KFC Organizational Change: Analysis, Strategies, and Recommendations

This report provides a comprehensive analysis of organizational change within Kentucky Fried Chicken (KFC), examining the company's background, mission, and goals. It employs a PESTEL analysis to understand the external factors influencing KFC's business strategies. The report delves into social process perspectives of managing change in New Zealand, explores various change management models, and proposes alternate change strategies. Key findings emphasize the importance of research and development for adapting to market dynamics and achieving strategic goals, while also considering social perspectives and resource maximization. Recommendations include focusing on healthier recipes, continuous menu improvement, and maintaining positive societal relations. The analysis utilizes secondary data from journals, publications, and annual reports, employing tools and techniques like balance scorecards, TQM, and Six Sigma, along with research models such as John Kotter’s and Lewin’s, to provide a holistic understanding of KFC's organizational change initiatives.

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Organizational Change
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Executive Summary
Research Objectives
Kentucky Fried Chicken restaurant is known for their fried chicken and various other
products selling over the globe. In this report, this company is taken as an example for
analysing the various aspects of change management and strategies needed to be done in a
timely manner for satisfying the wants and need of the customers and to make a competitive
stand in the market.
Data collection and analysis methods
The data is collected from the secondary sources, which include various journals,
publications and annual reports of the company.
The tools and techniques needed in the analysis of the collected data will include balance
scorecards, TQM and Six Sigma. Various research models like John Kotter’s and Lewin ’will
also help in the aid of this tool and techniques.
Findings
The main objective here is to find the solution for the research problem by seeing
them through various dimension and angles. This will help the organization in generating
new insights and understanding of the problem is taken into consideration.
Conclusion
KFC needs to focus on the field of research and development so that they can change
their steps with time and achieve their strategic goals. With the respect of attaining the
strategic goals, their social perspective should also be on track as these have a direct or
indirect impact on the decisions of the management. In achieving their strategic goals, the
company also need to maximise their resources.
Recommendations
As they are a market leader, it can be easily be understood that their Research and
Development department is efficient enough to deals with the sudden market consequences.
However, from the long-term growth perspectives, they should focus on producing the
healthier recipe with the continuous improvement in their menu items. In addition, they
should maintain good relations with all the society in the nations by respecting their cultures
and beliefs.

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Table of Contents
1 Introduction.............................................................................................................................3
1.1 Company background......................................................................................................3
Major products of KFC’s.......................................................................................................4
Mission and Goals..................................................................................................................5
PESTEL ANALYSIS.............................................................................................................5
1.2 Research Objectives.........................................................................................................6
1.3 Data collection and analysis.............................................................................................7
2.0 Research findings and Discussions......................................................................................7
2.1 Social process perspectives of managing change in New Zealand..................................7
2.2 Change management and models.....................................................................................9
2.3 Alternate change strategies............................................................................................11
3.0 Conclusion..........................................................................................................................13
4.0 Recommendations..............................................................................................................14
References................................................................................................................................14

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1 Introduction
KFC (Kentucky Fried Chicken) is a well-known chain of fast food restaurant that
specializes in fried chicken. It was established on March 20, 1930, and its headquarters is
situated in Louisville, Kentucky, in the United States (Denison, 2016). It is serving in around
123 countries at around 20,000 locations in the world and a world’s second-largest restaurant
chain.
Before the 1960s, New Zealanders had a limited choice for the food they wanted to
dine out and the venue anywhere. A more sophisticated culture of food and dining developed
late in the 1950s. The first KFC outlet opened in New Zealand in 1971 followed by Pizza Hut
in September 1974 and McDonalds.
1.1 Company background
Colonel Harland Sanders founded KFC in 1952, but its rudiment should backwards to
1930. At that time, Colonel Age was 40 and he was working as an operator of a service
station in Corbin, Kentucky. The love of cooking was so high that from his own living
quarters, he started cooking and serving food to hungry travellers. In a short period,
customers attracting and turning up towards the food, which makes Colonel, open a 142-
seater restaurant across the street and the name of that restaurant was “Sander’s Court”. This
also makes him study hard on various technologies used in making fried chicken and this
helps him to invent around 11 spices with unique cooking technologies including the secret
recipe (Walker, 2017). In a short span of time, his restaurant became so popular that the state
government gives him the designation of “Colonel” due to his fine contribution to the state
cuisine.
Eventually, the tremendous growth of business creates a difficulty for the Sanders and
so he sold it to the people who formed the Kentucky Fried Chicken Corporation. However,
the goodwill always lies with Colonel Harland Sanders. He died in 1980 but his philosophies
of excellent service and hardworking will always be a part of KFC tradition. KFC restaurant
adopted the traditional structure of the organization.
M
an
ag
erGeneral
Manager
Assistant Manager
Supervisor

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In the above diagram, the information and communication flow from the Manager to
the junior employees. This structure follows the centralization pattern where the topmost
management takes the decision.
Major products of KFC’s
Considering their products, they are majorly offering fried-on-the-bone pieces
seasoned with the “Original Recipe”. One of the encouraging policy of the company was to
discard chicken if it has not been sold within 90 minutes so that to ensure freshness. One of
the executives of KFC stated that the chicken taste could differ according to the various
regions and types of oil variety.
Other major products of KFC’s are chicken burgers (which also include tower burgers
and Zinger), wraps, and different varieties of finger foods like crispy strips and hot wings.
One of the most widely eaten KFC food was Popcorn Chicken, which also includes
small pieces of fried chicken (McCauley, 2017).
At some areas, chicken nuggets are also sold under the trademark of “Kentucky
Nuggets”. Worldwide, there were over three hundred KFC menu items, which are sold. Their
menu items are also divided by localities like in the US, they sell grilled chicken, Asia people
like more of spicy foods like Zinger chicken burger, at some regions in the US, fried chicken
lovers and gizzards are sold. In Asia, rice-based side dishes like kanji are also occasionally
sold, chicken meatball soup was sold according to the preference of Malaysia and in the US
and Greece, potato wedges are sold. Outside the USA, KFC also offers beef based products
such as hamburgers or kebabs, poutine and pork based products. The KFC products are
categorised into four dimensions, which includes chicken products, pork products, fish
products and beef products.
“KFC” breakfast menu was also released internationally in the year 2012, which
includes various items such as porridge and waffles, pancakes as well as fried chicken
(Louisville, 2012).
Mission and Goals
Counter and Kitchen workers

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The mission of KFC stands to be the leading chain of food restaurant in the ASEAN
region by focusing on consistent quality products and leading customer-centric service. With
the alignment of the vision, the company also has certain goals like maximization of profit,
improving the value of shareholders (by giving them maximum return) and ensuring
sustainable growth over the year (Waterman, 2011).
PESTEL ANALYSIS
KFC (Kentucky Fried Chicken) had a PESTEL analysis which includes Political,
Economic, Social, Technological, Environmental and legal factors and these have a direct or
indirect impact on their management business strategy (Gillespie, 2016).
 Political Factors – These factors include the government policies as the
political systems of every country are different which can influence a business
in many ways (DuBrin, 2009). As KFC is a foreign company but operating in
many countries, they have to make their business strategy according to the
government policies like, In India, the government have banned beef mixed
food items due to the culture problems and this makes KFC follow every
health and safety guidelines. In addition, the risk of doing business in New
Zealand is very high as the new government applies new regulations and the
labour force is very expensive in New Zealand.
 Economic Factors – This is the next aspect, which includes money and
income. Every effective business is connected with the country’s economy
where many conditions needed to be undertaken like stock rates, the standard
of living, capital flows and costs. The most important factor here is the buying
ability of customer, which directly affects the sales of the company. KFC also
estimated the consumption behaviour of the people through their like and
dislikes and decisions are taken by them. According to various reports, New
Zealand is suitable for those companies who produce luxurious products like
car, diamond and fast food as their per capita incomes is very high.
 Social Factors – For an international company, it is necessary to understand
the social connection beside the company’s world. Dividing the target market
on social class, culture and religion come under social factors (Lin H. , 2008).
KFC adopt different culture for different locations. For example, In Pakistan,
KFC provides Halal food to the customers, which show their acceptance of the
Muslim region. Social factors also include various social activities like
donations and charity. In India also, when KFC try to sell their products, many
farmers, doctors and environmentalist opposed their stores due to their product
core material made up of beef. At that time, many numbers of protestors also
damage their stores, which leads to creating in the chaos (Tandon, 2016). In
New Zealand, the majority of cultures are in the terms of Muslim and
Christian’s religion. Therefore, during the festivals like Christmas, the
consumption of foods and beverages increases.

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 Technological Factors - This includes the adoption of the latest modern
technologies in every aspect i.e., production, advertising and distribution. By
using advanced technology, they can minimize the costs of manufacturing and
production. A company also need to handle the internet technology because
one of the rumour damaged the company identity in a particular locality as
according to the media; a news was spread of animal cruelty by KFCs.
 Environmental Factors – It is one of the important analysis, which needs to
be addressed by the company. KFC always had been in critics by the world
environmentalist due to the consumption of beef, potatoes and chicken. The
reason was that the consumption of beef contributes to the greenhouse effect
by methane gasses coming from cow’s ranch. One of the disadvantages in
New Zealand as they have less resource of water and which affect the cost of
various businesses. KFC also being criticised for being insensitive to pollution
as of using one based packaging for its food products.
 Legal factors - Kentucky Fried Chicken is also a legal company and they
grow under the Yum! Brands. Also, KFC is an international company and so
have to comply with various laws and regulations. Their recipe also has a legal
stamp and so no one can steal or copy it. Various legal formalities, which are
needed to be followed according to the law, are operating hours, tax
requirement, labour and employment laws and environmental certification. As
the company is complying with these laws, the support of the government will
also be with them in the form of rebates and subsidies.
1.2 Research Objectives
The objective of doing this research on the company KFC are given below-
 To identify the two transformational change implemented in KFC.
 To recommend the various alternate change strategies help in these changes.
1.3 Data collection and analysis
This research is purely based on secondary data where information is obtained from
various journals, KFC’s official website and from in-house publications like newsletter and
publications.
After getting relevant data from the secondary sources, the data will be analysed
through various tools and techniques which change management tools like Balance
scorecards (A performance metric used by the management to improve internal functions of
the enterprise), TQM (Total Quality Management) and Benchmarking. It will also depend on
various perspectives relating to change management and these perspectives are cultural and
resource perspectives, political and system perspectives, etc. In this analysis, various change

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management models will also be included given by the researchers like John Kotter’s, Kurt
Lewin’s and organizational development.
2.0 Research findings and Discussions
In this section, the findings will be based on various reports and the main objective of
the discussion is to define the importance of the findings with relations with the investigation
of the research problem. In addition, the idea here is to generate new insights or
understanding about the problems taken into consideration.
2.1 Social process perspectives of managing change in New Zealand
Change is a complex dynamic, which results in new thinking and behaving. Managing
change is a critical component of any transformation. It helps the organization successfully
implement new strategies and policies. KFC New Zealand needs to understand certain
perspectives, which affect their decision making, and policies and mould them in the
direction of their mission and objectives.
1. Culture Perspective - An organization culture shows the belief and thinking of its
owner and employees and how they feel and act. In the case of KFC, it is directly
related to the company’s values and vision. For every enterprise, it is necessary to
retain its best employees for achieving the long terms sustainability and profitability.
However, the culture of an organization is determined by its way of decision-making
and commitments (Peterson & Anand, 2008).
The ‘feel-good” culture at KFC was supportive and inclusive and it is across all the
KFC brand rather than being restricted to a single store. The company is also
particularly flexible for accommodating time off for the exams, events and extra-
curricular activities.
Generally, the main aim of every new young employee is to earn an extra
percentage of money but as they continue their employment for a period, they realize
that they can here achieve excellent career opportunities. From an employment
perspective, they can excel in their skills through on-the-job training and teamwork.
This will provide future benefits to them at work.
KFC’s exclusive culture helps the company by providing excellent customer
service through the employee’s engagement. KFC should always adopt this strategy in
its every store where people from any culture or region can come and work together
which can also lead to cultural diversity (Maritz, 2013).

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Therefore, KFC has a profound respect for the cultures, values and traditions
of all the countries where their stores have a presence (Chalmers, 2013). The
organization is readily accepting social and cultural diversity by rejecting
discriminations based on the religion, ethics and on various other grounds. The KFCs
headquarter contain employees from more than 70 different countries but then also,
the organization culture seems to be flexible and professional (Brown, 2018). The
behaviour, attitude and the working environment are such flexible that it helps and
encourages all employees to feel comfortable and work openly with full freedom.
KFC people call themselves a family that help them to create positive working
relations.
The company also willingly accept changes suggested by the employees,
which shows that the company is adopting decentralization policy in their internal
business environment. It also shows that the company was making employees
included in the decision-making by using their feedbacks. From a long perspective, it
can be proved to a fruitful strategy as employees will later achier organization goal
prior to their specific goals and this will create a culture of harmony and peace. The
rate of employee turnover will also be reduced and so the company social perspective
will be stronger in the market (Bingham, 2016).
2. Psychological Perspective – It was said that KFCs serve the mind of the customer
instead of their stomach. This shows an innovation and creativity in their strategic
management (Zanger, 2018). These unique psychological characteristics make them
the winner of their target market. This concept of KFCs has addressed the brand
personality very efficiently, which help the company to rise in their market share. The
visual aid colour their advertisement and franchise are red, which shows an out-
flowing in the system of excitement (Grier, Mensinger, Huang, Kumanyika, &
Stettler, 2007). Contradictory, this brand colour was very amusing for the youth and
that is why KFC try to target the self-concept of consumers. On the other hand,
McDonald uses yellow colour in their logo, which helps them to stimulate hunger in
the customers. KFC also made an effort in their product named “Zinger Burger”
which helps them to attract the valued customers.
For deeply understanding the behaviour of the consumers, these psychological
factors are divided into several concepts:
 Motivation – Various factors that are used by the organizations in motivating
the customers includes providing good customer service, the smooth
environment in the restaurant and maintaining a high quality of food (Abratt &
Bendixen, 2018). In this aspect, the perception was the next process and KFC
always ensures to leave a good impact on the mind of the customers by the
help of effective advertisements and deals as it can manipulate the minds of
the consumers, which aids to perception.
 Buying behaviour – There are four types of buying behaviour which includes
(Liao, Shen, & Chu, 2009):
a. Complex buying behaviour
b. Dissonance reducing buying behaviour

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c. Habitual buying behaviour
d. Variety-seeking behaviour
The company focus on the consumer buying behaviour by classifying in these
four heads and then balancing the difference between the high and the low
involvement of the consumers in a particular situation.
 Stimulus – It is called as a process through which the buyers go through to
make the purchases. Stimulus is that thinking of consumer, which comes
before they take any particular decision (Raab, Elger, Neuner, & Weber,
2011). KFC use various marketing strategies to influence the mind of the
customers through this technique. Their business model is so strong, that
they know before what the consumer will purchase and deliver it before the
time.
The company segment the market based on psychographic factors such as social
class, lifestyle and personality characteristics. Under social needs, the organization
meets the needs of the people from the middle and upper class. This makes the
consumers from these two social classes identify themselves with the brand created
by KFC.
2.2 Change management and models
There are many available change management models; however, many companies
prefer at least one change management model, which help them in their survival and success.
The organization should focus on change to remain competitive and successful in the market.
The two-change models, which can be applied to the organization, are –
 John Kotter’s change model – With the successful implementation of the
Kotter’s model, KFC will be ascertained that it will attain its target
objectives. In this model, the first step is to identify the underlying problem.
In KFC case, it is struggling with two main issues – In the recent times, the
company was getting bad reviews for its food and the cleanliness. So, there
was a need to review the operations and employees so that to make it a
competitive chain in the world.
There are eight processes that mentioned in Kotter’s model, which was
shown in the diagram model –

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(Source: Kotter, 2008)
The first steps in the Kotter’s model are to establish a sense of urgency (Kotter, 2008).
In relation to the above-mentioned issue, the company need to first aware their intention of
change to the employees. After this step, the company needs to focus on the establishment of
new strategies to improve the quality of the products. In the next step, KFC needs to ensure
and addressed an effective team who will oversee the process of change and thus the
management will select team players who have different but collective skills that this process
requires. In addition, the management will involve people from customer service, kitchen
sections and human and finance resources.
For creating a vision, the company need to consider all those factors and aspects,
which will help the restaurant to achieve their overall objectives. The vision statement should
be customer centric which represent that high standards have been developed for quality
food. In the next stage, this vision must be communicated to the overall employees so that
they can also contribute to minimizing risk and conflicts and takes necessary initiatives
(Reiss, 2012). Now, the actions and implementations will be incorporated. The management
of KFC will ensure that the improvement of quality not must be in just of the product but also
in the customer service. Here, training will also be given to the employees so that they can
execute these changes easily. The next step focus on the creation of short-term wins as this
will help the employees in gaining long-term aspect of the changed project. KFC will also
find short-term strategies, which will help in the immediate improvement of the service. For
the next stage, KFC will hire more employees to enrich the quality of services and products
and will start a new set of training programmes which will enhance employee’s skills.
Therefore, following these pattern of series, KFC will implement the changes aligning
with it other goals and objectives.

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 Kurt Lewin’s change model – The Kurt Lewin’s model has given a three-step
process of change, which benefits the KFC by implementing a positive change in its
working. These three steps include – unfreezing, changing and refreezing (Morrison,
2014).
 Unfreezing – In this stage, the company set aside his old behaviour, which can
cause harm to the growth of the company. At this stage, the company need to
address the area, which was causing the actual problem. In KFC, the actual
problem was of the quality of the food and cleanliness (Amini, 2015). For this,
the manager can analyse the behaviour and working of the employees, which
can show that whether they are fulfilling their responsibility, or not.
 Changing – This was a crucial stage, as the management here need to
incorporate the development of the individual employee, which will help in
moulding new behaviour. For implementing this thing successfully, KFC can
follow three guidelines so that to managed change effectively. The first
guideline should relate to the improvement of overall performance, the second
guideline includes employees need to take responsibility for their work and the
third guideline should include motivation of the employees on the time so that
they can work as a collective team.
 Refreezing – This stage of Lewin’s requires the integration of learnings of the
individual with the actual practices. In this stage, everyone has to follow new
beliefs, feelings and behaviour. An individual from his/her superior learns
these things at the time of changing phase. This will leads to the adoption of
the new behaviour rather than returning to the old behaviour.
Change management plays a significant role in the company and the above model,
tools and techniques can help the company to be in a competitive position always. The Lewin
model can also bring various developments in the functioning of the employees by telling
what actual measure needs to be adopted to cope-up with the problems. The only drawback of
this model was its theoretical approach rather than the practical one. Whereas the Kotter’s
model can help the company by stating, it is every single minute detail in the most effective
manner but for using this model approach, a company need to do heavy investment in both
money and time.
2.3 Alternate change strategies
 Balance Scorecards – It is a system, which uses performance metrics for the strategic
management and thus improves the internal functions of the business (Lin & Chiang,
2009). It helps in viewing the organization from four perspectives –
1. Financial Perspective – This includes the setting of new financial targets for the
company as KFC New Zealand was working for the objective of earning
maximum profit. The company needs to measure their average margin, as

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according to the management, the margin data on each product was readily
available. The company also need to set accurate revenue goals, which should
focus on growth and sustainability. The top executives of the KFC New Zealand
should also use any other relative efficient metrics like employee/revenue,
employee/profit or restaurant/profit.
2. Customer Perspectives – This perspective involves measuring the customer
satisfaction, rate of retention and repurchase rate (Niven, 2010). Top
management of the team their do survey which includes customer satisfaction
regarding the food, service and quality but the final data did not give any
information that can help them to improve customer satisfaction. At those times,
most of the customers are anonymous which creates difficulty for the company to
analyse whether new or current customers made the purchase and that creates the
need to improve their proposed Metris, which can give result about the
transaction volume, average score, etc.
3. Learning and Growth Perspectives – This fast food industry mainly gives the job
to the youth and students for its various positions. This gives them the insight of
operational organizations and thus promotes career development. Also for
improving the customer satisfaction in KFC New Zealand, they give training to
the employees aligning with the incentives and the motivation so that it will
benefit the staff as well as a restaurant. KFC New Zealand also adopts a different
way of preventing waste treatment. They connect the reward system together
with the waste reduction targets. These will leads to reduce the amount of food
wasted and thus increase overall income in the company.
4. Internal business perspectives – KFC New Zealand was strictly controlled
according to KFC guideline established by the KFC headquarter that has been
passed by KFC Europe. Top executives state that sometimes they find difficult to
find ways of improvement. Some suggestion was also be made regarding the
customer service where the service was being provided slowly. The next
suggestion was to improve the conversion rate of these complaints where if 50
customer complaints, around 40 need to be resolved effectively. Another
suggestion was of separation of complaints by the customer consumption i.e.,
customer purchasing from the restaurant for immediate consumption or customer
was purchasing for taking away.
 Total Quality Management – It is also a management approach or strategy for
customer satisfaction through long-term success. It includes Benchmarking,
Employee Involvement and continuous improvement (Gutiérrez, Molina, & Torres,
2010).
Benchmarking is a process to compare one's business process with the best out
in the industry. It is set in terms of every aspect i.e. quality, culture, customer service
etc. To be competitive in the market, KFC provides more consistent quality and value
to the customers.
In TQM, the company KFC like uses various techniques –

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1. Six Sigma – It helps the management to identify and measure the process of the
organization before the work is done (Hemant, 2011). KFC MIS system is made
of considering this model only.
2. JIT Model – It includes the cycle time, which refers to the steps taken for a
particular process in the company like reservation processing of the order,
payment system, etc. (Gupta, 2011). KFC in-house operating manufacturing
system helps in control over the JIT model.
3. HACCP – It stands for Hazard Analysis Critical Control Point, which is related to
the food safety. It means to identify and evaluate the various hazards of ensuring
food safety (Mortimore & Wallace, 2013). It is used until getting of raw materials
up to serving the customers.
4. ISO 9001 – For the very scale of organization, this certification is necessary and
suitable and it helps in the management process globally compete (Tricker, 2016).
Therefore, TQM is a very important concept which can be used in the daily operations
of the enterprise and it is necessary to support at all levels (Hashmi, 2018). KFC applied all
the above methods in an efficient manner.
3.0 Conclusion
KFC is competent in all areas irrespective of its operations, scale and customer
service. With the time, implementation of the change of organization is necessary for every
enterprise so that to establish a competitive edge in the market. It can be also said that KFC
has lots of loyal customer list, which are also sticking to the company from a very long
period. One of the strategies, which can be adopted by KFC, is to increase the number of the
franchise over the world, which is also the easiest way to expand its market, and this will help
them to expand their market. With earning of big profit, it is also necessary to understand the
cultural values and rituals of the society, which can help them to create a strong brand
identity. It is also the most internalised fast food chain and as their market growth, the
profitability will rise.
One of the negative sides of the company was lacking in the field of research and
development, internal business control and the relationship with the franchise. In several
countries, KFC has faced various cultural issues for using beef in the products, employment
turnover and proper waste treatment. In the chain of the food industry, the entry of new
competitors can as be proved as a threat, which creates the need to make new strategic
alliances by adopting the renewed change of tastes and preference of the customers. As in
some countries due to cultural issue, some of the government agencies will also not support
the company and this will be a challenging task to deal with it.
Therefore, it can be understood from the case that very enterprise should understand
the importance of change management, ethics and cultural issues, which help them to operate
effectively and efficiently on a continuous basis.

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Lastly, KFC can get success through the combination of offline and online campaign
and they need to maximise their resources to achieve the strategic goal.
4.0 Recommendations
KFC is a market leader in providing Fried chicken and various dominant players like
MC Donald and pizza hut surround it. It products menu items is really well but need
improvement by making it dynamic and the introduction of new meals after time to time. The
products of the prices in KFC are reasonable as compare to another food chain like pizza hut.
However, they should adopt new pricing strategies to attract the consumers, as it will always
be the core aspect from a customer perspective. For this, they can launch discount packages
for families, students and regular customers.
KFC should work on the management issue for building good atmosphere for their
employees to work in. They also need to sure about their product food quality and superior
service. Also for increasing the market share, they need to target the right customers i.e.
people who are comfortable with eating the beef. In commercial areas, they should also open
new outlets, which will also be proven as an effective strategy. They should also focus on
building solid marketing departments. The marketing team of the company also ensures about
the advertisement campaigns, which should direct stimulate the hunger of the stomach. This
can be proved as an incremental factor for the growth of their sales as they just need an
efficient marketing department, which can easily handle the promotional activities.
KFC should also focus on making the healthier recipe and they can go through a
promotional campaign, which can change their image from fried to ‘healthy’.
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