social connection all over the world along with Singapore with other companies (Heinz, 2013). ·       KFC also supported several events and sponsored them for social causes along with providing donations to poor people
Technological	·       In an attempt of globalizing their business KFC focuses on using modern technology for advertising its products (Johnson et al., 2013). ·       The company has developed its own website to make its consumers just find their desired products for ordering it online and can also attain all the relevant information on KFC through online medium (Hawkes et al., 2013). ·       In Singapore the consumers can order their food through ordering over phone.
Environmental	·       Environmental factor analysis serves as most important evaluation that can be conducted by a company (Kang, 2015). ·       Devoid of analyzing environment, KFC cannot successfully operate its business as this aspect includes consumers from where they can attain their profit through selling their food products. ·       The restaurant uses highly sustainable products for preparing their food items and offers it’s to consumers through maintaining health and safety standards.
Legal	·       KFC is positioned all over the world as a legal company. The company has its business under Yum Brands ·       For maintaining the law and order situation KFC operates its international business in compliance to local laws of the nation (Rijal, 2015).

Porters’ five forces analysis id carried out for KFC for this is aimed at analyzing the competitive position of the company align with evaluating the most effective manner in which it can enhance its products and services for thriving within an increasing competitive international market (Ruiet al., 2016). The aspects of porters five forces for KFC is explained below:

• Threat of new entrants: Fast food market chain is observed to be difficult to penetrate because of several competitors. Products of KFC are observed to face tough competition from Radix fried chicken that is new restaurant. This restaurant has attained popularity as it offers fresh menu that is appealing for a huge consumer base (Shuailing & Zhi, 2015). However, KFC has attained high advantages of being a renowned international fast food brand. Due to its increased international presence, it is easier for the consumers of the restaurant to go for KFC rather than other fast food chains unless new entrants offers any innovative menu in comparison to KFC (Hawkes et al., 2013).
• Threat of substitute products: There are several other fast food restaurants that provide identical products those are offered by KFC and this is offering them the advantages to operate its business successfully. For example, Popeye’s Louisiana Kitchen has positioned itself as one of the major competitors of KFC (Sohn, 2015). This is for the reason that this restaurant offers innovative side dishes like Cajun Gravy, mashed potatoes and rice along with offering the customers with mild spicy chicken dishes. This has made this fast food restaurant popular enough. Considering the same, KFC has developed a strategy of offering Wi-Fi services along with offering morning services.
• Bargaining power of suppliers: KFC has attained great access to several suppliers of their major product that is fried chicken. This offers the restaurant with flexibility to work efficiently with its best suppliers (Trematerra, 2013). For examples over the past few years, the company has terminated the agreement with one of their chicken suppliers because of crude slaughtering of the chicken.
• Bargaining power of buyers: The purchasers of the KFC Company have attained increased access to identical products in outlets that includes Subway, McDonalds and Pizza Hut. This makes it highly complex for the KFC for increasing prices as there is increasing competition in comparison to its business rivals (Hawkes et al., 2013).
• Intensity of competitive rivalry: The fast food market is increasingly competitive. There is an increased competition that the KFC faces increased competition from fast food chains particularly the Mc Donald’s (Xin, 2015). This has taken place because of the reason that KFC to develop certain mechanisms that makes sure it competes in the market in a better manner. Among the most effective methods that was used by KFC has used to retain all its consumers through introducing the smart card for the children that provides them with discounts in KFC along with other renowned outlets which includes Sunway Lagoon, MPH Bookstore and Zoo Melaka (Hawkes et al., 2013).

Porters five forces analysis of KFC concluded the fact that the company is not well prepared for its strong competitors that was observed through evaluation of bargaining power of consumers and suppliers to that great extent (Wang, 2014). Rivalry among the competitors of KFC that is not impacting in any way and the company implements strategic leadership for such purpose and for fully understanding the strategy in consideration to the opportunity (Hawkes et al., 2013).

After conducting the PESTEL and Porters five forces analysis of KFC it is gathered that the company has dealt with several challenges that can be faced by the company in maintaining its strategic position. Such recommendations are explained under:

• Focusing on healthy food: In the recent years, the consumers are observed to be highly health conscious all over the world. For this reason, these consumers have stopped having the fast food items that includes KFC fried chicken that can result the company to lose their business. Considering the same, KFC must consider including healthier food items in their menu that will be made of vegetables.
• Expanding the business within all divisional cities: It is observed that products of KFC are in high demand in the large cities of Singapore and in Bangladesh. Considering the same, the company can make attempts in establishing business units in these divisional cities for expanding their business.
• Set highly convenient pricing menu: Considering the environment analysis, it is recommended that KFC Company must introduce a highly convenient pricing menu in order to attract all its new consumers specially the students.
• Improving employee motivation: KFC is recommended to develop and include their improved motivational strategy towards their employees that can further decrease the turnover rate of the company. Such strategy can facilitate the company in offering better services that can further boost the satisfaction rate of all its consumers all over the world.
• To deal with the problem of decreasing market share and business efficiency that has resulted from PepsiCo Company’s centralization strategy that gradually decentralized the company to become semi-autonomy. The managers of KFC can spend more time on making effective corporate strategic decisions. Decentralization can facilitate KFC in attaining ease to deal with the diversity of local situations along with responding to market fluctuations. This strategy implementation can also motivate the employees of KFC along with increasing their efficiency, productivity and performance.

Porter’s Five Forces Analysis of KFC Singapore

Conclusion

The objective of the paper was to conduct strategic analysis of KFC Company and analyze its competitive environment. Such analysis was conducted to provide the company will effective strategic recommendations that can facilitate the company in improving its position in the international market. From analysis conducted in the paper it was gathered that KFC Singapore offers an effective fast food service to its target consumers. In order to attain their business goals the company has prepared a political system which guides them or can be considered as guide’s service. In an attempt of globalizing their business KFC focuses on using modern technology for advertising its products. Environmental factor analysis serves as most important evaluation that can be conducted by a company. The paper also revealed that Products of KFC are observed to face tough competition from Radix fried chicken that is new restaurant. This restaurant has attained popularity as it offers fresh menu that is appealing for a huge consumer base. However, KFC has attained high advantages of being a renowned international fast food brand. KFC is recommended to develop and include their improved motivational strategy towards their employees that can further decrease the turnover rate of the company. Such strategy can facilitate the company in offering better services that can further boost the satisfaction rate of all its consumers all over the world.

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