Business and Business Environment: A Case Study of KFC

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BUSINESS AND BUSINESS ENVIRONMENT
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Table of Contents
Introduction................................................................................................................................3
LO1: Including the size and scope, explain different type of organizations..............................3
P1. Explain types and Purposes of organizations...................................................................3
P2. Define the size and scope of the different type of organizations.....................................3
M1. State how the structure was integrated with business objectives....................................4
LO2: State the interrelationship of various functions within the organization..........................4
P3. Describe relationship with different organizational functions and also develop a link
between those.........................................................................................................................5
M2. State the advantages and disadvantages of the interrelationship between organizational
functions and its influence in organizational structure...........................................................6
D1. Interrelation of complexities between different organizational structure and provide
different organisational functions interrelationship................................................................6
LO3: After using contemporary examples demonstrate both positive and negative impact on
the microenvironment................................................................................................................7
P4. Identify positive and negative impact that the macro environment has upon business
operations...............................................................................................................................7
M3. The conduct PESTLE analysis of the macro environment.............................................8
LO4: State what are the internal strengths and weaknesses of the business and also develop
better interrelation with the external macro factors...................................................................9
P5. After conducting internal and external analysis, identify the strengths and weaknesses.9
P6. State how the strengths and weaknesses are interrelated with external macro factors. .11
M4. Conduct SWOT analysis...............................................................................................11
D2. State the impact of both macro and micro factors that impacts on decision making....12
Conclusion................................................................................................................................13
Reference list............................................................................................................................14
Bibliography.............................................................................................................................17
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Introduction
Marketing strategy is essential in developing better planning to be unique in market of
competition. The organisation KFC is selected which is an American Fast Food organisation
who conducts professional business plan to identify future threats and opportunities. In order
to demonstrate overall picture, PESTLE and SWOT analysis are going to be conducted in this
study. The purpose of this study is to find out the macro and micro environmental factors.
The aim of this study is to focus on conducting external and internal analysis to analyse the
threats and opportunities and to identify organizational potential.
LO1: Including the size and scope, explain different type of organizations
P1. Explain types and Purposes of organizations
Different types of organizations are;
Public Organization- Audit commission is the public organisation that gets established under
Local Government Financial Act 1982. It mainly focuses on serving the public and in this
service, the defense and the important things stay combined (GOV.UK, 2015). It is the UK
government who rules this section to maintain regularity in the UK environment. The purpose
of this organization is to conduct better service to the consumers of the UK.
Private organization- In this case, two or more people stay committed with the business and
the loss & profit gets also shared in between them. In this type of business, two or more
individuals stay integrated by sharing a bond paper of partnership. John Lewis Partnership is
a retail private organization of UK (John Lewis Partnership, 2019). The purpose of this
organization is to gain profit and also looks after increasing that. Strong rules and regulations
get maintained in this type of business to maintain product quality and also to satisfy
customers. They also believe in gathering feedback from customers and also conduct
necessary changes on that basis. Effective leaders get involved in the business to maintain the
smoothness in product processing and also maintain product quality.
Voluntary organization- Save the Children organization is this kind of organization which
focuses on helping society more than conducting profit. Much large organization stays
connected with this type of organization. The organization runs out by the donation that gets
conducted by the private and public organization and also by the people. The purpose of this
organization is to raise fund and reaches to the needy who actually needs help. This
organization mainly focuses on saving children and also gives necessary support towards
them. This organization also has subparts in Asian countries especially in India (Save the
Children, 2019).
P2. Define the size and scope of the different type of organizations
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In this study, one public organisation gets selected named KFC. KFC is World's second
largest food chain and it has 750000+ workforces around the World. It mainly focuses on
serving fresh veg and non-veg items to the customers. This organisation also goes for
demographic segmentation to serve food items on the basis of customer's demands. They
have also focused on developing marketing strategies and also conducts research on that. It
helped in identifying the main customers and it is found that the main customers are young
aged people (Wickert et al. 2016). In order to develop the scope part, 5 main types of
variables get used in this and those are; age, lifecycle, gender, income and nationality.
Most of the organisations go through conducting development in customer care service as it
is one of the main parts which help in developing consumer satisfaction level. In order to
develop scope, this organisation focuses on maintaining the budget level to attract more
customers. Whereas public organisation focuses on maintaining the proper environment of
the country and those public organisations get regulated by the UK government.
M1. State how the structure was integrated with business objectives
Structure, size and extent of the organisations are to meet the organisation goals to develop
profit margin. In order to develop an organisational structure, it is also necessary to develop
the organisational goal. Business objectives are also needed to be set as per the target market.
All through different organisations have different path, though they have the common one
and that is related to satisfying customer demands. Satisfying the needs of customers can be
helpful in developing brand name and will also be helpful in developing better objectives.
Stakeholder involvement is also necessary as it helps in conducting improvement n the
production level (Vishnevskiy et al. 2015). The main stakeholders of the organisation are
Employees Who run the organizational activities. Thus necessary training is needed to b
provided to them. After that the customers are needed to be satisfied to maintain
organisational growth level. It is also needed to develop partnership with other organisations
and suppliers to conduct organisational develop and also to get fresh raw materials of the
supply chain.
LO2: State the interrelationship of various functions within the organization
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Figure 1: Organisational chart of KFC
(Source: Goetsch and Davis, 2014)
P3. Describe relationship with different organizational functions and also develop a link
between those
Organizational structure stays integrated with the business functions and objectives to
develop a better quality of the job. Business function of KFC stays interrelated in serving
customers and also stays involved in putting control over the whole organisation. Besides
developing the objective the training programs are also needed to be improved to serve in
better service to the customers. The aspects of the organisational functioning deal with sales,
marketing, prediction, billing, and research. The organisational structure in KFC helps in the
determination of collaborative relationship among the multiple departments. According to
Goetsch and Davis (2014), the business organisation adopts a structure which helps in
producing a chain of command among the functions. The structure of KFC helps employees
of this organisation to the concrete accomplishment of their goals and objectives. There is a
requirement of functional structure that can be implemented to find potential drawbacks of
this organisation. This organization focuses on the development of the divisional structure.
The divisional structure is beneficial, as the structure helps in spreading functions among
different categories of the organisation. The main advantage of this structure is that
employees can successfully carry out their duty and necessary functions. The efficiency of
the marketing group would determine the effectiveness of the sales perspective. The
promotional aspect of the company determines business growth.
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M2. State the advantages and disadvantages of the interrelationship between
organizational functions and its influence in organizational structure
Advantages of the interrelationship of business functions:
The effective interrelationship of the organisational functions allows KFC to achieve its goal
and objectives. With the utilisation of interrelationship, the organisation can develop mutual
understanding in their working style. As suggested by Torabi et al. (2014), the
accomplishment of market goals has to be associated with offering a commitment to the
important organisational functioning. Interrelation of organisational functioning in KFC
further allows the management to enhanced performance. There is an opportunity of gaining
a competitive edge by developing an efficient and effective interrelationship among the
organisational functions. The responsibility of the employees can be easily allocated with the
help of this aspect. Thus, the overall efficiency of organisational functioning can be achieved
through this procedure. Promotion of collaborative environment is considered to be one of the
major benefits of the interrelationship of organisational functions.
Disadvantages of the interrelationship of business functions:
A lot of focus on the interrelationship of business functions can have a negative effect on
hierarchy management. Miscommunication in the process of interrelationship can lead to
serious consequences for business growth. The negative aspect of one function has a direct
effect on the other functions and it needs to be crucial to focus on the creation of an effective
business relationship in the process.
Organizational functions that impact organisational structure:
The organisational functions of KFC help in the determination of organisational structure.
The hierarchy of the organisation is associated with the interrelationship of crucial
organisational functions. The functioning of finance director, operation director is influenced
by the managing director. Thus, the organisational structure is highly influenced by the
existence of a relationship among functions.
D1. Interrelation of complexities between different organizational structure and provide
different organisational functions interrelationship
There is a close interrelationship between business structure and business functioning. The
types of the business structure include network structure, horizontal structure, team-based
organisational structure and also divisional structure. In KFC, there is the existence of
horizontal structure to communicate important business decisions. The various types of
organisational functions in KFC include marketing, production, accounting, and human
resource management. The horizontal structure is effective in the determination of proper
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interrelationship between production and accounting. On the contrary, network-based
structure focuses on functions between marketing and human resources (Jussila, 2014).
Integration of different perspectives in marketing function is essential for the promotion of
good working environment. The team-based organisational structure is considered to be most
appropriate for the organisation, as it enhances communication and coordination among
various functions in the organisation. There is a deep correlation between the functioning of
the sales group and the production group. The production group determines their functions
with a discussion with the sales group.
LO3: After using contemporary examples demonstrate both positive and negative
impact on the microenvironment
P4. Identify positive and negative impact that the macro environment has upon business
operations
Several macro environmental factors are there which can affect the decision making part. The
main factors of Macro-environment are Political, Economical, Social and Technological
factors. In case of Political factors, the organisation needs to deal with the governmental rules
and regulations to avoid legal issues. The organisation KFC operates its business over 100
countries and it is necessary to stay compiled with the governmental laws to maintain
stability in organizational activities. Mhlanga (2018) stated that the business economy also
gets affected directly or indirectly with the change of economy. It has also been stated that
opening more stores in Asia could have been profitable in making organisational growth.
Lifestyle of any particular region also affects the business conduction as it is seen that people
in Asia more prefer Rice and noodle items instead of Burgers or fries. Thus, it is seen that the
business gets directly or indirectly gets affected by the factors of Microenvironment. Beside
this, technological improvement is also needed in the organisation to save time. Thus, it can
be seen that several positive and negative impact has on the microenvironment as it helps in
operating business in a better way.
Positive impact- After conducting analysis on Macro environmental elements it can be seen
that it helps in conducting positive change in the environment. It helps the organization to
look after positive organizational changes. Along with that, it also helps in developing a
better idea on political factors which is one of the most important things to be observed
(Gherhes et al. 2016). The organisation which faces legal issues, also losses positive brand
name, as it is necessary to compile with the government taxes and laws. Beside this, it is also
necessary to follow all the labour law, health & safety law and employment law to maintain
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stability in the organisation. Beside this, it is also necessary to look after economic, social and
technological factors as it helps in conducting necessary changes in the organisation.
Negative impact- Tax rates could have been changed rapidly which can impact negatively on
the organizational economical factors. The increase of tax can be the reason for conducting
increasing in product pricing rate. This can lead to customer dissatisfaction and also can be
the reason for developing a pricing strategy. Thus, economic factors can also be affected by
this which is another negative point.
M3. The conduct PESTLE analysis of the macro environment
PESTLE analysis can be helpful in developing ideas on Political, Economic, Social,
Technological, and Legal and Environmental factors of UK fast food market.
Political factors- In order to develop the opportunities, the organisation are increasing
international trade agreements to develop an opportunity for the organisation. The main threat
is related to UK guidelines that could have impacted negatively as the guidelines states about
maintaining health rate as most of the people in that country is facing issues related to obesity
(Nguyen et al. 2016). Thus, conducting PESTLE analysis helps to identify the governmental
guidelines related to health rules and regulations, as both the threats and opportunities can be
identified.
Economic Factors- The global and local economy makes a great impact on the fast food
organizations. It acts as the opportunity as it increases stability in the chain business. It is also
seen that economic factors can be effective in developing market sell as it improves the profit
margin (Barik and Kumar, 2018).
Social- Lifestyle of any particular region also affects the business conduction as it is seen that
people in Asia more prefers Rice and noodle items instead of Burgers or fries. Thus, KFC has
introduced Rice bowls in Asian countries as it can be helpful in promoting better profit in the
market. In these days people are turning out to be health conscious, thus KFC is also looking
after to add healthy food items in their menu to attract customers who are more health
conscious. Besides this, they have also stayed engaged in several social activities as it also
helps in gaining market values (Alava and Mu, 2018).
Technological factors- Technological improvement is needed in the organisation to save time
in productivity level. After connecting necessary analysis it is also seen that the
implementation of advanced technologies in the organisation can be helpful in conducting
improvement in productivity line (Aithal, 2017).
Environmental- It is an important factor as it is also necessary to look after environmental
development and not pollute those more. Thus, KFC is looking after marinating
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environmental factors in their organisation by developing sustainable business strategies. The
organisation was criticised for slaughtering animals and trees, thus they have also looked
upon these issues.
Legal factors- all the legal regulations get adhere buy the organisation to avoid legal issues.
They maintain all the labour law, health & safety law and employment law to maintain
stability in the organisation.
Figure 2: PESTLE analysis
(Source: Aithal, 2017)
LO4: State what are the internal strengths and weaknesses of the business and also
develop better interrelation with the external macro factors
P5. After conducting internal and external analysis, identify the strengths and
weaknesses
After conducting the analysis of internal and external factors the organisation need to follow
the SWOT analysis to identify the strengths and weaknesses. KFC being such a big and one
of the most famous fast food industries the organisation follows the SWOT analysis to cope
up with the present situation (Rahman, 2015). SWOT analysis as the best way for evaluating
the impacts of the internal and external factors is the best and modern way for the KFC
organisation. The macro environment also includes social, economic and governmental
influences as they could have negatively impacted on the environment. Coming to the
strengths, technological development gets conducted in this part which is necessary to
conduct development in food production level (Balamurugan et al. 2016). Besides this, social
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TechnologicalfactorsEconomicFactorsPoliticalfactorsLegalfactorsEnvironmental

and economic development also gets developed in this environment which helps in
conducting development in the productivity line.
Internal Analysis
As per the internal analysis, the main focus of the analysis is to follow the internal value and
improve the services of the KFC organisation. According to the analysis, KFC organisation
maintains all the management services with properly fulfilling the needs of employees,
suppliers and the stakeholders. The main strength of the company is successful operations
and very good availability of resources (Anand and Yeung, 2018). The different resources of
KFC Company include the total profitability, the brand quality, the qualities of the products
and employee capabilities as well.
External analysis
There are different types of external analysis for the identification of the present market
trends in the present situation. The SWOT analysis of the KFC organisation has some
different types of external factors like technological factors, economic factors including legal
environment, cultures and the social analysis factors (Omer, 2018).
The different types of external factors of the KFC organisation are mentioned below:
Economic Factors
The economic factors of the KFC organisation basically include the proper knowledge and
the skills which are used for upgrading the business strategy (Anand and Yeung, 2018). On
the other hand, not only the proper knowledge and the skills but the decision making policy
which is related to the customers and the production of this organisation is also affected by
the external factors.
Technological Factors
The technological factors actually include the skills and knowledge for upgrading the
company business. The company uses different types of techniques like modernization to
promote products and services. These factors are so much value to compete in the modern
fast food market with other famous and world-class brands as the market value is to be taken
into consideration for KFC brand (Mylonakis and Evripiotis, 2016).
Legal environment factors
The legal environment is important to identify the change in regulation and legal values.
According to the present situation, KFC Company has to follow some legal factors which
include tax policies and the changes in the duties.
Social and cultural analysis factors
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The cultural and social factors help to identify current trends and lifestyle of the culture.
Social and cultural factors basically consist of some facts like customer preferences, cultural
value, customer's attitudes and their values respectively. The KFC organisation has their
internal and external analyses which include the strengths and weaknesses.
The strengths and weaknesses are mentioned below:
Strengths
1) Satisfaction of the customers
2) Focusing on increasing customer number
3) Developing the profit margin
Weaknesses
1) Unhealthy fools are one of the very effective weaknesses
2) Lack of proper and valuable resources
P6. State how the strengths and weaknesses are interrelated with external macro factors
Macro environmental factor affects the organisation's performance level and decision making
the part by working over the business. Basically, micro factors look after the entire
geographic region in which the firm gets operated. Thus, it can be said that if the organisation
cannot work good in their home country, then it would be difficult for them to work at a
global level. Thus, the organisation needs to be internationally strength after identifying the
strengths and weaknesses (Sholihah et al. 2016). KFC has a strong international market
which means the management team of the organisation needs to take an immediate decision
on the basis of strengths and weaknesses. After identifying the weaknesses, the management
team needs to implement strategies to overcome those.
M4. Conduct SWOT analysis
After conducting SWOT analysis competitive advantage gets conducted to identify
organisational strength, weakness, opportunities and threats.
Strength- In the menu, KFC is conducting innovation by adding new items new their menu,
such as; smoothies, soda items and doughless burgers. In their food processing quality always
gets maintained to satisfy customers. The organization already had a strong brand image, thus
they give necessary training to the organisational people so that they can work accordingly.
Weaknesses- The main weakness of this organisation is related to the low quality of the food
items. Oily and high-calorie items get avoided in these days as they make a negative impact
on health (Sholihah et al. 2016). Besides this, the UK government is also looking after these
things, thus KFC is looking after conducting healthy food items on the menu. In the food
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