Description on the selected organisation

Present-day world is shifting and moving quicker day by day according to that publics
situation and their life style are also inspiring accordingly. People are adjusting them self by
making the things quicker, in this process publics are intent in saving time even at the place to
have food. Now a day`s people are extremely liable in fast food concept which can save their
time and have some decent food. Making this a business point many fast food midpoints are
rising in the marketplace, were the food is served in minutes. Bases on this concept many fast
food centers came into life like KFC, Burger king, pizza huts etc., Among many fast food
company, Kentucky fried chicken shortly known as KFC has taken its great benefit and
continued to be the top in the current market.

Colonel Harland Sanders is the founder of Kentucky Fried Chicken, in 1930`s Sanders
who was at the age of 40 year used to maintain a service station in Corbin at Kentucky and used
to serve the customers with his new formula of cooking chicken with 11 herbs. In the early 1935
then the governor Ruby Laffoon made him a Kentucky Colonel. Quickly the fame grew up and
people used to come more and more to eat his cooking foods accordingly Sanders came to streets
to cook and show his ability and announced his menu in numerous places. As the self-confidence
in his fresh fried chicken grew up Mr. Colonel Harland Sanders has interested towards
developing chicken franchising business and within no more time there were more than 600
franchises established in United States and Canada. In the year 1964 Mr. Sanders sold his
interest to a private group of investors Mr. John and Mr. Brown in United stated KFC for two
million dollars.

Under the new organization the Kentucky Fried chicken corporation presented the high
quality of service and to the result the sales grew up rapidly. In the year 1997 Pepsi Co, spun -off
its quick service restaurants including KFC into an independent restaurant KFC and branded it a
Yum which are today nearly 32500 branches in 100 countries.
Description on the general micro environment elements

For the current Malaysia market for fast food, it is not difficult for a fast food restaurant
to enter the market. Moreover, it would be extremely difficult to take over already running major
verity food chains’ dominancy in Malaysia or even make a significant amount of profit. While
there are enough people in urban Malaysia for any restaurant to survive, KFC holds the first-
mover advantage into the ‘non-veg food specialty food segment’ that gives them welcome
reputation. Customers, especially kids who are used to going to KFC as a treat or prize from their
parents, are not going to want to go to other restaurants they’ve not ever heard of .The brand
name is already recognized .Also, there is already a variety in the numerous western-style dining
places in Malaysia, such as McDonald’s, Pizza Hut, Domino’s and Subway, and any new fast-
food candidates would just be presenting something very similar to what’s already there. While
small neighborhoods restaurants usually have low barriers to entry, these are the barriers to entry
for similar restaurant businesses to enter the fast-food chain market.

The customers of KFC, particularly as specific buyers, have almost no negotiating power
because if only one customer threatens to no longer eat at KFC, the store is not going to lower its
price because the cost of losing one client is not very great. The suppliers like the buyers, have
very little bargaining power. In terms of food, KFC, upon its move into Malaysia, urged many of
its U.S. suppliers to also extend branches into Malaysia also began helping local suppliers by
giving them technological support to advance their products. This is a brilliant strategy because
the supplies that KFC would otherwise need to import from the U.S. can now be obtained
domestically, and if the U.S. suppliers decide to raise their prices, KFC can easily switch to the
local suppliers. This gives us a brilliant strategy. With this strategy, KFC created antagonism
among its suppliers, dropping the supplier bargaining power. In terms of human resources, work
cost is extremely low because the supply of non-skilled workers great exceeds the demand for
them. With so little buyer and supplier bargaining powers, KFC is able to have a very tight
control over its prices and expenses

As stated before, there are a few main competitors in the fast-food industry in Malaysia
for KFC, namely McDonald’s, Domino’s and Subway. The substitute products, in this case,
would be burgers, pizza, and sandwiches. Though they are competitors, their main products vary
greatly from each other, in that they sell, chicken, burgers and fries, pizzas, and sandwiches,
respectively. Traditional Malaysia dining, home-cooked foods, and grocery stores with ready-to-
eat foods are also alternates, as families could choose any one of these over fast food for a meal.
These substitutes are definitely considered healthy as compared to the fast food chains. Even
foods from street vendors count as substitute goods. While other fast foods serve as substitute to
KFC, they can also serve as complements for fast foods as a whole. If the overall price of fast
foods goes up, KFC’s price rises as well, and the same can be said of the quantity sold of these
products, which make them accompaniments to each other. KFC also sets up stores placed near
general tourist attractions, so tickets to these tourist spots are also complementary goods because
the more people tour these attractions, the more clients KFC will get.

Different what one would expect, KFC has slight rivalry with similar fast-food chains in
Malaysia. The main reason is that their main products are different, as in they sell different kinds
of fast foods with very different tastes and styles. For example, if KFC raised its price for
chicken by a small amount, Malaysia chicken lovers who may not be as accepting to burger are
not going to switch to Macdonald just because the price for KFC increased. In addition to that,
these restaurants have such different target customers that the variation of price for one
restaurant is not going to affect the others.
Identification and discussion on element(s) of macro environment

Political factor mostly deals with the government policies and procedures which is
worked out through lawmaking and contains of all authorized factors such as government place
on market ethics, government view on culture and religion, government policy on economy and
taxation policy on tax charges and inducements. These are some of the political factors that
include legal issues, government implementations and define both the formal and informal rules
under which the organization must be operated.

Economic factor on KFC organization is affected with national and global economic
factors such as Cost of labor, Interest and Inflation rates, Economic development rates, Business
cycle stage (e.g. recession, recovery) and Joblessness rates. Due to slump the income of the KFC
has consistently dropped down and most of the employees were jobless and the rest employees
were employed for very few hours also the organization had to cut down their budget.

It includes the cultural and demographic aspects of the peripheral macro environment.
The possible of the employees who come from different back grounds and work together in the
KFC and customer trends and aspect which the KFC has to consider as per their needs and wants
of the customer such as changes in lifestyles, Level of education, Value in society,
Demographics (age, sex, race etc.,) and Change in consumer needs and wants. The MALAYSIA
people are mostly reliant on of the fast food centers as they find very busy with their timetables.

Technological factor is the main driver of globalization which decreases the minimum
efficient of production levels and some of the technological factors are recent technological
growths, Rate of technology changes, Other way of providing services, New findings,
Communication expertise. The technology has now become the most significant aspect in KFC
as when the customers are mostly delighted and satisfied with service including modern
technology that is obtainable in the KFC. The latest Technological methods that are used to serve
the customer faster are such as digital screens, wireless headphones for the staff, cooking
utensils.

The KFC has to uphold the rules and regulations linked to the hygiene factors such as like
worker proper training regarding the food and safety, personal hygiene, clean work atmosphere
and proper use of the utensils. This also deals with the allowed environment in which the firms
operate like the Malaysia has come up with the introduction of age discrimination legislation and
increase in the minimum wage and greater requirement of recycles.

KFC by considering the environmental factor has showed to be quite friendly towards
atmosphere where it uses the paper material for the food and services carrying instead of plastic
to help in reducing the global warming though it cost very high for the organization to accept
paper materials such as paper plates, paper boxes for food parcel, glasses and cups etc.,
Recommendations to improve management of the macro environment

Market saturation occurs when a corporation enters/penetrates a market with current

Product development (existing markets, new products) is a firm with a market for its
present products might embark on a strategy of evolving other foodstuffs catering to the same
market For example, KFC is always inside the fast-food industry, but often markets new burgers.
Frequently, when a firm produces new foodstuffs, it can gain new customers for these products.
Hence new product development can be a crucial business development strategy for companies
to stay competitive.

Market development (new markets, existing products) as an well-known product in the

Change (new markets, new products): Tune Hotel, Tune Talk Telecomunication, Air Asia
Airlines, are examples of new products created by the Tune group of Malaysia, to leverage the
Tune brand. This resulted in the company entering new markets where it had no presence before.
Summary

The fast-food restaurant may all differ from one another based on the food they offer and
the customer service, but they all have to study the market they are catering to and how they
have to formulate their marketing plans to attract more clients and to retain the existing ones.
This report is based on the analysis of the factors that affect the environment in which they
operate and how they have to adapt their marketing strategies to particular conditions. KFC
remains a main fast-food restaurant in today’s world. Despite the latest political stunts and
debacles, the company is focusing on adopting new menu items and technology to improve
customer satisfaction. And it’s working; profits in set locations are already on the rise. If the
company can step away from doubtful corporate relationships and adhere to laws and
regulations, it’ll likely continue to embellishment in the fast-food industry.
References

http//www. kfcfranchise. com/about- K FC-fried-chicken-business

About KFC. (n. d. ). KFCfranchise. Retrieved March 9, 2012, from http://www. kfcfranchise.
com/about-KFC-fried-chicken-business. phpBrand values / KFC Gold standard qualities
guarantee chicken that is so good! . (n. d. ). KFC. Retrieved March 9, 2012, from http://kfc. com.
g/about-us-goldstandard. phpCain, S. (2009, June 14). The worst restaurant of the year award
goes to Kentucky Fried Chicken

Kentucky Fried Chicken. (n. d. ). KFC. Retrieved March 9, 2012, from http://www. kfc. com.
sg/about-us-milestone. phpDavis, L. (2002). Application of nutrition in the industry. In
Hospitality Industry Handbook on Nutrition and Menu Planning. (p. 217).
Reflective thinking

There are many fast-food corporations around the world. KFC is one of the most well-
known brands in the global fast-food industry. KFC stands for Kentucky Fried Chicken that was
founded by Colonel Harland Sanders in 1955 . At the beginning, KFC particular in Original
Recipe fried chicken that known as Colonel’s secret recipe. It blends of 11 herbs and spices and
completes by using the basic cooking procedure.

Therefore, KFC’s goods has been pleased many clients around the world. Moreover, the
growing number of KFC’s franchises is one of the indications shows the development of the
KFC Cooperation. In 1971, KFC Corporation contained more than 3500 worldwide franchises
compared with more than 600 KFC’s franchises in the U. S and Canada and opened the first
oversea outlet in England in 1964 ("Colonel Sanders & Kentucky Fried Chicken", n. d ).

Today, KFC retains more than 20,000 restaurants within 109 countries around the world
("About KFC", n. . ). KFC now can assess as a multi-billion dollars company. This report will
clarify some strengths, weaknesses, opportunities and threats of KFC, as well as the external and
internal environment, and give some recommendations to help KFC becomes more successful in
market.
Analysis

KFC must strive with many straight competitors in the global fast food industry. For
example, Burger King, BBQ, Mc Donald’s, Dominos’s and so on. All of them are strong rivals
based on their ability to gain market share, as well as their determination to become the leader of
the fast food industry. Moreover, fast food industry is soaked. Products are not easily
differentiated. Almost of all fast food, restaurants currently lack of product diversity. Their menu
contains small types of foods such as hamburgers, chicken, french-fries. Therefore, some
customers may feel difficult to eat these types of foods often. In order to compete with other
strong rivals in the market, even it is difficult; KFC tried their best to differentiate their products.
For example, popcorn chicken, rice and so on.

In customers’ estimation, fast food attracts them because it is suitable, delicious, and
economical. However, nowadays, many research papers show the negative impact of eating fast
food on health and encourage people to limit fast food consumption ( Schlosser, 2001) . KFC
have to face with important substitutes due to some companies who focus on healthier food but
also low price strategy will adapt strongly to customer’s demand.

KFC aims to final customers. Schlosser (2000) states that today, many women go to work,
instead of cooking at home usually, fast food helps them to prepare meals for family. Also, half
of their food spending is for fast-food eateries. Once again, the trend of eating outside amongst
Malaysia creates more chance for KFC expand their business especially in Malaysia. Moreover,
a quarter of Americans select fast food for their meals every day ( Ransohoff, n. d. ). Therefore,
KFC has many potential customers in order to satisfy those people and gets interest back.

Bargaining power of suppliers is quite low due to some reasons. First, fast food industry
especially KFC restaurants need common materials for producing. For example, chicken, breads,
beef, potatoes and so on. Therefore, these materials are available and low cost of obtaining.
Secondly, there are many suppliers provide those stuff want to cooperate with KFC which means
ability to raise prices can be limited.
learning and experience

One of KFC’s weaknesses is unfortunate value of service. Therefore, KFC may set
their goals to rise customer satisfaction, KFC achieve that goal by providing staff training
workshops. They know more about consumer behavior, and customer psychology in order to
satisfy customer’s needs. This information can support by people who have good knowledge
about customers. After these workshops, KFC should collect customer’s feedback whether staff
perform better or not.

KFC focus on satisfy customers to generate profits and improve its reputation. Each
department includes in KFC have to respond its function to achieve company’s goals.
Departments such as marketing department, production department have their own leader like
marketing manager, production manager, respectively. KFC must make sure that all of their
department not only finish their tasks but also coordinate with other departments. Therefore,
KFC need a good organizational structure to achieve its goals. For example, marketing managers
need to plan a promotion campaign to introduce new products.