SWOT and PESTLE Analysis of KFC

The report analyzes the SWOT and PESTLE factors of KFC, discussing how they affect the company's performance. The SWOT analysis reveals strengths such as a strong brand image and global presence, while weaknesses include unhealthy food menus and high employee turnover. The PESTLE analysis examines external factors like government policies and cultural barriers affecting the business environment.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
1Purpose of various kinds of organisations................................................................................1
2Explanation of each organisation that is public, private and voluntary....................................2
3Organisational objective and structure of KFC organisation with their interrelations............5
4Environmental factors that impact on the business operation...................................................6
5Porter's five forces analysis of KFC..........................................................................................7
6Relationship between strength, weakness and macro factors...................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

INTRODUCTION
Business environment is a process that shows the functions of internal and external
factors of company and how they influence companies operating activities including employees,
customer and their business regulation. Here in private company KFC organisation is chosen and
in public company Tesco company is chosen and in voluntary organisation Wellcome Trust is
chosen to analysis purpose of different kinds of organisation. In the present report it will be
discussed the ability of business organisation to survive in both micro and macro environment
factors. Three types of companies are chosen to describe this situation that is public limited
company, private company and voluntary organisations. Flat structure of organisation is
provided in organisational objective and structure. In this report an introduction will be provided
with the vision, mission and business objectives of company. Further it will be discussed about
the functions of chosen organisation using PESTLE and SWOT analysis.
Task 1.
1Purpose of various kinds of organisations.
Business organisations are divided into three parts that is Public companies, private
companies and voluntary companies. Companies which run by the government are part of public
companies.(Belás.and.et.al., 2015.) Companies which run by individuals for profit are part of
private and companies which has objective of charity and non profit are part of voluntary
companies.
Private companies. Private company or close corporation is the type of business which generally
runs by either individuals or small numbers of openers. Their main aim is profit maximization,
shares do not trade on public exchange but may issue stock and have shareholders. At the start of
2017 there are 3.4 millions sole proprietorships in UK which means 60% of total and 990000
employers are working. Every company has maintained their social responsibility towards
business environment KFC is a company which is expanding their business towards maintaining
health and safety guidelines, animal right campaigns etc. so that business environment does not
affect. KFC is maintaining food safety guidelines which does not affect peoples after eating their
products, they also maintaining good hygienic ingredients while making food process in the
company.(Brink., 2017.)
Public companies. Public company is public ally held companies whose shares are to be traded
on the stock exchanges. The ownership of these companies generally is in the hands of
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government and after that shareholders, board management and public shareholders. Currently
less than 1000 companies are trading in London stock exchange. TESCO is a public company
which is expanding their business for the growth of business environment by providing internal
process like recycling, reducing consumption, influencing customer to sustain business
environment. Many governmental events are running by the public companies to educate peoples
for maintaining environment and certain guidelines are explained to them for better business
environment.
Voluntary organisations. A voluntary organisation business does not have any profit motive
infect they do business to provide benefits to society or to do charities to help the societies
without any government interventions. Money earns by this organisation usually invest back to
provide benefits to the society.(1,62,965) organisations are doing business in voluntary
organisation. In UK it is estimated that these sectors contribute £11.7 billion to gross value
added. WELLCOME TRUST in UK is doing business in non profit organisation which is also
targeting to provide best in business environments like campaigning, offering information and
advice so that peoples can change their lives which does not affect the business environment.
(Bromley and Meyer, 2017.)
2Explanation of each organisation that is public, private and voluntary.
Public (TESCO) Private (KFC) Voluntary
(WELLCOME
TRUST)
background TESCO started when
JACK COHEN started
selling groceries in
East England of
London from a stall.
Growth opportunities
expand in 2000 and in
2010 TESCO opened
world's first Zero-
carbon supermarket.
By the year 2018
It is world largest
company which has
more than 10
thousands location
across the world and
they are best in
providing the chicken
fast food services.
JOHN Y BROWN and
JERRY MESSY
purchased it for $2
It establishes in
LONDON and is a
biomedical research
charity trust. SIR
HENRY is the founder
of this trust.(Chen,
2018) He wanted to
use the profits of
company in medical
research by doing
charity. Wellcome
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TESCO merge with
Wholesaler Booker
Group.
million in 1964. in
1986 PEPSI
companies buys KFC
and then 10000
restaurants were
opened japan and 9000
in china.
trust continuous to
grow in 2016 and their
investment portfolio
was worth £20.9
billion.
vision TESCO vision is to
make strategic
decision by which
company business will
be most highly valued
among their
customers, and
communities in which
they business and
among their
shareholders too.
Their vision is to build
an organisation which
is dedicated to provide
the best excellence
with superior quality
of food.
Their vision is to
provide nutritions and
health in the
environment, to
provide various
funding in initiatives,
improves health with
continuous research
with society.
Mission Mission is created a
value for customer
which provides them
lifetime loyalty of
customers. To grow
business which is full
of opportunities and to
innovate ideas which
modernise the
companies earnings.
Mission is to become
the best leading
industry in food
services and
maximising
profitability, and to
improve their
shareholders values.
To increase sales with
maintaining high
quality of products in
fast food services.
Mission of
WELLCOME TRUST
is to build string
relations with the
society so that doing
research in the medical
will provide
improvement in
human and animals
health.
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objective TESCO objective is to
create a product which
is fair in price with the
best quality so that it
helps them to lead in
market of competitors.
Objective of KFC is to
expand business in
worldwide to provide
better and faster for
the customer by
providing the best
quality in selling the
chicken to beat the
competitor in market.
Current objective of
WELLCOME TRUST
is to invest £5 billion
in next five years to
improve the heath of
humans and animals
by continuous
research.
Legal structure TESCO maintaining
rules regarding legal
structure of public
companies that is it is
run by board of
director which is
appointed in annual
general meeting which
is voted by
shareholders.
KFC maintaining rules
regarding legal
structure that is one
shareholder is must,
where company is run
by board of directors
and headed by
chairman.
There is no particular
legal structure for
voluntary organisation.
Products and services TESCO do business in
providing Groceries
items like Dyson
cleaners, Toshiba
widescreen TV, roses
with vase etc.
KFC provide services
in making fast food
services like mashed
potato, Mac and
cheese and its
premium product is
making of Chicken.
The main service of
WELLCOME TRUST
is to do research and
innovation which
helps in improving
health’s of humans
and animals.
Size Its size is divided
between TESCO
SUPERSTORES and
TESCO EXPRESS
KFC operates its
business around the
world because of this
its operations are wide.
This charity
organisation has the
largest investment
portfolio and it is the
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SHOPS which is
averagely 1000 square
meters. (Ifinedo, Pyke.
and Anwar,2018.)
world's second largest
foundation.
stakeholders Stakeholders includes
creditors, employers,
government, suppliers,
unions, and every
public company has
this community to run
the business.
A private company has
maximum 200
shareholders but the
employees do not
count in the
shareholders.
Stakeholders in these
organisations can be
patients because they
providing services to
health of humans.
3Organisational objective and structure of KFC organisation with their interrelations.
Organisation structure in a company shows how activities are allocated in organisation,
for achieving the task with proper coordination and supervision. Different types of structure
companies follow like Tall, Narrow and Matrix structure. Here our company. There are many
structures which company follows but in particular KFC follows FLAT STRUCTURE. As
company has departmental function like human resource departments, production departments,
finance departments, top authorities so for communicating with each other FLAT structure in
company is followed. It eliminates the salaries of middle level management which reduces
budget cost.
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Illustration 1: organisational chart
source:(Flat Organisational Structure,2018)

This structure helps to evaluate the level of responsibilities among employees by removing
excess levels of layers in the organisation. In this structure, employees are given authority to
execute the decision which is used in daily routines. It helps in increasing cost saving, employees
are collaborated to work with proper coordination and team management. As this structure
provides authority to employees innovation and creativity is much better in the organisation. Flat
organisation helps to become more adaptable because employees and work groups are so
motivated that they handle the situation at their own level.(Kew. and Stredwick, 2017) By giving
an opportunity to speak and submitting views company gets many news ideas which helps in
doing innovation in the company.
Flat structure decreases the communication gap between the employees which helps
management to attract more individuals to work in an organisation. KFC applied this structure to
achieve their vision and mission which is to expand the business in all over the world.
4Environmental factors that impact on the business operation.
Pestle can be defined as tool to know what macro factors affect the business. This study
of macro factors are used by organisation to minimise the effect of these on organisation because
these factor cannot be ignore. External environment have indirect impact on business function.
Theses factor are external environmental in which a business run. PESTLE analysis use by
organisation to know about factors that may indirectly create variation in result and outcome.
Political factor.
Political factor affects a business by its tax rate policy, employment lows, health low,
consumer protection regulation, foreign trade policy, ease of doing business facility, protection
to cultural practice. Provided by the government etc. lack of political stability hamper the
working of the organisation by frequent changes in low or biased policies.
Positive: government provide ease of doing business policy arrangement to KFC for establish
more stores in semi rural area like low interest rate for infrastructure development loan . KFC
follow
Negative: for consumer health protection government increase the credentials for healthy
chickens which lower the raw material span to KFC as well as enhance the cost to avail only
high quality chicken.
Economical factor
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Economic factors impact on business finance resources and income as inflation, disposal
income, banking facilities, unemployment rate, tariffs and barriers, labour cost, infrastructure
availability, skill and competency level of workers etc.
Positive: in Asian country KFC hire labour in low rate as comparison to European countries.
KFC also use the excellent infrastructure facility like public transportation, electricity and energy
in its business day to day function.
Negative: KFC also faced the 2008 economy crisis in which high inflation reduced the
purchasing power of people so sale reduced drastically and shutdown of various store to as cost
cut practice used by KFC.
Social factors
Social and cultural factors are set of believe, opinion, ethics, values, behaviour practice
and accept by a group or community. It also includes age, education, family. These factor give
idea to business kind of product are suitable, advertising strategies can be use, prohibited
practices.
Negative: So many times KFC face oppositions by animal welfare organisation by animal lover
group. KFC can not use beef as its raw material because in Asian countries cow is symbol of
god and people worship cows.
Positive:KFC provide and make its product after doing social audit. It provides different type of
product which varies in different country according to social and cultural practice like KFC open
its vegetarian outlet in some countries where non veg food have low demand ..(MAYELLA.
and Ryan, 2017. )
Technological factor
Technology increases the efficiency of current resources available for production,
distribution, marketing and other activities. Technological factor consist of technological
infrastructure like computer access, internet, technological education and skill, communication,
updated machines and software, laws regarding using of particular technology etc. technology
help in save time and labour cost and take competitors advantages.
Positive:KFC make itself update in technology by develop mobile app which provide distance
measure of nearby store, use website, social media for marketing.
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Negative: frequent change in technology like enhance the cost of KFC like latest technological
use by its competitors in production and marketing, also forced KFC to adopt the change very
fast.
Legal factor
Rules and regulation cover with low are the legal factor. Finance and borrowing
regulations, Contract law, customer protection law, environment law, labour law, public health
and safety law are come in this legal structure.
Positive: KFC follow all the rule and regulation regarding its food making and labour law. These
obedient nature of KFC boost its image in customer and labour. People want to work with KFC
as they know they will get fair treatment.
Negative: KFC has to pay its customer high amount in customer protection law even false
complaint register by customers.
Environmental factor
Environment factor include available natural resources, climate, geographical factor,
pollution, waste and recycle policy ,carbon footprint policy etc.
Negative: KFC has to earn high carbon emission point cause animal is major source of methane
gas emission in environment.
Positive: KFC put environmental initiative in its CSR policy like animal husbandry and effort of
waste management and recycling.
5 Internal and external analysis of KFC
Strength
 string brand image
 sound financial condition
 global presence
 impressive secret recipe
Weakness
 unhealthy food menu
 high employee turnover
 untrust worthy suppliers
 lack of marketing efforts
Threat
 government policies
Opportunity
 fast acceptance of non veg food in
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 Opposition by famous animal
protection bodies .
 High competition
 less product differentiation
 cultural barriers
 bird flu
ASIAN countries
 health food product
 can provide home delivery option
 improvement in quality of food
 Own chicken manufacture unit can be
open for avail the best raw material.
6Relationship between strength, weakness and macro factors.
SWOT analysis of KFC shows strength, weakness, opportunities, and threat factor which
affecting the company. But now it is to be discussed that what is the impact of political,
economical, social ,environmental, legal and economic factors on macro factor's of company.
 Product diversification. As company has product diversity it will give its impact on
social factor that teenagers and children affect more to try the new products. Economic
factor also affected because now people are more conscious towards what to eat and
product diversity does not provide good benefit to company.
 Adequacy of funds. If company has enough funds to invest then economic factor does
not affect as company does not have reduction in income of the company, also
technological funds improves by new ways goods and services, improves new way to
target the customers.
 Unhealthy food ingredients. Because of this weakness, company's economic factor will
affect as people cannot buys the food which is not nutritious. Legal factor of company
also get affected because food safety is the legal policy of the company.
 Low range of vegetarian food. This weakness affects the political factor of the
organisation as company serving large amount of non veg food it means that more and
more animals are used in making the food on which government can imposed restrictions
on the company. (Oliveira and.et.al., 2017.)
Conclusion.
From the above study it is to be concluded that market essentials plays an important role
in creating marketing in the organisation. Firstly different types of organisations are explained
and then detail explanation of organisation that is public, private and voluntary with example are
discussed in this report. KFC organisation is selected in this report to provide detail information
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of their objective structure and their interrelation with macro factors of the business environment.
Detailed information is analysed by SWOT and PESTLE analysis with the impact of strength
and weakness on macro factors of the organisation.
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