Research Report: Competitive Analysis of KFC and Oporto in Australia

This report provides a comprehensive analysis of the competitive dynamics between KFC and Oporto within the Australian fast-food industry. It begins with an introduction outlining the background of both companies, followed by an examination of their marketing and competitive strategies, including pricing and non-pricing tactics. The report identifies the oligopolistic market structure of the Australian fast-food sector. Key findings highlight KFC's dominant market share and superior product variability. The pricing strategies of both firms, including bundle pricing, are also discussed. The report concludes by emphasizing KFC's stronger competitive position due to its larger market size and online ordering capabilities. The research methodology involves both primary and secondary data collection, including site visits and analysis of company websites, journals, and news sources. The literature review establishes the context of the competitive environment. The report also explores the companies' growth strategies, competitive advantages, and the recommendations for Oporto to enhance its market position. The analysis covers pricing and non-pricing strategies, including menu design and promotional activities.

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Abstract
The report is known to state the competition present between the fast food giants of Australia,
KFC and Oporto. The first part of the report consist of the introduction whim states the
background information of the two companies. The second part of the paper marketing
strategy, competitive strategy for both the companies. The next part comprise of the pricing
strategy as well as the non pricing strategy of both the firms. They key findings are also
stated in the report which states that the fast food industry in Australia basically exercises
oligopoly market structure. The growth strategies states hat Australia has 40 percent of the
market share in Australia and Oporto holds less than 10 percent share in Australia. The
pricing strategy states that the firm’s uses bundle pricing strategy where when people buy
more amount of food together they are offered discounts compared to the food bought
individually. Lastly it can be concluded by stating that KFC can compete much better than
Oporto because of its huge market size, more variability of products and easier for consumers
to choose from online.
The introduction
KFC is a US based fast food chain known to start its business in Australia in the year 1968
where the first restaurant was situated in Sydney. Presently it is known to service more than 2
million consumers across 650 restaurants (KFC Australia | Home. 2019). On the other hand,
Oporto is an Australian fast food restaurant franchise with the Portuguese theme. These
company is known to operate in more than 100 take away restaurants in Australia as well as
in New Zealand which is found in 1986.
The goal of the report is to find the research report on competition between two fast food
chains in Australia. The companies chosen are KFC and Oporto.

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The research had been taken place in both the primary as well as secondary research. We
reached to various stores of KFC in Australia in New South Wales in Frenchs Forest and
Griffith and found out about the average footfall. We also reached in Oporto stores in New
South Wales in Plumpton and Tamworth. The secondary research have been found out from
the websites of KFC and Oporto. The websites provided various important information about
both the firms (Mazidi & Speakman, 2017). The secondary research help us to know the
market share for both the companies. The secondary research are carried out from journal,
books, newspaper and various websites.
Literature review
Both KFC and Oporto are the famous fast food restaurant chains. Although Mc Donald’s and
KFC are the global leaders, there are other brands which are known to target the similar
market Oporto is therefore falls into the category of big growing brand which had its first
outlet in Bondi, Australia. The market structure of oligopoly is mostly dominated by the
oligopolies or presence of competition among the few. The fast food sector falls in this
category. The fast food industry is known to be the perfect example of a market where certain
brands have a large proportion of market shares. The fast food service industry is known to
be characterized by a concentration of medium level of market share. The concentration in
the industry have remained relatively constant over the past few years (Thornton, Lamb &
Ball, 2016). Moving towards the healthier option away from the traditional fast food lead to
the entry of some of the small players. The barriers to entry and the formation of capital for
the new operators are known to be low as there are strong competition where there is a
mature status of life cycle. The oligopoly is a kind of market structure where only the few
firms are known to dominate. When the market share is known to be shared between few
firms, it is said to be highly concentrated in nature. The fast food industry chai is a perfect

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example of the market structure where the brands are known to have large proportion of
market share.
The fast food industries in Australia is not monopoly since there is no single seller in the
market. KFC is known to dominate the market both nationally as well as internationally. The
fast food industry are known to yield low margins which can make it quite difficult for
competing with cost leadership marketing strategy. In oligopoly there are few companies
which are known to dominate the market. Prices in case of oligopoly market are normally
sticky in nature. The companies which operates in the oligopoly fear from lowering the price
which can result of price war. Therefore, both KFC and Oporto always hesitate raising their
price since consumers will be purchasing a substitute from the competitors. As a result of
price rigidity the fast food industries need to stick to one price (KFC Australia | Home. 2019).
There is also lack of uniformity in the size of firms where the firms are known to differ in
size. Here KFC is larger than Oporto. Under oligopoly there is a major policy which changes
on the firm which is likely to have immediate effects. The Herfindahl Index is known to
measure the market concentration of the industries 50 largest firms for determining if the
industry is competitive or nearing monopoly.
The business are known to compete mostly in the fast food chains.
Competitive strategy of KFC
The competitive advantage of KFC is its supply chain and the distribution system. KFC is
also known to allow the fast food giant to cultivate the relationships with the business
partners for establishing a footing in regions where the competition is struggling (Mazidi &
Speakman, 2017). Since the supply chain and the distribution system of KFC is so well set up
in the world, it is known to have very less difficulty than the fast food giants.

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In order to compete with the other fast food brand in Australia, Oporto have known to
implemented exclusive strategy for marketing. It is known to include the promotion of the
restaurants as the beach restaurants. The company is known to use the logo of a Sun. Oporto
is known to use the beach and surfing images for promotion. One of the characteristics of
Oporto is that they deals in Portuguese style chicken and Bondi burgers (Oporto - Fresh
Grilled Chicken and Burgers. 2019). This company is the food franchise which is known to
specialize in Portuguese chicken an targets the high income youngster with the busy lifestyle.
One of the strength is that they uses effective marketing strategy for healthy fast food
Pricing and non pricing strategy
The pricing strategy is a way of finding a competitive price for the product and service. The
pricing strategy is a combination with the pricing strategies which are the 4P strategy that are
products, place, promotion and place. The common pricing strategy used by the industries are
cost plus pricing, price skimming , value based pricing, price skimming and penetration
pricing.
KFC globally known to enter the market using market skimming. Their products are usually
are priced quite high in nature which is known to target the middle to upper class people. The
fast food service industry is known to be characterized by a concentration of medium level of
market share. The concentration in the industry have remained relatively constant over the
past few years. Moving towards the healthier option away from the traditional fast food lead
to the entry of some of the small players
The pricing strategy of the marketing mix is known to specify the price points and price
ranges of the company’s beverages as well as food. They use the combination of bundle
pricing strategy and psychological pricing strategy. In case of bundle pricing strategy Oporto

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is known to provide offers on meals and other products when bought in large amounts, they
are known to be discounted compared to purchasing each item separately. For this reason,
consumer can buy meals.
Non pricing strategies
In case of KFC the pictures of food provided online are far more attractive and makes it easy
for the consumers to order food easily online. The menu of KFC comprise of boxed meal,
burgers, chicken legs, sides and salads, snacks and kids meals, twisters and drinks. The menu
of Oporto is also quite similar which comprise of burgers, sauces, meals, wraps and bowls,
snacks. The only extra thing provided by Oporto is the desserts.
Oporto might have fewer choice compared to KFC which makes it easier for the consumers
to pick according to the paradox of choice. But KFC although known to have more products
has designed its menu in such a way that makes it look very attractive and make it easy for
the consumers to choose. From that it can be observed that KFC have high demand in the
market.
Steps taken by companies for growing 600

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The above graph shows that KFC has the second highest share of customers who are known
to consume from the quick service restaurants. 40 percent of the consumers of the Australia
are known to consume food from KFC. The competitive advantage of KFC is its supply chain
and the distribution system. KFC is also known to allow the fast food giant to cultivate the
relationships with the business partners for establishing a footing in regions where the
competition is struggling. Presently KFC is known to have more than 640 in Australia where
more than 34000 Australians are known to work there (Taylor & Nichols, 2016). On the other
had there are only 134 stores of Oporto in Australia. The marker share of Oporto is quite
small when compared to food giants like KFC and Mac Donald’s. Oporto entered London in
2009 and then it is known to have entered in US in 2011.
Competition of the business
The two fast food franchise are competing with each other primarily.
Recommendation of growth strategy
For competing with bigger brands like Mac Donald’s and KFC, Oporto needs to change its
product for attracting large number of customers. The company therefore should be

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increasing the variety of foods or fusion food in order to attract more consumers. As Oporto
serves Portuguese food, the company should be including popular dishes from Portugal. The
restaurant is mainly known to operate in the low cost strategy where mostly young people are
known to visit. The restaurant can implement loyalty bonus and other type of schemes for
attracting more cost. It should also be using unique strategies for promotions. Oporto should
be advertising using the Portuguese theme for attracting consumers and also target on the
young generation as they are the main consumers of fast food. It can use social media for
advertising and can also provide discounts on weekdays so that school going and college
going people will visit more.
Conclusion
It can be conclude from the report that it is quite difficult for other firms to enter into this
industry since the firms are operating in the oligopoly market. In case of oligopoly market,
there are huge barriers of entry. The prices are sticky in nature and therefore, the firms will
always not able to raise the price too much. The companies which operates in the oligopoly
fear from lowering the price which can result of price war both the companies are known to
compete on a low cost strategy. However it can be said that KFC will be performing better
since it has large market share in the industry. It have been found out that both KFC and
Oporto compete on a low cost strategy. it have been also found out that both KFC and Oporto
are very similar in the terms of pricing strategies however, they can be very different in case
of non price strategy. The present growth strategies can be ineffectual in nature. However, as
new shops are round the corner to open, they might be posing danger to viability of both the
business. Therefore, it can be stated that this analysis can be included in the future to include
how the new business might pose a threat to both KFC and Oporto I the future if they come
up with trendy new style of products.

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Reference list
KFC Australia | Home. (2019). Kfc.com.au. Retrieved 21 May 2019, from
https://www.kfc.com.au/
Oporto - Fresh Grilled Chicken and Burgers. (2019). Oporto. Retrieved 21 May 2019, from
https://www.oporto.com.au/
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