KFC's Business Environment: Macro Factors and Organizational Impact

This report provides a comprehensive analysis of KFC's business environment. It begins with an introduction to the business environment and its importance, followed by a detailed examination of KFC as a private sector organization. The report compares KFC with public and voluntary sector organizations, specifically the BBC and the Maytree Foundation, highlighting their different functions, objectives, and legal structures. It delves into the size and scope of these organizations, outlining their services, products, and stakeholders. The report then explores the interrelationship between various organizational functions within KFC, such as sales and research & development, finance and production, and marketing and HR. Furthermore, it analyzes the positive and negative impacts of the macro environment, including political, economic, social, technological, environmental, and legal factors, on KFC's operations. The report also assesses the internal and external factors of the organization, identifying its strengths, weaknesses, and their interrelation with the external macro environment, culminating in a conclusion summarizing the key findings.

Business and Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
LO1.........................................................................................................................................1
P1 Different types and purposes of organizations..................................................................1
P2 Size and scope of different organizations.........................................................................3
LO2.........................................................................................................................................5
P3 Relationship between different organizational functions .................................................5
LO3.........................................................................................................................................5
P4. Positive and negative impact of macro environment on business operations..................5
LO4.........................................................................................................................................9
P5. Internal and external of organisation in order to identify strengths and weaknesses.......9
P6.Strength and weaknesses interrelation with external macro environment......................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment is a total of internal and external factors that influence the
business. The business environment helps in identifying growth and opportunities by analysing
various factors such as external and internal, these factors plays an important role in the
organizations to execute the business related activities within and outside the firms(Babu, K.,
2012).This report is about KFC, an American fast food chain which is also known as Kentucky
Fried Chicken. It was founded by Harland Sanders and the companies headquarter is situated in
U.S. This assignment will also cover the roles and scope of public and voluntary companies and
the effects of internal and external factors on business environment.
LO1
P1 Different types and purposes of organizations.
The public, private and voluntary are three different types of organizations which varies
from one another's functions and scope. In this report KFC, an American fast food chain is taken
as private company. British broadcasting corporation as public and Maytree foundation as
voluntary company the main objectives and functions of these organizations is to serve the public
and to earn profits (Bartlett, and et. al., 2013). Here the characteristics, mission, vision, role and
scope of these institution's is explained further
Public sector: This sector is controlled either by central, state or local government.
Public services are defined as government services such as military, public infrastructures as in
roads, bridges, tunnels, water supply and public telecommunication and transits. Here British
broadcasting corporation is selected as a public corporation it is a mass media industry and a
public service broadcaster.
Background: BBC was founded by John Reith on 18 October 1922 and it came into
existence on 1 January 1927. Its headquarter is in London , it's services are enjoyed worldwide
and 20,916 employees works within the organization. This is a worlds oldest broadcasting
corporation it uses radio, television and web portals to render its services. BBC is a broadcasting
organisation that’s why it gets revenues from different services it offers to its customers such as
advertisements, reception advice and many more (Belás, and et al., 2015)
Objectives: The basic objective of British broadcasting corporation is to serve the citizen
of the country with the fair and knowledgeable facts.
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Vision: The vision is to provide empowerment to people.
Mission: To reach the population of millions through creative communication and to
make them aware about their rights and responsibilities.
Legal structure: The public sector corporations are regulated by the central, local and
regional governments and these corporations are fully financed by the government. A public
institution is able to manage its affairs with independence and flexibility.
Central government: This government has the political authority that governs an entire
nation. It focuses on the large public corporations and are governed and controlled by the central
government.
Local government: It is a form of public administration which operates at small level.
The wider areas are not covered by this government it only focuses on the minor regulations of
the public sectors.
Regional government: This government is a type of municipal government which
focuses on the affairs of the particular place where the public organization is situated.
Private sector: This sector is sometimes considered as citizen sector which is regulated
and owned by the private individuals usually to earn profits. Private sector serves in the areas
such as finance, information technology, mining, transport, education, telecommunication,
manufacturing, banking, pharmaceuticals etc. Here the food industry KFC is selected as a private
organization.
Background: KFC is an American fast food chain founded by Harland Sanders on 20th
march 1930. this is also known as Kentucky Fried Chicken. It serves worldwide in 22,621
locations, Its headquarter is in U.S and the parent brand of KFC is yum brand which is operated
outside of china(Boons, and Lüdeke-Freund, 2013)
Vision: To sell healthy food in a fast and friendly environment.
Mission: To improves shareholders values and also aims to maximise the profitability.
Legal structure: The private companies has their own separate legal entity, These
companies need to full fill the rules and regulations to start the corporations. important details of
the company.
Sole trade business: The business activity which are carried by a single person is define
as sole trade business. Here the paper work gets easier because of non-intervention of others. The
profit and risk are not shared with anyone in the sole proprietorship.
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Partnership: It is defined as the contract between two people who agrees to work
together and shares the profit and loss. The partnership deed requires paper based formalities
which are to be full filled with the partners.
Voluntary sector: This sector is basically known as community sector, whose core focus
is to help the public and society without making profits. Here Maytree, a NGO is chosen to
explain the voluntary sector more precisely.
Background: Maytree is a charitable organization which is located in London and
England. This was established in the year 2002. this corporation aims to support people who are
suffering from mental health problems.
Objectives: The overall aim is to reduce suicide cases.
Vision: TO listen the service users and protect them
Mission: To provide flexible care and support and to promote independence, dignity and
choice.
Legal structure: The voluntary corporations are unincorporated associations whose focus
is to provide services with non-profit motive. These associations do not have separate legal
existence. The contracts are held on the behalf of the individuals who are involved in the
charitable association.
Organisation structures of Maytree:
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Associations: These are considered as the unions or the group of people who contribute
in the foundations for the welfare of the societies. To ensure their proper growth and
opportunities provided to them for improving their lifestyle.
Trustee: These are the individuals who organise and carry off the responsibilities of the
voluntary organizations. The funds are also given by the trustees to operate the foundations.
P2 Size and scope of different organizations.
Public sector: British broadcasting corporation
Size and scope: BBC has wide scope by introducing various services to the society. It
broadcast news on radio channels to broadcast the news all over the world and day by day the
market capture is also increasing. The total no. of employees are 20,916 who are currently
working and the operating income of BBC is £ 39.3 million.
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Service and product: BBC operates various television channels and currently it operates
in high definition broadcast and it has ten radio stations which serves the whole UK. BBC radio
stations provide family-friendly dramas and comedy for children's programming. The world
service of this broadcasting renders the services such as news, current affairs and informations in
different languages including English. The programming is also available to other countries. The
more services are also provided by BBC such as news, internet, interactive televisions and
music(Charter, 2017).
Stakeholders: These are the one who are involved in the business activities and also get
affected with the business. The stakeholders of BBC are its customers and government from
where it generates the money for operations.
Private sector: KFC an American food chain.
Size and scope: Kentucky Fried Chicken is a food chain which basically operates
worldwide to provide them best food services to its customers with variety of items and now it is
capturing the market to compete with others. The total revenue of the year 2013 was US$ 23
billions. The company operates in 3000 outlets in 48 different countries. The scope of KFC is to
satisfy the demand of the customers.
Service and product: It provides a range of products such as bucket meals, salad's, drinks
and the fried chickens. KFC provide its customers the online services by this the consumers can
order the food from homes and pay online transactions.
stakeholders: The stakeholders of KFC are the shareholders, suppliers, customers who
affects the business and in return get affected by the organizations in profit or loss terms.
Voluntary sector: Maytree foundation
Size and scope: It is a new established foundation which was introduced in year 2002. it
has 2 centres in London and UK. The scope of maytree is to provide healthy environment to the
service users. It deals with the mental patients to make them mentally happy and calm. It is non-
profit organization which only focuses on the society, 300 guest visits the organization daily.
Service and product: The services which are provided by the Maytree are to handle the
mental ill people and reduce the suicide ratios by motivating and encouraging them for their
good. It provides a day off stay of five days and four nights to the guests.
Stakeholders: The stakeholders of Maytree are the groups and the associations who
invest their funds to operate the foundations.
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LO2
P3 Relationship between different organizational functions
KFC is a food chain with the variety of products and services. There are many internal
and external factors which affects the business organizations. so to maintain the gaps the
organization relates the task which leads to the better functioning of the company.
Sales with research and development: The research and development helps in analysing
the market and the research is based on the markets demand and supply. Basically R&D helps
the manufacturing and production activities to achieve the sales target of KFC. after segmenting
the market with different demand and supply the sales department achieve its objective. When
the sales department's target is achieved research and development shifts its focus to the market
for capturing the market shares( Deasy, and et. Al 2016)
Advantage: The research and department plays a crucial role in defining the demand and
supply with the help of market analysis.
Disadvantage: lack in the proper knowledge of R&D's study can lead to the failure of
sales department.
Finance with production: The finance department of KFC ensures the budget for the
production activities such as manufacturing and production. For the smooth production
availability of proper budget is necessary. When the maximum production of KFC is achieved it
generates the capital which directly helps in increase of capital generation. These both functions
are interrelated with each other
Advantage: The finance helps to carry out the smooth operations.
Disadvantage: When the production of the company gets affected by internal factors than
this will directly impact on the finance department in generating the capital for KFC.
Marketing and HR department: Employees are known as one of the most valuable assets
of every organisation. Human resource department of organisation is the one which take and
handle all the decisions related with employees. Marketing department is the one who deal with
the activities of carry out promotion and marketing of products in order to influence customers to
buy the same. Manager of marketing department communicate with HR department when they
need candidates to perform specific job roles and manager of HR department help marketing
department by fill the vacancy.
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Different functions are performed by an organisation which are executed by various
departments in order to attain its set goals and objectives. However, organisation structure is also
interrelated with the functions which assist in attain set mission and strategic objectives. Mainly
organisation structure presents the flowchart of activities, directions and hierarchy followed by
an organisation. Currently KFC is following divisional organisation structure. Effective
organisation structure improves communication among all the employees and reduce the changes
of rising conflicts.
LO3
P4. Positive and negative impact of macro environment on business operations.
This macro environment factors known as external and uncontrollable factors which
affect organisation's performance, strategies and decision-making process. These factors include
political, environmental, social, technological , legal and economical factors. This factors affect
organisation in a positive and negative way. PESTLE of BBC company and KFC is explained
below:
PESTLE analysis of BBC and KFC:
Political factors:
These factors include government intervenes in certain industry or company. These
factors include government policy, political stability or instability, tax policy, labour law , trade
restriction and environmental law. Intervenes of government also affect nation's education
systems, infrastructure and health regulation.
Impact on KFC:
Positive impact: UK has its strong and stable political system which give positive
influence on KFC. This positive impact work effectively in term of achieving the organisational
objective. For example: they have employee in restaurant who run the activity. They Make
contract with the employees and make pension fee(Hair and et . al 2015).
Negative impact: For example: KFC criticized by nutritionist that selling unhealthy
food is different and playing with consumers psychology is wrong. Nutritionist blame that
advertisement should be banned. This give negative impact in the mind of customer and work
negatively for KFC.
Impact on BBC
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positive impact : Political stability of UK country is very strong. Rules and regulations
are not changing on the continue basis so its work very Effectively for BBC. In this context with
great political stability BBC can operate smoothly.
Negative impact: Government can change its rules and regulations which affect the
business and create complexities for company like BBC.
Economic factors:
This economy factors include economic growth, exchange rate, interest rate etc. these
factors gives long term Effect on businesses.
Impact on KFC:
Positive factors: economic factors are including money and funds. KFC provide its
product at lower price. For example: they provide food packets and discounts which attract
customer to buy again. KFC grow up with lower price and satisfying service.
Negative impact: if KFC provide its product at high price than the demand of product is
decreases which affect the economy negatively.
Impact on BBC:
Positive impact : changing in the exchange rate work Effectively for BBC and
liberalisation policy helpful in investing more in market.
Negative impact: high inflation rate leads to decreasing in the profit of company which
affect negatively.
Social factors:
this social factors include norm , customs , values. Population growth rate, age
distribution, income distribution, health , lifestyle attitudes and cultural barriers.
Impact on KFC:
Positive impact: now days KFC is considered as one of the biggest company in the
world. KFC provide the food in restaurant according to the taste of its customers and also they
give donation to the people this create better goodwill of organisation.
Negative impact: KFC criticized by nutritionist that selling junk food is different and
playing with consumers health is wrong. This give the negative impact on society.
Impact on BBC:
Positive impact: this social factors work affectively in term of providing news and
different channels to its customer's.
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Negative impact: Government is facing the problem of income disparity which affect
negatively to BBC
Technological factors:
These factors include level of innovation , automations, research and development ,
technology awareness etc.
Impact on KFC:
Positive impact: Technology gives positive impact on KFC. They use modernization
method to advertise their product(Zeng, and Duan, 2012). KFC made website from which
consumers get the information about KFC. They also provide facility of home delivery and
payment through internet.
Negative impact: If an organisation not provide online services of information about the
product than its give negative impact on organisation.
Impact on BBC:
Positive impact: Technology work effectively for BBC they are highly web designed
and graph designed and provide new HD services to its customers.
Negative impact: if organisation is not using effective technologically present era than
it can create negative impact for its customer's.
Legal factors:
This factors include laws such as discrimination laws, employment laws , consumer
protection laws, copyright and patent laws.
Positive impact: KFC is pay the rightful amount of taxes since they are in food
businesses. This gives positive impact in term of legality.
Negative impact : If the tax are not paid by this food company than it affect their
business negatively.
Impact on BBC
Positive impact: BBC usually maintain the legal protection of intellectual property .
Patents , copy right in various country. This protection enable holder of the copyright to take
action against infringers in court.
Negative impact: If BBC not maintain environmental law and guides than its its work
negatively(etherly, and Otter, eds., 2014)
Environmental factors:
9

This factors include ecological environmental aspect like weather, climate and climate
changes.
Impact on KFC :
Positive impact: In this, KFC purchase its packaging material from a company which
avoid deforestation in order to make paper.
Negative : If KFC is using plastic packaging than it impacts negatively on environment
as pollution increases due to emission of harmful gases.
Impact on BBC
Positive impact: In this context, BBC factor work positively in term of changing in
employment law and regulation which affect business from business perspective.
Negative impact : this work negatively in term changing in environmental policies
because it change their operational procedure and equipments.
LO4
P5. Internal and external of organisation in order to identify strengths and weaknesses.
SWOT analysis of KFC:
Strength
 KFC is world's largest restaurant in the
world and its is established all over the
world or globally present.
 It is strong parent company it is a
subsidiary of yum.
 KFC attracting more customer's by
providing both veg and non-veg food.
 It has its own original recipe which is
never disclosed to outside the world.
Weakness
 KFC don't have proper knowledge
about their customer's.
 KFC not give more focus on research
and development.
 In food of KFC its include unhealthy
fats and unhygienic calories which
10

create problems.(Siewiorek, and et. al.,
2012).
 Managing franchises is one of critical
issue in the success of KFC.
Opportunity
 KFC can easily expand its market with
its cooperative parties.
 They can expand its menu in the
category of vegetarian fast food.
 This company can design its menu
according to the health conscious
population.
Threat
 KFC has high level of competition in
the market so it has to compete with all
other.
 Increasing in price of raw material
affect the industry.
 Increasing in the channels create
conflict of closing the franchises which
affect brand image negatively.
 One of the best strength of BBC is that
it keep it self updating with new trends
like colour TV, 3D channel, HD
channels etc.
 This company has its strong brand
image in the market.
 This
SWOT analysis of BBC:
Strength  This company has its good old
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reputation. This made consumers have
good faith on this company.
 In worlds BBC has its largest
broadcaster with almost 23,000
employees.
 This company has its good brand image
in the market.
 Technical advancement is work as the
big strength for this company. They
have highly technical web design,
software design and graphs designed.
Weakness  It is blamed on BBC that new items
presented this touch some sensitive
issues due to which it faces criticism.
 This company has its high operating
cost.
Opportunity  This company has its strong image and
its affect south Africa market from
which they are getting high revenue.
 They can be join partnership with
satellite channels that will bring more
opportunities the businesses.
Threat  This company has its strong
competition with new channels like
CNN.
 In this there are other domestic
channels which gives competition to
BBC.
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P6.Strength and weaknesses interrelation with external macro environment.
Political factors: this political factors works as the strength of KFC company because
with the rules and regulation of government KFC company provide hygienic food, clean stores.
Which work positively for KFC. In BBC, political factors in term applying new advanced
marketing strategy(Quinlan, and et. al., 2019).
Environmental factors: in BBC, economic factors work negatively in term providing
news on sensitive issues. In KFC, it work negatively in term of providing high fat and high
calories food.
Social factors: in KFC, social factors work effectively because in this context KFC only
target young people in the market. In BBC, social factors work positive factors because this
company target
Technological factors: technical factors work as positively for the company like KFC
because with the help of technology they spread information about its product and payment is
also done through the internet. In BBC technical factors work positively because BBC has its
strong web design and apply different technology( Shenkar, and et. al., 2014)
Legal factors: Legal factors work positively for both of the company because its provide
protection of copyright in various country(Hilton, and Platt, 2013)
Economical factors: in BBC, its work effectively in term of economy because they
cover large are including Asia which earn more revenue. In KFC, its work as strength because
its attract large customer's which is effective in earn high profit(Groebner, and et. Al 2013).
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CONCLUSION
From the above mention report its has been concluded that the business environment
effective in identifying growth and opportunities by analysing various factors such as external
and internal, these factors plays an important role in the organizations to execute the business
related activities within and outside the firms. Each sector play an important role this each sector
has its different type, role , scope and its legal structures. There is the relationship between the
different organisation function and its link to organisation objectives. There is different positive
and negative impact of macro environment on businesses. In businesses strength and weaknesses
are interrelated with external macro factors.
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