Executive Summary
The UK has provided a highly competitive market for every firm that needs to venture in a particular business due to many participants. The analysis of KFC success in the UK market has concluded that the firm has ensured such success due to its increased technology usage and adoption and providing the best customer care services. Although the competition is stiff, KFC is utilizing several methods such as gifts to encourage customers to buy their products. It is effective to conduct feasibility research so as to understand all the market requires before starting any business operation.
Introduction
Environmental and situational analysis is an effective task for entrepreneurs and firms to perform so as to understand the general trends or happenings in the market. This report will focus on the situational and environmental analysis for KFC in UK. The UK has several market standards that ensure overall harmonization of the market and determining the feasibility of several businesses. Also recognised as Kentucky Fried Chicken, KFC is among the most leading fast food franchises in the globe. It was founded in 1952 by Colonel Sanders, it has gone through many ups and downs to become among the most successful fast food restaurant chains.
Environmental Analysis
According to Omer and Soran (2018), environmental analysis of a firm consists of both internal and external factors of the firm. Through their research which included the SWOT analysis for KFC, they found that environmental analysis for the firm was very effective in penetrating the overseas market especially the UK Market (Omer and Soran 2018, p.4). For the case of this report, PRESTCOM analysis will be utilized to analyze the behavior of the UK market and its resultant impact on KFC.
Political
Attack by Activists
Among the key political factors that influences and shape the fast-food franchise is the inclusion with unhealthy foods, including high-calorie diets. From Kentucky Fried Chicken, the eatery transformed its name and individuality to the acronym KFC. The latter was done with the aim of removing the “fried chicken” from the name deprived of making any chief inner changes. The latter was considered as a wise decision by the franchisee, but it has been attacked by several nutritionists and activists by exploiting the emotional vulnerabilities of most individuals.
Health Regulations
A fast-food giant said he admitted during a hearing at the City of Westminster Magistrates Court in London that he had inadequately pest-controlled at a branch office in Leicester Square in central London. Environmental examiners from the Westminster City Council commented that an inspection of the premises of Coventry Street on August, revealed that cockroaches, mice and flies were found and that the firm was charged for poor handwashing practices.
Regulations
According to Dhingra et al (2018), Britain’s involvement in the international market is progressively founded on the comparatively large supply of skilled workers, the rule of law of business, and its geographical location. These features determine the shape of relative benefit in the trade of goods and services (Dhingra et al., 2018, p. 9). Prominently, the similar features determine the direction and type of foreign direct investment (FDI) in the UK. Such the move has impacted the KFC’s business in the UK thus running its operations smoothly without further disturbance by the authorities.
Economic
Economic Status
Economic issues have a significant impact on customer purchases and expenditure, as well as a company’s production process. Due to the purchasing power and short cooking times of the day, fast food has grown into a very attractive, convenient and accessible middle class (Zhang et al., 2020, p. 8). UK being among the strongest economy giants has a large disposable income an per capita income that has enabled consumers in the country to have a high purchasing power which has impacted their choice of consumption.
Economic Recession & Pandemic
The Covid-19 pandemic has significantly reduced KFC’s annual sales in its UK branches. The reason was the one-month blockade and closure of hotels and eateries around the world.. Chen and Mushui (2020) commented that Production stagnation ne in some countries it affects the entire industrial chain The deadlocked process of globalization is one of the huge. The challenges facing KFC. In terms of food costs, Transportation, rent or salary, KFC loses it Benefits of previous globalization processes Pandemic outbreak (Chen and Mushui, 2020, p.4). Different at the same time the government issues regulations to control imports, export goods or impose restrictions on immigration, all of these measures are not good news for KFC’s operations. Figure 1.1 shows how the pandemic affected the fast-food restaurants in the world.
Social Factors
KFC is also constantly under attack by utilizing profitable advertising to lure teens and crowds into restaurants, though cleverly concealing the clear health problems and dangers posed by consuming fast food. increase. In addition, KFC and other fast-food giants have responded negatively to the advocacy of animal cruelty. Chicken in their facility contains hormones to keep more fat and muscle. UK is additionally a multicultural nation and they have different tastes and preferences (George et al., 2021, p.52). However, there has been a good show of many individuals adopting to consume chicken and its products.
Technology
KFC employs several current technologies and variations to meet the varying trends and likings of its clients. Many stores recently have a click-and-carry choice that allows customers to order food before you arrive at the store. In addition, self-order kiosks, voice machines and online podiums are examples of the variations they have made to surge profits and sales. Such technologies have been made easier by utilizing the huge connectivity network present in the UK. Numerous UK KFC franchises make social media platforms available to employees. The firm also allows consumers to share ideas and ideas and ask queries on social media pages.
Competition
In the UK, the competition status for fast food restaurant is very stiff due to the involvement of other big competitors in the market. Therefore, the firm has been coming with several strategies to ease the competition status such as through the development of other products, maintaining hygiene, and offering free gifts to consumers (Lynch et al., 2019, p. 121). On the other hand, other competitors such as Mc Donald’s, and burger king have also adopted their own measures of curbing the competition and attracting customers. Figure 1.2 shows the competitive nature of fast-food restaurants in the UK.
Organization
The UK market is organized in a more structured manner to enable smooth operations of the firm. KFC is organized into small sops distributed in major UK cities and have unique appearances and layout to enhance easier identity by their customers. Such strategy is crucial because it has enabled the firm to reach their furthest consumers through their various branches.
Market
UK market segment is organized to different forms of market operations such as oligopoly, monopoly, and perfect competition. KFC can be well rated to be in the perfect competition market structure because the market has many buyers and sellers, thus customers cannot mitigate the price of goods and services offered (Janssen et al., 2018, p.18). The market allows many participants to enter the market but they must comply to the rules. Figure 1.3 shows the major branches of KFC as distributed over the world.
Situational Analysis
Strengths
The popularity of KFC is well known between customers through their providence of unique spices in their food. Moreover, their intensive utilization of technology is another factor that has enabled the eatery to experience a huge consumer base. Customers around the UK have a high purchasing power that has enabled an easier purchase of goods and services or faster movement of consumption activities thus increased sales.
Weaknesses
UK has several rules relating to hygiene and KFC has at some time failed to deliver as per the rules causing chaos between them and the relevant authorities. KFC prices for their products are relatively higher than those of their counterparts posing a huge threat of loosing customers. KFC has a franchise administration system meaning that Each is managed individually. It is not common for each KFC to be highly regarded, while another KFC next door is getting bad news. Such unstable systems tend to be operational, production, and poor management skills. All of this influences the public’s view of the compound in question and the brand as a whole.
Opportunities
UK has a large population thus relating that the demand of chicken products is high in the region. Also, KFC decision to include vegetables in their venture is another opportunity since the restaurant will have many products to sell. UK advancement in technology has enable KFC to integrate e-selling which has increased their consumer base.
Threats
In the UK, the competition status for fast food restaurant is very stiff due to the involvement of other big competitors in the market. Therefore, the firm has been coming with several strategies to ease the competition status such as through the development of other products, maintaining hygiene, and offering free gifts to consumers. On the other hand, other competitors such as Mc Donald’s, and burger king have also adopted their own measures of curbing the competition and attracting customers.
Conclusion
Research has shown that the UK provides a feasible but more competitive market. It is the duty of the firm to ensure they are not ruled out by others in the market by providing more outstanding services. KFC strategy of having many of their outlets spread in the UK is a crucial advantage as it allows them to reach the furthest consumer. However, KFC has to consider hygiene issues and offer to include good wages for their employees. In addition, the firm has to continue to embrace technology and providing necessities as per the consumer needs. The UK market structure comprises of many buyers and consumers thus consumers have several choices for products to consume and from which firm.
References
Chen, M., 2020. Fast Food Industry in the Post-pandemic Era—A Case Study of KFC. In E3S Web of Conferences (Vol. 218). EDP Sciences.
Dhingra, S., Ottaviano, G., Rappoport, V., Sampson, T. and Thomas, C., 2018. UK trade and FDI: A post‐Brexit perspective. Papers in Regional Science, 97(1), pp.9-24.
George, S. and Lhouvum, L., 2021. A Study on the Consumer Behaviour at Fast-food Chain Amidst the Pandemic in South India. BUSINESS RESEARCH AND INNOVATION, p.52.
Janssen, H.G., Davies, I.G., Richardson, L.D. and Stevenson, L., 2018. Determinants of takeaway and fast food consumption: a narrative review. Nutrition research reviews, 31(1), pp.16-34.
Lynch, M., Brooks-Cleator, L.A., Giles, A.R. and Rumford, M.H., 2019. “RIP KFC”: Public Perceptions of a Fast-Food Restaurant Closure. Ecology of food and nutrition, 58(2), pp.120-141.
Omer, S.K., 2018. SWOT ANALYSIS; THE TOOL OF ORGANIZATIONS STABILITY (KFC) AS A CASE STUDY. Journal of Process Management. New Technologies, 6(4).
Zhang, R., Wu, C., Yin, J., Liu, L., Cheng, L. and Xin, X., 2020. Corporate Social Responsibility (CSR) Survey—KFC, McDonald’s. Academic Journal of Business & Management, 2(8).
Appendix
Figure 1.1
Figure 1.2
Figure 1.3
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