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1. Introduction

Kentucky Fried Chicken (KFC)stands for high-quality fast food in a popular array of complete meals to
enrich the consumer’s everyday life. KFC strives to serve great-tasting, “finger lickin’ good” chicken
meals that enable the whole family to share a fun, uninhibited and thoroughly satisfying eating
experience, with the same convenience and affordability of an ordinary Quick Service Restaurant. TFL
successfully launched the flagship KFC on South Avenue, Gulshan in September 2006. It has already won
over the heart of the Dhaka crowd with its great tasting food, high standard of hygiene, cleanliness,
terrific interior and of course excellent and affordable pricing. Following its enormous success in
Gulshan, the second outlet was opened in Dhanmondi in November 2008, and yet another in Banani in
December 2008. Most recently TFL has opened two outlets at Eskaton on February 2010 and another
one is in Paltan. TranscomFoods Limited (TFL)started its journey in 2003 as a franchisee of Pizza Hut, the
first International Chain Restaurant in Bangladesh, and went on to sign the contract to become the
franchisee of Kentucky Fried Chicken (KFC) in the year 2006. Both Pizza Hut and KFC are subsidiaries of
the world’s largest restaurant company Yum! Restaurants International. In a span of seven years, TFL
has opened 4 Pizza Hut and 7 KFC outlets so far throughout the country. Every day, nearly eight million
customers are served around the world. KFC’s menu everywhere includes Original Recipe chicken—
made with the same great taste Colonel Harland Sanders created more than a half-century ago.
Customers around the globe also enjoy more than 300 other products—from a Chunky Chicken Pot Piein
the United States to a salmon sandwich in Japan.KFC continues reaching out to customers with home
delivery in more than300 restaurants in the United States and several other countries. And in quitea few
U.S. cities, KFC is teaming up with other restaurants, Taco Bell Hut, selling nearly fifty years ago; Colonel
Sanders invented what is now called “home meal replacement” –selling complete meals to harried,time-
strapped families. He called it, “Sunday Dinner, Seven Days a Week.”Today, the Colonel’s spirit and
heritage are reflected in KFC’s brand identity –the logo features Colonel Harland Sanders, one of the
best-recognized icons in the world. In this report, I am trying to find the secret reason about the success
of KFC.

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2. External analysisof KFC

An external analysis can be defined as “the process of scanning and evaluating an organization’s
different external environmental sectors to determine positive and negative trends that could impact
organizational performance”(p. 66, Coulter 2005). A company’s strategic decisions can be predisposed
by a number of factors. The external environment can be one of those things and should be closely
monitored. We should be aware of changes and trends in the environment around you, know what your
customers prefer and what your competitors are up to. We should also be aware of the latest
technological developments and maybe even political changes that might affect your strategic plan.
Partly we are conversant about changes and trends through the media, there are however large changes
occurring that we notice first after a while if we do not try to imprison the information earlier. Being
able to see changes early and actaccordingly is a vital competitive factor. In order to do this an external
analysis is appropriate to use. Why isthis so important? Changes in a company’s environment can
radically change the conditions for their operations. Additionally, the rate at which changes occur
nowadays has increased tremendously. The benefits of conducting an external analysis are that it helps
to generate profits, helps to support change, helps to cut costs, and increases knowledge and supports
learning.

2.1. Macro environment

KFC operates in a larger macro environment of forces that creates opportunities, but also threats.
(Kotler et al 2003). A company such as KFC usually cannot influence trends in the macro environment, as
they affect people and organizations on a larger scale.However, KFC has to carefully examine macro
environmental trends and must create competitive responses to such trends. There are six major macro
environmental forces KFC has to take into account.

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152.1.1 PEST Analysis

PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an
acronym for the Political, Economic, Social, and Technological factors of the external macro-
environment. Such external factors usually are beyond the firm's control and sometimes present
themselves as threats. I’ll discuss the PEST analysis starting with the political analysis, followed by
economic, social and technology analysis.

i) Political Analysis:

Though there is several political insatiability occurred in Bangladesh, it has not any big impact on KFC.
Hence, they might face some problems in the last year when there were constantly strikes and hartals.
Government is friendly to the fast food industry so that this industry is growing up. Moreover
Government is earning huge revenue from this industry.

ii) Economy:
Bangladeshis one of the growing economies in the world. Bangladesh is developing from an agriculture
based economy to an industrial manufacturing based economy, though the country maintains strong
manufacturing, service and agricultural sectors.. Bangladesh is still surviving to be politically and
economically stable and is open to foreign investment.iii)

Social -Cultural Environment

: Society's attitudes have changed in the past decade toward eating healthier food selections, eating
fewer fried foods, and eating more

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reduced-fat food selections. The majority of KFC's menu items are fried foods. Today, KFC’s customers
generally choose the restaurant they will eat at based on quality, rapidity and variety of items. KFC’s
customers are also really price sensitive and will go elsewhere if they find that the value is not worth the
price. The customers can also be characterized by being people that want to be served fast and be out of
the restaurant in no time. This is due to the increasing. In, Bangladesh KFC is decorating their outlets in
different national and cultural events.

iv)Technological Environment:

As the technology continues to improve, it creates unlimited opportunities for innovation. Technology
helped restaurant chains a bit by increasing productivity and efficiency.

2.2. Porters 5 forces Model Analysis on KFC

Buyer Power

The factor of a lot of competitors such as Pizza Hut, BFC, Nandos, CP, the loyal and potential customer
are starting to decline and this caused a big loss to KFC. Customer can go to any fast food restaurant that
offered more affordable price especially to students which requiring a lot of money to survived. To
attract their consumers back, KFC start to decrease their prices and give a discount of their products to
the consumers. So, the buyer power of KFC is high when this proved that the consumers able to
influence the pricing when they has many choices

Supplier Power

There are a lot of suppliers available for KFC’s raw materials. KFC can easily switch their supplier to
another supplier since the materials need in the process of producing KFC is easily to get such as
chicken. In 2004, KFC has some internal problems and issue regarding of their raw chicken supplier was
found doing something horrible when butchering the chicken. KFC decide to terminate the contract
between them and find the new supplier to replace them. So, chicken supplier can not easily increase
the price for chicken since their supplier power is low. Other than that, KFC also binding a contract