KFC "finger lickin good,": KFC

KFC the world wide fast food chain, it is one of the fastest growing food chain accoss the globe, can be found as a franchise in multiple countries .The KFC’s strategy aims to make sure the chain’s return on investments with a long-term competitive advantage the KFC management has issued a number of management techniques across the globe in different counties, to gave them the edge. To reach the desired targets, during the last decade KFC has mainly focused on expanding its intercontinental operation, primarily in developing countries. This international diversification of revenues has contributed to reinforce the KFC business by differentiating operational risks and by allowing the corporation to partly counteract declining performance due to previous years’ economic slowdown. Still in 2008 there was a predominantly hard year, due to decreasing revenues for the first time. KFC react to deteriorating buyer flow with the launch of value offers like Streetwise menus and fresh products like the ‘healthy’ Kentucky Grilled chicken for health conscious people and the Krushers milkshake line – dubbed Krush’ems in the UK .KFC has also made an attempt to expand its client base. KFC has also opened halal outlets to appeal to Islamic customers in the US and the UK and middle eastern. At a global level, the chain is in an ongoing refurbishment programme. If Asia, and particularly China is perceived as ‘The biggest opportunity of the 21st century in the restaurant industry’, America, especially the US, continues to struggle with decreasing customers’ flow and scaling back plans in terms of number of units

Kfc porter five forces

Bargaining Power of Suppliers

High levels of competition among suppliers act to reduce prices to producers. This is a positive trend for Kentucky Fried Chicken. … "High competition among suppliers (Kentucky Fried Chicken)" has a important impact, so an analyst should put more weight into it.

When suppliers are reliant on high volumes, they have less bargaining power, because a producer can threaten to cut volumes and hurt the supplier’s profits. This can positively affect Kentucky Fried Chicken The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching costs positively affect Kentucky Fried Chicken

Bargaining Power of Customers

When buyers are less responsive to price, prices can increase and buyers will still buy the product. Inelastic demand positively affects Kentucky Fried Chicken. … This will guide to an increase in profits for this unit. "Low buyer price sensitivity (Kentucky Fried Chicken)" will have a long-term negative affect on this entity, which deduct from the entity's value. When buyer has inadequate information, they are at a difficulty in negotiations with sellers. But limited buyer information has positively affects Kentucky Fried Chicken. This statement will lead to an increase in profits for this entity. "Limited buyer information availability (Kentucky Fried Chicken)" is a difficult qualitative factor to defend, so competing institutions will have an easy time overcoming it. When customers cherish particular products they end up paying more for that one product. This positively affects Kentucky Fried Chicken. When customers have limited choices they end up paying more for the choices that are available. Limited buyer choices are a positive for Kentucky Fried Chicken.

Intensity of Existing Rivalry

When storage costs are low, competitors have a lower risk of having to unload their inventory all at once. Low storage costs are a positive for Kentucky Fried Chicken. … These statements will have a short-term positive impact on this entity, which adds to its value. "Low storage costs (Kentucky Fried Chicken)" will have a long-term negative impact on this entity, which subtracts from the entity's value. Large industries allow multiple firms and produces to prosper without having to steal market share from each other. Large industry size is a positive for Kentucky Fried Chicken. When industries are growing revenue quickly, they are less likely to compete, because the total industry size is also growing. The only way to grow in slow growth industries is to steal market-share from competitors. Fast industry growth positively affects Kentucky Fried Chicken. When exit barriers are low, weak firms are more likely to leave the market, which will increase the profits for the remaining firms. Low exit barriers are a positive for Kentucky Fried Chicken.

Threat of Substitutes

A lower performance product means a customer is less likely to switch from Kentucky Fried Chicken to another product or service. Lower quality product means a customer is less likely to switch from Kentucky Fried Chicken to another product or service. When products and services are very different, customers are less likely to find comparable product or services that meet their needs. This is a positive for Kentucky Fried Chicken. An inferior product means a customer is less likely to switch from Kentucky Fried Chicken to another product or service. A limited number of substitutes mean that customers cannot easily find other products or services that fulfil their needs. Limited substitutes are a positive for Kentucky Fried Chicken.

Threat of New Competitors

Strong brands like McDonalds are significant to compete, then this will drive have to improve their brand value and quality in order to effectively compete. Strong brands positively affect Kentucky Fried Chicken. When corporation need to use resources in building a brand, they have fewer resources to participate in the marketplace. These costs really affect Kentucky Fried Chicken. Economies of scale help producers to lower their cost by producing the next unit of output at lower costs. When new competitors enter the market, they will have a higher cost of production, because they have smaller economies of scale. Economies of scale positively affect Kentucky Fried Chicken. If existing competitors have the best geographical locations, new competitors will have a competitive disadvantage. Limiting geographic factors positively affect Kentucky Fried Chicken. High switching costs make it difficult for customers to change which products they normally purchase, due to costs. High switching costs positively affect Kentucky Fried Chicken. When the learning curve is high, new competitors must spend time and money studying the market before they can effectively compete. High learning curves positively affect profits for Kentucky Fried Chicken.