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KFC andthe Global Fast Food Industry (703).

Extracts from this document...

Introduction

KFC and the Global Fast Food Industry (703) 1. The five-force analysis suggests that KFC faces a very active and rigorous competition. � There is extreme rivalry in the fast food industry. There are more then a hundred other fast food businesses that KFC competes with. � Statistics show that there is always threat of new competition as there are new chains developing from time to time in the industry. The reason behind such a threat existing is due to the fact that the industry is a highly profitable market. � There a various number of substitutes that KFC faces as competitive forces such as fine dining, different fast food concepts such as Mexican, Chinese, Italian etc. � There is not a significant pressure from supplies in terms of bargaining as there are also a vast number of supplies available to supply the fast food Industry. � When it comes to bargaining between seller and buyer, there is heavy competition, due to the fact that there are many other fast food chains with the same restaurant concept as KFC, with whom KFC competes with. 2. The competitive factors to be considered to succeed in the fast food industry: - � To succeed a fast food chain should always be working in improving their quality of food they offer to their consumers. � The development of new product from time to time is critical to stay on top of the market; consumers always look forward to new products that businesses have to offer. � The frequent analysis of demographics helps the business to keep active awareness of a risk in the change of their target market in a particular area. The analysis helps businesses keep track of any change needed to cater to changing demographics. 3. KFC's internal strengths and weaknesses: - � One of KFC's internal strengths is its early experience in the international market. ...read more.

Middle

Our partnerships with the International Franchise Association's (IFA), for example, assist our brands in educating and attracting prospective minority franchisees. Our franchisees are key to our overall business growth, and help us build thriving neighbourhoods and provide economic opportunities for everyone. Problem Identification � Poor relationship Between Pepsi Corporation and KFC franchises. � KFC loose their market share because of other chicken chain competitors (Popeyes, Chick-fill-A, Boston Market, and Church's) increase sales at a faster rate. � Cultural factors influence when they going to expand their business overseas. � Other chicken chain competitor's differentiate their products. (For example Boston Market introduce new restaurant chain that emphasized roasted chicken rather than fried chicken. � Conflicts between KFC and Pepsi Cola's corporate cultures create a moral problem within KFC. � Low Research and Development funding from Hubelin, the division found it difficult to match the expansion plans of its main competitors. � Local franchisees often were more interested in maximizing profits in the short term rather than to adhere to corporate standards and strategic plans. 2. Assumption Strategic management is concerned with matching the organization's internal capabilities with the external opportunities and threats and developing plans to achieve the medium to long-term goals. There are few Assumptions need to make in order to achieve those goals. � Foreign exchange rates dose not change significantly. � Political instability in Asia not last long. � Current tax system not going to change � Bank interest rate will be stable. � No new environmental laws introduce for the industry � KFC should ignore their competitors in the fast food restaurant chain, such as McDonald's which is technically in the sandwich segment and go where it will be more profitable. � Fast food chains had already experimented with new forms of existence such as in shopping malls, airports, department stores, universities, etc � Socio-cultural trends in U.S. were favourable to the fast food industry, except for consumer demands for lower and lower prices. ...read more.

Conclusion

At this time their performance in this regard is deficient. � Generating shareholder value. � Focusing on the customers. � Capitalize on their technological advantage in fast food improvement. � Satisfying a global demand for the next generation of fast food. � Try to produce more innovative new tastes and menus and bring them to market. � The demand for a healthier life-style among consumers would create defection from fast food to healthier food types. � Concentrating on positioning KFC as an international brand name. � Emphasize innovation in production to increase quality and reduce costs. 5. Reasons for rejecting the other options � KFC doesn't have ability to concern any options with price considerations. � Tricon International Restaurant must show the profits and new investments. This is depending on gain the trust from investors. Bit hard to increase the price of the shares. 6. Recommendations � Extend the use of local suppliers in the form raw food supplies and distribution services. � Create and add local food items on the menu that cater to global market taste. � Create a management hub in the Latin American region to oversee operations of franchises in those countries. � The non-tariff and free-trade agreements would only ease the management of these franchises. 7. Implementation and Action Plan Action Responsibilities Time Action step Conducting a market research on fast food consumption in globally. The Yum brand Inc, Board of directors, Market research organization. I year Announce the actions, conducts the research acknowledge the shareholders. Expand the plant capacity, and build a new branches in Asia Announcing and tendering to find the best fast food market. Start the advertising campaign Develop marketing strategies and plans. Yum brand Company Board of Directors On going Expand the Business Yum brand board of directors and Pepsi Inc. On going Starting the new branches in Asia Board of Directors, Middle managers and workers and franchisers. 1 year Designing an advertising campaign. Advertising department, marketing department. One year Make new advertisements Advertising department 1 year Starting the new advertisements in media. ...read more.

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