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Factors affecting the development of Kentucky Fried Chicken franchises in Malaysia.

Extracts from this document...

Introduction

Content P.G 1.0 Introduction ..................................................................... 4 2.0 PESTEL Analysis .................................................................... 5 2.1 Politic .................................................................... 5 2.2 Economic .................................................................... 6 2.3 Social .................................................................... 7 2.4 Technology .................................................................... 8 2.5 Environment .................................................................... 9 2.6 Legal .................................................................... 10 3.0 Michael Porter's Five Forces .................................................................... 12 3.1 Threat of New Entrants .................................................................... 12 3.2 Bargaining Power of Customers ............................................................... 13 3.3 Bargaining Power of Suppliers ............................................................... 14 3.4 Threats of substitutes .................................................................... 14 3.5 Intensity of Rivalry ......................................................................... 15 3.6 Conclusion .......................................................................... 16 4.0 Competitors Analysis ......................................................................... 17 4.1 McDonald ......................................................................... 17 4.2 Domino's Pizza .............................................................................. 18 4.3 Burger King .......................................................................... 19 5.0 Market Analysis ........................................................................ 20 6.0 Internal Analysis ........................................................................ 21 6.1 Resource Based View ........................................................................ 21 6.1.1 Threshold Resources and Competences ................................ 21 6.1.2 Unique Resources ...................................................... 22 6.2 Key Success Factor ......................................................................... 24 6.3 Core Competencies ......................................................................... 25 6.4 The Value Chain ......................................................................... 26 6.4.1 Primary Activities ...................................................... 26 6.4.2 Support Activities ...................................................... 28 7.0 Strategy issues/ Conclusion .......................................................................... 30 8.0 References ........................................................................... 31 1.0 Introduction A strategic management plays a vital role which provides greater competitiveness to every company. After analyzing the external and internal factors of strategic issues that aroused by the company, a company would have the ability to identify the strategic issues that will bring potential impacts for the company's future. A company is not able to achieve its competitive advantages for their long-term plans if there is no proper set up on the managing of the strategic in company's objectives or visions. Hence, there is a must for a company to develop a strategy that could lead the company to achieve its own-recognized competitive advantages. 2.0 P.E.S.T.E.L Analysis 2.1 Politic Government Support Firstly, the strong government supports in franchising sectors have granted an opportunity for the fast food restaurants to better operate within the industry.. Under the 8th Malaysian Plan (8MP), which was the country's economic development plan, franchising has been identified as one of the growth areas for the structural change and upgrading of the distributive trade industry. ...read more.

Middle

4.0 Competitors Analysis There are some direct competitors in the fast food industry, such as McDonalds, Burger King, Domino's Pizza and so on. 4.1 McDonalds McDonalds is KFC's number one competitor. Their business began in 1940. McDonalds Corporation is the world largest chain of hamburger fast food restaurants. McDonald sells hamburgers, chicken products, French fries, chicken porridge, soft drinks, and desserts. To attract more customers they promoting breakfast items, McValue Lunch (cost from RM5.95), and happy meals with toys. There are providing a joyful and comfortable environment. McDonalds have strong and loyalty suppliers. Some of McDonald's classic food items like Fillet-O-Fish, French Fries, Chicken Nuggets etc. are results of supplier innovation. Nowadays people are more demanding for convenient services so drive-thru service will be correspond for them but KFC has lesser drive-thru service outlets(22) if compare with McDonalds(57). McDonalds restaurant have delivery and online booking service which KFC does not have. On the other hand, McDonalds also have some weaknesses like people will feel very heavy when take their meal if compare with KFC, they offered mash potato and also salad which are healthier than French Fries. 4.2 Domino's Pizza Domino's Pizza, Inc. is also a strong competitor for KFC. It is an international fast food pizza delivery corporation. In 1999, Domino's Malaysia's commissary was recognized as the Best Commissary in Asia Pacific and it holds the fastest pizza maker. By reviewing Domino's menu, they have less product line than KFC, so, this might be an opportunities for KFC in gaining more customers. There are product satisfaction guarantee by Domino's which ensures that great-tasting and quality pizzas If a customer is dissatisfied with their dining experience, they will remake the product or provide a refund. They also provide delivery service and online order that KFC does not have. They will provide a Free Regular Pizza voucher, if any delay in home deliveries. Their delivery is totally free. ...read more.

Conclusion

KFC keep coming out new products especially on the healthier choice. Newly established computer information system enables them to improve efficiencies on managing their employees, stock control, and sales analysis. Procurement KFC's chicken supplies products are supplied from its poultry processing plant's primary processing operation, which the chicken is slaughtered according to Halal requirement and processed to the required specifications. To make sure KFC purchase only the chicken supplies of highest freshness and hygiene, the process from importing feeding grains and breeding activities, to hatching process, supplying day-old-chicks to contract farmer, and poultry processing are strictly regulated by various quality control practices. 7.0 Strategy Issues/ Conclusion Infectious disease is the issue that encountered by KFC recently. The total revenue of KFC was dramatically dropped due to the reason of bird flu; it caused people become more sensitive and stays away from chicken. Besides that, H1N1 is the latest issue that confronted by KFC. People are more prefer to dine in their house instead of going out for their meals. Nowadays, the consumers are well-educated and having enough information regarding to the ingredients of the food product. Therefore, as the concern of the good healthy lifestyle, consumers from different demographic and age group wouldn't choose KFC as their meal. Another significant issue is the poor service problem which had experienced by its customers in KFC outlets. Drawback from many feedbacks or the researches, basically what the complaint that received by its customer is the staffs in KFC restaurant show bad attitude and impatient towards its customers when they are placing the order. In addition, fierce competitors such as McDonald and Burger King and other new entrants such as Wendy's and Subway, they are strong enough to compete with KFC and serve almost same range and variety of the products to the public. It could directly threaten the KFC's market share in the industry. Lastly, KFC needs to develop new ideas, products and services endlessly in order to meet the opportunities and overcome the threats. This could retain existing customers, attract new customers and also compete with the substitute products and competitors. 9. ...read more.

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