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Assignment Front Sheet: Qualification BTEC Level 4 HND Diploma in Business

This document provides an analysis of KFC's internal and external business environments. It examines KFC's competitive environment including potential competitors like Radix Fried Chicken, current competitors like McDonald's and Burger King, substitute products, as well as the power of suppliers and buyers. It also includes a PESTEL analysis of KFC's macro environment focusing on environmental and technology factors. Finally, it analyzes KFC's internal strengths such as its core values, organizational structure, human resources, brand name, and technology/R&D. Based on this analysis, the business analyst concludes KFC has potential for fruitful investment.

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0% found this document useful (0 votes)
105 views17 pages

Assignment Front Sheet: Qualification BTEC Level 4 HND Diploma in Business

This document provides an analysis of KFC's internal and external business environments. It examines KFC's competitive environment including potential competitors like Radix Fried Chicken, current competitors like McDonald's and Burger King, substitute products, as well as the power of suppliers and buyers. It also includes a PESTEL analysis of KFC's macro environment focusing on environmental and technology factors. Finally, it analyzes KFC's internal strengths such as its core values, organizational structure, human resources, brand name, and technology/R&D. Based on this analysis, the business analyst concludes KFC has potential for fruitful investment.

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Quốc Khánh
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ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment

Submission date Date Received 1st submission

Re-submission Date Date Received 2nd submission

Student Name Duong Quoc Khanh Student ID GBD191323

Class GBD1007 Assessor name Phan Tran Phuong Trang

Student declaration

I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that
making a false declaration is a form of malpractice.

Student’s signature

Grading grid

P4 P5 P6 M3 M4 D2
 Summative Feedback:  Resubmission Feedback:

Grade: Assessor Signature: Date:


Internal Verifier’s Comments:

Signature & Date:


Table of Contents
I. Introduction .......................................................................................................................................4

II. Micro and Macro environment ...........................................................................................................4

1. Competitive environment: .............................................................................................................. 4

Potential competitor: ......................................................................................................................... 4

Current competitors: .......................................................................................................................... 5

Substiute product: .............................................................................................................................. 6

Power of suppliers: ............................................................................................................................. 7

Power of buyers: ................................................................................................................................ 7

2. PESTEL ANALYSIS ............................................................................................................................ 8

2.1. Environmental factor: .............................................................................................................. 8

2.2. Technology factor: ................................................................................................................... 8

III. Internal analysis .............................................................................................................................. 9

1. Core value or Mission or Vision; ......................................................................................................9

2. Organizational structure; .............................................................................................................. 10

3. Human resources; ......................................................................................................................... 11

4. Brand name or brand equity; ........................................................................................................12

5. TECHNOLOGY based or RESEARCH and DEVELOPMENT ................................................................ 12

IV. Business decision .......................................................................................................................... 13

V. Conclusion ........................................................................................................................................14

References .............................................................................................................................................. 16
I. Introduction
Wells Fargo, an American global financial services organization, employs me as a business analyst. It is the
fourth-largest bank in the world by market capitalization and the fourth-largest bank in the United States
by total assets. KFC, a worldwide corporation, is the business firm I have chosen. The company's internal
and external environments are quite diversified. For this project, my firm learns about the company's
internal and external environmental analyses, and I acknowledge that this company has the potential to
be fruitful speculation.

II. Micro and Macro environment


1. Competitive environment:

Current competitors:
Substitute
competitors:

Potential
competitor: Customers power: Suppliers power:
High Low

Potential competitor:
Before a new entrant can build a name for themselves in the fast-food sector in USA, they must invest
heavily in marketing and product development. Existing brands, such as KFC and McDonald's, have such a
strong brand image that they have a large devoted consumer base. These clients avoid visiting anywhere
other than these specific eateries. The capacity of current companies to maintain consistent product
flavor, restaurant atmosphere, and good customer service around the globe has increased the entry
hurdles to this business even more. Radix Fried Chicken debuted in 2008 and has since gained market
share and consumers due to its innovative menu (Cornelius, 2010). As a result, the danger of new
competitors is moderate for KFC (Kasi, 2017).

Current competitors:
For the fast-food market, apart from the fast-food chain KFC, we can have bread and hamburger products
such as McDonald's, Burger King, Subway in USA:

No Companies/Products Price Design Market Growth


1 KFC (Classic Chicken 3.99$ In KFC logo, KFC's recent expansion and
Sandwich) (Menupriceguide, Colonel Harland promise for the future, the quick-
2022) Sanders, the service business expects to nearly
founder of KFC, quadruple in size from 25,292 to
moved from a 75,000 in 2021, with a new shop
white vest to a opening every five hours. The firm
red apron to has opened 700 units in the
indicate previous two quarters alone.
simplicity and According to Baird Equity
preserve the Research, the strength of this
basic part of the growth estimate is bolstered by
colonel emblem "excellent unit-level returns for
is a black bow, franchisees, a flexible real estate
glasses, and a strategy," and prospects in
goatee closer to growing areas worldwide,
the consumer. including Africa, Russia, the Middle
East, and India.
2 Mc Donalds (Burger 3.99$ McDonald's McDonald's sales climbed by 7.5
Big Mac) popularity may percent in the United States, while
(Jojorecipes, be traced back to the International Operated
2022) its eye-catching Markets sector increased by 16.8
logo design. The percent, while the International
McDonald's Developmental Licensed Markets
insignia, often section increased by 14.2 percent.
known as the During the quarter, consolidated
Golden Arches, revenues climbed by 13%. In Q4
has a fantastic 2021, McDonald's diluted profits
narrative that per share were $2.18, marking an
should inspire 18% rise. The restaurant chain's
any graphic consolidated operating income
designer. increased by 12%. McDonald's
McDonald's global comparable sales climbed
logo's career by 17% year on year.
began with the
company's fast
expansion.
The fast-food sector is one of the most competitive enterprises today. KFC is also experiencing tremendous
rivalry in its business from other industry competitors, particularly McDonald's, which is vying for the top
spot in the worldwide market. Although certain goods are differentiated, the majority of the products are
the same, such as fries, soft drinks, coleslaw, salads, and so on. As a result, KFC faces fierce competition
(Kasi, 2017).

Substiute product:
There are a lot of restaurants that provide goods comparable to KFCs. , for example, has become a
powerful substitute for KFC. Other side dishes, like rice and mashed potatoes, are available at the
restaurant, which KFC does not. Second, in many of the countries where KFC operates, it is being
challenged by local restaurants such as Popeye's Louisiana Kitchen in the Middle East area. KFC has
addressed this issue by providing free Wi-Fi in its locations and launching a breakfast menu in the morning.
As a result, the threat of alternatives is considerable for KFC (Kasi, 2017).
No Companies/Products Price Design
1 KFC (Classic Chicken 3.99$ In KFC logo, Colonel Harland Sanders, the founder of
Sandwich) (Menupriceguide, KFC, moved from a white vest to a red apron to indicate
2022) simplicity and preserve the basic part of the colonel
emblem is a black bow, glasses, and a goatee closer to
the consumer.
2 Popeyes (Classic 3.99$ The colors found in the logo ‒ red, orange, and white ‒
Chicken Sandwich) (Menuandprice, repeat the original design of the restaurants. They also
2022) give a hint of the seasonings in which many products
the Popeyes menu is famous for are marinated.
The eye-popping color scheme has not failed to justify
the hopes set on it ‒ it makes the brand’s visual identity
look optimistic, inviting, and therefore, appealing.

Power of suppliers:
KFC's key raw resources are chicken, soft drinks, and potatoes. Because of the frequent and substantial
purchases, there are a great number of suppliers willing to agree to KFC's requirements and supply it with
the raw materials it requires. Because of the absence of product differentiation, the vast magnitude of
orders, and the big number of suppliers, the suppliers have little negotiating strength against KFC and
cannot raise their pricing. KFC canceled a deal with one of its chicken suppliers in 2004 owing to the birds
being slaughtered inhumanely. As a result, KFC's suppliers have little negotiation power over it (Kasi, 2017).

Power of buyers:
Customers that visit KFC restaurants on a daily basis are the company's purchasers. Customers now have
a variety of options, such as McDonald's, Subway, RFC, Pizza Hut, and so on. Product differentiation within
the industry in the United States is strong, which indicates that purchasers cannot discover alternative
enterprises providing a certain product. Because switching is difficult, purchasers' negotiating power inside
the sector is weakened.
The purchasers in the sector have a modest income. This means that there is a lot of pressure to buy at
cheap prices, which makes purchasers more price sensitive. Buyers' purchasing power becomes a weaker
force in the business as a result (Murphy, 2018).

2. PESTEL ANALYSIS
2.1. Environmental factor:
ECO-FRIENDLY TREND

The customer market has become extremely concerned about the environment and the long-term viability
of organizations. KFC is aware of these tendencies among its consumers, and the firm has made several
initiatives over the years to make the organization more sustainable and decrease carbon waste (Shaw,
2021).

BIODEGRADABLE PAPER

KFC's use of biodegradable paper and recyclable materials is one of its environmentally friendly practices.
It has assisted the fast-food chain company in reducing over 14000 tons of plastic packaging (Shaw, 2021).

COGENERATION SYSTEM

Tidy Planets and KFC have formed an alliance. It has developed a product known as CHiP. On the product
site, it is a small-scale cogeneration system project that turns used/scrapped frying oil into hot water and
power. It has assisted the firm in lowering its yearly carbon emission rate of 4000 tons (Shaw, 2021).

2.2. Technology factor:


TECH SAVVY

KFC is a technologically sophisticated corporation that is continuously seeking to enhance its technology
in order to better serve its customers. It predicts what people will order using face recognition technology.
It will collect data from many users, evaluate it, and then decide what a buyer would buy based on how
they seem via learning. The company has launched a mobile payment system that allows customers to use
Apple Pay, Android Pay, and Samsung Pay at stores and drive-thrus (Shaw, 2021).

SOCIAL MEDIA
The advancement of information and communication technology has resulted in the use of novel
marketing methods to improve customer collaboration. The usage of social media in the current corporate
world has become commonplace. KFC can boost business performance by leveraging the potential
provided by social media marketing. Technological advancements may be exploited to launch social media
campaigns aimed at building online brand communities (Henry, 2018).

ADVANCED TECH

Furthermore, self-order kiosks, voice-activated devices, and online platforms are some of the
modifications they have used to enhance profitability and sales. KFC has also improved its digital presence
by improving its social media management and promotions (Shaw, 2021).

According to an estimate, 98% of the hotels and restaurants at KFC use the click-and-collect tool, and it
increased by more than 20% of the company.

III. Internal analysis


1. Core value or Mission or Vision;

(EdrawMind, 2022)

Strengths:
Such a largely known and beloved company like KFC boasts many strengths, including a global presence,
unique menu options, and a secret even the internet hasn’t exposed. The KFC brand is one of the best
known worldwide, even in the affluent parts of the urban centers of third-world countries. A brand with
excellent value finds it easy to acquire and keep its customers, more so if it is the first to introduce a
product to them. As well, KFC is also popular with franchisees (FRUE, 2019).

Weakness:

Low investments in KFC's customer-oriented services - This might lead to competitors acquiring an
advantage in the near future. KFC must enhance its investment in research and development, particularly
in customer-service-oriented apps.

2. Organizational structure;
KFC's organizational structure consists of six layers. The management board, which includes the president
and regional directors, as well as the chief financial officer(CFO), is at the top. This is followed by general
managers, assistant general managers, unit managers, team members, and laborers.

(IvyPanda, 2021)
Strength:

AL STRUCTURE OF ORGANIZATION KFC is a worldwide corporation that specializes in quick food,


particularly chicken. Furthermore, KFC is a registered trademark of the YUM! company. The KFC brand is
handled by the YUM Group's Area Manager (Area Manager). organized, and underneath that was a
hierarchy of subordinate administrators KFC's organizational structure consists of a Regional Director,
Restaurant Manager, Restaurant Director, and Assistant Directors, as well as a Customer Service Team.
KFC will meet its aim with this organizational structure since, according to 2013 figures, KFC's sales are 23
billion USD and KFC is present in more than 141 countries and 22,000 outlets (Farooq, 2019).

Weakness:

KFC operates on a franchise management structure, which means that each restaurant operates
independently. It's unusual for one KFC to earn favorable comments while another just down the street
receives bad feedback. Such a volatile system is prone to poor operational, production, and managerial
attributes, all of which influence how the general public sees the joint in issue, as well as the overall brand
(FRUE, 2019).

3. Human resources;
Strength:

KFC offers a lot of human resource assets, such as solid human resources, well-trained employees, and
professionalism... KFC, with its cultural traditions, consistently recognizes its employees' excellence and
tremendous passion. KFC employs almost 3,000 employees under the motto "work hard - enjoy hard," and
it also produces additional employment in the surrounding industries. KFC provides employees with a
diverse work environment and the greatest working environment possible.

Weakness:

Human resources are unstable and change regularly for a variety of reasons, resulting in many staff having
little experience and making mistakes when serving customers and preparing meals. At the same time, it
costs money to recruit and train new personnel, but the time it takes to put those individuals to work is
short. This has a direct impact on KFC's business.
4. Brand name or brand equity;

(Logos, 2022)

Strength:

KFC has some of the following advantages. Kentucky Fried Chicken, or KFC, is a well-known brand in the
United States. It is one of the world's largest restaurant chains, noted for its secret business recipe of 11
herbs and spices. By the end of 2018, KFC's franchisee network has expanded to over 141 countries and
territories, with over 22,000 restaurants. The restaurant's worldwide modernism is without a doubt one
of the brand's biggest assets (Farooq, 2019).

Weakness:

Every major corporation has had its fair share of controversy and bad press, and KFC is no different. In
reality, the sheer amount of controversies and negative publicity that KFC has recently encountered, as
well as how it has handled with them, is rather intense. These controversies have varied from risky food
handling to unethical treatment of livestock and people, as well as unethical corporate tactics. KFC has
survived all criticism, but at a high cost and loss of income, and it is scarcely a lucrative trend to continue
(Thomas, 2022).

5. TECHNOLOGY based or RESEARCH and DEVELOPMENT


Strength:

KFC employs technologies such as: using technology to train personnel and using modern technology to
make delivery, kiosks, and ordering more convenient... KFC focuses on making the company as simple as
possible by offering delivery, click-and-collect money, and kiosks. Each market is prioritized differently.
KFC, for example, has supplied door-to-door services in the Middle East for decades, and a mature channel
accounts for more than 30% of sales (Kelso, 2019).

Weakness:

The technological skill of the personnel remains limited. Recently, the organization has changed its
attention to staff training in order to provide the greatest possible client experience. "The client experience
will never be greater than the staff experience." "We aim to make every day easy and gratifying for our
team members," said KFC Digital Director Ryan Ostrom in an interview with Restaurant Business (Techhq,
2018).

IV. Business decision


Bringing consumers a leading brand of food, creating bright and fun for people of all ages. “Youth in the
soul, dynamism in life” is the criterion. & strategy of the KFC brand.

KFC's goals include providing great cuisine, a clean atmosphere, and a happy and vibrant customer
experience. The ultimate objective is to expand its company and endure competition from other fast-food
restaurants (Fleming, 2019).

Another of KFC's objectives is to put a smile on the face of the world by expanding the KFC empire.
Customer satisfaction is another important aim for KFC, and another method they attempt to make their
customers happy. Kentucky Fried Chicken aspires to be the finest in the business and does all possible to
please all consumers (Fleming, 2019).

The product life cycle goes through stages: launch, development, growth, maturity, decline, and death. To
be able to maintain and prolong the growth process, the company needs a good business and competitive
strategy because this is a period with many strong competitors.

Finding a strategy is finding out the path of the company as well as the products that the company is
trading in the market, when the strategy is effective, it will bring success to the business. Same goes for
the KFC company. KFC's competitive strategy globally as well as in Vietnam is very effective, which is
reflected in the success of KFC today.
In this business choice, KFC's strength is that it leverages technologies such as: employing technology to
teach people and using current technology to make delivery, kiosks, and ordering easier... KFC strives to
make the firm as easy to use as possible by providing delivery, click-and-collect money, and kiosks. Each
market has its own set of priorities. For example, KFC has been providing door-to-door services in the
Middle East for decades, and a mature channel accounts for more than 30% of sales (Kelso, 2019).

Furthermore, the organizational structure is a weakness in KFC's business choice. KFC works on a franchise
management system, which implies that each store is self-contained. It's unusual for one KFC to earn
favorable comments while another just down the street receives bad feedback. A volatile system is prone
to bad operational, production, and management characteristics, all of which impact how the general
public perceives the joint in question, as well as the entire brand.

KFC's choice to develop a partnership with Tidy Planets is consistent with the social factor of the
macroenvironment. It has created a product known as CHiP. According to the website, the product is a
small-scale cogeneration system project that converts used/shredded frying oil into hot water and
electricity. It assisted the firm in lowering its yearly carbon impact by 4000 tons. Customers are more
worried about the environment and the long-term health of businesses. KFC is aware of these customer
inclinations, and the company has implemented a number of measures over the years to make the
business more sustainable and reduce carbon waste.

Furthermore, the competitive dynamics of the competitive environment impact the company's actions as
well as KFC's goods. Popeyes Louisiana Kitchen is a replacement rival with the potential to completely
replace KFCs in the market. Furthermore, Popeyes Louisiana Kitchen's items, such as burgers, fries, and
chicken, have a comparable flavor to KFC's products. Popeyes Louisiana Kitchen is the largest alternative
rival to KFC in today's market. KFC has to improve its product strategy and attract more customers.

V. Conclusion
In conclusion, for KFC enterprises in the Vietnamese market to grow and achieve their objectives. In order
to develop plans and adjust to market policies, businesses must thoroughly research environmental
aspects. Internal and external forces have contributed to the industry's growth, resulting in an exceptional
brand in the eyes of customers, a world-class refreshment firm. At the same time, KFC must identify its
shortcomings, build on its strengths in order to seize opportunities, and prevent threats.
References
Cornelius, S., 2010. Structural Analysis KFC. [Online]
Available at: https://www.scribd.com/doc/31608312/Structural-Analysis-KFC
[Accessed 24 April 2022].

EdrawMind, 2022. KFC Mission and Vision Statement Analysis. [Online]


Available at: https://www.edrawmind.com/article/kfc-mission-and-vision-statement-analysis.html
[Accessed 24 April 2022].

Farooq, U., 2019. SWOT Analysis of KFC. [Online]


Available at: https://www.marketingtutor.net/swot-analysis-of-kfc/
[Accessed 24 April 2022].

FRUE, K., 2019. SWOT Analysis of KFC. [Online]


Available at: https://pestleanalysis.com/swot-analysis-of-kfc/
[Accessed 24 April 2022].

IvyPanda, 2021. KFC Company’s Organizational Communication System. [Online]


Available at: https://ivypanda.com/essays/kfc-companys-organizational-communication-
system/#:~:text=KFC%20has%20six%20levels%20on,members%20and%20finally%20the%20workers.
[Accessed 24 April 2022].

Kasi, A., 2017. Porter's Fivre Forces Analysis of KFC. [Online]


Available at: https://www.porteranalysis.com/porters-five-forces-analysis-porter-model-of-kfc/
[Accessed 24 April 2022].

Kelso, A., 2019. How KFC Scales Technologies Across 22,000 RestaurantsAroundTheWorld. [Online]
Available at: https://www.forbes.com/sites/aliciakelso/2019/05/30/how-kfc-scales-technologies-
/?sh=4931c9d9438f
[Accessed 24 April 2022].
Logos, F., 2022. KFC Logo. [Online]
Available at: https://logos-world.net/kfc-logo/
[Accessed 24 April 2022].

Pratap, A., 2021. Pestle analysis of KFC. [Online]


Available at: https://notesmatic.com/pestle-analysis-of-kfc/
[Accessed 24 April 2022].

Shaw, A. A., 2021. PESTLE Analysis of KFC. [Online]


Available at: https://swotandpestleanalysis.com/pestle-analysis-of-kfc/#Social_factors_impacting_KFC
[Accessed 24 April 2022 ].

Techhq, 2018. How technology helps KFC train employees and delight customers. [Online]
Available at: https://techhq.com/2018/10/how-technology-helps-kfc-train-employees-and-delight-
customers/
[Accessed 24 April 2022].

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