KFC Business Environment: Doc

Business and Business Environment

Table of Contents

INTRODUCTION
Business can be defined as an entity in which individuals performs their duties together
so as to earning money or living their life. In other words, it is a function that is done by
individuals by taking effective contributions from staff members so that goals can be achieved
effectively. Whereas, business environment is a combination of internal and external factors
which can influence the operations and functions of an organisation in adverse or favourable
manner. Taken organisation for this project is Kentucky Fried Chicken (KFC) that performs its
functions internationally and its headquarters are located in Louisville, Kentucky, U.S. In current
scenario, firm is operating its business operations in more than 20000 locations across the world
(About KFC, 2019). Present report will discuss about the scope, vision, mission and structures of
several kind of organisations along with interrelation among several divisions of firm which
provides support the firm in achieving objectives. In addition, PESTLE along with adverse and
positive impacts will also covered in this report. At last assignment will describe about SWOT
and interrelation of internal factors with macro environmental factors.
Activity 1
Overview of the different types of organisations
Several organisations are present in a particular area of market which is engaged in
different sectors and performs assorted activities so that pre-determined goals can be obtained in
market. Structure and purpose of these firms are discussed as below:
Public organisation: These are those organisations which are basically controlled or
regulated by governmental authorities so as to developing economic wealth of nation. Objectives
of these firms are to raising standard of living of societal individual instead of making
profitability in market (Türetken and et. al., 2011). More laws and legislations are followed by
public organisations which states that these firm faces more complexities while performing their
business operations. Taken organisation for this kind is NHS which is solely regulated by UK
government. Some purposes of NHS are briefly defined as below:
 Offers good healthcare services to the societal individuals without taking charge on it.
 To provide health services across the nation so that health requirement of nation can be
fulfilled effectively.
Legal structure:

 Local government: This kind of government performs its functions at niche level in the
nation and maintain code of conduct at small scale like city or district. State government: This is the middle level of governance who performs its functions
within the boundaries of state.
 Central government: This governmental authorities have obligations to incorporate laws
and legislations for entire nation so that proper code of conduct will be followed by
public organisations.
Legal responsibilities which should be followed by health care firms – NHS is public
organisation that adhere its roles and responsibilities across the nation by following Health and
Social care Act, 2012. For establishing healthcare firm within the UK several laws and
legislations like NHS service Act, 2014, Health and Social care act, 2012 would be required to
follow because these acts are formed for removing inequalities from Health services and
maintain well-being of societal individuals.
Private organisation: These are the firms who believes in selling products and services
for earning money or profitability. Complexity which is faced by these firms are that any
member of firm have no right to sale its shares directly to general public. Taken firm for this
kind is KFC which is a multinational fast food chain that offers fast food products over the
world. Legal structure and purpose of these associations are discussed as below:
 Purpose: Sole purpose of organisation is to providing best quality of food to customers
so that good image and customer base can be maintained in marketplace. Company
believes in maintaining healthy and hygienic-al quality in food products due to which
they makes modifications in their offerings on regular basis so as to gaining
competitiveness among their rivals (Zsambok and Klein, 2014).
Legal structure: Partnership: It can be defined as an arrangement in which two or more parties are
mutually consent for performing functions together so that preset goals can be achieved
effectively. Whereas, complexity in this structure is, if any partner have take loan on the
behalf of organisation and have left the firm then the remaining partner have duty to
repay the amount of loan.
 Sole trader: This structure is formed by single individual and whole authority of
decision-making is handled by themselves. For incorporating this kind of structure very

less investment is needed because of which formation of this is easy as compare to other
structures. Whereas, complexity is faced by them in raising funds when they have to start
the firm.
Legal responsibilities that are essential for Private limited to follow:
Each private organisation have duty to submit annual report in company's house UK. If
any modification is done by the owners or management then they have duty to submit reports
regarding these changes to company's house. As KFC is engaged in restaurant sector then it is
very essential for them to follow several acts and take licences from the government of UK so as
to run their business within UK nation like Pest control, food hygiene certifications etc.
Voluntary organisation: These organisations are formed with an unique aim along with
a group of individuals who performs similar functions for achieving common objectives.
Complexities which are faced by these firms are related with raising funds because investors has
different mentalities due to which some may not take interest in the functions of organisation
(Shenkar, 2014). For this kind taken firm is Oxfam which was founded in 1942 whose main
purpose is to removing diseases and help the victims of natural disasters. Purpose of Oxfam are
given as below:
 To improve standard of living of societal individuals and providing them secure life
which is free from poverty. To create an atmosphere across the world which is free from poverty.
Legal structure:
 Trust: This is divided in three segments like trustees, beneficiaries and donors in which
donors are investors trustees are volunteers who performs duties for firm and
beneficiaries are the societal individuals who gets necessary things from the organisation.
 Association: In this kind of structure, individuals comes together and doing their duties
so that desired goals can be obtained.
Some legal requirements which should be followed by Voluntary firms like Oxfam:
Trustees of NGOs like Oxfam have obligations to make their registrations under the Charity
Act, 2011 so that any difficulty not be faced while performing operations within the UK. Along
with this, trustees of these firms have no authority to earn profit from any functions of firm.
Whereas, if organisation will be dissolved in future then its capital will be provided to other Non
profitable firm.

Size and scope of different organisations
Public organisation: (NHS) National Health Services
Background details: Organisation was founded by Aneurin Bewan in 1948 for
providing health and medical care services across the European countries. All functions of firms
are controlled by Health and Social care department, UK.
Products/ Services : Eye surgery, Clinical Treatment, Hearth Surgery, Operations are
those services which are offered by NHS to citizens.
Size & Scope: There are around 1400000 employees are worked under NHS which is
highest in numbers of staff members within a public firm. Firm performs its functions in East
England, south east and west etc. that defines large scope and size of organisation.
Mission and vision: Mission of NHS is to delivering better wellness services across the
nation along with making investigations for the treatment of infectious diseases so that well-
being of societal individuals can be maintained. Whereas, vision of firm is to maximising health
and well-being along with preventing illness from society.
Organisational structure: Organisation performs its functions as an independent
governmental body and regulates health and medical services across the nation. Along with this,
organisational structure of NHS is divided in three parts like local, state and central which is
regulated by Healthcare division of UK (Saleem, 2017).
Legal structure - Firm follows each rules and legislations which are formed by
government for healthcare sector and performs its duties at local, state and national level.
Stakeholders - Investors, governmental bodies, patients are the main stakeholder of
NHS.
Voluntary organisation:- Oxfam
Background details: Oxfam is a combination of 20 independent charitable firms which
are incorporated for removing poverty from the world. Any individual of firms is engaged in
profitable functions due to which it is also called non-governmental firm.
Services: Volunteers of Oxfam performs various kind of services like providing food and
accommodation to vulnerable individuals across the world.
Size & Scope: Company is performing its business operations across 90 nations such as
India, Brazil, UK etc. along with this, 23000 volunteers are performing their operations which
defines large scope and size of organisation.

Mission and vision: Mission of NHS is to fulfil basic requirements of vulnerable
individuals so that they can live their life without facing any difficulty. Whereas, vision of
OXFAM is to make a world free from poverty.
Objectives: Main objective of Oxfam is to provide necessary things to needy individuals
so that their basic requirements can be fulfilled effectively.
Organisational structure: Oxfam follows hierarchical structure in their operations in
which the decision-making authority is given to Winnie Byanyima, who is managing director of
Oxfam. Main objective behind applying this structure in the workplace is to managing each work
effectively.
Legal structure – Organisation is non-governmental firm because of which firm have
adopted the structure that is applicable on trusts. Its volunteers performs their duties for raising
funds and utilise these in accomplishing desires of needy people of nation.
Stakeholders - Trustees, investors and volunteers are the main stakeholder of Oxfam.
Private organisation:- Kentucky Fried Chicken (KFC)
Background details: Harland Sandars was the founder of KFC who have established the
firm in 1930 along with it, headquarters of firm are situated in Louisville, Kentucky, U.S
Products: Organisation offers Chicken Burgers, French Fries, Desserts, Sandwiches etc.
to their customers.
Size & Scope: Company performs its functions at Global level such as 21000 KFC
outlets are operating their functions under KFC and having presence in 130 nations like India,
UK, U.S etc. across the world. Along with this, approx. 750000 staff members are working with
KFC which defines large size and Scope of firm (Meiners, Ringleb, and Edwards, 2014).
Mission and vision: KFC's objectives are to fulfilling needs of customers through
offering them quality food products whereas, vision of organisation is to making international
presence across the world.
Objectives: Prior aims of KFC is to become a strong fast-food chain in all over the
globe so that investors can receive better returns on their invested amounts.
Organisational structure: Company follows hierarchy structure in their working
operations Tony Lowings CEO is responsible for taking decisions for overall operations and
functions.

Legal structure- Organisation is operating its functions in private sector because of
which they are responsible to adhere all legislations and laws which are applicable on private
limited organisations.
Stakeholders- Employees, investors and customers are the main stakeholders of KFC.
Interrelation between organisational function and organisational objectives
Illustration 1: Organisational Chart of Company
 MARKETING AND PRODUCTION- Marketing department is responsible for
identifying customer's needs and wants from company and selling offering of firm in
market whereas production department have responsibility to manufacture goods and
products according the needs and wants of customers. For example- Marketing
department of KFC have conducted market research and identified that most of the
customers are falls under the young age. After that, this report is provided by them to
head of production department so that through making products as per the needs and
wants of customers sales figures of firm can be enhanced in marketplace. Through this,
organisation will easily achieve its goals and objectives in marketplace
 HUMAN RESOURCE & MARKETING - HR department is responsible for fulfilling
human requirements within the organisation whereas, Marketing division of KFC have
obligations to use effective channels of promotion so that sales figures and profitability of
firm can be enhanced. For example- marketing executives are required within the
marketing department therefore, it is responsibility of marketing head to make a list of
necessary skills, experience, qualifications required members etc. and provide it to HR
department (Hamilton and Webster, 2017). So that, experienced and knowledgeable

candidates are hired by HR managers for marketing department which not only support in
increasing satisfaction level of customers but also leads the firm towards achievement of
goals.
Advantages
 It leads the management in creating healthy atmosphere at workplace.
 Working structure of different department is assorted in nature but through interrelation
cooperation is increased between these divisions which leads the firm towards
achievement of goals.
Disadvantages
 If one division is not performing its functions effectively then it negatively impact on
overall operations of firm.
 If management structure is not good then it leads dissatisfaction among the staff members
which directly influences on decision-making of firm in negative manner.
Impact of Interrelation on organisational structure- Organisational structure is
referred as a system that is used to define that how each functions would be performed by
different divisions of firm whereas, it also defined that what structure will be followed for
conveying the information. KFC is using hierarchical structure in their workplace which can
increase employee turnover the firm so that, it is necessary for their managers to implement
matrix or flat structure in their workplace through which maximum contribution can be taken
from workers and less effect of interrelationship is faced by firm (Crane and Matten, 2016).
Activity 2
Positive and negative impacts of the macro environment on business operations
External environment is a combination of factors that includes political, environmental,
economical etc. which can affect the operations and operations of firm from outside. These
factors can't be controlled or managed by organisation therefore, it is very important for KFC to
conduct PESTLE analysis so that these factors and their impact on operations of firm can be
identified and suitable strategies for overcoming the impact can be made by organisation
accordingly. PESTLE analysis of KFC is given as below:
 Political factor: It comprises government stability, tax duties etc. which can posses
either favourable or adverse impact on profitability and sales figures of organisaiton. Due

to Brexit, import and export rates within UK are increased due to which management of
KFC have faced heavy losses in sales figures and revenue of firm. For overcoming this
kind of impact management of KFC have set effective prices of their offerings so that
through increasing sales figures losses can be recovered effectively.
 Economical factor: It also includes several components like inflation rate, GDP, interest
rates etc. which are related with economic factors of nation where company is operating
their business functions. Due to Brexit, purchasing power of customers in UK were
decreased due to which they prefers those offerings which are affordable in terms of
prices and fulfilling their needs. It have also posses wrong impact on the sales figures of
KFC. In order to remove this impact from operations, management of KFC have decided
to change their menu and add some items which are affordable in prices so that, sales
figures can be maintained in marketplace.
 Sociological factor: It comprises of beliefs, preferences, taste, attitude of customers
towards any offering etc. which can provide positive or negative impact on the
profitability and sales figures of organisation. Citizens of UK are more aware regarding
their health issues but as KFC is fast food restaurant and offers oily things which is
negatively influencing the sales figures and customer base of firm. For resolving these
issues and retaining their customers, management of KFC have added Corn on the Cob
and House Salad in their Menu so that customer base & sales figures of KFC can be
maintained in marketplace.
 Technological factor: This factor contains several aspects like advancement of
technology, R&D, implementation of technology at workplace etc. UK is a country
where citizens are highly educated and technically updated due to which they wants
products and services in quick manner. As KFC is using websites and food ordering apps
which is a positive sign for customer base and sales figures of firm. Whereas, up-
gradation of technology can increase cost of operations at workplace which is not
beneficial for profitability and cash reserves of KFC (Adeoye and Elegunde, 2012).
 Environmental factor: This factor is related with protection of environment and natural
resources. KFC is known as non veg food provider and kills around 1 billion chickens per
year due to which firm is heavily criticised for killing animals for earning profit. But for

overcoming this impact, company is doing several CSR activities on regular basis so that
brand image of firm can be improved in mindset of customers.
 Legal factor: This factor comprises several laws and legislation which are formed by
government of UK and have benefited and affected business operations of organisations
at same time period. For example- KFC have paid an amount of £19,000 because of not
maintaining hygiene in kitchen (KFC fined pound 19000 for food hygiene breaches,
2010). For overcoming this influence, management of KFC have to renewed their
hygiene certificate and take effective measures for maintaining hygiene at kitchen and
stores.
Impact of Pestle analysis - If managers of KFC will consider changes in above
discussed factors effectively then it will be beneficial for them in operating their functions and
decision-making. Through considering these factors, positive decision will be made by
management of KFC which leads the firm towards competitiveness in UK market (Belás and et.
al., 2015). Along with this, through conducting PESTLE analysis management will also able in
formulating better strategies and decisions which will beneficial for them in handling changes
and negative impact.
SWOT analysis for determining the strengths and weaknesses
SWOT is used by organisations in order to identifying their strength, weaknesses along
with opportunities and threats of the marketplace. SWOT analysis of KFC is given as below:
Strengths Weakness
 KFC is offering both veg and non veg
items to their customers which had
strengthen of firm in marketplace.
 KFC is also known as the second
largest fast food chain who have also
implemented latest technologies like
online payment, voice activated
training tests etc. so that economic
stability of firm can be maintained at
workplace.
 Criticisms related with killing animals
for making food is a serious concern for
the profitability of firm.
 Due to the issues and conflicts between
management and franchisees several
stores of KFC are closed since their
inception.
 Implementation of digital technology
have impacted the profitability and cash
reserves in negative manner which is

 With a presence in more than 130
nation along with around 20000 stores
company have made its strong global
presence in all over the world.
 KFC uses secret chicken recipe due to
which customer are more loyal towards
offering of firm which is also
strengthening the firm.
 KFC is performing their functions
under YUM brands which have built
economic stability of organisation
among their rivals.
also a weakness of KFC.
 Less payout are providing by company
to the experienced staff members due to
which company is facing employee
turnover issues in their operations.
Threats Opportunities
 Giant players like McDonald, Pizza
Hut is making modifications in their
offerings regularly which can become
threat for profitability of firm.
 Customers in UK are more aware
regarding their health due to which they
are preferring non-oily food products.
 For changing demands and handling
health conscious issues company can
offer healthy food products to the
customers which will leads the firm
towards strong growth and success in
marketplace.
 KFC can upgrade their food delivery
system through pay per click and pay
after delivery option which will
automatically increase profitability and
sales figures of firm.
Impact of SWOT on decision-making- From the above analysis, it has been identified
that there are several weaknesses are exist within the firm which should be improve by
management through making effective decisions and strategies. Through doing this, weaknesses
will be converted into opportunities which will automatically leads the firm towards achievement
of objectives and competitiveness in marketplace.

Interrelation of strengths and weaknesses with external macro factors
 POLITICAL- Major strength of KFC is that, company is offering products and services
in several nations like China, UK, India etc. due to which global presence is built by
company among their rivals. Whereas, new franchisee are not managed by management
properly due to which company's sales figures are falling down in global markets.
 ECONOMICAL- KFC is doing its all functions and operations under YUM brand which
have built good financial position of firm in marketplace. Whereas, KFC's loyal staff
members are regularly leaving their job because management is not providing good
payout to them as per their expectations. Therefore, management of KFC have to make
effective plans and strategies regarding payout of employees so that negative impact on
overall performance can be overcome effectively (Sigurjonsson and Davidsson, 2011).
 SOCIAL- Company is known as 2nd largest fast food chain in all over the world and have
also started to offering veg food items to their customers so that customer base can be
increased in marketplace. Whereas, criticism related with killing animals for making
profit have impacted the sales figures of firm negatively. Apart from that, management of
KFC is already doing CSR activities so as to improve their brand image.
 TECHNOLOGICAL- Managers of KFC have implemented online, voice activated
training tests etc. at their workplace so as to increasing efficiency of workers at
workplace. Whereas, heavy investment is done by Management for implementing these
techniques at workplace due to which company have not enough funds for smooth
functioning of operations.
CONCLUSION
It has been concluded from the above discussed assessment that there are several factors
are exist within the business environment that should be consider by every organisation so that
customer base and market share can be maintained at market. Several type of associations like
Profit, Non-Profitable and Non-governmental are exist in marketplace whose objectives along
with purposes are different in nature. Interrelation between departments are also important
because it leads the firm towards achieving their goals effectively. Conducting SWOT and
PESTLE analysis is also important for the management because it assist the firm in making
changes as per the business environment factors.

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