Environmental Scanning and Business Strategy: A Case Study of Kentucky Fried Chicken (KFC)

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RISK AND CRISIS MANAGEMENT
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Executive Summary
The paper has analyzed the link between environmental scanning and business strategy by
performing an internal and external environmental scan for Kentucky Fried Chicken (KFC). KFC
strengths have included good reputation, huge cash flows, expanded markets and developed brand equity.
Weaknesses of the organization included untrusted suppliers, health concerns and bad publicity images.
The opportunities included home delivery services, product differentiation and an increase in demand for
healthier food. The threats included rising competition from shops and supermarkets, government
regulations and health concerns like obesity in a young generation. Political, economic and natural
factors are external risks surrounding the company. Political risks included government policies and
regulations, political instability, high-interest rates, change in foreign exchange, imports and exports.
Economic factors included inflation rates, unemployment rates, recession and market boom. Natural
resources included disasters like fire, earthquakes, hurricanes and floods. The paper concluded that if
KFC needs to expand its growth and sustain the emerging competitive environment it must formulate
strategies to mitigate the risks.

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Table of Contents
Executive Summary....................................................................................................................................2
Introduction.................................................................................................................................................4
Company Background................................................................................................................................4
Stakeholders................................................................................................................................................5
Internal Stakeholders.................................................................................................................................5
External Stakeholders................................................................................................................................6
SWOT Analysis...........................................................................................................................................6
Strengths......................................................................................................................................................6
Weaknesses..................................................................................................................................................7
Opportunities...............................................................................................................................................7
Threats.........................................................................................................................................................7
Internal Risks..............................................................................................................................................8
External risks..............................................................................................................................................8
Political Factors...........................................................................................................................................8
Economic Factors........................................................................................................................................9
Natural Factors...........................................................................................................................................9
Conclusion.................................................................................................................................................10
References..................................................................................................................................................12

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Introduction
All companies are responsible for the Environment they create, with the organizations’ structure
and operations being directly affected by the created environments. The environment of an organization
has a great impact on the opportunities and resources. An organization’s primary objective is to take care
of its operations and the way they affect the environment. The successful development and growth of a
business are critical in the development of strategies which can assist in the operations of the business. In
understanding the scanning of a business environment, it is important to understand the operations of the
business and their effect on the business environment. Therefore, environmental scanning is a process of
dispensing, analyzing, and gathering business information for strategic and tactical purposes. The process
of environmental scanning entails acquiring both subjective and factual information on the environment
which the organization operates or considering venturing. The report will analyze the link between
environmental scanning and business strategy by performing an internal and external environmental scan
for Kentucky Fried Chicken (KFC).
Company Background
In 1952, Colonel Harland Sanders founded Kentucky Fried Chicken in the small front room of a
gas station in Corbin, Kentucky where he opened his first restaurant. Currently, KFC has become a
successful and renowned fast food restaurants in the world. In the United States alone, the organization
has operated more than 5200 restaurants and has more than 15000 active branches around the world.
More than twelve million customers are served by the outlets of KFC every day in the organization’s 109
territories and countries globally (Shoyemi, 2014). Currently, customers have been increasingly educated
on their daily food and are sensitive to the nutritional and healthy aspects of their diets which has greatly
impacted their food purchasing behavior and attitudes. The ethical behavior of the firm influences the
sale of their products, brand reputation and its overall image to customers.