Crisis Management: Key Issues Faced by KFC and How It Handled the Crisis

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Crisis management
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Introduction
A crisis is a major, unpredictable event that threatens operations of a company,
customers, staff, legal, financial status and reputation of an organization. Furthermore, a crisis
can strike any company at any time regardless of size or notoriety and can affect an organization
unexpectedly. Research conducted by Al-Jenaibi (2019 p.89-107) shows that over 30 companies
face crisis annually and each company uses a different strategy to manage its crisis situation. A
Crisis is experienced in various forms such as allegations of misconduct, product recalls, layoffs
and strikes. Although some crisis is termed as “small”, every crisis has the potential of damaging
an organizational reputation as well as its market share. Several companies have lately faced
crisis including united airline (customer care failure crisis) Equifax (data breach crisis) and
Kentucky Fried Chicken (KFC, Chicken shortage crisis.). Therefore, the paper seeks to examine
the key issues faced by KFC Company and how it managed to respond to the crisis.
Overview of KFC’s Crisis
KFC, short form for Kentucky Fried kitchen, is the second largest fast food franchise
restaurants after Macdonald Company. Colonel Sanders founded the company in 1952 and it
spread to various countries globally including United Kingdom (UK), Malaysia, China and
others. Despite its success in the industry for a couple of years, the company has faced many
crisis with UK’s food Chicken crisis being the latest. In 2018, KFC closed more than 300 stores
(half of its 900stores) in the United Kingdom after the company that literally have “chicken” in
its name ran out of chicken (Baryannis, Dani, Validi and Antoniou, 2019 p.53). The crisis
erupted in mainstreams and social media who enjoyed the irony of the shop as some termed it as
“a chicken shop without any chicken”. The shortage of the chicken arouses form delivery
problem after the KFC’s supply chain switched its contract to DHL Company that uses software

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developed by the firm Quick Service Logistics (QSL). Furthermore, DHL Company had
previously experienced “administration problem” and therefore a number of deliveries were
delayed and others canceled. The crisis favored MacDonald Company (main competitor of
KFC’) that gained competitive advantage and fully benefited from the crisis as loyal customers
and new customers vented on Twitter and later moved to McDonald. After the crisis, KFC’s ran
an apology advertisement to its customers for the inconvenience it caused. In the apology
advertisement, KFC Company advertised using a brand’s core young consumers while taking the
ownership of the problem as a way of emphasizing it was a short-term problem to be resolved as
soon as possible. Later on, media and customers applauded the company after it restored the
crisis within the shortest time possible and it became an example of how other companies should
handle a similar crisis in the future.
Key issues faced by the company
Poor planning was an issue that was associated with crisis eruption. If the KFC had a
good plan on its supply chain, the problem could not be experienced to that extent. The impact of
the situation could be minimal and could not affect organizational reputation to that extent.
According to Allen, McLees, Richardson and Waterford (2015 p.1) “failing to plan is planning to
fail” and therefore KFC could have planned for a better supplier or laydown alternative supply
chain in case DHL fails. Furthermore, the plan of management to switch supplier was the poor
decision management made with the consideration that DHL has had a bad reputation in the past.
For example in November 2018, DHL Company engaged in a contract with QSL (a food service
company) and after a short time the company posted on its website, “we are regretting the
interruption of supply chain and we are working to rectify the situation as soon as possible”. The
statement clearly indicates that DHL Company has spoiled the supply chain integrity that was