Kentucky Fried Chicken

(KFC)
NAME:
INSTITUTION:
 Overview of KFC

 KFC is a fast food restaurants chain that originated from

Louisville, Kentucky in the US. It mainly sells chicken wraps,
pieces, sandwiches and salads but the primary focus is on fried
chicken.
 The company’s founder is Colonel Harland Sanders who
established the restaurant in 1952 (KFC,2020).
 The organizational structure of the company is determined by
various factors which shape how they will be used depending on
the country they are in (KFC,2020).
 The factors include social customs, beliefs, values and goals of
the existing managers where technology and environmental
constraints are determined as well.
KFC Organizational Structure

 KFC bases its organizational structure on the notion that

an organization needs to possess significantly
impermeable and easily accessible boundaries.
Therefore, they focus on differentiating their
organization from the environment.
 KFC has adopted use of technology in formulating
organizational structures in different countries through
the use of office management systems utilized for
completing and integrating work (Chicken, 2017).
 KFC focuses on two main group structural variables to
establish organizational structure: roles and position.
Organizational Structure Type

 KFC applies the divisional organizational structure. This type of structure consists of two
components which have distinct functions on the bases of the operational requirement
(KFC, 2020).
 Each division controls a particular operational area or strategic objectives.
 The main aim of this corporate structure is supporting organizational flexibility and
autonomy when satisfying business needs within varying markets and organizational
aspects.
 Some of the characteristics of KFC’s organizational structure in relation to the business
operations of the food service include; function-based groups, performance-based
decisions, and global hierarchy.
PEST Analysis of KFC (External Analysis)

 Political: Some countries are politically unstable and especially when frequent strikes are
held; this affects the KFC operations.
 Economy: The economy of a country determines if KFC will continue with its foreign
investment or risk losses due to a unstable economy.
 Social-Cultural Environment: The attitudes of society change and this changes the
preferences of customers; for instance, preference for healthy foods
 Technology: Technology helped KFC improve efficiency and productivity but negative
opinions from social media especially if they have a negative experience in their
restaurant, can ruin reputation and lead to losses.
 KFC SWOT Analysis (Internal Analysis)

 Strengths: Strong position in international market,

partnerships with similar brands, and unique chicken recipe
that gives it a competitive advantage (Omer, 2018)
 Weaknesses: Negative publicity, unreliable suppliers, high
employee turnover, and unhealthy food menu.
 Opportunities: Home meal delivery, increased demand for
healthy food, and introduction of new products to the
chicken range option.
 Threats: Intense competition especially in developed
economies, healthy eating trend, local fast food restaurants,
and economic degradation.
Challenges in International Operations

 Different countries have different cultures, KFC had challenges in adapting to cultural
differences like the working hours that are culturally acceptable in a country and the
relationship between the employee and employer (Huang et al., 2015).
 Competition is vigorous internationally and with major competitors like McDonalds,
Burger King and more, the international operations are forced to strive to adapt new and
unique strategies to remain at the top.
 The distance of foreign franchises from the headquarters make it complex to control
quality of the individual franchises.
 The policies in the foreign markets have also made international operations difficult such
as the ban of poultry importations in Indonesia and Malaysia. This leads to product
shortages.
Cont’d…

 KFC has had some internal issues regarding their supplier of raw chicken who was
discovered to have butchered the chicken inhumanely. Such issues lower their supplier
power and increase costs.
 The perceptions of the consumers are changing and they want healthier food rather than
fast food. This has hindered KFC business operations and lowered profits in some parts of
the world (Hussain, 2014).
 Negative publicity from animal rights groups over the poor conditions that the chickens
have been raised in have damaged the reputation of the company.
 The company has high employee turnover due to the fact that it is a low skilled job. This
has hampered their performance and increased training costs.
Solving the Challenges

 KFC has indulged in Corporate Social Responsibilities (CSR)

globally and has become among the most popular company
for its good CSR policy. Some examples are the KFC
Foundation, Supplier Code of Conduct, diversity and more
(Huang et al., 2015).
 The enterprise has shifted to the local communities of the
foreign countries as a way of learning their needs and
incorporating them which increases revenue generation.
 A diverse menu has been introduced as a way of levelling
with the local competitors within the foreign countries.
 They have also improved the employees’ salaries by aligning
their pay with restaurant performance and customer service.
Cont’d…

 KFC has re-established and maintained emphasis on cleanliness and upgraded their
restaurants while focusing on service delivery and maintaining product consistency.
 The needs of the local market have been fulfilled through hiring local employees and
providing a menu that contains items relevant to the respective culture.
 The enterprise has also expanded its operations to each divisional city within the foreign
countries by establishing outlets as a way of expanding the business and gain a
competitive advantage.
 Subsidiary products have been cut out in order to save costs.
Conclusion

 KFC has put in additional efforts to overcome the competition through launching and
improving their menu. For instance, vegetarian meals can now be found in the restaurants
and this has expanded their customer base as well as the volume of sales.
 It is evident that cultural differences must be addressed and alternative menus need to be
developed for particular cultures while maintaining its core product; fried chicken.
 In order to maintain consistency and efficiency, KFC maintains the quality of its food
irrespective of the country its restaurant its in. Therefore, customers are able to recognise
and identify themselves with the meal every time they visit the restaurant.
References

 Omer, S. K. (2018). SWOT analysis: The tool of organizations stability (KFC) as a case study. Journal
of Process Management. New Technologies, 6(4), 27-34.

 KFC (2020). About us. Retrieved from http://www.kfc.com/about/

 Hussain, S. (2014). The impact of sensory branding (five senses) on consumer: A case study on KFC
(Kentucky Fried Chicken). International Journal of Research in Business Management, 2(5), 47-56.

 Chicken, K. F. (2017). Competitive Strategy Of KFC.

 Huang, Z., Guo, Y., & Li, C. (2015). Chain Restaurant Industry Supplier Selection and Performance
Evaluation: A Case of KFC in China. In LISS 2014 (pp. 41-48). Springer, Berlin, Heidelberg.