Kentucky Fried Chicken (KFC) Business Environment Analysis

This document is a business environment analysis of Kentucky Fried Chicken (KFC), the American fast food restaurant specializing in fried chicken. The analysis covers KFC's relationship with its business environment, market domination, technological abilities, and stakeholder management. The document suggests that KFC should improve its market penetration strategies, minimize expansion, improve technological services, and treat employees better.

Management 1
Management
Name
Student ID
Institutional Affiliation

Management 2
Kentucky Fried Chicken (KFC) is an American fast food restaurant specializing in fried
chicken. The organization is headquartered in Louisville, Kentucky, and is the second largest
restaurant chain in the world with approximately twenty thousand outlets worldwide. The
organization has a strong relationship with its business environment as it has the advantage of
holding the non-vegetable food specialty segment which has given them a great reputation. The
bargaining power of customers and suppliers is low since the cost of losing a buyer or supplier is
low. Little competition from the company’s major competitors like Subway, Domino’s, Pizza
Hut and McDonald’s gives the KFC high revenues due to market domination. In addition, the
macro environment factors such as social, legal, technological, political and environmental
factors usually affect how KFC undertakes its business processes. For example, KFC uses paper
material instead of plastic for packaging and carrying its food thus assisting in reducing the
effects of global warming.
In the ability to identify, interpret and respond quickly to indications of the environment
that it is necessary to make a change, KFC is highly effective in assessing the level of
competition in the market so as to be aware of any increased competition and formulate
strategies on improving their business. However, KFC should ensure that it improves its market
penetration strategies by gaining more customers from their competitors. Market penetration
occurs when an organization penetrates or enters a particular market with its current products
(Arkolakis, 2010 p.1152). Therefore, KFC should always be ready to respond to indications of
the market that changes are necessary by being in a position to diversify and develop their
markets and products.

Management 3
In the willingness of the company to take risks through trying new things frequently and
regularly, KFC has opened a chain of restaurants across the globe. However, though attractive,
the international markets have exposed KFC behavioral, competitive, economic, political and
financial risks. For example, on different occasions, KFC has been forced to stop expansion due
to lack of finances for expansion. KFC should, therefore, minimize expansion and focus on
improving their current restaurants and improve their business processes so as to reduce risks and
improve their revenue.
In terms of technological abilities, technology at KFC has become an aspect that is
important so as to delight and satisfy their customers with technological services (Lu, 2010
p.620). Latest technological methods used at KFC in serving their customers promptly such as
digital cooking methods, wireless headsets for staff and digital screens. KFC should, however,
improve on the services offered to customers like implementing systems for online ordering of
food and delivery to customer’s doorsteps so as to improve their capability profile.
In the ability to manage its stakeholders, KFC has implemented the concept of
stakeholder democracy. KFC has implemented ethical behavior and corporate integrity in dealing
with its stakeholders by going beyond the compliance with regulations and laws (Roberts-
Lombard, 2009 p.242). However, the company should improve on treating their employees better
by offering continuous training and rewarding highly productive employees, which would inspire
and enthuse all employees working at different levels of the firm. In addition, KFC should strive
to minimize negative impacts to their stakeholders and maximize on the positive impacts.

Management 4
References
Arkolakis, C., 2010. Market penetration costs and the new consumer’s margin in international
trade. Journal of political economy, 118(6), pp.1151-1199.
Lu, J., 2010. Multiple modernities and multiple proximities: McDonald’s and Kentucky Fried
Chicken in Chinese television commercials. International Communication Gazette, 72(7),
pp.619-633.
Roberts-Lombard, M., 2009. Customer Retention Strategies of Fast-Food Outlets in South
Africa: A Focus on Kentucky Fried Chicken (KFC), Nando's, and Steers. Journal of African
Business, 10(2), pp.235-249.