Strengths and Weaknesses Analysis of KFC

This assignment requires a thorough analysis of the strengths and weaknesses of KFC, including its organizational structure, product offerings, and market position. The report should also identify opportunities for growth and potential threats to the company's success. A detailed examination of the macro factors affecting KFC's operations is also expected.

Business and the business
environment

INTRODUCTION
Business environment includes external and internal factors that may affects business
activities. Some factors of the business are uncontrollable such as political, economic, social,
technological and legal. Some factors are partly controllable such as supplier, employees and
customers etc. but they both affects all-over performance of the organisation. Present study is
based on Kentucky fried chicken (KFC) which offers wide range of fast foods to the customers.
It deals in list of products but its main product is fried chicken. It is located in more than 22,621
locations globally. Report will include different type and purpose of organisation. It will describe
the size and scope of different types of organisation. Report will provide deeper insight about
strength and weaknesses of an organization through SWOT analysis. Further, report also
highlights the extent to micro and macro factors are interrelated.
LO 1
P1 Explain different type and purposes of organisations
Public company:-
It is operated by government and
provides different services to general public.
The company sells their securities to general
public by initial public offer. The share of
public company are traded in stock exchange.
The subsidiary of public company is also called
as public company. The public company are
governed by some laws, rules and regulations
and are bounded to follow them.
The purpose of the public company is to
offer high quality product and services to
general public at affordable price and enhance
their shareholder value by maximize profit. The
objectives of public company are integrated
with social and environment goals.
TESCO is a public company. Purpose of this
company is to provide their services and
products in the international market. TESCO
company is expanded its market at global level
by providing product at low pricing to the
people in the global market (Kolk, 2016).
Private company:-
Private company is governed by the
individual or group of people. There is no
government interference in this organisation.
There article of association is restricted to the
transfer of share in any other individual and
general public. Its main objective is to earn
profit. It is directly registered in companies act.
It have separate legal entity. They also trades in
stock exchange but not by initial public offering.
The purpose of private company is to
maximise profit for owners and shareholder and
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expand their business operations at global level
(Laudon and Traver 2016).
KFC is an American fast food restaurant
chain. The purpose of KFC is made the
company the largest fast food operation in the
world wide and increased the quality of fast
food and capture the whole fast food market
(Bohari, Hin, and Fuad, 2017).
Voluntary company:-
It implies for the non-profit
organizations which take initiatives for the
welfare of others or society.
The purpose of voluntary organisation is
to focus social impact not on profit. It also
improves well-being of people and offer them
satisfactory health services.
OXFAM refer as the charitable trust
organisation which operated with the aim to
reduce poverty from their country. It mainly
focuses on four main resources: essential
services, economic justice,, right in crisis and
gender justice (Hamilton and Webster, 2018).
Legal structure of the organisations
legal structure of public company:-
The activities of public company is run
by its board of director on the behalf of its
shareholder. It sells its share to general public
by stock exchange. The board of director and
management can left and transfer their
ownership and powers. It publishes its annual
report so banker and investor can identify the
organisations positions.
Legal structure of private company:-
Private organisation have separate legal
entity. All shareholder have limited liability for
the debts and profit of the company. It is run by
its board of directors, shareholders and
chairman etc. the company must be formed the
article of association and memorandum of
association.
Legal structure of voluntary company:-
In voluntary company, the decision is
taken by the volunteers of the company. It is an
unincorporated association. It has limited
liability membership. The guarantee of the
organisation is limited (Becker, Kunze and
Vancea, 2017).
P2 The size and scope of a range of different
types of organisation
Bases Public
organisati
on
(TESCO)
Private
organisati
on
(KFC)
Voluntary
organisati
on
(OXFAM
)
Backgroun
d
TESCO is
a British
multinatio
nal retailer
KFC is an
American
fast food
chain. It is
OXFAM
is a
charitable
organisati
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industry,
founded in
1919. it is
the third
largest
industry in
the world
by gross
revenue.
TESCO is
expanded
globally
with enter
in
11countrie
s in the
world.
also
known as
Kentucky
fried
chicken. It
is second
largest
restaurant
chain in
world
(Whincop,
2017).
on that
focusing
on
reducing
poverty. It
was
founded in
England in
1942. It is
a non-
profit
organisati
on.
Objectives There are
two main
objectives
of
TESCO:
reducing
their
products
prices and
doing
better their
customers
experience
in each
It have
two main
objectives:
first is
developme
nt of their
products
and
second is
increased
varieties
in their
menu.
The
objective
of
OXFAM
is to
expand the
business
operations
so that
more
people are
engaged
with
organisati
visit. on that
will help
in fulfilled
the needs
and wants
of the
people.
Vision &
Mission
Vision of
TESCO is
created
need and
wants
around the
world.
Mission is
growing
their
business
operations
with full
of
innovation
, modern
and
opportunit
ies.
KFC's
vision is to
sell fast
food in
friendly
and fast
environme
nt with
affordable
price.
Mission of
KFC is
delivering
constant
quality
fast food
to the
customers.
The vision
is made
world
without
poverty.
The
mission of
OXFAM
is people
are valued
and treat
equally to
each
person.
Products It includes
supermark
et,
hypermark
The
products
are KFC
beverages,
OXFAM
company
helps in
bringing
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et,
superstore
and
convenien
ce shop
etc
(Geissdoer
fer
Vladimiro
va and
Evans,
2018).
chicken,
chicken
wings,
desserts
and grilled
chicken
and many
more.
out the
online
technolog
y to
improve
the
condition
of poverty.
Market
size and
scope
It
generates
£57,491
million
revenue in
2018. it
scopes to
expand
more on
globallay.
KFC
generates
on an
average
$942000
sales
annually
and $436
millions
net
income. its
scope is to
increase
the market
share
worldwide
and to
improve in
the quality
of the
products.
OXFAM
have 19
organisati
on and
local
communiti
es in more
than 90
countries.
Its scope
is expand
their
organisati
on
globally.
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Stakehold
er
The
stakeholde
rs of
TESCO
are any
person,
institute
and
company
who own
at-least
one share
of the
company.
The
stakeholde
r are
employees
,
contracted
vending
companies
and
delivery
services,
suppliers
etc.
OXFAM
have
volunteers,
funders ,
donors and
communiti
es as a
stakeholde
r.
Number of
employees
Number of
employees
are
460000 in
2017
KFC have
24000
employees
and
ranked
second
among the
competitor
s.
OXFAM
have 5300
employees
in world
wide and
22000
volunteers.
Legal
structure
Legal
structure
of TESCO
includes
KFC is
listed on
the new
york stock
They are
formed the
council of
trustee
11member
s in chief
executive
committee
and
various
level of
hierarchy
(Geissdoer
fer,
Vladimiro
va and
Evans,
2018).
exchange.
The
company
decision is
taken by
the owner
of the
company.
They have
to
maintain
the
memorand
um of
associatio
n and
article of
associatio
n.
which is
governed
by the
associatio
n of
OXFAM.
Organisati
on
structure
TESCO
follows
hierarchic
al
organisati
on
structure.
KFC
follows
Manageria
l
organisati
on
structure.
It follows
tall
organisati
on
structure.
5

LO 2
P3 Interrelation of different organisational department and its importance to achieving the
organisational goal
Organisation structure
KFC follow the hierarchy organisational structure to perform their operations smoothly.
In this structure all level of authorities are linked vertically in the company and also linked the
chain of commands between the supervisor and employees in all level of the organisation. In this
structure of the KFC higher level control the lower level. There are board of directors, president,
department head, then super visor and then come employees. In the KFC Higher level concern
with the organisation structure they make plan or the KFC like in what area have to serve their
food what will be the target market and customers and the quality of the food. THis plan is
execute by the supervisors they set the target for the employees and employees perform and
prepare the food as the direction of the supervisor. This continuous and smooth process of
operations that help the KFC In flexible supply chain and making strategies (The 5 Types Of
Organizational Structures: Part 1, The Hierarchy,2019).
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Illustration 1: hierarchy organisational structure
(source: The 5 Types Of Organizational Structures: Part 1, The
Hierarchy)

Relationship between different department
With the motive to maintain its chain and image in the world or to provide the perfect
taste to the customers they want because of this unique taste and recipe and method KFC has
different department which follow different operations and functions in the organisation and they
all are interlinked with each other to provide the best services to the customers (Aithal,2016).
Production and Purchase department
Production department of KFC is relate to the purchase department of KFC in order to
produce quality product food. Purchasing department of the KFC share the good relation with the
suppliers as to buy or produce the best products and reach at the customers to the market.
Purchasing department fulfil the requirement of the production to produce an manufacture the
best food for the customers (Widya Yudha, Tjahjono and Kolios, 2018). In other words,
production department of KFC entails material which they need for fulfilling customer’s
requirement. Hence, as per the requirements of production department, purchasing manager
purchase all the good and thereby contributes in the attainment of organizational goals pertaining
to sales and profit maximization.
Relationship between Marketing and Finance department
In the context of KFC, both marketing and finance department is highly interrelated.
Moreover, marketing department specifies activities which it need to perform for achieving
objectives (Marketing and its relationship with other business activities, 2019). Referring this,
finance department prepares budget for marketing zone and thereby ensures smooth functioning
of operations.
Advantages
 Relationship helps to establish the effective communication among the different
department
 This relationship also helps to maintain the positive environment and work culture in
the KFC company.
 This also affect the business activities which is being carried out by the different
department of the KFC like finance, HRM etc.
Disadvantages
 Time is time consuming because of interdependency on each other department.
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 Different Departments of KFC will not work according to their own department
system they have work according to other department needs and wants as they can not
take their own decision.
 There may be conflict situation occurred among different departments of the
company.
LO 3
P4 PESTLE analysis of KFC
PESTLE analysis can be referred as the external environmental factor of the organisation
that helps to analyse the problem and affect business activities. PESTLE analysis of KFC is
enumerated below:
Political factor:
it influences business operations by many ways. Political factor can create opportunities as well
as threat to the business.
Positive impact: Political factor can open up many options for the organisation. If there is
political stability in the country that is a good time to establish a franchisee of KFC and the free
trade agreement also reduced KFC's cost of sourcing the product.
Negative impact: some time political factor is affected the performance of the organisation. KFC
have to followed all the policies of the government where KFC runs their business if they break
any policy they are liable to pay to government as well as they have to close their store on this
location(Widya Yudha, Tjahjono and Kolios,2018).
Economical factor:
It is also an important factor that affect organisation. The product price and the income of the
employees are decided by economic of the countries where they run their business.
Positive impact: the economic environment helps to identify the resources for the business that
they are needed to run their operations. With the help of economic environment, KFC identifies
the availability of financial resources than set up their business on those countries where good
financial resources are available.
Negative impact:- some time economic environment creates competitions that affects sales of the
organisation as well as profit and some times it reduces market share of the organisation. Due to
financial crises in the country there will be chance to increase the price that is affected the flow
of cash in the market.
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Social factor:
Positive impact: it introduces many opportunities for the organisation because it helps to identify
the trends, thinking and perception of the people that help to KFC in decision making. KFC have
strong customer loyalty, so customers with promoting KFC through word of mouth that is
enhanced the sale of the products in the countries.
Negative impact: sometimes it creates threat for the organisation because in present there are
vastly change in demographic. People attitudes, belief and interest are changes that fails the
existing decisions of the organisation. Different cultures of the countries are also affected the
sale of KFC. Different country has different beliefs and perceptions so it influence the
purchasing power of the consumer(Widya Yudha, Tjahjono and Kolios,2018).
Technological external factor:
Positive factor: the new approaches and technology is introduced in the marketing. With the use
of this technology, KFC can make its process effective and achieve their goals. KFC is now
starting its marketing through digital platform that can increase the sale of their product.
Negative impact: when any technical problem arises in the machinery that can stop the hole
process and waste lot of time. When the activities like research and development are not
conducted in the company then it lacks in the technology and decreases the sales of KFC.
Legal factor:
Positive impact: In order to sell the products of the KFC in other country, they must have to follo
some law which are made by their country's government. To expand the business by the KFC in
new countries have to follow their rules and laws. If there laws and policies are in favour of the
new business and welcomes the international business in the countries will provide the best
policies to them. Their interest rates, taxation policies will help the KFC to import and export of
the production and the demand of the new products will high and company will also able to fulfil
the high demand of the customers that generate the great revenue of the company (Pestel
analysis,2016).
Negative impact: Legal factors also affects the operation cost and the demand of its product in
the country. Legal factors like laws and policies of that country for the international business, its
taxation policy will influence the import and export of the products, because of this value of the
product also get high that affect the demand of the products.
Environmental factor:
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Positive impact: As the KFC is food chain company, that require huge amount of vegetables,
porks and other materials to produce their foods. If the environmental conditions of the country
is good and seasonal vegetables will grow more that will help the production of the food. That
will also help the company to fulfil the demand of the customers as they want fresh and quality
foods and helps in makes profit (Pestel analysis,2016).
Negative impact: If the environmental condition is not favourable in the production of the
vegetables and other products like pork, chicken as KFC is mainly produced the non vegetarian
foods, this will influence the company in their production. Because of the environment porks and
chicken get effected then quality of the food will get low that affect the organisation.
KFC image.
LO 4
P5 SWOT analysis of KFC
With regards to internal and external assessment of KFC, SWOT analysis is enumerated
below:
Strength:-
KFC has many strengths that are as follows-
 Strong global presence: it presences more than 130 countries with over 21000 stores. It
has very vast global presence and hold 2nd position in world's largest restaurant chain.
One more strength is majority of countries are non-vegetarian food segment.
 Variety in menu: KFC is offered variety of veg and non veg food to their customers. Its
foods are based on the region in which they operate.
 KFC's secret recipe: one of the biggest strength is its secret recipe“11 herbs and spices”.
Its recipe is remained same for all its franchisee (Phadermrod, Crowder and Wills, 2019).
Weakness:-
there are some weaknesses where KFC needs to improve:-
 Supply chain and distribution issues: KFC has many distribution issues related to delivery
of the fast food. This issues are so big and they created situations of closing stores in UK.
 Managing franchisees: it is also a critical issue of KCF in their success. It arises due to
conflict between KFC and its franchisees.
 Food quality related issues: food quality is always a biggest issue for food industry. In
past year, KFC is also faced cooking related issues for non-veg food. The issue is that
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non-veg increases fat of the people where KFC said low calories food.
Opportunities:-
 Innovative menu for health conscious generation: in present millions of people are
conscious about the health. Kfc's menu are added low calories items that enhance
profitability.
 Focus on low cost: the preferences of customer is changed. They want health as well as
best price. Kfc is focused on increasing low cost products to enhance their sales.
Threat:-
 Competitors: from the last two-three years, the competitors of kfc are increased. Its
measure competitors are McDonald and other fast food brands because they also
introduces innovative products with low calories.
 Millenial preferences: the preferences are vastly varies from generations. The
demographic changes are also created pressures on kfc. The customers wants great
services with best quality of food. The preferences are increased day by day.
P6 The strength and weaknesses interrelate with external macro factors
As KFC is American fast food chain company, run its business activities globally. It is
related to the environmental political factors as if there is political instability in the UK country
the company won't be able to establish their franchisees and that will affect the global grow of
the company as well as the sales (Bohari, Hin and Fuad,2017).
KFC is doing manual working to make foods as it is showing the lack in the
technological up gradation in the company as it will take more time to accomplish the work
manually without help of the technological use that is related to the external technological factors
of the environment.
KFC is offered wide variety of products in the fast food market that creates brand value
in the market but it may effect the economic environmental factors. If the prices of their food
product will rise then the customer will not able to purchase their product and it will influence
the sale and profit of the KFC and affects variety of products and also decrease the profitability.
KFC has wide range of product but it will affect by the legal factors because each country
have different laws and as a global company KFC have to followed global laws such as in Indian
laws, they are not allowed to sell beef in their stores(Laudon and Traver, 2016).
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CONCLUSION
By summing up this report, it has been concluded that objectives of different kind of
business unit vary significantly. It can be seen in the report that scope and size of KFC is too
wide. As, KFC is operating at global and offering employment opportunities to the people over
the globe. Besides this, it can be inferred that significant relationship takes place between the
departments of KFC. Along with this, it has been articulated that macro factors has significant
impact on KFC’s operations in terms of both positive and negative. It can be summarized from
the report that KFC has opportunity to enhance profit margin by introducing variants in the
category of diet or hygienic food. Further, from assessment high interrelationship found between
micro and macro factors associated with KFC.
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REFERENCES
Books and Journals
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