Kfc Business Environments

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is also fried chicken. Yet across South Africa, KFC has 828 outlets and Chicken Licken with 247. KFC is usually opened 24 hrs and also handle a drive-thru system . Other threats would include retails such as Pick n Pay & Food Lovers Market who serve fried chicken at cheap prices attracting consumers. (wikipedia.org, 2017)

Power of Buyers: South African consumers have a wide variety of fast-food outlets. If they dislike the service of one outlet, they can just move to the next. KFC customers are known to be supportive and loyal but as South African consumers are wary of the prices of different outlets therefore, KFC will have to compromise in order to keep their customers loyal.

Power of Supplier: KFC is superior to the supplier as chicken is a common raw material so for KFC to change their suppliers is an effortless task to tackle. The secret recipe, as stated by Colonal Sanders himself, is made up of the most common ingredients giving KFC an advantage. KFC could easily switch over to Pepsi if any had to happen to their soft drinks, as it is owned by YUM! Brand which also owns KFC.

Level of Rivalry: The SAcsi reveals how South Africans purchase their meals according to the value and services of the outlet due to the rivalry in the South African market being tough. South Africans refuse to spend money on fast food outlets that consist of meals which are out of their budget lines. KFC needs to focus on the rivalry in the market as their rating, as portrayed in the index, happens to be collapsing.

Threat of New Entrant: Problems only rise if a new brand enters South Africa’s fast-food market because of the low-switching costs which will allow consumers to purchase to the new entrants. Other than consumers will only purchase from the outlets that they are use to and comfortable with thus leaving KFC at peace.

STRATEGIES AGAINST ANTICIPATED ISSUES IDENTIFIED THROUGH PORTERS MODEL

Availability of Substitute Good - Substitute goods are now consistently available at the markets regarding the fact that a sufficient amount of Chicken produce are being provided at majority of the fast-food outlets.

Strategy: Stores like Spar, Pick n Pay Woolworths, Game, Checkers and so forth sell their food products/meals are at higher prices compared to the prices at fast-food outlets. Therefore, product prices should be kept in a lower price range in order to attain more business as customers are wary of prices and go for the less expensive stores or outlets. Introducing a value chain analysis will enhance the business as you would be able to pinpoint exactly which products should prices be dropped or increased for as well as, it will give the store a competitive advantage.

KFC can combat South Africa’s saturated “meat” market by proceeding with the following:

Inbound Logistics - Lowering the costs of logistics will require purchasing raw materials to factories if KFC were to build their own fabricated factories resulting in subsidiary fixed costs.

Marketing and Sales - By each local independent store taking an initial initiative to set up in house advertising mediums i.e. Instagram, Facebook, Google Hangouts, owners in turn could opt for such and enough doing so cut advertising time on larger platforms thusly reducing marketing costs taken upon the owner and costs by KFC, as their brand still receives publicity coherently reducing overall costs allowing for money to be spent elsewhere or just lower profits as it is already covered by saved expenses.

If all of the above expenses are taken into account and thereafter decreased to a substantial cost, consumers will come back to purchasing from these outlets rather than the retailers.

Powers of buyer - South African customers are very wary of the places they choose to purchase their meals from as they pick places where prices are affordable for them. In this way, they have an advantage as to having the benefit to select where they’d like to purchase their meals from depending on the budget. However, KFC will have to come up with a strategy that will allow consumers to choose to purchase from them rather than other cost friendly stores.

Strategy - KFC’s wiser chose in my opinion would be to offer a program that would attract customers where all they would have to do is earn points that would get them on either of the 3 Membership Value Packs ( Bronze ; Gold and Platinum ). As meals are purchased and for example, a meal costs R25, the customer will receive 150 points, in relation to their membership status, as in such case for example a Bronze member for spending such amount in relation to the code of the meal item (i.e. R35 Sweet chilli twister) will receive 150 points where as a Platinum member could earn up to 350 for the same item. Cards can only be upgraded by meeting a requirement of certain points stored and spent to upgrade to the next tier i.e. Gold to Platinum – 10000 points. Another way of attracting customers and to maintain consumer loyalty is to offer members an opportunity to order of a Secret Menu as of McDonalds. This not only keeps consumers but attracts new ones as a sense of self advertising due to societal intrigue as to what is this mystery menu all about.

REFERENCES

"KFC". En.wikipedia.org. N.p., 2017. Web. 15 May 2017.

"KFC". En.wikipedia.org. N.p., 2017. Web. 15 May 2017.

"KFC". En.wikipedia.org. N.p., 2017. Web. 15 May 2017.

"KFC". En.wikipedia.org. N.p., 2017. Web. 15 May 2017.

"CHICKEN LICKEN". En.wikipedia.org. N.p., 2017. Web. 15 May 2017.

Ozersky, Josh (April 2012). Colonel Sanders and the American Dream. University of Texas Press.

Whitworth, William (February 14, 1970). "Kentucky-Fried". The New Yorker. Retrieved February 23, 2013.

KFC

ENVIRONEMENTS

Macro Environment – This is the environment which KFC has the least control over. One can even consider the macro environment as uncontrollable. However, with resources such as an extended PESTLE analysis KFC would be able to determine strategies that may protect the company from threats which come from the Macro Environment.

Political

This factor analyses the possible challenges that may come from the government or any factors that influence the country politically. For example, the recent unexpected Cabinet Reshuffle that was undertaken by President Jacob Zuma had profound