The Hospitality Business Plan - Assignment
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Added on 2020-11-30
The Hospitality Business Plan - Assignment
Added on 2020-11-30
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The Hospitality Business Plan1.Introduction of the chosen organization Kentucky Fried Chicken (KFC), a brand pioneered by Mr. Harland Sanders wasoriginally created for his own livelihood after development and has become one of the fastestfood service systems in the world. Currently, it belonging to one of the brands of Yum BrandsInc (USA) and has more than 20,000 restaurants in 109 countries and territories worldwide.KFC is famous for its unique flavorful fried chicken that is created by 11 different spices withtraditional recipes. Besides traditional dishes such as Fried Chicken or Hamburger, coming toVietnam market, KFC has prepared many dishes suitable for Vietnamese taste such as mixedcabbage (Coleslaw), chicken rice, shrimp hamburger, etc. In addition, despite being a fast food model, they provided friendly service style, a cozyand comfortable restaurant atmosphere are the keys to success not only in Vietnam but also inmany countries. The first store opened in Ho Chi Minh City in December 1997, June 2006 atthe Hanoi capital and in the following years expanded to other provinces across Vietnam. Sofar, KFC has more than 140 large and small stores, with more than 3,000 employees, at thesame time creating career opportunities for citizens. Vietnam is a developing country with theneed of modernisation, KFC is one of the international companies that have spent 10 years
suffering losses with a sustainable journey to become a familiar brand of the Vietnamesepeople.2.Mission, vision, objectives and strategy statementStrategy defines and represents an organisation's purpose through the company'smission, vision, goals or values.Mission :To maximise profitability, improve shareholder value and deliver sustainablegrowth year after year. Vision :To be the leading integrated food services group in the ASEAN region deliveringconsistent quality products and excellent customer-focused service.Values of KFC are potential, the Colonel’s values are not a marketing gimmick. They arealive and well inside our walls – in our food, our people, our services and our restaurants. AtKFC, we have a passion for food, and serve it with pride. We belive to ensure that everyguest leaves happy. Objectives : Bringing to consumers a leading brand of food, creating bright and fun forpeople of all ages. "Young in mind, active in life" is the criterion and strategic brand of KFCVietnamStrategy statement : KFC uses demographic segmentation to serve the market accordingto the needs and desires of customers, mainly young people. KFC used to serve a samplemenu worldwide with indiscriminate targeting. But recently they've started localising theirmenus, transforming their value-based product positioning strategy. In the consumer's mindwhen thinking of fried chicken comes KFC. To have a strong foothold like today, KFC has avery unique product strategy. They constantly diversify their products, but also developchicken rice, mixed cabbage, and soft bread for many markets. Vietnam's eating culture isvery familiar and they have responded quickly to a nutritious meal. In addition they also offerdifferent prices for consumers to have more choices. KFC's strategy is to localise whereverthey go, they use communication very effectively and a huge amount of interaction.3.Macro-environmental analysisPESTELanalysishighlights six environmental factors in particular: political, economic, social, technological, ecological and legal.-Political factors The Vietnamese federal government has implemented monetary tightening measures inVietnam Dong to cope with high inflation prices by cutting government spending to slowinflation. The fast food industry in Vietnam has grown in the past ten years up to 40%(according to research by Nielsen Company). Therefore, this is also an opportunity for KFCto expand further for the benefits of the economic environment in Vietnam. Vietnam's newfranchise law was legalised after Vietnam joined the WTO in 2006. The Government ofVietnam has used trade rules to promote foreign franchising with the expectation that it willdevelop in the future. The 30% growth over many years shows great potential as a form ofbusiness in Vietnam.
-Economic factors According to VnExpress, KFC and Lotteria in Vietnam are the fastest-growing fast foodcompanies with trillions of revenue, but the revenue growth rate started to decline partly dueto the expansion of the market. For instance, convenience stores, customers change theirpreferences from saving time and more convenience because it appears nearly everywhere onthe street. Vietnam's GDP growth in recent years has left foreign countries as an emergingmarket, at 7.1% (2018). Compared to a few years ago, the fast food industry in Vietnam isestimated. It has grown and generated high revenue according to Nielsen Market research,but recently the trend of healthy eating has started to gain consumer attention. Moreover,market research company Euromonitor said international companies dominate the restaurantmarket in Vietnam was set up by small families but did not have the potential to deal with bigcompetitors. In May 2018, according to the European Commission's report the Food andbeverage market entry handbook, Vietnamese people spend 78% of their time eating out atlocal vendors restaurants and only 1% of the choice to go for fast food.-Social factors KFC often pays attention to the ethnic, social and honest values of the locality.Restaurants have adjusted dishes and drinks to suit the taste and civilisation of the localVietnam, but in general, the fast food chain is growing more slowly. One of the factorsaffecting the slow growth is due to the changing eating habits of Vietnamese people and ahigher priority for health. A large portion of Vietnamese consumers identify good health as asign of success compared to wealth. In addition, KFC has been criticised for using enticingadvertisements to attract children and people to the restaurant while they are hiding risks andhealth-related problems when consuming fast food.-Technological factors This is a very important factor to become more competitive and keep up with the ever-changing trends. Without state-of-the-art technology a company will go a lot slower in themarket. Most of these daily stores have a click-and-take option so you can order food beforeyou arrive at the store, help you save time in queue. KFC has adopted many new technologieswhenever they think it is time to introduce new technology. They use the latest technology inmachines, stoves, and ovens to organize the cooking order and reduce the time it takes toprepare food. They have applied a HACCP product quality management system (a qualitymanagement system based on hazard analysis and critical control points) into all of theirproduction processes. To increase profit and sales, self-order and online ordering kiosks areapplied and with good results. Better social media advertising also helps KFC increase itsdigital presence.-Environmental factors Being a big fast food chain, it is not surprise that KFC makes a big contribution to theenvironment. They have switched from cardboard to paper to be recyclable andbiodegradable in order to reduce the amount of tons of packaging. In addition, KFC hasadopted a number of measures to reduce carbon emissions and make its supply chain moreenvironmentally friendly.
-Legal factors The KFC company operates in many countries around the world, it must comply with alllaws relevant to the country in which it operates. Specifically, they need to disclose allrelevant information in the financial statements, and pay the appropriate amount of tax so thatstakeholders know their real position. Therefore, any non-compliance can put the company indanger. KFC operates in the food business so food hygiene and safety standards as well asquality need to be met depending on each country.M1 Critically analyse the hospitality macro environment to determine and inform strategic management decisions Mainly, political, economic, environmental and social factors have a great influence onKFC. As seen, KFC products are highly appreciated by consumers for their quality.Therefore, KFC should continue to promote this strength to improve quality further toenhance its reputation and increase its competitive position in the market. KFC should createnew and more novel products, design more heart-shaped hamburger for lovers. This willcause excitement and curiosity for everyone. Another solution is to expand the menus thatblend Vietnamese and Western styles. For example, adding ingredients such as vermicelli,pho, noodles, but can be processed in Western style. Currently, the KFC distribution systemis being strongly competed with other fast food brands and also with the tendency to open upwhen Vietnam joins the WTO, KFC needs to take more active measures to continueattracting. retain customers. Strict management of its distribution system from employeeselection, facilities, location, storage, and preservation needs to be consistent in quality atstores across the country. In addition, developing a door-to-door delivery system, improvingthe quality of the team as well as the delivery process to ensure on-time delivery. Currently, the three words "KFC" have become quite familiar to consumers. According tothe research data, it can be seen that advertising and promotion factors significantly affect theyouth's decision to choose KFC, so KFC should continue to maintain advertising andpromotion as outlined above. Regarding competitors, continue to promote 4Ps to maintaintheir current positions and strategies to position more firmly in the minds of customers tocreate a deep KFC image in the mind, whenever it comes to chickens, fried refers to KFC.Regarding public relations, KFC should make public about the origin of raw materials andnutritional content in each meal with the press and consumers in order to create confidence inquality and actively do charity activities. Marketing budget allocation based on the market objectives and the market cycle of theproduct. While the revenue growth of KFC and Lotteria in recent years decreased to less than5%, the sign of gradually going sideways, the fried chicken chain from the Philippines(Jollibee) maintained the double-digit growth. This result makes the race of two-way codes inthe fast-food market gradually becoming a trio. In 2019, the revenue is nearly 1498 billionVND (65646 USD), so how much revenue is expected in 2020 to allocate to the cost ofadvertising, direct marketing, sales promotion and PR.4.Industry analysis: a.Porter’s 5 force modelPorter's Five Forces Model is a model that identifies and analyses five competitiveforces in all industries and helps identify the industry's weaknesses and strengths. It often be
used to specify the structure of an industry to define a company's strategy, Porter's model canbe applied to any segment of the economy in search of profitability and attractiveness. To be able to see how KFC has adapted and how successful we are together analysis of5 pressure blocks as defined by Michael Porter that KFC is facing in Vietnam.-Rivalry between existing competitors12345 Currently, foreign fast food companies are operating in Vietnam more and more and arecontinuing to penetrate this potential market with the opening of more stores in almost allprovinces and cities across the country. Can say about :* Lotteria of Korea appeared in 1972 in Japan and 01/2004 officially entered Vietnam.Currently present in 30 cities with 210 stores nationwide.* Jollibee of Philippines (JFC) is the first and biggest fast food group in Asia established in1978. Entering Vietnam market in 1997 with 1 store operating under the franchise form, therewere about 70 years old. The store is mainly located in the South and will continue to expandin the future when they have purchased the chain of Pho 24 and Highlands Coffee.* The Pizza Company of Thailand. In April 2013, TPC - a fast food brand belonging toMinor Food Group (Thailand), was officially present in Ho Chi Minh City. The brandcurrently has more than 60 stores in Vietnam.-The threat of entry
According to M-porter, potential competitors are those that are not in the industry on themarket but may affect the industry in the future. That depend on two very important factors in.Firstly, the Industry attractiveness, it shown through many factors but in short will be overallthrough 3 expenditures: rate of return, number of guests row, number of businesses in theindustry, number of businesses industry. We can see Vietnam with a population of over 80million inhabitants is enormous environment with the food industry. Besides trying to createKFC from more than half a century ago, he was successful with the public secret blend of 11aromatherapy and herbs along with the century. That made it expensive to enter the industry.KFC is also encountering many barriers when entering the Vietnamese market, such as:capital,engineering, commercial factors, distribution systems, customers, brands, the specificresources, input materials (patented, source controlled force of government protection, etc.Compared with other industries, the real industry ,the product does not require high capital.Technology and specific resources are key sost important. From there, we see that the barriersto entry into the industry are also quite high.-The threat of substitues
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