KFC Macro Environment Analysis

Principal of ManagementPOM 17 bookman Thuy LE MinhStudent number 31926529Lecturer Mr Dipan K MehtaProgram autobusMs Hazel OngI. IntroductionII. SWOT summaryIII. Macro- environment psychoanalysisIV. Competitive environment analysisV. Application astir(predicate) planning, organizing, leading and arbitraryVI. ConclusionVII. Recomm annulationsVIII. ReferencesI . Introduction There argon umpteen luxuriant f are companies around the origination. KFC is champion of the most famous brands in the planetary immediate victuals application. KFC stands for Kentucky Fried bellyacher that was founded by Colonel Harland Sanders in 1955 with tho $105 (Colonel Sanders & adenylic acid Kentucky Fried Chicken, n. d. ). At the beginning, KFC specialized in Original Recipe hot up wimp that known as Colonels secret recipe. It blends of 11 herbs and spices and completes by using the basic cooking technique. connatural essay KFC Training and DevelopmentToday, KFC expands their products va riedly to serve customer alike Kentucky Grilled Chicken, Honey BBQ Wings and freshly made chicken sandwiches (About KFC, n. d. ). gross sales volume is an important factor to generate profit in altogether(prenominal) go with. In 1971, to a greater extent than 2. 7 billion pieces of chicken were sold by KFC it marked up the sales of more(prenominal) than $2 billion (Colonel Sanders & Kentucky Fried Chicken, n. d. ). In 2008, KFC took 42 percent of the market luck in the U. S. chicken quick service restaurant (About KFC, n. d. ). any day, KFC restaurants prepare meals for 12 jillion customers in the world.Therefore, KFCs products has been satisfied umpteen customers around the world. Addition exclusivelyy, the ripening number of KFCs franchises is one of the evidences shows the development of the KFC Cooperation. In 1971, KFC Corporation manipulateed more than 3500 worldwide franchises compared with more than 600 KFCs franchises in the U. S and Canada and opened the fi rst everyplacesea 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 house gauge as a multi-billion dollars company. This report lead clarify some strengths, weaknesses, opportunities and little terrors of KFC, as seeably as the external and internal environment, and prey some recommendations to supporter KFC becomes more successful in market. I. SWOT Analysis i. Strengths * Good reputation, well- deft provide. According to the oblige Brand values / KFC Gold standard qualities stop up chicken that is so well-be becomed ( n. d. ), KFC ranks the highest in the capital of capital of capital of capital of Singapore and the U. S. Quick serve up Restaurant Industry.Additionally, KFC has many loyal customers ascribable to the fact, everyday KFC serves more than 12 million people. * Delicious and affectionate trademarks recipes. Until now, KFC is famous for the Original Recipe fried chicken, and impressive KFC slogan is Finger Lickin Good * Worldwide- recognized brand and a remarkably consistent brand identity The image of Colonel was pull uped both children and their resurrect (Liu, 2008, p. 69). Furthermore, Liu (2008) states that Colonels humorousness attracts children and their parents put their trust in Colonels products. dependable 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- cordial reception A- true statement M- Maintenance P- ware Quality S- Speed * Good advertising bear on Weekly one KFC commercial derriere attract nearly 185 million people to see (About KFC, n. d. ). * Convenient locatings, it is easy to access to KFCs restaurants. ii. Weaknesses * Products tend to be close substitutes in the mark et. * In the past, KFC did use the oils contain Trans fats. Fonda, 2006) * Too many stores plenty lead to poor quality execution ( Tice , 2010) * Unhealthy and fattening regimen (Cain, 2009) * Lack of providing foods instruction ( KFC Singapore did not mention sugar or salt level ) (Macmullan, 2009, p. 31) iii. Opportunities * Trend towards flying-food because it is delicious, quick and cheap ( Schlosser, 2001) * Consumers are curious approximately horse opera foods. (Liu,2008) * Chinese market is considered as the worlds fastest growing scrimping, KFC can discern this potential market to invest more restaurants. Hailing mainland China as Worlds Fastest Growing Economy, Secretary-General Urges Chinese political sympathies to Put Greater Emphasis on cordial Equity, Environmental Sustainability, 2010) * The form magnitude in number of young generation is enormous. iv. Threats * Risk of rude(a) entrants due to low entry barrier (Luo, 2000) * Liu (2008) points out that avian flu bring down dramatically number of sale in fast food industry which always focus on chicken. * The growing trend of healthy food against fast food increase strongly. Davis (2002) states that eating fast food affects ostracizely to peoples health so people should say no to fast food.II. Macro- environment analysis i. Laws and Politics Singapore government controls over all companies and chorees. According to the article Singapore Rankings, 2012, intellectual property has the strongest warranter over Asian countries. Additionally, Singapore is the least dispassionate country in Asia. Corruption in Singapores economy is limited to minimum. In rewrite 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 line of descent in Singapore, (n. d. ), starting a business need 3 days includes online registration with ACRA, comp any seal making, and work with Work dent Compensation Insurance. Additionally, business opened in Singapore must heed 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 form an economy.MAS- Monetary Authority of Singapore tries to keep inflation rates low, in order to keep value for the currency (Singapores exchange rate insurance policy, 2011, p. 15). CPI stands for The Consumer Price Index. In 2011, Singapores CPI was 5. 4% due to higher prices for accommodation, a significant increase in provide and food (Huang, 2011). GDP is an bare-assed(prenominal) measure of inflation, which stands for Gross Domestic Product was 5% growth in 2011. The Singapores economy can baptistry with many effortfulies 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 satisfactory at using computers. Thank for the development of IT in Singapore, KFC can be more easily generate their business here, for example, online market or online food ordering. In addition, telecommunications much(prenominal) as phones or mobile phones are evolution rapidly in Singapore. Therefore, KFC can contact with their customers by phone or order food by using phone. v. Demographics According to the article state 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, agree 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 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 , there was slightly reduced in number of marital 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 division sold 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 decide what places or restaurants to eat (Liu, 2008, p. 69). In Singapore, Chinese are the bulk 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- adept workforce as well as the best skilled prod in Asia, so it will provide faithful skilled employees for KFC . iv. Social Issue and the Natural Environment According to the article feed and drunkenness work group report,(n. d. , p. 54), societal trend towards eating impertinent rather cooking and eating at home amongst Singaporeans.So, it creates more prospect 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. each 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 differentiated. Almost of all fast food, restaurants currently lack of product differentiation. Their menu 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 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 sort of high for fast food industry in general. Capital requirements are one of important factors, Jekanowski (1999, p. 15) shows that 2 main huge part of companys expense are constitute of materials and employees salaries. In order to open some fast food outlets, comp any 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 impact of eating fast food on health and pull ahead 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 vary 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, one-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 hire fast food for their meals every day ( Ransohoff, n. d. ). Therefore, KFC has many potential customers in order to play those people and gets interest back. v. Suppliers Bargaining power of suppliers is sooner 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 stand by 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 ugly Attractive Competitors x Threat of entry x Substitutes x Suppliers xCustomers x V. Application rough planning, organizing, leading and controlling i. Application about planning One of KFCs weaknesses is poor quality of service. Therefor e, KFC may groom their goals to increase customer satisfaction in 1 month. Then, KFC can happen upon that goal by providing staff training workshops. They should know more about consumer behavior, and customer psychology in order to touch customers needs. These information can support by people who have pricey knowledge about customers. After these workshops, KFC should apprehend 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 part includes in KFC have to respond its function to come upon 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, marke ting 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 restrictions 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 manage 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 following 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-env ironment 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, engine room, 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 favor 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 management through process of planning, organizing, 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 mathematical 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, natal day cards or small gift in customers birthd ay can build a better relationship. KFC can increase its sale volume and advertise its brand widely by raceway 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. 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 decidedly outweigh 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 course award goes to Kentucky Fried Chicken. The Health Wyze Report. Retrieved March 9, 2012, from http//healthwyze. org/index. php/component/content/ar ticle/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. 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