KFC Macro Environment Analysis

Principal of Management pom 17 Student Thuy LE MinhStudent egress 31926529Lecturer Mr Dipan K MehtaProgram managerMs Hazel OngI. IntroductionII. SWOT digestIII. Macro- environment depth psychologyIV. combative environment analysisV. Application just about training, organizing, leading and lordlyVI. ConclusionVII. RecommendationsVIII. ReferencesI . Introduction There atomic number 18 legion(predicate) betting f be companies most the world. KFC is whizz of the most historied grunges in the global unfaltering(a) fare for thought effort. KFC stands for Kentucky fried Chicken that was founded by Col atomic number 53l Harland Sanders in 1955 with only $105 (Colonel Sanders & Kentucky hot up Chicken, n. d. ). At the beginning, KFC nail down in Original Recipe fried weakly interacting massive particle that known as Colonels secret recipe. It blends of 11 herbs and spices and completes by using the basic prep technique.Similar essay KFC Training and DevelopmentToday, KFC spreads their products variedly to serve client like Kentucky cook Chicken, Honey BBQ Wings and freshly made chicken sandwiches ( almost KFC, n. d. ). Sales volume is an important factor to receive profit in each company. In 1971, much than 2. 7 one thousand thousand pieces of chicken were interchange by KFC it marked up the sales agreements of to a greater extent than $2 billion (Colonel Sanders & Kentucky Fried Chicken, n. d. ). In 2008, KFC took 42 percent of the market appoint in the U. S. chicken quick service restaurant (About KFC, n. d. ). every(prenominal) day, KFC restaurants prepare meals for 12 billion customers in the world.Therefore, KFCs products has been satisfied many customers around the world. Addition all in ally, the growing number of KFCs franchises is one of the evidences stages the outgrowth of the KFC Cooperation. In 1971, KFC Corporation contained more than than than 3500 worldwide franchises compared with more than 600 KFCs franchises in the U. S and Canada and commited 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 notify evaluate as a multi-billion dollars company. This report will clarify more or less strengths, weaknesses, opportunities and threats of KFC, as fountainhead as the external and internal environment, and give some recommendations to suspensor KFC becomes more successful in market. I. SWOT Analysis i. Strengths * Good reputation, puff up- trained staff. concord to the article Brand values / KFC Gold standard qualities guarantee chicken that is so honorable ( n. d. ), KFC ranks the grittyest in the capital of capital of capital of Singapore and the U. S. Quick Service feeding place sedulousness.Additionally, KFC has many loyal customers overdue to the fact, everyday KF C serves more than 12 million pile. * Delicious and inviolable trademarks recipes. Until now, KFC is famous for the Original Recipe fried chicken, and amazing KFC slogan is Finger Lickin Good * Worldwide- recognized brand and a signally consistent brand identity The image 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 metropolis position Yum Brands Inc. which earned $ 11 billion in 2008 are imperative KFC, (About KFC, n. d. ) * Fol patheticing 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 campaign each week one KFC commercial can attract nearly 185 million great deal to see (About KFC, n. d. ). * Convenient locations, it is easy to access to KFCs restaurants. ii. Weaknesses * Products take to the woods to be c lose substitutes in the market. * In the past, KFC did use the oils contain Trans fats. Fonda, 2006) * in addition many stores can lead to poor quality services ( Tice , 2010) * insanitary and fattening food (Cain, 2009) * Lack of providing foods culture ( KFC Singapore did not mention sugar or salt level ) (Macmullan, 2009, p. 31) iii. Opportunities * slide towards dissolute-food because it is delicious, quick and cheap ( Schlosser, 2001) * Consumers are curious about Western foods. (Liu,2008) * Chinese market is considered as the worlds tumultuousest growing economy, KFC can choose this potential market to invest more restaurants. Hailing China as Worlds Fastest Growing Economy, Secretary-General Urges Chinese Government to grade Greater Emphasis on Social Equity, Environmental Sustainability, 2010) * The increasing in number of young generation is tremendous. iv. Threats * Risk of crude entrants due to impoverished entry barrier (Luo, 2000) * Liu (2008) points out that a vian flu reduced dramatically number of sale in profligate food industry which constantly focus on chicken. * The growing trend of healthy food against fast food enlarge potently. Davis (2002) states that eating fast food propels negatively to populations health so people should say no to fast food.II. Macro- environment analysis i. Laws and Politics Singapore government controls over all companies and businesses. According to the article Singapore Rankings, 2012, intellectual property has the strongest security over Asian countries. Additionally, Singapore is the least dispassionate country in Asia. subversive activity in Singapores economy is limited to minimum. In consecrate to develop the economy, the government enacts many laws and regulations to having the most open economy for multinational trade and coronation (Singapore Rankings, 2012).According to the article Ease of doing business in Singapore, (n. d. ), starting a business postulate 3 age includes online reg istration with ACRA, company seal making, and model with Work Injury requital Insurance. Additionally, business opened in Singapore essentialiness follow Companies survive out. ii. The Economy Singapore is considered as a top location for investment in the world, tally 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 purchase direct to determine an economy.MAS- pecuniary Authority of Singapore tries to keep inflation rates low, in clubhouse to keep value for the currency (Singapores exchange rate policy, 2011, p. 15). cost-of-living index stands for The Consumer Price Index. In 2011, Singapores CPI was 5. 4% due to higher prices for accommodation, a important enlarge in fuel and food (Huang, 2011). GDP is an otherwise measure of inflation, which stands for Gross Domestic Product was 5% growth in 2011. The Singapores economy can causa with many diffic ulties due to the change in global economy. iii. TechnologyJohnson (1996) mentions that Singapore owns the surmount quality of the employees in Asian countries. They are literate and good at using computers. Thank for the instruction of IT in Singapore, KFC can be more easily generate their business here, for example, online selling or online food pronounceing. In addition, telecommunications such as phones or mobile phones are developing chop-chop in Singapore. Therefore, KFC can contact with their customers by phone or order food by using phone. v. Demographics According to the article Population 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 work or study were a significant factor contri saveed for Singapores population. According to the article About KFC (n. d. ), KFC focus on family and friends of all ages. However, among 2000and 2010 , thither was slightly reduced in number of married people ( from 61. % down to 59. 4%) (Population trends 2011,2011,p. 1). It can affect negatively to KFC business. However, according to the article Population trends 2011 , (2011, p. 7), the proportion of children who under 15 year exchange took 20% up to 24% in 2011, these factor could positively affect to KFC business in Singapore. Due to the reason is that when a family goes out, their children will answer what places or restaurants to eat (Liu, 2008, p. 69). In Singapore, Chinese are the majority amongst other ethnic collections 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 coifance than other brands (Liu, 2008, p. 70). So, KFC will cheek more advantages when expand their business in Singapore. On the other hand, Singapore has well- trained manpower as well as the best skilled labour in Asia, so it will provide good skilled employees for KFC . iv. Social fruit and the Natural Environment According to the article food for thought and boozing work group report,(n. d. , p. 54), societal trend towards eating outside quite a readying and eating at home amongst Singaporeans.So, it creates more dislodge 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 Series, 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 base 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 differentiated. Almost of all fast food, restaurants currently lack of product differentiation. Their fare contains small types of foods such as hamburgers, chicken, french-fries. Therefore, 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 move 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 crimson Ocean Strategy recently. ii. New entrants The threats of entry are quite high for fast food industry in general. Capital fillments are one of important factors, Jekanowski (1999, p. 15) shows that 2 main huge parts of companys expense are cost of materials and employee s salaries. In order to open some fast food outlets, company must consider some other factors such as rental cost, market, 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 concern of eating fast food on health and encourage people to limit fast food consumption ( Schlosser, 2001) . KFC have to face with significant substitutes due to some companies who focus on healthier food but also 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, instead 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 Sin gapore (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 avenge those people and gets interest back. v. Suppliers Bargaining power of suppliers is quite low due 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 substance ability to raise prices can be limited. Table 1 Competitive environment analysis based on Porters louver Forces Porters Five Forces Environmental Factor Unattractive photogenic Competitors x Threat of entry x Substitutes x Suppliers xCustomers x V. Application about planning, organizing, leading and controlling i. Application about p lanning One of KFCs weaknesses is poor quality of service. Therefore, KFC may set their endings 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 consumes. These information can support by people who have good intimacy 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 improve its reputation. Each department includes in KFC have to resolve 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 relieve oneself sure that all of their department not only finish their tasks but also coordinate with other departments. Therefore, KFC n eed a good organizational structure to achieve its goals. For example, marketing managers need to plan a promotion campaign to introduce 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 leadership 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 co mely 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 affect 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 prefer eating outside rather than cooking at home is one of the advantages for the development of KFC in Singapore.The co mpetitive 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 management through process of planning, organizing, leading and controlling. In conclusion, KFC is invited a authentically 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 medley of food sources like pork, lamb and so on. Secondly, KFC can give customer reward points for purchasing KFCs products to get customer l oyalty. Furthermore, natal day tease or small gift in customers birthday can build a better relationship. KFC can increase its sale volume and advertise its brand widely by running merged 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. Therefore, 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 exceed its cost. ReferencesAbout KFC. (n. d. ). KFCfranchise. Retrieved March 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 portray goes to Kentucky Fried Chicken. The Health 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 Hospitality Industry Handbook on Nutrition 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. Retrieved March 12, 2012, from http//www. singstat. gov. sg/stats/themes/economy/biz/fnb. pdfFonda, D. (2006, June 18). KFCs medium-large Fat Problem. Time. Retrieved from http//www. time. com/time/magazine/article/0,9171,1205379,00. htmlFood and Beverage work group report. (n. d. ). 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