KFC Macro Environment Analysis

Principal of ManagementPOM 17 pupil Thuy LE MinhStudent number 31926529Lecturer Mr Dipan K MehtaProgram managerMs Hazel OngI. IntroductionII. SWOT outlineIII. Macro- environment analysisIV. Competitive environment analysisV. Application closely planning, organizing, leading and controllingVI. ConclusionVII. Recomm subvertationsVIII. ReferencesI . Introduction There ar many immediate-flying viands companies around the world. KFC is nonpareil of the closely renowned brands in the global fasting food for thought industry. KFC stands for Kentucky Fried Chicken that was founded by Colonel Harland Sanders in 1955 with only $105 (Colonel Sanders & Kentucky Fried Chicken, n. d. ). At the beginning, KFC narrow down in Original Recipe fried chicken that known as Colonels secret recipe. It blends of 11 herbs and spices and completes by using the basic cooking technique. analogous essay KFC Training and DevelopmentToday, KFC expands their harvest-tides variedly to serve client like Kentucky Grilled Chicken, Honey BBQ Wings and freshly made chicken sandwiches (About KFC, n. d. ). Sales gaudiness is an important factor to generate profit in each company. In 1971, more than 2. 7 billion pieces of chicken were sold by KFC it marked up the sales of more than $2 billion (Colonel Sanders & Kentucky Fried Chicken, n. d. ). In 2008, KFC took 42 percent of the food market share in the U. S. chicken quick assistant restaurant (About KFC, n. d. ). Every day, KFC restaurants prepare meals for 12 million nodes in the world.Therefore, KFCs products has been satisfied many customers around the world. Additionally, the growing number of KFCs franchises is one of the evidences immortalizes the study of the KFC Cooperation. In 1971, KFC Corporation contained more than 3500 worldwide franchises compared with more than 600 KFCs franchises in the U. S and Canada and spread outed the first oversea outlet in England in 1964 (Colonel Sanders & Kentucky Fried Chicken, n. d ). In 2002, KFC is acquired by Yum Brands . Today, KFC owns more than 20,000 restaurants within 109 countries around the world (About KFC, n. . ). Started with only $105, KFC now can evaluate as a multi-billion dollars company. This continue will clarify approximately strengths, weaknesses, opportunities and threats of KFC, as well as the external and internal environment, and give some recommendations to help KFC becomes more flourishing in market. I. SWOT Analysis i. Strengths * Good reputation, well- trained staff. agree to the member Brand values / KFC Gold standard qualities guarantee chicken that is so good ( n. d. ), KFC ranks the highest in the capital of Singapore and the U. S. Quick Service Restaurant Industry.Additionally, KFC has many loyal customers callable to the fact, everyday KFC serves more than 12 million people. * Delicious and strong trademarks recipes. Until now, KFC is famous for the Original Recipe fried chicken, and impressive KFC slogan is Finger Lickin G ood * Worldwide- recognized brand and a remarkably consistent brand identity The catch of Colonel was attracted both children and their parent (Liu, 2008, p. 69). Furthermore, Liu (2008) states that Colonels humorousness attracts children and their parents put their trust in Colonels products. Strong capital position Yum Brands Inc. which earned $ 11 billion in 2008 are controlling KFC, (About KFC, n. d. ) * Following C. H. A. M. P. S system (Liu,2008, p. 65) C- Cleanliness H- Hospitality A- Accuracy M- Maintenance P- Product Quality S- Speed * Good advertising disturb Weekly one KFC commercial can attract nearly 185 million people to see (About KFC, n. d. ). * Convenient locations, it is easy to access to KFCs restaurants. ii. Weaknesses * Products hightail it to be close substitutes in the market. * In the past, KFC did use the oils contain Trans fats. Fonda, 2006) * Too many stores can lead to poor quality services ( Tice , 2010) * Un sanitary and modify food (Cain, 2009) * L ack of providing foods information ( KFC Singapore did not mention sugar or salt level ) (Macmullan, 2009, p. 31) iii. Opportunities * Trend towards fast-food because it is delicious, quick and gimcrack ( Schlosser, 2001) * Consumers are curious about Western foods. (Liu,2008) * Chinese market is considered as the worlds fastest growing economy, KFC can take away this potential market to invest more restaurants. Hailing China as Worlds Fastest Growing Economy, Secretary-General Urges Chinese Government to Put Greater Emphasis on social Equity, Environmental Sustainability, 2010) * The increasing in number of young generation is tremendous. iv. Threats * Risk of new entrants due to low entry barrier (Luo, 2000) * Liu (2008) points out that avian flu reduced dramatically number of sale in fast food industry which always focus on chicken. * The growing trend of healthy food against fast food adjoin strongly. Davis (2002) states that eating fast food affects negatively to peoples h ealth so people should say no to fast food.II. Macro- environment analysis i. Laws and Politics Singapore politics controls over all companies and businesses. According to the bind Singapore Rankings, 2012, intellectual property has the strongest security over Asiatic countries. Additionally, Singapore is the least dispassionate country in Asia. Corruption in Singapores economy is holded to minimum. In order to develop the economy, the government enacts many laws and regulations to having the most open economy for international trade and investment (Singapore Rankings, 2012).According to the article Ease of doing business in Singapore, (n. d. ), starting a business need 3 days includes online registration with ACRA, company seal making, and urinate with Work Injury Compensation Insurance. Additionally, business opened in Singapore must equal Companies Act. ii. The Economy Singapore is considered as a top location for investment in the world, according to the article Singapore Rankings,2012. According to Overview, (2006), Singapore rated as a solid macro economy in the world, which is one of the most important factor in order to run into an economy.MAS- Monetary Authority of Singapore tries to keep inflation rates low, in order to keep value for the currency (Singapores exchange rate policy, 2011, p. 15). consumer price index stands for The Consumer Price Index. In 2011, Singapores CPI was 5. 4% due to higher prices for accommodation, a significant increase in fuel and food (Huang, 2011). gross domestic product is another measure of inflation, which stands for Gross Domestic Product was 5% growth in 2011. The Singapores economy can reckon with many elusiveies due to the change in global economy. iii. TechnologyJohnson (1996) mentions that Singapore owns the best quality of the employees in Asian countries. They are literate and good at using computers. Thank for the development of IT in Singapore, KFC can be more easily generate their business here, for example, online marketing or online food ordering. In addition, telecommunications such as phones or active phones are developing rapidly in Singapore. Therefore, KFC can contact with their customers by phone or order food by using phone. v. Demographics According to the article world trends 2011 , (2011, p. 1), Singapore had 5. 8 million people at the end of 2011. It was 2. 5 times bigger than 2. 1 million people were at the end of 1970. Total population in Singapore includes both residents and non- residents. Between 2010 and 2011, total number of citizens increased 0. 8%, and non residents increased 6. 9 %. Therefore, people who went to Singapore to crop or study were a significant factor contributed for Singapores population. According to the article About KFC (n. d. ), KFC focus on family and friends of all ages. However, between 2000and 2010 , thither was slightly reduced in number of married people ( from 61. % down to 59. 4%) (Population trends 2011,2011,p. 1). It ca n affect negatively to KFC business. However, according to the article Population trends 2011 , (2011, p. 7), the proportion of children who under 15 year sold took 20% up to 24% in 2011, these factor could positively affect to KFC business in Singapore. referable to the reason is that when a family goes out, their children will decide what places or restaurants to eat (Liu, 2008, p. 69). In Singapore, Chinese are the majority amongst other ethnic groups like Malaysians, Indians and so on (Population trends 2011, 2011,p. 29).Additionally, KFC has a strong position in Chineses mind because of KFC considered as more Chinese performance than other brands (Liu, 2008, p. 70). So, KFC will face more advantages when expand their business in Singapore. On the other hand, Singapore has well- trained workforce as well as the best skilled turn over in Asia, so it will result good skilled employees for KFC . iv. Social Issue and the Natural Environment According to the article Food and drun kenness work group report,(n. d. , p. 54), societal trend towards eating outside rather cooking and eating at home amongst Singaporeans.So, it creates more demote for Food and Beverage services expand its business. For instance, in 2008 there were 306 new fast food outlets were established compared with more 376 new outlets were opened in Singapore (Economic Surveys serial publication, 2011, p. 7). III Competitive environment analysis i. Competitors KFC must compete with many direct competitors in the global fast food industry. For example, Burger King, BBQ, Mc Donalds, Wendys and so on. All of them are strong rivals based on their ability to gain market share, as well as their ambition to become the leader of the fast food industry.Additionally, fast food industry is saturated. Products are not easily identify. Almost of all fast food, restaurants currently lack of product differentiation. Their menu contains trivial types of foods such as hamburgers, chicken, french-fries. Ther efore, some customers may feel difficult to eat these types of foods frequently. In order to compete with other strong rivals in the market, even it is difficult KFC tried their best to distinguish their products. For example, pop corn chicken, egg tarts and so on.Based on lacking of product differentiation, as well as tremendous increase in competitors, fast food industry is control by Red Ocean Strategy recently. ii. New entrants The threats of entry are quite high for fast food industry in general. Capital requirements are one of important factors, Jekanowski (1999, p. 15) shows that 2 main huge parts of companys expense are cost of materials and employees salaries. In order to open some fast food outlets, company must consider some other factors such as rental cost, marketing, utilities and so on. iii. Substitutes and ComplementsIn consumers opinion, fast food attracts them because it is convenient, tasty, and cheap. However, nowadays, many research papers show the negative impa ct of eating fast food on health and encourage people to limit fast food consumption ( Schlosser, 2001) . KFC necessitate to face with significant substitutes due to some companies who focus on fitter food but as well low price strategy will adapt strongly to customers demand. iv. Customers KFC aims to final customers. Schlosser (2000) states that nowadays, many women go to work, rather of cooking at home traditionally, fast food helps them to prepare meals for family.Furthermore, half of their food spending is for fast-food restaurants. Once again, the trend of eating outside amongst Singaporeans creates more chance for KFC expand their business especially in Singapore (Food and Beverage work group report, n. d. , p. 54). Additionally, a quarter of Americans select fast food for their meals every day ( Ransohoff, n. d. ). Therefore, KFC has many potential customers in order to satisfy those people and gets interest back. v. Suppliers Bargaining power of suppliers is quite low du e to some reasons. First, fast food industry especially KFC restaurants require common materials for producing.For example, chicken, breads, beef, potatoes and so on. Therefore, these materials are available and low cost of purchase. Secondly, there are many suppliers provide those stuff want to cooperate with KFC which means ability to raise prices can be limited. Table 1 Competitive environment analysis based on Porters Five Forces Porters Five Forces Environmental Factor Unattractive Attractive Competitors x Threat of entry x Substitutes x Suppliers xCustomers x V. Application about planning, organizing, leading and controlling i. Application about planning One of KFCs weaknesses is poor quality of service. Therefore, KFC may mark their goals to increase customer satisfaction in 1 month. Then, KFC can achieve that goal by providing staff training workshops. They should know more about consumer behavior, and customer psychology in order to satisfy customers needs. These info rmation can support by people who have good knowledge about customers. After these workshops, KFC should collect customers feedback whether staff perform better or not. ii.Application about organizing KFC focus on satisfy customers to generate profits and reform its reputation. Each department includes in KFC have to respond its function to achieve companys goals. Departments such as marketing department, production department have their own leader like marketing manager, production manager, respectively. KFC must make sure that all of their department not only finish their tasks but also coordinate with other departments. Therefore, KFC need a good organizational structure to achieve its goals. For example, marketing managers need to plan a promotion campaign to exhibit new products.They must cooperate with finance departments to determine the promotion budget. So, integration coordinates labors efficiency iii. Application about leading KFC can choose relationship-motivated leade rship style to control company. As a result, managers should build good relationships with employees, narrow the distance between managers and workers. Managers should care more about workers, satisfy their needs, and show companys respectability toward employees. For example, managers can give more bonuses for workers in order to encourage them to finish their duty perfectly. iv. Application about controllingKFC should follow clan control to achieve its targets. The managers should discuss with followers to make decision. For example, chiefs, cashiers and waiters who have more chances to communicate with customers can contribute many worthy ideas. Conclusion This report mentions SWOT analysis, macro-environment analysis focus on Singapore, and competitive-environment analysis of KFC in Singapore then give some recommendations. KFC has good brand image in customers mind. However, KFC lacks of product differentiation amongst their strong competitors. The change in demographic can aff ect positively to fast food industry especially KFC.On the other hand, the trend towards healthy food can against the development of fast food. The macro environment focuses on five mains parts which are Law and politics, economy, technology, social issues and demographic. In Singapore, government open their laws and regulations to attract overseas investment. Moreover, the economy in Singapore is quite stable, with the development of technology help Singapore become a potential market for KFC. Moreover, Singaporeans cull eating outside rather than cooking at home is one of the advantages for the development of KFC in Singapore.The competitive environment mentions five factors are competitors, threat of entrants, suppliers, customers, and substitutes. KFC has to face with many currently strong competitors, as well as new rivals. However, KFC lacks of its products differentiation. Some actions can help KFC in order to achieve good circumspection through process of planning, organiz ing, leading and controlling. In conclusion, KFC is invited a really potential market especially in Singapore, they should develop their advantages as well as limit the disadvantages as much as possible to satisfy customers. RecommendationIn order to gain more customers satisfaction, KFC can do some renovations. First, KFC should make differentiated products to compete with its rivals. For example, create new menu contains vegetarian food besides normal menu. Additionally, provides food in a variety of food sources like pork, lamb and so on. Secondly, KFC can give customer reward points for purchasing KFCs products to get customer loyalty. Furthermore, birthday cards or small gift in customers birthday can build a better relationship. KFC can increase its sale volume and advertise its brand widely by discharge corporate discounts with its complements such as Pepsi, and Nestle.Last but not least, KFC need to care more about their customers by gathering customers information. Therefo re, it is easier to collect their feedback as well as do customer loyalty program. All of these things above need a strong finance to support, however, its benefit definitely outweigh its cost. ReferencesAbout KFC. (n. d. ). KFCfranchise. Retrieved shew 9, 2012, from http//www. kfcfranchise. com/about-KFC-fried-chicken-business. phpBrand values / KFC Gold standard qualities guarantee chicken that is so good . (n. d. ). KFC. Retrieved March 9, 2012, from http//kfc. com. g/about-us-goldstandard. phpCain, S. (2009, June 14). The worst restaurant of the year award goes to Kentucky Fried Chicken. The wellness Wyze Report. Retrieved March 9, 2012, from http//healthwyze. org/index. php/component/content/article/134-the-worst-restaurant-of-the-year-award-goes-to-kentucky-fried-chicken-kfc. htmlColonel Sanders Kentucky Fried Chicken. (n. d. ). KFC. Retrieved March 9, 2012, from http//www. kfc. com. sg/about-us-milestone. phpDavis, L. (2002). Application of nutrition in the industry. In Ho spitality Industry Handbook on nourishment and Menu Planning. (p. 217).South Africa JutaCo. Ease of doing business in Singapore. (n. d. ). Doing business. Retrieved March 13, 2012, from http//www. doingbusiness. org/data/exploreeconomies/singapore/starting-a-businessEconomic Surveys Series. (2011, November 24). Statistics Singapore. 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