Risk and Crisis Management Proposal Assessment 2022

Running head: RISK AND CRISIS MANAGEMENT 1
Risk and Crisis Management Proposal
Institution

RISK AND CRISIS MANAGEMENT 2
Contents
Introduction....................................................................................................................4
Increased competition....................................................................................................6
Suggested strategies....................................................................................................6
Introducing new and healthier products..................................................................6
Stakeholders responsibility.........................................................................................6
Future Actions............................................................................................................7
Plan of Action on Risk Eventuation...........................................................................8
Impact Assessment.....................................................................................................8
Employee Retention risk................................................................................................9
Analysis......................................................................................................................9
Hiring on a Contract Basis......................................................................................9
Good relations with employees...............................................................................9
Stakeholders responsibility.......................................................................................10
Contract hiring......................................................................................................10
Establishing good relations with employees.........................................................10
Future Actions..........................................................................................................11
Plan of Action on Risk Eventuation.........................................................................11
Impact Assessment...................................................................................................11
Contaminated food.......................................................................................................12
Analysis....................................................................................................................12
Strategies..................................................................................................................12
Future Actions..........................................................................................................13

RISK AND CRISIS MANAGEMENT 3
Plan of Action on Risk Eventuation.........................................................................13
Impact Assessment...................................................................................................14
Conclusion....................................................................................................................14
References....................................................................................................................15

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Risk and Crisis management Proposal
Introduction
KFC Food Company is a remarkable fast-food restaurant company that is popular for
dealing with fried food, especially chicken. Colonel Sanders special chicken recipes have
gained popularity from KFC's customers, together with their attention capturing campaign
slogans such as the 'finger-lickin' good' slogan. However, the food industry is a very
competitive field, especially because consumer appetites and eating habits keep changing. It
is, therefore, a struggle to keep up with customer satisfaction and yet remain at the top of
market share ranks.
Risk and crisis management during its operations is an important part of supply chain
management in KFC. As evident from the risk management table, it continually faces crises
like lawsuits from food regulatory bodies such as People for the Ethical Treatment of
Animals (PETA) and unsatisfied consumers. Other risks include competition from companies
such as McDonald's, fluctuations of currency value in the global market, and employee
turnover.
This report analyses three different risks, as stated in the risk table, giving strategies
that can be put in place as a prevention measure. It also details a risk management plan for
the risks, that handles both preventive and control actions in the event of their occurrences.

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Risk
Category
Risk Type Stakeholders
Affected
Likelihood
Rating
Consequence
Rating
Risk Control
Method
Contaminated
Food
Physical Customers A 2 Elimination
Employee
Retention rate
Human Employees C 3 Process
Increased
Competitors
Market Internal
Stakeholders
B 1 Process
PETA Legal Internal
Stakeholders
E 4 Administration
Government
Regulations
Legal Internal
Stakeholders
D 5 Administration
Dollar value Financial Internal
Stakeholders
D 5 Administration
Lawsuits Financial
& Legal
Internal
Stakeholders
E 5 Administration

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Increased competition
KFC faces competition from other successful fast food companies around the world.
Their competition majorly comes from companies like McDonald's, Subway, Burger King,
and Domino's Pizza (Herminingrum, 2020; Cafer, Willis, Beyene, & Mamo, 2015). The
likelihood of occurrence of the risk is ranked as highly likely it is imminent daily. Increased
competition is a market type of risk facing the company. This is because it affects the
company's market share and consumers
Suggested strategies
Introducing new and healthier products. Fried products such as fried chicken are
associated with health risks such as cardiovascular conditions (Hu, Li, & Campos, 2018;
Owen, et al., 2016). Consumers are currently looking for food products that can satisfy their
eating habits and still keep a healthy lifestyle (Omari, Ruivenkamp, & Tetteh, 2017). Cultural
beliefs also determine people’s eating habits (Sari, Mizerski, & Liu, 2017). An example is the
Israeli culture that is preventing the penetration of KFC products in the region. It is, therefore,
of crucial importance for KFC to introduce new products that are appropriate for these
cultures and is healthy enough for the consumers to appreciate (C.Murphy & S.Dweck,
2016).
Strategy steps
 Formation of a research and development center (Michelle A. Joyner, 2017).
 Formation of the KFC food research team.
 Extensive research on new products incorporating conservative cultures, vegan
culture, and healthier recipes.
 Promotion and introduction of new products.
Stakeholders responsibility
Strategy parts Stakeholders Timeframe Resources

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responsible Required
Research and
development center
Financial department
Project management
department.
1 year Money to acquire
research facilities
and equipment.
Formation of a
research team
Human resource
department
8 weeks Money to hire a
research team
Extensive research
for the products
Research team
Financial department
Continuous process Money to enable
different research
ventures and
testing
Introduction and
promotion of new
products.
Production department
Marketing department
Continuous Process Money to hire an
advertising team
Money to conduct
promotions
Future Actions
Future actions regarding the strategy of introducing new products should be follow-up
with consumers to get their feedback on the products. To maintain profitability, a product
should be popular in the market, ensuring a large number of sales. The company can obtain
feedbacks by engaging customers on the company website or social media (Bhatia, Li, Peng,
& Sun, 2013; Scott, 2013; CIPR, 2013). Feedbacks help the company to make necessary
changes, thus achieving growth.

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Plan of Action on Risk Eventuation
Increased competition in the market can cause a phase-out of the enterprise with the
lowest market share. It is a challenge that KFC experienced with McDonald's in Israel. The
primary remedy to control competition is to re-evaluate the company's marketing plan. The
company can remain relevant in the market through intensive product promotions and
extensive advertisement. The company should come up with more adverts like the "Finger-
lickin’ good” advert (Bacovia, 2018). However, the slogan is currently failing because it
contradicts with the coronavirus prevention measure. KFC should, therefore, introduce an
alternative that keeps them at the bar or ahead of their competitors in sales.
Another step to save a company’s market share is customer incentives, such as
buy a product and getting additional products for free (Ghezelbash & Khodadadi, 2017). It is
a promotion strategy that could save KFC’s customers from shifting to other competitors who
offer better and cheaper services
Impact Assessment
KFC faces competition from a wide range provider, including supermarket
preparing their chicken for sale. Competition, as much as it keeps a company on its toes,
always self-improving; it has adverse effects on companies' income.
High competition facing KFC will lead to an increase in money value spent by
companies in the promotion since they have to be perfect and better than their rivals'. The
company may need to make their products cheaper to increase their number of consumers, or
better, maintain their existing ones. This reduces their earnings. In the worst-case scenario,
the company may be forced to have unplanned partnerships to avoid being phased out. This
entirely leads to losses and, therefore, low annual returns obtained from the business.

RISK AND CRISIS MANAGEMENT 9
Employee Retention risk
Analysis
Employee retention is a common risk that fast food industries, including KFC,
have to deal with often. KFC is a busy enterprise with a wide supply chain. Its operations
range from raw food sources, food preparation kitchens, fast food restaurants, and transport
logistics. It is, therefore, difficult to adhere to every employee's needs, and combined with
huge workloads, there is often a risk of employee turnover (Adnan, Rahman, & Ahmad,
2018). The employee turnover rate in KFC in 2015 was estimated at 50%. Jobs like
waitressing and cleaning do not often require a lot of skills, and they attract low wages. They
work for long hours, usually because of overload. Worker absenteeism is, therefore, common,
even for KFC.
Employee retention is classified as a human risk type, as it involves the
company's human resource. It is a problem that the industry is constantly dealing with, but
they have been using measures such as employee training and encouraging employees to
voice their grievances. Owing to these mitigation steps, the likelihood of the risk is of a
moderate level to the company.
Control Strategies.
Hiring on a Contract Basis. This means that the recruited workers will sign a
contract that states their terms of service, the contract period, and the consequences of
violation of terms (Fahn, 2017). This will encourage the workers to strive to their terms of the
contract. The strategy will start by definition of the contract terms, evaluating the relevance to
their hiring criteria and, finally, implementation.
Good relations with employees. This is achieved through constant incentives and
rewards for good jobs. Employees should also be encouraged to speak up about workplace
conditions. This can be done by enacting company welfare platforms that serve this purpose.

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Stakeholders responsibility
Contract hiring
Strategy parts Stakeholders
responsible
Timeframe Resources
Required
Defining contract
terms
Human resource
department
12 weeks Contract filing
team.
Evaluation of
contract
Contract Manager and
internal and external
audit team
8 weeks Money to hire
external audit
personnel
Strategy
implementation
Contract Manager,
hiring team
Continuous operation Money for
employee
recruitment
Establishing good relations with employees
Strategy parts Stakeholders
responsible
Timeframe Resources Required
Incentives and
rewards
Section managers Continuous
process
Money to actualize the
incentives
Design a Platform
for sharing
Welfare team -
Management and
employees, IT
department
8 weeks Web designing team
Money to hire the personnel if
non-existent.
Future Actions
There is a need to review contract terms regularly to ensure that employees' needs are
well-considered. Review of employee opinions is also important as it helps the company

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identify the real problems affecting them (Stamolampra, Korfiatisb, Chalvatzisb, & Buhalis,
2019). Employee opinions also give insights for business improvement.
Plan of Action on Risk Eventuation
In the event of high employee turnover, the instant remedy is recruiting a temporary
team to handle the large workloads and the long waiting lines. The company should also
consider increasing the wages of the remaining employees to give them morale. They may
also consider creating promotion opportunities for employees. To manage the crisis, the
existing employees may be promoted in the merit of experience. That way, they can help in
orienting new employees.
Another remedy to be considered by the company is outsourcing delivery logistics to
other service providers. This way, the service providers bring in their teams who handle their
deliveries. This eliminates the company from the direct impact of employee turnover.
Impact Assessment
The emergence of a situation high employee loss can be devastating. For example, a
KFC restaurant with 50 employees earning $10 per hour and a turnover rate of 50%; will
leave about 25 workers on average in every shift. This lowers the service rate by half
resulting in a doubled waiting time. As a result, customers are dissatisfied, causing the
company to lose customers to its competitors.
Costs are incurred in hiring new workers, who might demand more pay, reduced
production capacity, which results in low profits. This is a case of one premise. The
cumulative cost of high employee turnover in the entire company can lead to enormous loss
of profits.

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Contaminated food
Analysis
Food contamination can be a common occurrence in the food industry if cleanliness
and good food handling procedures are not observed (Baron & Frattaroli, 2016). It makes
food unfit for consumption. KFC has been facing bad publicity due to claims that it uses
impure chicken bred with antibodies. Food contamination is a physical risk that faces KFC’s
supply chain as it affects the products flowing in the chain. The risk has a very high
likelihood of occurring. Its consequences are large losses resulting from lawsuits and closures
from food quality regulating agencies
Strategies
Food inspection strategy. Food inspection involves the examination of foods (both
raw and processed) to ensure wholesome and clean products free from unsafe microbes or
chemical contamination, natural or added harmful substances, and decomposing during
production, processing, packaging. It is a strategy that is appropriate for food handling in
KFC. The food inspection strategy involves the introduction of a system to inspect raw food
on receipt in KFC kitchens and attaching inspection cards as evidence of inspection (Lee,
2013; Varavikova & Tulchinsky, 2015; Young, Waddell, Wilhelm, & Greig, 2020). Certified
food quality inspectors also inspect cooked food before transiting to restaurants.
Strategy Steps
 Design a process of the food testing system and inspection cards.
 Evaluation of the inspection process.
 Implementation of the process.

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Strategy parts Stakeholders
responsible
Timeframe Resources required
Designing the food
testing process.
Food safety
department
Employees
8 weeks Financial resources
Evaluation of the
process
Food safety
department
Internal audit team
2 weeks Money to evaluate the
process
Implementation of the
process
Employees Continuous process Financial resources
Future Actions
Educate the employees handling food. The employees handling food in the
company, such as chefs and waiters, should be educated on ways to handle food to avoid
contamination regularly. The employees should be made well aware of food contamination
implications for the company. In the same way, they should be trained in teaching new
employees about proper food handling methods (Onyeneho & Hedberg, 2013).
Plan of Action on Risk Eventuation
In the event of the occurrence of food poisoning incidences, customers
become reluctant to purchase the company's products. It may also lead to lawsuits from
affected parties, which cost the company unnecessary losses. The main control measure for
such instances is to issue apologies to affected customers. The company, on the verge of
lawsuits, is obliged to pay up the fines; failure to do this usually attracts negative publicity,
which harms their business. Appropriate advertisements and promotions should follow these
negative business encounters to boost consumer morale.

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The company also has the freedom to sue sites that spread false news about their
operations online. This acts as a lesson to others who use cybercrimes as a thriving tactic in
competition.
Impact Assessment
The immediate consequence of food contamination in KFC Company is food
poisoning. Consumers who experience this lose their interest in the company's products. They
also share these experiences on social media, discouraging others from purchasing. This
diminishes the company’s popularity leading to a reduction of its market share. A reduction
in the market share reflects losses in return from business. Bad publicity in social media
escalates very fast. It can, therefore, lead to devastating losses if not immediately handled.
Conclusion
There is a need for a company with a large supply chain like KFC to foresee risks in
its supply chain to prevent them. It instills stability in its business operations, leading to
constant profitability. The main risks facing the company as from the SWOT analysis are
increased competition, employee turnover, and bad publicity due to food contamination. Risk
mitigation measures such as increasing employee satisfaction, implementing systems for
thorough food inspection, and the introduction of new products should be given priority in
handling these challenges.

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