KFC's Strategic Management: Overcoming Global Recession and Challenges

This report provides a comprehensive analysis of KFC's strategic management, focusing on its internal and external environments through SWOT and PESTEL analyses. It explores strategies to overcome global recession, including reducing service time, decentralizing the firm, and focusing on core competencies. The report also discusses the purpose of strategic planning, differentiating between intended, emergent, and realized strategies. Furthermore, it highlights the impact of global crises on firms and the changes that occur in such critical conditions, emphasizing the importance of cash flow management, customer retention, and efficient resource allocation for KFC's sustainability and growth.

STRATEGIC MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
Question 1........................................................................................................................................3
a. The evaluation of internal and external environments to identify potential strategies for
KFC -...........................................................................................................................................3
b. Strategies to overcome global recession -...............................................................................6
QUESTION 2...................................................................................................................................7
C. The purpose of strategic planning and decision making within an organisation also
differentiate between intended, emergent and realized stratergy................................................7
QUESTION 3 ................................................................................................................................11
d. Organizational change implementation and implying SMT analysis to mark its importance.
...................................................................................................................................................11
CONCLUSION .............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
Strategic management is the process of formulating strategies to meet specific goal of
business unit. Present study is based on KFC which is leading fast food provider firm that has
branches across the world. In the year 2018, US has faced trade war with China. This thing has
affected many businesses. In the condition of global crises productivity and profitability of
companies get badly affected. Current assignment will evaluate internal and external
environmental factors that must be considered by business at the time of global crises and it will
describe various potential strategies that may help the firm in sustaining in crises situation
effectively. Furthermore, report will recommend emergent strategies to manage global recession.
In addition, report will explain purpose of strategic planning and will describe difference
between intended, emergent and realized strategies. Furthermore, report will highlight impact of
global crises on firms and changes that occur in such critical condition.
Question 1
a. The evaluation of internal and external environments to identify potential strategies for KFC –
Business environment can be defined as actual situation of company that helps the firm in
sustaining in market for longer duration. Internal environment explains that internal condition of
firm whereas external environment highlights external factors that impact on business unit.
SWOT ANALYSIS
Strengths -
Strong global presence - The food chain KFC is the leading fast food chain across the
globe operating in 130+ countries with about 21000+ stores serving its eatables to the customers
(Ansoff, 2018).
Customer loyalty - The secret recipe of KFC helped in establishing its own fan base.
The crunchiness of the chicken is the favourite part of the customer's preference.
Menu's variety - The outlets of KFC serves variety of food menus across the world to
attracts the customer's on the basis of region to satisfy the need of its customers (Rosenberg
Hansen, and Ferlie, 2016).
Secret recipe - Sandler's 11 herb and spices secret recipe kept in KFC's Louisville
headquarters is one the best recipe stated till time.
Weakness -

Supply and distribution - KFC faced a tremendous downfall in supply and distribution
channel and thus threatened the image of the chain.
Franchises management - The management of franchises is a major challenge for KFC
and some outlets failed to stay functional after the inspection (Jenkins, and Williamson, 2015).
Opportunities -
Globalisation: if firm enters into new location or market then it would give benefit to the
firm and entity will get opportunity to raise its profit.
Introducing new eatables in menu - KFC felt the opportunity of introducing low fats
and calories food in market (Moutinho, 2018).
Threats -
Change in trends and consumer's food preference - KFC promoted food that is health
in nature as earlier they faced criticism for serving fried items and the government also imposed
several boundation on law related to food quality (Gallus, and Frey, 2016).
PESTEL ANALYSIS -
Political - The political risk in KFC vary from sudden change in political party as
political stability never exists, the enforcement of law on company, protection of company's
intellectual property, trade barriers, risk of military invasion as always their thus KFC always
managed to establish a backup plan if changes in political factors occur affecting the business
conditions. As in 2018, US and China involved in trade war and the implementation of Trump
administration came into existence as they started imposing tariff resulting in impose of 34
Billion $ tax on 800 products to which China responded by imposing 25% tax on products
imported from the US (Hill, 2017).
Economic - KFC consider economic factors such as GDP, interest rates, exchange rates,
unemployment level and other such factors to implement strategies for implementation of its
business plans. KFC established standards to deal from economic risk by stabilizing interest
rates, regularly coping up with minimum wage, and even study the change in taxes slabs. The
free trade is seen benefiting economies of the two countries. Further, according to a bill the US
can be pulled out of the WTO resulting to threaten the economist that policies from the
wealthiest countries of the world could result in recession and threaten global policy resulting in
making the economies unstable since 2008 that could affect working conditions of those places
(Frynas, and Mellahi, 2015).

Social - KFC considered demographics of population respective to age, gender, class
distribution, educational background and health factor to establish business standards. The
promotion of premium product to the public failed to impress their perspective as individuals
have different mentality. The trade war between the two countries resulted in social instability of
the people are several of the jobs are threatened because of disputes (Meyer, Neck, and Meeks,
2017).
Technological - KFC initiated attractive display changes at the launch of any snack and
this strategy help them gained tremendous attention and promote their products. Therefore, as
China is the leading country for its technological advancement US faced difficulties coping up
with them (Frynas, and Mellahi, 2015).
Environmental - KFC faced soreness due to climate conditions for the availability of some
spices and ingredients and thus have introduced different menus according to change in seasons,
climate and some are even affected by global warming (Morden, 2016).
Legal - As in the hospitality industry KFC faced health and safety issues, discrimination law
for job opportunities as well as intellectual laws for its property. The chain then established a
code on conduct to follow these rules to maintain their legality of working conditions (Frynas,
and Mellahi, 2015).
KFC planned strategies
 KFC is planning to enhance use of social media for promoting the brand. This will help
the firm in dealing with risks. If company use this technique then it will be able to raise
profit by attracting more consumers. In such condition cash flow will be increased and
also number of consumers will be raised. If in next few years there is economic crises
then this financial resources will help the firm in dealing with such crises.
 KFC is planning to make changes in its pricing strategy, this will help business in raising
its number of consumers. That will help in dealing with future risks (Chen, Delmas, and
Lieberman, 2015).
KFC must consider the following factors/ conditions to ignore facing future crises -
 Cash flows - Planning amount of cash for a period considered for operating business
activities of the quarter. Setting alternatives to pay if the business failed to generate
expected sales and income (Frynas, and Mellahi, 2015).

 Organize and prioritize payments - KFC must plan in prioritizing payments concept.
The necessary payments must be made on time and unnecessary expenses are to be
eliminated from the process. Focusing on factors that involves overspending of funds and
thus eliminating them to ignore future crises.
 Retain customers - KFC must maintain quality and services of the products as expected
by its customers in order to retain their count and thus will result in generating sales and
maintaining cash flow for the company (Morden, 2016).
 Audit - KFC must audit the activities and re-organize business activities to ignore
drainage of funds unnecessary. Updating the staff and operations to overcome lacking in
process and skills for business development (Steiss, 2019).
b. Strategies to overcome global recession -
Any business going through recession need to avoid unnecessary investments they must
also reduce service time of each employee rather than firing them facing financial crisis.
 KFC must reduce the service time of employee’s subject to work requirement rather than
unnecessary terminating them from their services so they can control unnecessary flow of
funds on salaries, overtime, wages, etc. (Ethiraj, Gambardella, and Helfat, 2016).
 They must de-centralize the firm to maintain decision making, workforce management to
eliminate mistakes and confusion in such a time. They must focus on matching decisions
with expertise as errors occurred during these times can put the company in tremendous
trouble.
 They overcome recession by ignoring lay-off as it involves training factor and thus
increase the cost of the company (Ethiraj, Gambardella, and Helfat, 2016).
 Focus on maintaining the cash flow as they might face trouble recovering the overdue
from the clients thus help ignore unnecessary debt on the company.
 Maintain a good credit image as at times the recession in market or downfall of daily
business activities will result in loss of tremendous funds as happened to KFC they
further due to their good credit image will successfully be granted with extra funds to
operate their business activities (Steinbach, and et.al., 2017).
 KFC must opt for less expensive marketing backgrounds like promoting business on
social media like Facebook, Twitter, Instagram, etc. that includes low cost and ultimately
results in marketing of business in such time of recession.

 KFC must focus on core competencies at that time as they may make mistakes in
developing new product or even the article may fail in market even after great efforts thus
state that at the time of recession KFC must not focus or invest in developing new
product and introduce it to targeted customers (Hitt, Ireland, and Hoskisson, 2016).
QUESTION 2
C. The purpose of strategic planning and decision making within an organisation also
differentiate between intended, emergent and realized stratergy.
Strategic planning can be defined as process of managing resources and activities in
effective manner so that goal of business can be accomplished. The purpose of the strategic
planning leads directions for the organization by defining its objectives for its existence and
also by providing goals at the same time it provides measures for success indicators in order to
achieve the purpose effectively and efficiently. Strategic planning provides the stakeholders and
opportunity in order learn more the administration and to know about the strengths as well as
weaknesses and also identifies the critical issues that affects and the future probability that can
affect the organization. In order to grow and sustain in the global market KFC is required to set a
strong strategic plan in order to build and develop a strong financial base or foundation that will
safeguard from many trade barriers, uncertainties as well as economic and financial crisis. The
following are the five pillars in respect to strategic planning that KFC need to ensure, Because
the strong strategic plan will help KFC ;-
1. It allows the administration to become proactive:- Strategic planning will allow KFC to
forecast the future and to get prepared as per the challenges. With the help of this the
organization will be able to anticipate harmful scenarios such as trade barriers, financial and
economic crisis before it will happen and accordingly the company can take necessary measures
in order to avoid that. Strong strategic design can help KFC to be proactive instead of merely
reacting for the situations that arises. Being proactive will make the organization to be update
with changing directions like crisis or trade wars in the global market and also helps in better
decision making for the organization (Frynas, and Mellahi, 2015).
2. It sets direction:- Strategic planning will assist KFC by guiding with the direction that the
organization must follow and will help in setting up of realistic objectives as well as goals as per
the vision, mission. It also offers needed foundation through that the administration can grow and

can measure its success, correct the employees. Strategic plan also set up boundaries in order to
make better and effective decision making (Steinbach, and et.al., 2017).
3. It helps increasing efficiency:- Strong strategic plan helps to provide the road map in order to
match the functional activities for attaining the established goals. It will guide KFC in
management discussions and it will also help in decision making like in identifying resources
and the requirements for budgets in order to achieve the set purpose which will result to
operational efficiency.
4. It assists to increase profitability as well as market share :- With the help of strong
strategic design or plan will help KFC for getting valuable perception with regarding to market
trends as well consumer segments and at the same time offering in respect to products that may
affect the success of the organization. If the strategic plan is well targeted and strategized in
order to increase sales that will increase the profitability, market assets and effective decision
making.
5. It helps in long term durability of the business:- Business is said to be as disruptive concept
because one year it may be growing and another year it may be in debt. With the changing global
markets as well as industries administration lack strong base, foresight that can trouble the
running of the business for the future. In order to consider the strong strategic plan will help KFC
to align the employees as well as daily operations. The organization need to use management
software for strategic plan that will help in administering the strategic as well as operating plans
that will result to strong decision making and better track performance (Frynas, and Mellahi,
2015).
In stable as well as predictable environment. The strategic design will enable KFC in
order to attain, manage and at the same time to maintain success and growth in the global market
but in actual condition only some organizations experience perfectly lasting as well as
foreseeable situation.
Purpose of decision making is to make clear decision after evaluating actual situation of
company, this helps in getting positive results and minimising risk of business unit.
For this reason, the organization need to understand concept regarding intended, emergent as
well as realized strategies
Intended strategies Emergent strategies Realized strategies

It refers to that strategy in
which the organization hopes
or anticipate in order to
execute or what the
organization is planning to do.
In order to achieve the
intended plan KFC need to
allocate the important
resources as well as time in
order to attain the specific
purpose. Whereas the
administration can face
unanticipated events while
creating plan and realization
that will the actual result
different from the knowing
plan.
The researcher have found that
around 10 to 30% of the
deliberate strategy is realized.
In order to make the deliberate
strategy the realized one KFC
need to set the precise
objectives that it need to be
SMART that means Specific,
measurable,attainable , result
destined as well as time bound
and also the company need to
do the PESTLE that is
(political, economical, social,
technological, legal as well as
This strategy refers to the
unplanned strategy which
occurs in respect to
unexpected challenges as well
as possibilities and how these
outcomes are incorporated
within the future incorporated
plan with the help of bottom
up method in respect to
management (Steinbach, and
et.al., 2017).
Inflexibility in plans express
that the organization must
continue with the intended
strategy not taking into
account the changes in market
or environment. Whereas the
political changes and
advancement in technology
and more factors will affect the
business in different ways
because of these changes
implementing the intended
strategy is impossible.
In order be more flexible as
per the changes in the market
like financial crisis and trade
affairs. KFC need to prefer the
emergent strategy that will
result in smooth learning in
operations and sustainability
This strategy refers to the
strategy that the organization
is actually following that is
what the organization have
planned to execute.
In order to make the planned
strategies into realization the
company need to motivate the
employees for achieving the
objectives. Many companies
knows that what are the
strategies that are required for
success. Whereas many
entities like large ones face
difficulties to transfer the
intended plans into action.
In order to sustain and to
implement this strategy KFC
need to motivate the
employees,secondly to turn the
intended into real action and
third managing the
performance and involving the
capable employees to achieve
the best results as well as
objectives effectively and
efficiently. So KFC need to
look at the business results as
well as to improve the targets
delivered which will result to
success and sustainability for

environmental) in order to
meet the challenges that the
company can face while
realizing the objectives
(Jenkins, and Williamson,
2015).
for the long term in the global
market.
the long term in the global
market and growth of the
economy.
Consider the alternative approaches, how strategy can be viewed and strategic planning
undertaken within an organization
There are alternative approaches and according to that strategy can be positioned, viewed
and managed that can be design approach, positioning approach and planning approached
thorough.
Design approach
This approach is Top down that is planned by top administration. This approach is called
for dependency on the external element like possibilities and threats that can exist in the
domestic as well as global market. This approach can help KFC to design the plan as per the
external factors and will also help to identify the threats like financial and economic crisis
(Jenkins, and Williamson, 2015).
Planning approach
In this approach it is not developed by top management. It is created by specialized
planners in the administration and these planners declare the process to be followed by others.
This strategic approaches will help KFC in solving the problems as well as in decision making
for the organization.
Positioning approach
This approach refers to the organization's position in the overall market. This most
important and common tool that is uses which includes the five force that covers the bargaining
power of suppliers, bargaining power of buyers, threat of new entrants, threat of substitutes as
well as rivalry among competitors that will help KFC to position the market (Zhao, 2017).
Alternative approaches to Strategic planning
Zoom out-zoom in is the best alternative approach in this companies pay more attention
on existing market situation to make effective strategies so that realistic goal can be obtained. It

prepares long term plan. KFC can evaluate its current market and situation of industry and will
analyses situation of industry or company in next 10-20 years. By this way managers can be able
to make long term strategy that may support in gaining positive result to organisation. Whereas
in zoon in tactics company can pays close attention on next six month planning and its impact
on KFC. Company builds systematic plan by involving all leaders and mangers and prepare a
great plan that can shape business unit. They also evaluate risk involve in implementing that
strategy and find solution for them same.
The main objective of this approach is that future is uncertain hence company has to
make advance planning that can give best result organisation. Strategic planning by using this
approach can help in minimising future uncertainty of KFC. Furthermore, KFC can give more
benefit to investors by implementing this approach (Steinbach, and et.al., 2017).
QUESTION 3
d. Organizational change implementation and implying SMT analysis to mark its importance.
Organizational change can be defined as alteration that takes place in existing business
practices due to changes in external or internal business environment. There are many causes of
organizational change such as market situation, value of economy etc.
Companies badly get affected by global crises, there is essential requirement of
organizational changes so that such kind of critical situations can be managed effectively. In
such conditions government also make some effective regulations so that enterprises can sustain
in such situations effectively. Companies which are unable to make changes in the firm can fail
to maintain its position and they may have to eliminate itself from market.
Global recession is considered as most drastic situation that may affect productivity of
entire country and impact on overall performance of all business. In such condition enterprise
are required to make necessary changes in their practices so that they can sustain in the market
for longer duration. KFC being a global brand has to ensure that economic condition of nation is
good. If there are financial crises, then firm may face difficulty in recovering cost of all
investments.
Global crises impact on social and economic condition of US hence foreign investment
get reduced in KFC. In such condition KFC has to make changes in its existing investment
policies so that it can manage its operational cost accordingly and sustain in crises situation

effectively. If it fails to make changes sin its investment strategy, then it would be difficult to
have liquidity in crises condition that may create problem for business unit.
In the global crises situation KFC has to make changes in its external trade activities. If
this is not done, then entity may get fail to get return on its trade activities. All these changes can
impact positively on the firm then company may face huge loss. Apart from this, global crises
impact negative on the firm because entity get fail to implement advance technologies, as it has
limited fund to invest hence its investment strategies get influenced. One of the major impact is
that there is lack of cash flow in the firm (Zhao, 2017).
In the global crises situation consumers fail to invest such large amount on luxurious
activities hence sales of KFC get reduced which decreases cash flow in the organization. In such
condition many firms go to bank for getting credit facilities. If they do not receive adequate fund
then they may get fail to run their daily operations significantly in the market. There are many
examples where companies get fail to run business in global crises due to lack of funds. In such
condition KFC will get fail to provide bonuses at the end of fiscal year to its stakeholders. This
thing may make all the stakeholder negative towards the brand. In such condition KFC may have
to make changes in its leadership style. Leaders will have to motivate its workers and other
stakeholders by showing them future growth plan. They have to make them understand the
reason of cancelling bonuses so that people support the firm and they stay with organization for
longer duration.
Layoff and high unemployment is another impact of global crises on business units. Due
to issues in carrying out operations companies terminate its most of the employees so that their
operational cost can be managed. In order to manage such issue KFC has to make changes in its
structuring and working process. It can hire people on part time bases. By this way it will have to
pay less salaries to its workers and its operational cost will be managed easily (Zhao, 2017).
Falling stocks is another impact of global crises on business. In such condition KFC has
to make changes in its investment plan. Furthermore, it has to manage its stock effectively or
reinvest processed so that it can improve stock performance of its shares. This will help KFC in
sustaining in crises situation effectively.
In the global recession KFC modified its ways to operate the business. The company focuses
mainly on two factors namely customer's requirement and market trend and production process.