Economics and Finance for Business: KFC and Oporto

Running head: ECONOMICS AND FINANCE FOR BUSINESS: KFC AND OPORTO
Economics and Finance for Business: KFC and Oporto
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ECONOMICS AND FINANCE FOR BUSINESS: KFC AND OPORTO1
Abstract
The report has the objective of evaluating the corporate strategies, growth along with pricing and
non-pricing strategies implemented by the KFC and Oporto in the fast food industry in Australia.
The key findings of the report that strategies implemented by these two fast food chains, it is
observed that the product differentiation strategy developed by KFC is highly successful in
comparison to Oporto in attracting different target consumer vase including wealthier consumer
sand price sensitive consumers. It is also revealed that, one of the major differences in the non-
pricing strategy between KFC and Oporto is KFC’s extensive food menu offering that includes
diversified food ranges for consumers to choose from. On the other hand, Oporto has selected
products in its menu that has affected its chances of consumer base growth attracted from its
diversified menu offerings. For Oporto to compete successfully with KFC on the basis of non-
pricing strategy it must consider implementing the strategy of food menu expansion. In this
strategy, the Australian fast food chain must consider re-designing its menu aligns with
considering product innovation. This can attract more consumer base towards the fast food chain
as they will have increased food choices.

ECONOMICS AND FINANCE FOR BUSINESS: KFC AND OPORTO2
1. Introduction
The report has the objective of evaluating the corporate strategies, growth along with
pricing and non-pricing strategies implemented by the selected organisations in the fast food
industry in Australia. The organisations that are selected for detailed analysis in this report are
KFC and Oporto. Oporto is an Australian fast food franchise that has a Portuguese theme that
operates quick service restaurants and offers products like grilled chicken, burgers, salads and
fries (Oporto - Fresh Grilled Chicken and Burgers., 2019). KFC is a US based companies
operating in Australia holding a leading position in chain of chicken restaurants and offers
chicken based products internationally.
The research is conducted in the report by employing secondary data collection
methodology in which important data will be gathered from several peer reviewed journals on
the Australian fast food industry, annual reports of the selected organisations and certain
strategic management books.
For completing the report successfully, the second section will evaluate the market
structure and corporate strategies of the selected companies along with developing effective
proposals for improving business competitiveness. The third section will focus in analysing the
growth strategies implemented by the selected companies along with proposing effective growth
strategies for the companies. The third section will analyse the pricing and non-pricing strategies
implemented by the companies along with proposing effective strategies in improving pricing
and non-pricing approaches implemented by them.
2. Market Structure and Corporate Strategies
The industry that will be analysed in evaluating the market structure and corporate
strategies implemented by Oporto and KFC is Australian fast food sector. The fast food sector is
evidenced to be booming in Australia that is expected to attain a dynamic growth in future by
20% as the consumers prefer dining-out more often in the nation. The market structure of
Australian fast food industry indicates that it is a highly competitive sector with several
established market players like McDonalds and KFC (Arlidge & France, 2018). This indicates
that the competitive rivalry is high in the industry with existence of several smaller fast food
brands and cuisine restaurants having their own client base. The threat of new entrants is
observed to be high in the sector because of better market capitalisation where the new entrants
attain competitive edge through brand imaging. With high barriers of entry in the industry it took
more than two years for Oporto and KFC to enter Australian fast food market. The figure below
indicates the market share of KFC in Australian fast food industry that has attained a leading
position after McDonalds and Subway with 41% share whereas, Oporto has 11% market share in
Australian fast food industry (Fosfuri, Giarratana & Roca, 2016).