Business & Business Environment

This report covers a brief description of KFC, types of companies, size and scope of organizations, and the relationship between different organizational functions. It also discusses the positive and negative impact of the macro environment on KFC's business operations.

Business &
Business
Environment

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Introduction
Business is the process of buying and selling of products so that the producer can earn money
and satisfy the needs and wants of the consumers. Business Environment consists of all the
internal elements as well as the external factors which includes factors such as employees, needs
and expectations of customers, demand and supply, their management, suppliers, clients, owners
of the company, interference by the government of different nations, technological innovation,
trends in market and social life, changes in economy etc. this report covers a brief description on
KFC which stands for Kentucky Fried Chicken, it is a restaurant which serves fast food. It is an
American brand headquartered in Louisville. Their special recipe is their fried chicken. After
Mcdonald’s it is one of the largest food chain. They have 22,621 stores in 136 countries. The
company was founded by Colonel Sanders on 24 September 1952. This report covers questions
such as types of company, SWOT analysis, PESTLE analysis of KFC, Interrelationship between
SWOT analysis and PESTEL analysis, interrelationship with marketing factors, scope and
objectives of the company. These all questions will cover the brief analysis of KFC that how
they should operate, where to expand, where to improve.
P 1 Types of Company-
Public Company- Ownership of the company is distributed among the public and the
shareholders who invest in the company. NHS is a public company and it has distributed its
ownership among the public and their shareholders. The shares of the company are traded within
an open market with many people ready to invest in their shares. To establish it minimum of 7
no. of people is required and there is no limit for maximum and requires a paid up capital of 5
lacs and the company whichever private company if it is a subsidiary of the public company then
it will be considered as a public company. To establish it NHS has completed every requirement
which is needed legally to set up a accompany. They have completed their documents such as
Memorandum of Association and Articles of Association and to invite and accept the funds from
public they have made their prospectus.
Private Company- This company is registered by the proprietors when it is operated by a sole
person or a partnership. The scale of the company is not very larges but in exceptional cases it is
large. KFC was established as a private company with minimum of 2 members and they had a
limit up to 200 members. Minimum amount for paid up capital required to start a private
company is 1 lacs and can go up to the suitability of the business. AS a private company KFC
cannot transfer its shares. The company has put some restrictions on it to void takeovers by their
competitors and by that they ensure the safety of the company. KFC does not take any kinds of
deposit from the public as it sells their franchise to the rightful owners who can maintain their
name in the market. With this the issue of selling shares and raising money from the market is
totally gone. Their are only 2 directors in the company and no one is independent.

Voluntary Company- Oxfam serves as a voluntary company in the market. The company has
joined hands with 19 other organizations which serves in charity and focuses on removing the
issues of poverty faced by people globally. These type of companies serves as a non profit
organization and so does Oxfam. The executive director of the company is Winnie Byanyima .
the company was founded in 1942 with headquarters in Kenya. The company has NGOs which
works for giving education to the children and provides facilities to those who are in need. The
aim of Oxfam is to provide equal opportunity to the community of poor people such as wages to
be distributed equally and have equal rights over any issues they face in their life. Company
believes that they must be treated equal in every way. The main focus of the company is to
provide facilities for women and children so that they can reduce their vulnerable conditions.
The legal structure of Oxfam is that they held their trustees responsible for the law of charity and
on their activities and assets.
P 2 Size and scope of a range of different types of organizations
Size of NHS is that they have made their services available in countries such as England,
Scotland and Wales and it is affiliated with social and health care in north Ireland. The company
was established 71 years ago at the time of second world war and they have 170,000 employees
working for them. They provide their services at free of cost for the UK residents but only
charges for services related to dental care and optical care. The patients are also been given
exemption on the charges of prescription. They also made delivery to their patients at free of
cost.
Size of KFC is that they have over 100,000 employees working for them and more than 22,000
stores which are operated in more than 135 countries. It is the second largest food chain after
McDonald’s. according to estimated reported the company feeds around 12 million people daily.
Reports suggest that more than 185 million people see their advertisement. It is because of the
successful marketing that the company achieves so many results and achieves success in the
market. Scope of the company is that they want to serve in every country of the world. As the
company is a international brand which is known by everyone it is easy for the company to
assess this operation and complete the task successfully. Their focus is on increasing their quality
only by doing that the company can increase their share in the market they have targeted. The
goal of the company is to beat McDonald’s and gain their share so that they can capture the
market of fast food restaurants.
Size of Oxfam is that it has joined hands with 20 different organizations so that they can fight
together on issues related to poverty, how they affect and how it is caused so that they can
remove these issues. Scope of Oxfam is that they want to change the thought process of people
so that they can distribute equal powers among people so they can reduce poverty on global
basis. They work on finding ways for the people to fight which are more of a practical approach
and ways which are innovative so that they can get them out of poverty. They help in rebuilding

the lives of those people who are needy at the time of disaster management and help save lives of
people who have loosed hope.
P 3 Relationship between different organizational functions of KFC or any other organization of
your choice and how they link to organizational objectives and structure
Marketing with HR-
The HR department of KFC is more concerned with managing the issues related to diversity in
culture. Mostly in India and China, KFC focuses and aims to expand their market and capture
and obtain more share in the fast food industry. But the department of HR is facing many
problems in managing the team and recruiting the employees because of the cultures in
countries. That is why in western countries KFC is not a successful brand and are not satisfying
the customers because they failed in recruitment and training that is why the company has taken
the help of marketing department to help them out and find them suitable candidates to work
with so that they can grow their name in the market. It is necessary for both the departments to
go hand in hand.
Marketing with Finance-
Finance is needed to carry out the operations in the day to day business operations as without it
no task can be completed be it marketing or any other element. Same goes the other way around
as without the team of marketing company cannot spread its awareness which will result in
loosing profit for the company and if the company has to raise funds from market it cannot be
done without marketing that is why both departments needs to work together and go hand in
hand. Otherwise KFC will loose its efficiency and monetary share in the market.
Marketing with Research and Development-
KFC needs to adapt new technology and resources and enhance them according to the culture
they are operating in. For that both the departments of marketing and research and development
needs to work together. For instance if marketing department is lacking somewhere the R&D
department of KFC will tell them that this area has a lot of scope and when the R&D department
is facing problems like they need men to cope up with the advancements then marketing
department will help find suitable candidates so that KFC can cope up with the market.
P 4 Positive and negative impact the macro environment has upon business operations of KFC
Political factors affecting KFC
In the beginning KFC didn’t used abbreviation for their name they changed it because their
former name gained negative associations for the company that is why they changed it so that
they can save the image of the brand. KFC only deals in proper unhealthy food unlike their

competitors such as Burger King or McDonalds they can make their burgers healthy but fried
chicken will always be unhealthy. That is why they changed their name to abbreviation still now
the company serves the same and high amount of calorie intake food but by implementing this
trick they have changed the perception of the people. KFC has been facing issues such as
disputes on political topics some people wanted to tell general that he is a chicken so they
crushed the bucket of KFC by foot and the logo of the KFC was clearly visible by people. This
was not a publicity stunt instead it could ruin the image of the company.
Economical Factors-
Yum is a brand which owns KFC and many other brands like Pizza Hut and Taco Bell. Today all
of them are struggling in the Asian markets and most of them can’t be seen as they will grow in
future because of the amount of decline in profit the company is facing. The company don’t have
many options as they have already tried changing their name but now the people who are health
conscious won’t be preferring KFC anytime because of their unhealthy menu. As of now the
company is delivering some items which are vegan but they are making more dishes and they are
experimenting sandwiches instead of buns and fried chicken which is their specialty. Just with
implementing and addressing these issues the company has gained its profit share and trust they
lost in the market which is beneficial for the company in both ways socially and economically.
Social Factors-
KFC struggle with issues which concerns to social topics that attaches negative vibes from
consumers to the company. People concerns about the daily wages and mistreatment of workers,
some of them also have thought that the food being served is fresh or not, how it was preserved,
if or not it was injected, kept in unhygienic places which increases the fat content in food. This is
when PETA arrives they boycotts those restaurants who follows and go out of the ethical
behavior. That is why KFC is starting serving healthy and vegan food as healthier options won’t
gives them a chance to spoil their reputation.
Technological Factors-
To beat their competitors in the market KFC is adapting the newest of all the technologies so that
they are not left behind. KFC believes that the if they change the environment for employees
then they will the customer service. As more of the workers working in the restaurant are young
so it will be easy for them to understand the new aspects. They have even started in Australia
there they are communicating with their employees through social media and they are told to
conversate with each other and share their ideas on a common platform. They have also started
providing kiosk services in their outlets so that meals can be ordered directly for them. People
now don’t have to wait in the queue which saves a lot of time of consumers. This idea has

already increased the profit around 20 per cent in Australia. This process is also known as click
and collect feature.
Environmental Factors-
KFC uses paper receipts for bill and packaging of the food which affects the environment as it
leads to deforestration which impacts in a negative way to the health of the planet. This factor
also lead to increase in extinction of species which are already endangered.
Legal Factors-
KFC handles 120 tasks every second and to remain operational like that they follow each and
every law of the country. They do it by filing their proper taxes according to the income,
following laws of labour and ensuring that all the outlets matches up to the safety standard of the
company and if they don’t follow these laws and regulations they may not be allowed to serve in
the market and asked to leave the country.
P 5 SWOT analysis of KFC
Strength-
KFC has the brand value of $6 billion which makes it the second largest company in the market
it is known by people in many countries and have trust in the market because of their marketing
strategies and the expansion in multiple countries. The recipe KFC uses is a secret they never
reveal it to others that is why they have a slight advantage over their competitors. Half of the
money KFC earns comes from China as their market is increasingly growing and they have
4,000 outlets in China alone. KFC partnered with different restaurants such as Pizza Hut and
Taco Bell so that they can offer more varieties to feed more people with more variety. KFC
offers chicken as their main variety and primary product.
Weaknesses-
KFC has faced some issues which were related to contaminated food or were mistreating chicken
which results in loosing of customers and a fall in reputation for the company which also broke
the trust of employees and this all happened because of the untrustworthy suppliers. They faced
many issues from PETA that they sell chickens with kidney and on the conditions that how they
are raised this all issues resulted in negative publicity for the company. The food that the KFC
offers contains high amount of calories, fat and salt. Some organizations fight against it as it
affects the health of people badly. Some consumers are health conscious which reduces the
popularity of the company. To work in companies like KFC low skilled workers are hired as
their pay is low which results in low performance and that leads to cost of training which results
in high amount of employee turnover.
Opportunities-

KFC can reverse its menu from offering unhealthy food to healthy food because demand for
healthy food is increasing in the market which will result in increasing the profit share of the
company. By delivering their food to more and more customers they can fully exploit this
opportunity. KFC is thinking of targeting new kinds of group of consumers so according to that
they will offer a full vegetarian menu, pork or beef menu all according to that which will help
them to reach more and more customers.
Threats-
As the market of fast food industry is already well established in the developed economies, the
company fears that it will difficult for them to make a place in the eyes of the consumers. More
people are preferring healthy food rather than unhealthy food because of the various and
different kinds of attempts by governments. That is why what KFC offers is a threat in itself.
KFC has its own recipes and it can adapt to the culture which they are serving in but they can’t
make it fully according to the taste of local people and they have a large amount of customers
and because of their lower prices in serving the food it is difficult for them to grow in that area.
A part of the income KFC generates comes from foreign markets it becomes difficult for them
sometimes because they want the money in dollar and the currency which is weaker than dollar
will not match up to the currency difference. Issues which the company has faced also include
lawsuits and that too many times they are expensive and takes a lot of time and money from the
company’s account. If the company does not change their way of operating then their will be
more lawsuits to fight.
P 6 Interrelationship between SWOT and PESTEL analysis of KFC-
SWOT and PESTEL are similar approaches to analyze the business. These both approaches
strongly correlates with each other. The only difference is PESTEL of KFC focuses on external
environmental factors that affect the business, whereas SWOT analysis focuses on both internal
and external factors. PEST explores the political and legal landscape by looking at employment
laws, political issues, taxes and regulations that impact the business. By evaluating and joining
both the analysis KFC can know where to improve they know now they have to start offering
healthy and vegan food instead of only fried chicken as more and more people are shifting to
healthy food and the company needs to cope up with external factors. Also by following this
company will not face threat from PETA or any other organization about the treatment of
chicken how they preserve it etc. By offering healthy food this threat will be eliminated and all
the accusations these organizations put on the company will be gone too. Ultimately this all will
help to maintain the name of the brand in the food industry and will not let customers shift which
will help the company to grow their share in the profit and can expand easily into new markets.
Then company don’t even have to worry about the taste of local people and how to target them.
Just marketing by advertising and various channels will be enough.

Conclusion
From the above studies it has been concluded that KFC has to change their way of operating in
the market otherwise they will loose their fair share. Company also needs to change their
suppliers who contaminate the food and increase the issues such as adultery and preservation of
food. By changing them it may disturb the flow for once but it will save the reputation of the
company. To survive in the market KFC has to adapt according to the taste and choices of people
they have to start serving healthy food otherwise they will be long gone against their competitors
because buns can be converted into a healthy food but fried chicken cannot. Company has also
partnered up with other companies such as Pizza Hut and Taco Bell so that they can offer various
items to the public. The idea which they started and implemented in Australia must be started in
every country as it saves the time of people its easy as it sounds click and collect and more
importantly it improved the sales and profit of the company that is why it is necessary to
implement it. The company is also focusing on improving their quality and they have already
announced to introduce chicken sandwiches in their list of menu and vegan items which will be
beneficial as it will improve the customer base of the company. This report also gives a brief
description on the SWOT and PESTEL analysis of KFC.

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