KFC Competitive Advantage: A SWOT, PESTEL, and Marketing Mix Analysis

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EXTENDED BUSINESS PROJECT – INDIVIDUAL REPORT FRAMEWORK
(RPTN)
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Contents
Introduction...................................................................................................................... 3
Overview of the company (KFC)......................................................................................4
Competitive Advantage....................................................................................................4
SWOT of KFC.................................................................................................................. 5
PESTEL of KFC............................................................................................................... 7
Marketing Mix of KFC (7 P’s of KFC)...............................................................................9
Recommendations......................................................................................................... 11
Conclusion..................................................................................................................... 13
References.....................................................................................................................14
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Introduction
The report will include a general overview of the KFC and methods used by the KFC to
earn a competitive advantage in the marketplace in the same industry. The report will
include a SWOT, PESTLE, and five forces analysis to determine the factors affects the
business of the KFC and its strengths and weaknesses. The report will also provide a
brief description of the opportunities available for KFC. The report consists of the
marketing mix of KFC which helps in determining the marketing factors and 7P’s of the
company. The report will also include recommendations through which the company
can attain a successful position in the marketplace and earn a competitive advantage in
the next years.
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Overview of the company (KFC)
KFC is an abbreviation of Kentucky Fried Chicken which is a restaurant of America
headquartered in Louisville. It is a restaurant which offers fast food products to the
customers. It was founded in 1930 by Colonel Harland Sanders and started its first
franchise in 1952 in Utah. It is a subsidiary type of company of Yum! Brands.KFC was
the first brand of American fast food that expanded its business at international market
viz. in the United Kingdom, Canada, Jamaica, and Mexico by the mid of the year 1960.
KFC was the first Western chain that started its business by expanding in China in
1987. KFC started its business with the products such as fried chicken, chicken fillet
wraps and sandwiches, salads, chicken strips, and other dishes like soft drinks,
coleslaw, French fries, and desserts (Probst, et. al., 2015). In order to attract more
customers and increase its revenues and profitability, KFC uses various slogans such
as “Nobody does chicken like KFC”, “It’s Finger-Lickin’ Good!”, and “So Good”.
According to the present condition KFC is considered to be the second largest chain of
the restaurant in the world after McDonald's. According to the statistical data, KFC
offers its products to around more than 12 million people on a daily basis. It provides
facilities of take-away and home delivery along with the dine-in facility. It has adopted
various innovative marketing strategies to build its brand identity.KFC is a subsidiary of
The Yum! This conducts several programs to increase the brand recognition,
competitive advantage, business support, franchise value system, customer attraction,
economic stability, return on investment, supply chain, etc. It specializes in a product
like fried chicken (Bororing, et. al., 2017).
Competitive Advantage
Competitive advantage is a situation which provides the company with a superior
position in the marketplace against the competitors. It gives the companies a favorable
condition which creates a superior position for the companies and ensures earning
greater revenues and profits. It is an advantage attained by the companies over its
competitors by providing the customers greater value by either selling the products at a
lower price or providing high-quality products or other benefits which justifies higher
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pricing of the products. The companies can earn a competitive advantage by entering
into the niche market, product differentiation, and/ or cost differentiation.
In order to gain competitive advantage, KFC conducts the research and determine the
market segments and needs of the target customers and produces products which fulfill
the unmet needs of the customers. It uses innovative marketing strategies to gain a
competitive advantage and make excessive use of technology to promote its products
and services. It offers high-quality products and services to its customers. It uses
specific time-bound strategy to deliver the products which attract most of the customers
and provides various combo offers. KFC uses presentation strategy while serving its
food to the customers and test its products before serving it to the customers. It charges
an affordable price for its products and focuses on quality, service, cleanliness, and
value. KFC serves freshly cooked food to its customers which results in maintaining the
quality and freshness of the food. It does not make use of the microwave to warn the
already prepared food (Crittenden, et. al., 2015).
SWOT of KFC
SWOT analysis is a technique used by the companies to conduct the internal analysis
and determine the strengths, weaknesses, threats, and opportunities of the company. It
emphasizes on both internal and external environmental factors (Omer, 2018).
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Image: SWOT of KFC
Source: By Author, 2019
Strengths:
1) KFC offers both vegetarian and non-vegetarian food items: It started its
business with fried chicken but expanded with various dishes including
vegetarian dishes to attract more customers and increase revenues.
2) Worldwide business: It has more than 18,000 stores of its franchise stores in
120 countries and territories across the world.
Opportunities:
1) Expansion of the market: The marketing conditions have been changing rapidly
and people are most likely interested in eating outside which leads to the growth
and development of the sector and KFC. It conducts research to determine the
needs of the customers and produces products in order to fulfill the unmet needs
of the customers.
2) Modifications in the menu for health-conscious people: It has designed the
menu for the people who are more likely health conscious which provide a
competitive advantage to the company. People these days are busy with their
work that they do not get time to focus on their health and so at least try to eat
healthy which helped KFC in focusing on the changing needs of the customers.
Weaknesses:
1) Management of franchise stores: It is one of the biggest issues in the success
of the KFC to manage its franchise stores. Because of increased operational
conflicts between the KFC and its franchise stores, it becomes difficult to operate
its business and thus as a result, its franchise stores get closed.
2) Increased fat: Fast food articles increase fats and unhealthy calories and KFC is
one of them who offers fast food items.
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Threats:
1) Changing needs and demands of the customers: People are more health
conscious and have reduced the consumption of fast food which resulted in
having a negative impact on the business of the fast food sector.
2) Competition: There are a varied number of competitors available in the
marketplace against the KFC which becomes a threat to the business of KFC.
3) Rise in the prices of raw materials: The rise in price results in higher
production cost and increased total cost of the product. This result in an increase
in prices of the products which can result in decreased profits of the company
(Achola, 2016).
PESTEL of KFC
PESTEL analysis is a tool used to determine the external environmental factors which
help the companies in earning a competitive advantage. PESTEL is an abbreviation of
Political, economic, social, technological, environmental, and legal factors which affects
the business of the companies. PESTEL of KFC will help in determining the external
factors which have an impact in the business of the KFC.
1) Political: The political factors affect the profitability of the KFC and increase the
political risks due to change in decisions of the government. The political factors
which affect the business of the KFC are:
 Increased taxation level
 Level of political stability
 Laws enforcing in the countries, different laws in different countries
 Trade barriers, etc.
2) Economic: It affects the economy of the nation, for example, factors like inflation
rate, interest rate, foreign exchange rate, the GDP, etc. These factors have an
impact on the investment, demand, and climate of the business. The economic
factors that have an impact on the business of the KFC are:
 Rate of gross domestic product growth
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 Exchange rate, interest rate, and inflation rates
 Increased level of unemployment in the nation, etc (Nguyen, et. al., 2016).
3) Social: It has an impact on the society and emphasizes on attitude, culture,
value, and belief of the population. It focuses on the lifestyle of the customers,
their beliefs, their education level, etc. The social factors are:
 Demographics of the population
 The difference in the background of the customers' education
 Quality standards, the reaction on the harassment claims, etc.
4) Technological: The technology is related to the innovation and thus emphasizes
on producing products which maximize the profits of the KFC. These factors are:
 Technological advancements and developments
 Copying of the usage of the technological process
 Transformation of the products with the use of advanced technology, and so on.
5) Environmental: It focuses on the protection of the environment and helps in the
prevention of global warming. The environmental factors are
 Change in weather conditions
 Use of renewable energy
 Making use of endangered species
 Production of a large number of waste effluents
 Change in climatic conditions can make the product useless.
6) Legal: The laws and regulations affecting the business of the KFC are as
follows:
 Discrimination laws which are formed to protect the biases faced by the
employees on the basis of gender, age, religion, ethnicity, or sex
 Laws to match a certain required quality of product or service
 Intellectual property and laws relating to data protection in order to prevent the
innovative idea and patents
 Health and safety laws to provide a safe working environment to the employees
especially to women (Gil Ebrí, 2017).
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Marketing Mix of KFC (7 Ps of KFC)
KFC is the second largest fast food restaurant in the world after McDonald’s which
comes up with new and innovative products in the market and earn a competitive
advantage. It is a combination of elements that can be influenced to purchase the
products by the customers (Harrington, et. al., 2017). The marketing mix of the KFC is
as follows:
Image: Marketing Mix of KFC
Source: By Author, 2019
1) Product: The products are the intangible things of the marketing mix. The
products of KFC consists of fried chicken, hot wings, wraps, chicken nuggets,
chicken burgers, chicken strips, side dishes comprise of soft drinks, bread rolls,
salads, French fries, etc. It also offers Flaming Crunch Chicken.
2) Price: KFC offers two types of pricing methods which are mixed bundling pricing
and optional pricing. The price of the products offered by KFC ranges differently
varying from the product. The customers can purchase add-ons from the menu
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MarketingMixofKFCProductPricePromotionPlacePeopleProcessPhysicalevidence

which is optional pricing. It provides various combo offers the prices of which
varies.
3) Promotion: KFC conducts promotional activities by providing coupons, combo
offers, add-ons at discounted prices, kids meal, t-shirts, etc. It advertises its
products through several LED/ LCD screens which are kept inside the stores to
promote its product and creates the desires and cravings among the customers.
4) People: There are several key people who are associated with providing
services and products to customers. The employees and other staff members are
provided expert training to deal with the customers and other relevant matter.
5) Place: KFC is an American fast food restaurant which has expanded its business
in various international countries. It has started its business in China as well. It
promotes its products on social media and aims to fulfill the unmet needs of the
customers.
6) Process: The process of the KFC starts after the customers visiting the stores,
or when the customers make online purchases. The more the process the
easiest the higher the level of satisfaction to the customers.
7) Physical Evidence: It refers to the physical existence of the stores from where
the customers purchase the products. The physical presence builds a positive
brand image in the mind of the customers and satisfies them. KFC with the use
of technology and infrastructure builds attractive interior stores which attract
more customers and increases the revenues and profits of the KFC (Giang,
2016).
Recommendations
Recommendation 1: KFC should build a strong customer base by building a bond and
connection with the customers. The KFC should build more contacts by building a
relationship with its customers. It should offer combo packages or discount coupons to
its loyal customers to attract more new customers.This helps the KFC in earning
competitive advantage against the competitors.
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Recommendation 2: KFC should on continuous basis conduct research to determine
the demands and needs of the customers. This helps in fulfilling the unmet needs of the
customers and provides the company competitive advantage. By focusing on the needs
of the customers, the customers can get attracted and thus the company can increase
its brand identity, revenues, and profitability of the company which results in attaining
competitive advantage.
Recommendation 3: KFC should provide high-quality products and services to its
customers. It shall match the required quality standard and deliver the products with
hygiene. The high-quality products attract more customers and aid in increasing the
customer base. The quality measures are essential to keep the customers satisfied and
to increase the revenues and profits of the company. The high-quality products result in
earning competitive advantage and increasing the trust of the customers. It helps in
taking preventive measures towards the health of the customers.
Recommendation 4: KFC should use attractive promotional strategies in order to
promote its products and attract more customers. It shall make excessive use of
advanced technology to promote and advertise its products. This increases customer
attraction and increases the sales and brand image of the company. It can promote its
product by using the face of the celebrity which increases more revenues and attracts
more customers as people are fond of celebrities and have a blind trust in them. This
provides KFC a competitive advantage and increases the survival of the company in the
marketplace. Promotional activities are one of the most important methods to increase
the competitive advantage of KFC (Randhir, et. al., 2016).
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Conclusion
From the above report, it has been found that KFC is the second largest fast food
restaurant across the world. It offers products for both veg and non-veg people. It has
expanded its business in the international market and has increased its revenues and
profits. It has earned a competitive advantage against the competitors and created a
brand identity in the mind of the customers. KFC is the fastest leading company and
provides high-quality products to its customers by focusing on their health. It offers its
customers according to their needs and desires and satisfies them by fulfilling their
unmet needs. KFC has various strengths and opportunities available and has several
threats and weaknesses which affects its business. There are also several external
forces which affect the business of the KFC and it takes preventive measures in
advance to survive in the marketplace fighting against the external factors and attaining
competitive advantage.
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