1 and analysis of external and internal stakeholders
1 Introduction This report aims for stating on Kentucky Fried Chicken which people known as KFC, KFC is one of biggest companies in both Thailand and international. KFC was created in 1952. The main product which is fried chicken is very popular. The company is successful about food, currently KFC operating in Thailand and international around the world. At the beginning, product of KFC is only fried chicken cooked with 11 types of secret herbs, and then KFC added more products to attract people which are burger and soft drink until KFC had become one of the world’s most popular chicken restaurant chain. Now there are more than 20,500 branches in over 125 countries around the world. KFC is one of subsidiary of Yum brand. Yum brand is the parent company which has many subsidiary company such as Pizza hut and Taco Bell. This report will describe all about KFC such as background of company, an example history of the company, and how company survives to became KFC. Also, it mentions about products of KFC which has many various of food in many countries. Competitors of KFC in both Thailand and international, size and data of company are also included in background of this report. This report will focus on environmental scanning and analysis of external and internal stakeholders such as the general environment, the task environment, internal stakeholders. Also, SWOT analysis of KFC is also included. Readers will understand more about the management of KFC Company. We choose this company because KFC is an interesting company which all people know in world wide. This report would help readers to realize the right way to manage company to be better than competitors and all knowledge in this report can be used in real life to manage your own company. 2 Company Background 2.1 History of the company KFC Corporation, based in Louisville, Kentucky, is one of the several brands in America that can decade a long history of success and innovation. KFC started with one cook who created the world-famous recipe more than 70 years ago. That cook was Colonel Harland Sanders, and now KFC is the world’s most popular chicken restaurant chain, specializing in that same Original Recipe® along with Extra Crispy™ chicken, buttermilk biscuits, and home-style sides. Nowadays, there are over 20,500 KFC outlets in more than 125 countries and territories around the world. 2.2 Product Portfolio of the Company KFC Corporation is the most popular fast food restaurant in many countries as it has a variety of foods. The main purpose of this company is to sell fried chicken, but it also offers other menus that absolutely use chickens as the main ingredient which is burgers, snacks, and twisters. Aside from the food categories, the company also sell beverages, desserts, and salad as well. 2.3 Competition on National and International level KFC is one of main fast food chains that serving chicken as main product such as chicken grill or hamburger. There are many competitors of KFC that comes to serve products as same as KFC, the main competitor of KFC is McDonald’s due to both of companies running business at the same way. McDonald’s is top selling of hamburger included chicken menu. So, they attract same type of consumer, promotions and activities of them is to take away customer from competitor. 2.4 Size and structure of the company The organization is currently structured with two divisions under PepsiCo. David Novak is president of KFC. John Hill is Chief Financial Officer and Colin Moore is the head of Marketing. Peter Waller is head of franchising while Olden Lee is head of Human Resources. KFC is part of the two PepsiCo divisions, which are PepsiCo Worldwide Restaurants and PepsiCo Restaurants International. Both of these divisions of PepsiCo are based in Dallas. In 1992, KFC continued with another reorganization in its middle management ranks. They eliminated 250 of the 1500 management positions at corporate and gave the responsibilities to restaurant franchises and marketing managers. 2.5 Data about the company KFC revenues = USD in Million expect per share data in 2017-03 is about 208.92 USD KFC reported 7 percent overall sales growth for restaurants open at least one year. Net income from continuing operations nearly doubled to $418 million, or $1.18 per share, helped by the better-than-expected restaurant sales, cost controls and a lower effective tax rate. 3 Environmental Scanning and Analysis of External and Internal Stakeholders 3.1 The General Environment Political-Legal Forces KFC is a running fast food business. KFC faced very little political problem. In India and Pakistan government have banned beef mixed food items because of their minorities religious culture. KFC follows every health and safety guideline. So, there’s no problem for them to run business where political situations are unstable. Economic Forces Every successful business associated with the country’s economy. These conditions include Capital flow, Costs, Standard of living, stock rates etc. The buying ability of customer from KFC is important. Many countries have slow economy growth. Which affects in sales reduction of KFC. In many country KFC affected in these problems. Sociocultural Forces Social For being a global company KFC can’t go against social ritual and other things of a country. It may undergo the side effect of fast food, increased vegetarians and other health issues. KFC has been the target of a campaign by the animal rights organization PETA. In spite of KFC executives have protested that the Yum! chain is unfairly singled out for criticism. KFC has also been accused by Greenpeace with contributing to the destruction of the world’s rainforests with unsustainably sourced cardboard and paper packaging. Which can’t be able to support the future. Technological Forces In this 21st century technology become a very important part of every business. KFC customers are more rational about their food choice, price, taste. By the bless of internet everyone is able to do marketing of their business. But using the facility companies getting so many rumors. In case of fast food KFC recently suffered from a rumor of animal cruelty. Protesting the false news KFC ensured their quality maintenance and other issues to the authority. By using advance technology, they are minimizing cost of productions, speeding up production and maintaining their customer mania. International Forces There are franchises in many countries aroud the world which facing the difference of economic, political, legal, and technology among each countries. So, there are standard or rule of KFC that all the franchises should follow. Demographic Forces There is no age limit focus by the KFC. The target and focus is on each and every individual in a society. KFC focus on both male and female so gender dost not play any role. One more thing is household size. It is a vital role in demographic factor of KFC. KFC target on whole families rather than single persons so that why family meals are cheaper price. . 3.2 The Task Environment Customer Force: KFC always try to convince their customers by providing good quality of good and service. Suppliers Force: K & N Products provide KFC raw material, KFC receives around 95% of their items. Competitors Force: Biggest competitors of KFC are (McDonalds, Nandos, AFC, HFC and etc. ) Distributor Force: Cupola Dubai based company who is directly operating KFC in Pakistan since 1999 Cupola is a Dubai based multinational company involved in several businesses in many countries including, oil gas exploration, plastic cards and food franchising. 3.3 Internal Stakeholders Internal stakeholders are the owners or partners who related to the business that gaining profit and taking risk of loss. The owners of KFC brand is Yum!, and all the franchise owners are the main stakeholder of KFC. 4 SWOT Analysis 4.1 Strengths Worldwide Presence: KFC is the world second biggest restaurant network, and KFC has more than 18,000 restaurants in 120 nations around the world. KFC is the leader of non-vegan type to become more popular in many countries. Strong parent company: KFC is the subordinate restaurant that it is belong to YUM company. Yum company is the biggest fast-food company, there are include Pizza Hut and Taco Bell. YUM company has over than 41,000 restaurants in 125 nations around the world. Veg & Non veg offerings: KFC knows as fired chicken menu, but now KFC not offer just only chicken menu. KFC also has vegan and non-vegan food to make their company can earn more money. Secret Recipe: KFC has original recipe 11 herbs and spices, and it is very secret and famous. The recipe is the most famous fried recipe. 4.2 Weaknesses Unhealthy fats: Use of unhealthy fats & unhygienic calories is creating problem for the fast food chains to which KFC is not an exception. Managing franchisees: Franchisee management is one of the critical issues in the success of the fast food chains and due to conflicting operational issues between KFC and its franchisees many of its outlets got closed since its inception. 4.3 Opportunities Market expansion: Emerging economies and their changing lifestyle resulting into more of outings with family/friends, corporate parties will result in the high growth of the industry. Furthermore, the presence and popularity of McDonalds is anytime more daunting for KFC. Specializing into vegetarian Menu: Although KFC recently entered in vegetarian fast food category but they have limited menu items as compared to other chains like subway, Pizza-hut, Mac Donald’s, who are already an established player in the segment. So specializing into Veg. items like they have in Non-Veg will help the company in its overall global growth. Rise in health conscious population: Designing its menu for the health conscious population will be the driving force for the whole industry in the future because due to changing lifestyle people are getting less time for themselves due to which health issues are raising. Penetration: Strengthening its outlet network by further penetrating the current market will help KFC in increasing its revenues & become no.1 player in fast food chain market given that now they have presence in both Veg. & Non-Veg. menu in the selected market. 4.4 Threats Competition: KFC is not a leader in the fast food chain industry so it has to compete with all other well established fast food companies who all are flourishing in the market. Changing Consumer Eating habits: With government & NGO’s health awareness campaigns people are becoming more aware of what to consume & what to not which is affecting the business of fast food Industry as a whole. Raw Material prices: Rise in the raw material prices may affect the industry, of which KFC business is not an exception. Closure of current Franchisees: Rise in channel conflict resulting into closing of the franchisees is affecting its brand image & resulting into negative word of mouth.