Introduction This fast food chain started from Kentucky by a man called Colonel Sanders, whose picture we see in logo. KFC is known to have been safeguarding its recipe for all these years and have not patented it because patents expire. The man who started it faced many hardships in the beginning of his life and had to start earning his living at a very early age. The first time he sold his famous chicken was on a road side and gained popularity from there.
They highlight the strengths, weaknesses opportunities and threats along with their significance of the industry. Analysis helps to understand the current competitive position the industry occupies, animates positioning and clarifies areas of improvement. However, for convenience of understanding and application the group has carried out the analysis by considering KFC to be in two major industries, the first being fast food and the second being franchise.
Hence, industry analysis is carried out by taking the industry to be fast food franchise. These continuously fight against each other for a better position in the market. Rivalry among competitors takes place in the form of price competitions, advertising battles, product differentiation and increased customer services.
Rivalry in fast food industry can be measured by analyzing the following: Number of competitors and size Fast food franchise industry in Pakistan consists of large number of firms having large variance in size and scale. Also, they Kfc pest analysis in pakistan a lot in prices, quality and service.
So, they do not have to monitor all the firms for their actions and they can make moves without the risk of severe retaliation. However, few large players that compete against each other have resources for vigorous retaliation when some close competitor makes an important move.
Fierce competition might result in the form of various deals and price cuts offered specially in burgers between McDonalds and KFC, but on the whole rivalry in the industry remains moderate due to the existence of numerous players operating in various sizes. There is a lot of room for firms to enter and be profitable.
As barriers to entry to the industry as a whole are low, more and more firms as well individuals are entering in this business. For instance, Subway successfully entered the industry a few years ago and now Hardees has also followed suit.
Also, existing firms are increasing their number of outlets quite fast. Moreover, firms continue to introduce products and expand their product lines, hence, entering the new markets and targeting the new set of buyers. Hence, because the overall profitability from the industry is high, the rivalry is not very bitter and everyone gets its share of profits without diverging into severe price-wars and advertising battles.
The rivalry thus remains moderate. High fixed and storage costs For the fast food franchise industries the fixed costs are usually high due to the royalty charges they have to pay to operate as a franchise. As for KFC, it takes the cooperation approximately 40 million to open a new outlet.
Similarly, for its close competitors the costs are similar, as they are about equal in scale, size and operations. High sales, however, help these firms to earn sustainable profits.
Storage costs are also high due to expiry and quality issues. This also places pressure to increase sales hence increasing marketing efforts and cutting prices which can drive profits low. In these cases they might even indulge in severe advertising battles.
Therefore, the rivalry increases.
However, this is only the case with small franchise businesses. The firms following quality standardize do not usually face the problem of over capacity and hence do not have to incur costs of wastage of storage materials.
The rivalry overall remains moderate. Differentiation and switching costs Product differentiation in the fast food industry exists but is not quite high and generally the products are perceived as commodities so their choice largely depends on price and service so the pressure to ensure competitive price and service escalate.
Also, switching costs are quite low, as customers do not have to incur any cost for not buying from a firm. Therefore, rivalry can become high. Competitors have to enter into price and advertising wars to attract customers. However, this usually happens in small franchises who are unable to differentiate their products either on price or quality or the by increasing the product line.
On the whole, the industry operates in conditions where rivalry is moderate. Increasing capacity in large increments In the mentioned industry, there are expiry issues so raw material is not purchased in bulk. KFC never purchases in large quantity that would result in overcapacity, because it has set quality standards and KFC never compromises on that.
Overcapacity can result in huge wastage of raw materials because most of the raw materials are perishable.Essays - largest database of quality sample essays and research papers on Kfc Pest Analysis In Pakistan. KFC occupies a major position in the fast food industry, being the largest seller of chicken products in Pakistan.
It captures 50 percent of the total fast food market in the country. KFC wore the title of being the market leader in its industry.
Serving delicious and hygienic food in a relaxing. May 25, · Pest Analysis On KFC - December 2nd, Pest Analysis On KFC: KFC Corporation (KFC), founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky, in the United States.
It was initially named “Kentucky Fried Chicken” after the location from where it first started but later on it was changed to KFC, in order to eliminate the association of the restaurant with fried stuff.
The SWOT analysis of KFC talks about the major contributing factors in the success of the brand and the weaknesses and opportunities which are existing.
Although KFC is known for its finger licking Chickens menu but recently they ventured out in Vegetarian category which is helping them in increasing their business. SWOT analysis of KFC December 22, By Hitesh Bhasin Tagged With: SWOT articles KFC is known to be a favorite of meat and chicken lovers, and this segmentation is the main success factor of KFC.