Kentucky Fried Chicken (KFC) Business Environment Analysis

Management 1
Management
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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.