Introduction
Global trade is the term used to describe the exchange of goods across international borders. This is required by countries engaging in trade negotiations to create agreements by ceding part of their territorial sovereignty to accomplish a shared, mutually beneficial objective (Commerceiets, 2020). Contrarily, according to Giachetti & Dagnino (2021), competitive dynamics refers to the collective actions and reactions that all businesses that compete in a given market adopt. In particular, businesses research, forecast, launch attacks against rivals, and react to those attacks to enhance or maintain their competitiveness inside their competitive arena.
Question 1: KFC, its Products and Activities
Colonel Harland Sanders developed the American fast food restaurant business KFC (Kentucky Fried Chicken), which is headquartered in Louisville, Kentucky, according to KFC (n.d). (1890–1980). The company is a part of Yum! Brands, Inc. is a well-known international chicken restaurant brand with a lengthy reputation for achievement and inventiveness. Optimism, friendliness, resilience, culture, commitment, and doing things correctly are some of the company’s brand values. Also, while the company’s vision is to improve equity, support communities, and help end hunger, its mission is to have a passion for finger-licking-good cuisine and serve it with pride (KFC, n.d.). It is important to remember that KFC popularized chicken in the fast-food sector and diversified the market by challenging hamburgers’ long-standing dominance. Currently, KFC sells a wide range of items, including fried chicken, hamburgers, chicken sandwiches, French fries, wraps, soft drinks, salads, milkshakes, and desserts (KFC, n.d.).
Question 2: What does it mean to be a global organization? Why is KFC a global organization?
Per Bhagat, McDevitt, and Baliga (2017), a global organization is a business that views the globe as one market and operates in more than one nation to gain Investments in research and development, production, marketing, and monetary benefits in its expenses and brand image that are unavailable to competitors who only compete domestically. Remembering that a global business can supervise and manage operations across several countries and obtain an edge over local rivals is important. Due to the favorable global trading environment in the nations where they operate, these firms can operate across many cultures and nationalities.
Owing to the above definition, KFC is a global company with more than 20 000 locations spread across more than 150 nations. A new KFC location opens every six hours (KFC, n.d.). According to KFC (2021), the United States (3943 stores), China (7166 stores), Japan (1140 stores), the United Kingdom (928 stores), South Africa (955 stores), Thailand (853 stores), Indonesia (742 stores), Canada (601 stores), and Australia are among KFC’s key international marketplaces (699 stores).
Question 3: Factors triggering KFC to expand across international boundaries.
According to Dithurbide (2022), globalization presents opportunities for companies to grow into new markets, connect with global consumers, and boost earnings. Companies may eventually face domestic demand saturation for their goods or services. They can keep growing by satisfying international demand by diversifying their market. Various factors initiated and continue to influence KFC’s global growth in the countries it operates and the opening of new stores in new locations. These factors comprise;
First, the need to enter new areas and gain a competitive edge internationally led to KFC’s expansion. According to Bell and Shelman (2011), the company’s managers aimed to expand the brand so that customers would see KFC as a part of the neighborhood—rather than as a fast-food chain selling low-cost Western-style foods, but rather as restaurants offering a variety of foods and the traditional dishes that Chinese customers find appealing.
Second, the need to satisfy the demand for fast food restaurants from abroad prompted KFC’s growth. According to Loc N Apps (2020), localization is at the heart of KFC’s global marketing strategy. Each KFC location has a localized menu mainly catering to distinctive local tastes and preferences. KFC, for example, offers dishes exclusive to each of its international markets. The requirement for product modification.
Thirdly, KFC’s growth into new areas is motivated by the need to boost profits through increased sales, claims Jitpleecheep (2021). For instance, Mr. Piyapong, an executive of KFC under the management of Central Restaurants Group Co, reports that the KFC Café by Arigato, a beverage chain from Japan, is intended to generate fresh possibilities for collective success and adaptability, as well as incremental sales of KFC, which typically experience their peak sales around lunch and dinner. Additionally, it aims to make the Arigato name more accessible to Thai consumers.
Question 4: KFC’s Main Success Factors, Marketing Strategy, Competitors, and Competitive Advantage
The company has a strong and genuine brand image, which is key to KFC’s success. KFC has kept an excellent brand image throughout the globe, which has been made possible by the company’s intense commitment to quality, menu ingenuity, and advertisement, claims Blog.notesmatic (n.d.). According to Think with Niche (2022), KFC’s success resulted from building an authentic brand with a memorable name and distinctive recipes so patrons could always rely on delicious food when they visited one of their locations. Arun (2023) also claims that the main components of KFC’s marketing plan are content marketing, SEO, social media marketing, email marketing, and video marketing. To emphasize its affordability and customer experience, KFC focuses on social media marketing and employs the most well-liked digital marketing platforms, like Facebook and Twitter.
KFC’s rivals include Burger King, Domino’s, Pizza Hut, Subway, Wendy’s, Chipotle, McDonald’s, and Popeyes Louisiana Cuisine (Blog.notesmatic, n.d.). Additionally, KFC’s supply network and distribution system are a competitive advantage. KFC has a better supply chain and delivery system than other fast food goliaths, so it is easier to establish a presence, particularly in less competitive regions with plenty of room for expansion (Staff Writer, 2022).
Question 5: Globalization vs. Customization
Globalization and customization are frequently seen as competing forces, with globalization supporting consistency and conformity while customization focuses on variety and local adaptation (Dithurbide, 2020). KFC attempts to balance consolidation and adaptation by standardizing the value offering’s easily transportable components (KFC’s core products and positioning), customizing the company’s standard chicken products with a new topping or sauce, and providing a vegetarian menu (PRESSBOOKS, n.d.).
Contrarily, customization describes adapting goods, services, and communication plans to regional marketplaces’ unique requirements, tastes, and circumstances (Dithurbide, 2020). This strategy recognizes that global consumers may have varying tastes, preferences, and ethnic backgrounds and that a one-size-fits-all strategy may not always be successful. According to Tien (2019), KFC makes use of customization. As a result, the business has a varied and distinctive menu that is appropriate for every region: In addition to conventional fried chicken, KFC offers meals tailored to the preferences and needs of customers in each region. According to Bell and Shelman (2011), KFC China’s menus usually have 50 items, compared to 29 in the US. Additionally, KFC managers expanded the brand by offering traditional Chinese dishes that appeal to Chinese customers, helping them see KFC as a part of the neighborhood rather than a fast-food chain providing low-cost Western-style foods.
KFC uses a variety of strategies to adjust to local preferences and conditions, such as: firstly, product adaptation, as shown by KFC’s offering of meals that resonate with the local culture, such as the KFC Shrimp Doughnuts in Thailand, the KFC Nacho Box in Australia, and the KFC Egg Tarts in Singapore (Kelso, n.d.). Second, the structure and style of KFC’s stores are appropriate for regional tastes and customs. According to Bell and Shelman (2011), KFC China locations are about twice as large as those in the United States to accommodate larger kitchens and more floor area for customers to linger. KFC restaurants in the United States are built mainly for takeout because most dining is done at home.
Question 6: KFC Ethical considerations
The foundation of ethics is a set of rational norms of right and wrong that outline what people should do, typically regarding their rights, duties, benefits to society, fairness, or other particular virtues (Velasquez et al., n.d.). Due to the changing eating habits and increased nutrition awareness, KFC is presently dealing with some ethical issues. KFC has acted unethically in several ways. First of all, it has been observed that KFC has been heavily involved in providing customers with food that contains Tran’s fatty acid, which is produced by their cooking oil and causes heart diseases by raising cholesterol levels in the body (Burros, 2006).
Secondly, according to HT Correspondent (2009), KFC has been confronted with an ethical predicament pertaining handling of the chicken. While the chickens are still fully cognizant, their throats and beaks are cut; some are even scaled to death. Additionally, KFC was charged with breeding the chickens so big that their weight rendered them immobile. A video taken by PETA on KFC’s slaughterhouse at Pilgrim’s Pride in Moorefield, West Virginia, revealed that laborers intentionally maltreated chicken. The video caught workers hitting live chickens like football and smashing them on the divider (EduBirdie, 2022).
Question 7: Post-COVID-19 challenges and opportunities for KFC
According to Marketing Week (n.d.), the Covid19 pandemic constrained KFC’s operations as it was compelled to shut down operations. Woolley (2022) notes that in July 2020, some KFC locations in Melbourne were compelled to cease operations after being left with limited stock due to the Covid19 pandemic. Due to these, the company faced the following fundamental difficulties: maintaining brand recognition while its restaurants were closed and ensuring that customers would return. Additionally, the Covid19 pandemic reportedly disrupted the business’s supply networks for poultry, according to Woolley (2022). The business had to offer a smaller menu due to supplier issues with original chicken, zingers, fillets, and wings.
According to Li et al. (2022), KFC quickly shifted from its traditional emphasis on tiered strategic planning and execution to one far more effective “stratecution,” combining the two. People focus more on their happiness and mental wellness during this time. These changes have allowed KFC to embrace a cultural and psychological change, strengthening the company over time.
Conclusion
Globalization has emerged as a haven for businesses looking to increase their revenues by incorporating new global variables. Any organization’s plans to go global are based on several critical success factors that help it compete and succeed in the global market when combined with marketing tactics. Many aspects of the target global market or pressures on the local market are major motivators for entering the global market. Because a globalizing firm works in a multicultural setting, its success is directly related to how ethically it conducts itself.
References
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