KFC Business and Environment: Macro-Factors, SWOT, and Interrelation

This report provides a comprehensive analysis of KFC's business environment, examining various aspects of its operations. It begins with an introduction to different types of business organizations, including public, private, and voluntary sectors, and explores the growth of the international business environment. The report then delves into the specifics of KFC, a multinational chain restaurant, detailing its products, services, mission, vision, and organizational objectives. It also includes an organizational chart and an analysis of the interrelationships between various functions within KFC, such as research and development, production, marketing, human resources, and finance. Furthermore, the report identifies and analyzes the macro-environmental factors impacting KFC's business operations using PESTLE analysis, covering political, economic, social, technological, legal, and environmental factors. A SWOT analysis is conducted to identify KFC's strengths, weaknesses, opportunities, and threats, followed by an examination of the interrelationships between these factors and the external macro-environmental influences. The report concludes with a summary of the key findings and a list of references.

BUSINESS
AND
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Different types of organizations and the growth of international business environment...........3
Details of different types of business organization.....................................................................4
Organizational chart and interrelationship between various functions of KFC..........................6
Identification of various macro-environment factors impacting business operations................8
Internal and external analysis of KFC to identify strength and weakness................................10
Interrelationship between strength and weakness with external macro factors........................12
CONCLUSIONS............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Every business organization gets influenced by various factors. Both internal and external
factors of business influences the working of business and its related activities. In order to
sustain in competitive business environment, organisations needs to analyse all the influencing
factors and accordingly make its business related strategies. In this study report, various types of
business organization's size and classification are discussed. Their legal structure, background
details, products and services, mission, vision and business objectives are explained further. KFC
is a multinational corporation and deals in chain restaurant business. In this study, various factors
influencing operations of KFC are explained in detail. PESTLE and SWOT analysis are
conducted in order to find out various influencing factors and their impacts on business
operations.
MAIN BODY
Different types of organizations and the growth of international business environment
Public sector business:
Public sector company is a government corporation in which shares are traded in stock
exchange. Public limited companies have to follow various legal requirements and official
documentation. It should be registered under the companies act, 1980. Ralph Lauren corporation
is a public limited company operating its business in fashion products and also offers fragrances,
foot-wares, furniture, home products, clothing and apparels. Ralph Lauren deals in marketing
and distribution of products and services to public(Polyvyanyy, Smirnov and Weske, 2015).
Private sectors business:
Private limited companies have owners and shareholders who owns the company and are
liable for its profits and loss. It requires legal paper works and requirements to start business and
its accounts should be shared with government. KFC is a private company and offers wide range
of food products and beverages to its customers. Various food products include sandwiches,
chicken products, sauces, popcorn nuggets, drinks, etc. KFC owns some of its restaurants and
also deals in franchising(Hill, 2008).
Voluntary sector organization:
Voluntary sectors aims at benefits and enriching society. These sectors are set up in order
to create and maintain social impact rather than making profits. Voluntary sector organisations
focuses on providing social services, health services, education benefits and other unmet needs

of people. This sector gets its funding from charities, donations and taxes received from
foundations and welfare organisations(Bohari And et.al., 2017). Red cross is voluntary sector
business organization and aims at protecting human life and their health. It ensures respecting
every human being and aims at preventing and alleviating human sufferings.
International Business Environment refer to multidimensional approach which
includes various factors such as cultural differences, political risks, exchange rates, taxation and
legal issues. The various business environmental factors greatly affects every types of business
organization as it influences business and its related activities. International business
environment is growing and developing on rapid pace because many business organizations are
growing in global markets. Availability of low cost labour, increased demands of products and
services, development of technological communications, trade barrier reduction, etc. makes
every business organization to expand in global markets.
Details of different types of business organization
Public limited
company
Private limited
company
Voluntary sectors
business
Background Details Ralph Lauren is an
American corporation
started in the year
1967(Oraman, 2014).
KFC is multinational
chain restaurant
business and was
founded in the year
1952. KFC stands for
Kentucky Fried
chicken.
Red Cross is an
international
humanitarian aid
movement founded in
1863 in Geneva,
Switzerland.
Products and Services It offers wide range of
lifestyle products such
as clothing and
apparels. It also offers
home furnishing
products, fragrance
collections, children
wear and accessories.
KFC offers various
food products and
beverages including
chicken products,
burgers, wraps, salads
nuggets, sandwiches,
soft drinks, fried
Gizzards, etc.
Red Cross provides
various services to
public including
hospital services,
vocational training
programs, prevention
of infectious and
communicable

diseases and relief
programs. It also
offers home for
disabled serviceman,
child and family
welfare programs.
Size and Scope The revenue of Ralph
Lauren globally is
around 6.18 billion US
dollars.
KFC generates
revenue of 23 billion
US dollars in
international markets.
Red Cross responds to
approx 64000 disaster
annually.
Organizational
Mission and Vision
Ralph Lauren's
mission and vision
statement explains that
it aims at redefining
style and aims at being
biggest and top
fashion retailer. It also
focuses on maintaining
high standards by
providing high quality
products.
KFC vision and
mission statement
refers to be the leading
food services and sell
food in friendly and
speedily and make its
environment in a way
that appeals pride
conscious and health
minded customers.
Red cross mission
statement states that it
aims at protecting
human lives and
dignity of victims of
armed conflicts and
also to assist
them(Oraman, 2014).
Organizational
Objectives
Operational objectives
of Ralph Lauren is to
expand international
presence by increasing
stores and e-commerce
business.
The main objective of
KFC is to offer better
food products and
beverages to its
customers and to
provide services at
faster
speed(McDonagh and
Prothero, 2014).
Red cross's main
objectives are to
reduce death and
injuries from disasters.
And also reducing
impacts of diseases
and to provide health
emergency services.

Legal structure Ralph Lauren follows
hierarchical structure
to operates its business
and operations and
consists of board of
directors, officers,
employees and
shareholders as
various levels of
hierarchy(Apăvăloaie,
2014).
KFC follows a tall
organizational
structure to operate its
chain restaurant
business and its
operations.
Red cross being a
voluntary association
follows tall structure
in which officials are
charted by National
Board of Governors.
Key Stakeholders Its stakeholders are
shareholders,
consumers,
employees, suppliers,
manufacturers, etc.
Its stakeholders are its
customers, employees,
suppliers,
manufactures. It
mainly focuses on
satisfying its
customers and
employees.
Its stakeholders are
patients, research
institutes, media,
government
authorities, employees,
volunteers, etc.
Organizational chart and interrelationship between various functions of KFC
Organisational chart refers to structure followed in company and it also explains
relationship between levels of management i.e. employee to another level of employee or with
top management. KFC being a multi-national corporation follows tall organisational structure
having various levels in its hierarchy(Bohari And et.al., 2017). Organisational structure of KFC
explains line of responsibilities and authority of every employee of business organisation. In
KFC, communication line is long and time consuming and span of control generally remains
with top management.
Various functions of KFC and interrelationship between them:
Every business handle and manages various functions in order to operates its business
and related activities which helps in providing products and services to its target customers. The

different functions of KFC assists in achieving its goals and objectives and which are explained
as follows:
Research and Development: KFC aims at providing better goods and services to its customers
and satisfy them. Research and development deportment focuses on identifying needs and wants
of customers which results in achieving overall goals and objectives. Research and development
department communicates with finance department to decide budget regarding tools and
techniques to be used for identifying needs. It also communicates with production department to
provide information regarding volume of products to be generated according to expectations
target markets which benefits KFC to achieve its objectives(Erasmus, Strydom and Rudansky-
Kloppers, 2016).
Production Department: Production department of KFC interrelate with various other
departments of organisation to provides accurate information. Research and development
department of KFC identifies needs and wants of customers then communicates with productions
department which enables this department to produce accordingly. Production department
communicates with finance department to get budget for producing and manufacturing products
and services which can meet expectations of target customers. Human resource management
ensures to provide accurate personnels for production department according to volume of goods
to be produced.
Marketing Department: Marketing department aims at attracting target market customers.
Every department of KFC are interrelated which makes it possible to communicate easily and
also allows easy transfer for accurate information. Marketing department communicates with
production department regarding preferences and taste of target customers, so that they produce
products and services accordingly. Marketing department of KFC also interrelate with finance
department regarding selection of marketing techniques and tools according to decided budget.
Human Resource Management Department: human resource department of organisation
focuses on recruiting and selecting the best available employees and also provide them with
training and development programs(Hamilton and Webster, 2015). Human resource
management of KFC aims at recruiting talented and skilled employees who can put their best
potential and bring innovation in operations. Personnel needs of every department is fulfilled by
human resource department. It aims at providing accurate and talented staff which can

accomplish organisational objectives. Finance department assist human resource department by
providing accurate budget for various activities, such as recruitment and training programs.
Finance Department: Finance department interrelates with every department of KFC as it
decides budget of every function and maintain cash flow of business organisation. Finance
department communicates with human resource department to allot wages and salaries to
employees, provide budget for training and development programs, offer bonus and incentives,
etc. Finance department also communicates with marketing department and provide with
accurate budget to identify expectations of customers. Meeting needs and wants of customers by
providing proper and accurate budget to production department which can lead to achievement
of organisational goals and objectives(Polyvyanyy, Smirnov and Weske, 2015).
Identification of various macro-environment factors impacting business operations
Business and its related activities gets influenced with various environmental factors.
Business needs to make its plan and strategies by considering various affecting factors. KFC
operates its business in chain restaurant also gets affected by environmental factors. Macro-
environmental factors affect decision making of KFC. PESTLE analysis is used to identify
various macro-environmental factors which influences business and its operations, which are
explained as follows:
Political Factors
Political factors affect and influences every business organisation and its related
activities. It includes various policies made by government regarding tax, foreign trade, labour
law, etc. KFC's business gets influenced by various changes in political factors.
Positive impact: Political changes made by government influences KFC and its operations. Free
entry in new markets benefit KFC to increase its market share and brand image in global
markets.
Negative impact: The decision of UK to leave European Union brings political instability which
affects business of KFC. It brings negative impacts for business and operations of KFC.
Economic Factors
Economic factors includes interest rates of country, disposable income of people,
inflation, cost of labour, economic growth of country, etc. The various changes in economic
factors affects KFC as following.

Positive impact: The changes or increase in cost of labour of a country affects KFC as it has to
occur more expenses for labour cost which will increase the products cost and affects the
demand s of consumers. The changes in economic factors of a country greatly influences the
business and its activities(Hamilton and Webster, 2015).
Negative impact: Stable economic growth of a country affects business of KFC as it will not be
possible for KFC to increase its chain restaurant outlets and will also limit its development and
growth in that country.
Social Factors
The social factors are education level, demographic factors, trends and culture being
followed by people, etc. Social factors are related to social environment of country and it also
brings influences in business of KFC(Apăvăloaie, 2014).
Positive impact: Changes in population affects and influences business and its operations.
Decline in birth rate of a country cam bring influences in demand and supply of food products
and services of KFC.
Negative impact: Now-a-days people focus on having healthy food products which affects
business of KFC as it focuses on providing fat recipes. KFC can aim at including healthy recipes
to its menu and get benefits and also achieve its objectives.
Technological Factors
Changes in technological factors includes technological developments, distribution
channels, adoption of advance ways of production, etc. The update and advance technology
brings influences to every business organisation and its operations.
Positive impact: KFC adopts various technological advancement to operate its business activities
such as it has implemented robot waiters to serve its customers, it benefits in attracting customers
and also to increase its brand image and loyalty(Bohari And et.al., 2017).
Negative impact: Implementation of new and advance technologies requires extra money which
leads to increase its product price and it leads to negative impacts for KFC. Implementation of
advance technologies also requires training and development programs for employees.
Legal Factors
Legal factors affects every business organisation and it includes various laws and policies
such health and safety law, consumer law, employment law, discrimination law, etc.

Positive impact: KFC aim at providing better and quality food products to its customers and so
maintain cleanliness and hygiene, this leads to building trust and brand image in the minds of
customers. This brings positive benefits for KFC and brings trust and loyalty of customers.
Negative impact: Several countries does not have good development employment law which
affects employees and results in employee turnover, and this brings negative impacts for KFC.
Environmental Factors
Environmental factors influences every business organisation directly or indirectly. It
includes changes in climate, global warming, weather conditions, availability of raw materials,
limited natural resources, etc(Erasmus, Strydom and Rudansky-Kloppers, 2016).
Positive impact: KFC focuses on maintaining environment sustainability which leads to creation
of brand image in the minds of customers and results in increase in productivity and profits of
company.
Negative impact: recycling standards are avoided by KFC which leads to creation of waste and
pollution. This greatly affects its brand image and also affects productivity.
Internal and external analysis of KFC to identify strength and weakness
Internal and external analysis is done in order to find out strength and weakness of KFC
as it greatly affects its decision making(SWOT Analysis, 2016). Internal analysis is done by
SWOT which is explained as follows:
Internal Analysis of KFC is done to identify strength, weakness, opportunities and threats of
company, which is explained as follows:
Strength of KFC
 KFC is popular brand for fast food products and created brand loyalty.
 Provides wider range of products such as burgers, nuggets, chicken products, sandwiches,
etc.
 Adopts to various marketing techniques such as print media, hoardings and billboards,
TV advertising, online ads(Hamilton and Webster, 2015).
 KFC has approx 20000 outlets in more than 120 countries resulting in large market share.
 KFC operates its business activities with clean stores and hygienic food and also provides
fast services to its customers.
Weakness of KFC
 KFC's menu has high calorie and fat products which does not satisfy needs of customers.

 It has been criticised for causing harm to environment and animals which leads to affect
its brand image and loyalty of customers.
 KFC fails to manage its franchise business. Some franchises chain restaurant faces
operational issues which affects overall brand image of KFC.
Opportunities for KFC
 Introduction of more and better vegetarian products will lead to increase market share
and profits for KFC(Hill, 2008).
 KFC can spend more on technological advancements and developments for introduction
of new food items which can boost business of KFC.
 KFC can enter in new markets and introduce budget friendly food products such as
snacks to its customers.
 Provide home delivery services as a regular service and it will result in increasing
demand of its products.
Threats for KFC
 Threat of competition from other fast food business such as McDonald's, Burger King,
Subway, Pizza Hut, etc.
 Changing lifestyle of people and increasing awareness towards healthy food products.
 Rise of labour cost, operational and material cost act as a threat to KFC.
External Analysis of KFC is done by Porter's Five Force Framework to identify wider
environmental factors that affects business activities and also influences decision making.
 Potential Entrants: Chain restaurant business is difficult to penetrate and enter. KFC
can get advantage as compared to new entrants as it has already developed its brand
image and created loyalty of its customers.
 Existing Competitors: Fast food chain restaurant business faces a great competition
such as Burger King, McDonald's and subway. KFC can gain advantage over its suppliers
by offering variety of snacks, quick eats and healthy food products and at faster speed.
 Bargaining Power of Buyers: Bargaining power is high when there are many chain
restaurant business as customers have many options to choose from(McDonagh and
Prothero, 2014). KFC can gain advantage from offering better quality food products and
services at faster speed.

 Bargaining Power of Suppliers: KFC has many outlets around world-wide therefore it
needs to maintain large number of suppliers. This leads to decreasing and flexible
bargaining power of suppliers and benefits KFC.
 Alternative or Substitute Products and Services: there are many brands offering same
range of food products as KFC. KFC can get benefits over its substitute brands by
providing Wi-Fi services and introducing healthy food products at discounted rate.
Internal and external analysis of KFC helps to identify strength and weakness which needs to be
taken into consideration for making strategic decision making and benefit in gaining competitive
advantages.
Interrelationship between strength and weakness with external macro factors
Internal analysis is done to identify strength and weakness of company which facilitates
companies to make plans and strategies in a way that leads to achievement of overall goals and
objectives of organisation. External macro factors influences and affects business activities also
decision making. Interrelationship between strength and weakness and external macro factors is
given below:
Political Factors are rules and regulations laid down by government on business such as labour,
tax policies, trade related agreements(Oraman, 2014).
Strength: NAFTA trade agreement ensures organisations to do business in member nation
countries. This benefits KFC to increase its markets share and productivity.
Weakness: Strong regulations of government on a country makes it difficult for business
organisations to operate profitably and it also affects operations of KFC.
Economic Factors includes labour cost, economic situation of country, disposable income, etc.
Strength: low cost of labour of country benefits KFC to spend less on human personnels and
more on technological advancements that leads to attracting more customers and gain
competitive advantages.
Weakness: Recession situation or slow economic growth faced by a country affects business
organisations and its operations. KFC also gets greatly affected by economic situations of
country.
Social Factors includes changing lifestyle of people, social trends being followed, etc. These
factors have directs impacts on demands of products and services.

Strength: Millennials focus on having outside food and also prefer fast food products which
makes KFC to increase its productivity and market share.
Weakness: Young age group are both price and health conscious. This makes KFC to put
pressure on introducing healthy food products at cheaper rates(Polyvyanyy, Smirnov and Weske,
2015).
Technological Factors influences business and its related activities as it includes advancement
of techniques of productions and distribution.
Strength: KFC has developed mobile apps that allows customers to order online and also make
payment through online, this facilitate KFC to attract more customers and maintain smooth flow
of activities.
Weakness: KFC adopting to technological advancements makes it complex for employees to
handle and manage the activities and operations. This also leads to dissatisfaction of employees
and result in employee turnover.
Legal Factors includes various laws and policies that needs to be followed by business
organisations.
Strength: Favourable policies and law of country benefits KFC to operates its business in a way
that leads to increase of productivity and profits.
Weakness: Many nations have strong bureaucracy that makes difficulty for business
organisations to operate their business in profitable way. KFC gets affected by various legal
factors as it has to put its focus on maintaining complex policies.
Environmental Factors relates to ecological factors such as global warming, climatic
conditions, etc.
Strength: KFC focuses on maintaining sustainability and environment protection which benefits
in creating brand image and loyalty of its customers.
Weakness: KFC fails to maintain Corporate Social Responsibilities(CSR) which affects its brand
image and leads to decrease its market share and profits(Springer and et.al., 2017).
CONCLUSIONS
Business and its activities gets affected by various environmental factors. Internal and
external analysis helps every business organisation to identify its strength and weakness which
can be used while making plans and policies. SWOT and PESTLE analysis assists in identifying

strength and weakness which greatly affects business and its operations. The various macro
environmental factors also influences decision making and performance of business operations.

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