Strategic Planning and Applied Research Case Study

Analysis Of The Strategy Of KFC Compared To Other Fast-Food Brands

Introduction: Analysis Of The Strategy Of KFC Compared To Other Fast-Food Brands

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Having an apparent and focused plan is very significant for the victory of every company, and without a well-defined plan, the trade may fail in achieving its goals and objectives (White, 2017). Having emotion attached to the decision-making process is helping the business and team to be more alert, more productive, and most important more commercial. A thriving strategic plan provides proper direction and action plan, which further directs the organization on how will it achieve goals. For understanding the purpose and causes of strategic change in an organization applied research is considered. Applied research is very helpful in industry in building awareness and developing solutions regarding all problems. It enables an association to recognize the strange requirements of target markets and this could also help in creating diverse business strategies which further allow them to gratify these needs and importance (Malhotraet. al. 2017) The main effect of applied research is that it helps the organization in improving workplace efficiency and organizational policies, applied research also helps in bridging skill gaps in the workplace. 

The report discusses the analysis of the strategy of KFC compared to other fast-food brands. KFC (Kentucky Fried Chicken) is an American corporation that is the major fast-food chicken operator and franchise all over the world, its headquarters are in Louisville, Kentucky. It fully owned subsidiary company of PepsiCo. Inc, the company operates over 5000 units in the only US in which around 60% of which is franchised. On the global market, KFC has around more than 3700 units that are franchise based (KFC Corporation, 2021). The company is driving its franchising and fully-owned operation, the company is also participating in joint ventures and is involved in investigating other substitute venues in direction of gaining market share in the fast-food market. KFC is also known for its second position in the restaurant chain market after McDonald's with 22,621 locations in over 150 countries. 

Literature review (theory 3-4)

Kentucky Fried Chicken (KFC) dedicated to its expansion and is currently ranked 2nd in the top 10 global fast-food chains according to the research of Forbes. The company has wanted to improve its marketing strategy and improve the level of engagement with customers. Through the years KFC's marketing strategy has helped from the increasing worldwide appetite for food across over 145 countries which resulted into profit. (Anandand Yeung, 2018). To reach an audience that encompasses both vegetarian and non-vegetarian groups, KFC employs demographic segmentation. Children, young people and a lot of others of the age ranges are served to buy its food products (yum! Brands, 2022). The four groups that structure KFC's target market are as follows:

• Kids
• Teenagers and young adults
• Budget-conscious clients; families

Since the majority of teens are impulsive and enjoy dining out with their acquaintances or ordering meals online for sharing with their loved ones, teens and their families comprise the primary customer base. Adults are also included in the second profile of consumers and those with smaller budgets are listed in the tertiary profile of customers. Because of its global food consistency, KFC initially employed a non-differentiated targeted approach. In recent years KFC has been working on localizing its menu to improve its market acceptance. The marketing strategy of the company further incorporates two kinds of marketing channels which are

• Personal channel – it includes communicating directly with the audience, like the salesperson contacting directly to the customer over the phone or in person. 
• Non-personal channel – it includes the media like online and offline channels like
  • Newspapers
• Social Media
• Webpages
• Billboards
• Magazines
• Radio
• Television
• Posters 
• Promotion Campaigns 
• PR activities 

For evaluating the performance of the company's strategy management, the report considers various strategy theories. Various strategic management theories are used by several businesses all across the world to achieve organizational goals and objectives. The case company KFC is using strategic theory which helps the company to plan its future growth plans since it provides them with the opportunity to gain experience and exposure which is an crucial to the fast food industry's growth.

The KFC Corporation tends to match with the planned group theories. The strategic group theory states that while the business is considered a group, the participants of the industry tend to activate in the same method by employing similar strategies. In the case company KFC which is now own by Yum Brands, the company is on the path of following the same strategy which are working by its competitive brands in the same industry. The important theories which the company is using in strategic management are as follows: 

Demand theory –the company is applying demand theory to focus on the demand of the market and needs and requirements which they need to cop-up with. The company is regularly focusing on the customer's demand for healthier food (Omer, 2018). By analyzing the demand for healthy food, the corporation has come up with foodstuff that is arranged in oil and trans-fat free, and the meal the company offers also includes green vegetables and side salad in its menu. 

Operation strategy theory– the operational strategies employed by the company are quite similar to its competitor's companies like Wendy's Burger, McDonald's, and Pizza Hut, all of which are leading brands in the fast-food market. KFC operates through a franchise business model in both local as well as international markets. Through this operating model, local businessmen are acquiring franchise and operating them with the facilities and equipment provided by the company. In return, the company is sharing part of its profits with the franchise owner through a royalty program. 

The marketing strategies theory - the marketing strategies applied by the company are as comparable to its competitors in the same industry. The company focuses more on influencing the popular combo meal, the suitability of the fast food which the company is offering, and the good and happy environment which is shown in advertisements of the company (Rahul Arun, 2022). The marketing strategy of the company includes promoting its product via digital marketing strategy which is very popular nowadays, by advertising on television, on social media platforms like Facebook and Instagram, etc. 

Competencies theory – The core competency of the company focuses on providing several benefits which are giving tough competition to its competitors to copy and offer such leverage for diverse goods. The interior competencies theory of KFC Corporation comprises of capabilities of the company to deliver an exclusive and unique recipe-based chicken which have a special and different taste in comparison to its competitors. This recipe is further shared with all the franchises across the globe known providing a similar taste at each outlet. The corporation has major proficiency in supervision various franchises and restaurants in the international market (Randhiret. al. 2016). The company also enjoys bargain power with its supplier which further allows the corporation to receive provisions at the lowest costs which impact growing profit margins on each product sold. The company also comprehends economy of level with local, international and regional operations, which is used in strengthening the cists improvement with the supplier but at present the company has not been engaged in such activity. 

Sustainability report of KFC- the industry in which the company is operating has several sustainability issues which include planet, citizens, and earnings. The sustainability features linking the company to the planet relate to the effects of KFC and its competitors on the surroundings. The factors that are distressing the planet is the emission of greenhouse gases for overcoming these factors the company can opt for using science-based target creativities to further appraise and diminish the GHGs. 

The other important factor that affects the planet is the extreme use of the normal resource. The production of raw materials which is used in the industry includes the huge capacity of natural assets for case company KFC uses meat and dairy farming products (Bediako, 2018). For reducing the over exploitation of natural resources, the company could commission to source all the palm oil from various suppliers who are sustainable. 

The next factor sustainability factor is the people, the main impact of these fast-food companies on people is increasing obesity. The food from which companies can create high calories which leads to various diseases together with fatness. For facing this factors company could provide its customers with all the information regarding the nutrition of their products, by which customers are aware. 

And the last factor that represents sustainability is profits, these companies employ people from various places at a very low wage which represents a significant sustainability aspect because this impact the employees and their families (Uddin, 2020). The other factor which affects the profits of these fast-food companies is investing in suppliers’ developments which affect the business. Suppliers share a very important role in supporting every business operation, investing in their development and sustenance of relations is very long-term and is affected by serious factors which are probable to maintain potential operation. 

Methodology (thematic analyzed)

One of the most commonly often used qualitative analysis methods is thematic analysis. When implemented correctly, qualitative theme analysis is an extremely effective analytical tool. Analyzing significance pattern that is what thematic analysis is all about. In other terms, it involve analyze the data set's themes to find consequence. The mainly essential thing to memorize is that since this process is guided by research questions, it is not obligatory to determine every potential theme in the data but rather to focus on the essential factors that are related to that question (Braun and Clarke, 2021). The company adopted a four-phase thematic breakdown process in the exploration of strategy operation barriers. Issues of data understanding, searching of theme, reviewing, and thematic mapping are all part of the thematic method, further considered for procedural details and consistency considerations

• Familiarization-Searching for main themes in a company's data is the first step in thematic analysis. The business must now choose whom to employ, what and how to code, and which codes effectively reflect the content. then taking into account the company's attention and goals. Businesses must keep a reflection journal. The business may study the codes and themes that support the results as well as remark on the coding process in this reflexivity journal (Vaismoradi al. 2016). The focus of this organization should be on data analysis and choosing the codes that best reflect the material.
• Look for themes in the codes.– The business now has to look for code themes or patterns. The transition from these scripts to themes is neither simple nor easy. To understand the data better, the company might need to assign different codes or themes. Following data analysis, the firm may release subthemes and subdivisions of themes that focus on an important or pertinent element.
• Review themes– The company can proceed and evaluate subjects once it has become aware of the themes and subthemes. At this point, make sure everything designated as a theme is either included in the data or matches it exactly. Considering that all themes have been correctly and completely coded, the company can proceed to the following phase even if any themes are lacking(Terry al.2017). This might need to split the themes if there is insufficient information under each one or if the topics are too wide so that the research could be more focused.
• Finalize Themes–After researching and refining topics, naming and completing them, the analysis will begin to take shape. Moving on does not prohibit a corporation from revising or rethinking the subjects. Contrary to the earlier stage, selecting themes requires a detailed description. If the company encounters issues, it is important to examine whether the data and code represent the themes, and divide them into separate parts, if necessary. Making ensuring the theme's name accurately communicates its qualities is important. Additionally, make sure the themes connect with the relevant research questions. The company should keep in mind that the final report must meet the aims and objectives of the research.
• Report writing -At this stage, the report is done and completed. Now that the company has examined the data it needs to write a report. A thematic analysis report includes:
• A starting
• An approach
• The results
• Outcome

Drafting a report provides quite enough details for a customer or competitors to assess findings. In other words, the report shows every detail that a viewer wants to know about, how the company analyzed the data, and why. "What", "how", "why", "who", and "when" are helpful there (Neuendorf, 2018). 

Resource method (using content analyzed to develop theme review annual report, sustainability report)

The report has access to various theories, strategies, annual reports, and official websites of companies to collect all the data which is required in the report. The report is been developed on secondary data which was available on the websites of the company which includes the annual report of the company. The report has also used various technological tools like survey monkey, thematic analysis, and several data collection tools, which all helped in gathering secondary quantitative as well as qualitative data for the report. 

Research proposes

The main purpose of this report is to develop a detailed understanding of KFC's strategy in comparison to other fast-food companies in the market. KFC is 2^nd largest company in the fast-food industry as mentioned in the report. The main proposes of this report is to analyze the strategy of KFC as better than its competitors. The main competitors which are present in the fast-food industry are Mcdonald's and Burger King (Bediako, 2018).  The report portrays the various advantages that are skilled by the competitors of the KFC Corporation and the disadvantage that the competitors face while operating in the same industry. 

The main advantage for competitors is diversified operations all over the world, there are so many companies like McDonald's and Burger King which are also as popular as KFC. And the main advantage of these two companies is that they also offer vegetarian meal options which is the biggest drawback for KFC, and their vegetarian options are quite popular in comparison to KFC’s vegetarian options (Sun, 2022). The company like McDonald’s have an expansive and quick distributive network, these competitor's company has established a high level of customer service and also a wide range of packaging options and exciting offers on their meal purchases. 

The advantages which the company has accessibility to are linked to its relatively strong market position, its brand image, and the potential value and impression that it conveys to customers' minds. One of the key advantages that a firm like Burger King enjoys is that it has been utilizing its market diversification as its franchise mix and international franchise network.

Competitor companies' vulnerabilities also include a high level of collective bargaining power of clients for companies like Mcdonald's, the limited availability of products, and the lack of size to deal with larger competitors in the market. Additionally, the market concentration of the company and its recent poor operational results in disadvantages for companies like Burger King and McDonald’s. 

Research strategy

The main strategy of the report is a comparison of the strategy of KFC to other fast-food companies in the market. The research for the report starts with gathering all the information about KFC, its owner, and the strategy changes that took place. The company has a long history from PepsiCo to Yum Brands, the research shows that the company is currently owned by its parent company Yum Brands. The company is operating in the local as well as the international market by using the promotion strategy of its brand and also with the co-branding connections with its suppliers and also beverage brands like Pepsi (Peerooet. al. 2021). After gathering information about KFC, next in the research focused on the main competitors who are dealing same local and international markets, across all the companies in the market KFC has two main competitors McDonald's and Burger Kings. This includes all the strategic theories and tools used by the case company in keeping up with its competitors. The main strategy of the research is to evaluate the strategy of KFC in comparison to other companies in the same industry, for this, the research considered the financial statements and other data from the website of companies and compared them to KFC, as concluded the outcomes. 

Research method

The strategies, methodologies, and procedures used to collect data are all outlined in the research methodology. To comprehend the area of study, one uses the segment's material. There are several ways to perform data research utilizing different data collection methods. The best strategy for this research is a "qualitative approach" to data collection (Aspersand Corte, 2019). It is one of the best methods for analyzing data using the researcher's knowledge. The act of gathering data and measuring variables using a specified measurement technique are both parts of the data collection process. The researcher will be able to efficiently gather data as a result. The secondary data collection approach is one of the techniques the study will use. The necessary information will be acquired from already-existing sources like annual reports & journals.

Data analyzed the case of KFC

KFC is the world's 2^nd largest fast-food chain and also the largest chicken restaurant based on its sales, it is a successful brand under its parent company Yum. KFC has around 75000+ workforce, serving fresh and delicious fried chicken to its customers in around 18000 restaurants all over the world in 120+ countries. KFC is currently ranked with a global ranking of 147. With consistent, good brand positioning, the business can increase consumer awareness (TOMA). Additionally, KFC's worldwide business model is addressing the underserved group that contributed to the development of its brand by offering the veg menu and localization plan. Along with above-the-line and below-the-line marketing techniques, KFC's recent branding initiatives are significantly contributing elements to the success of the company.

The graph above shows the number of KFC restaurants which are globally opened between the years 2010 to 2021. The company has a dramatical increase in the number of restaurants from the year 2010 to 2021, in 2010 the number of restaurants was 16853, which further increased to 19986 in the year 2015, in the year 2018 the number of restaurants increased to 22621, and the according to a recent study of the year 2021 the company owned 26, 934 restaurants across the world (Nguyenet. al. 2018).

The company's main focus is on its social media promotion activity as these activities are the main support behind the company's success other than its taste and flavors. For getting on-step ahead of the competitors the company is focusing on its promotional activities. According to the report, the company has announced a budget of just 230,000 pounds to be used in social media, prints, and outdoor promotion activities.

Fast food is an extremely competitive industry that is experiencing dramatic transformation. $102.7 billion was the total revenue earned by the worldwide fast-food industry in 2006, which represents a compound annual growth rate (CAGR) of 3.5% from 2002 to 2006. Comparatively, throughout a similar period, the US and EU markets increased with CAGRs of 3.7% and 3.3%, respectively, to reach values of $55.2 billion and $19.5 billion in 2006. Between 2002 and 2006, market consumption volumes climbed with a CAGR of 1.5%, totaling 80.3 billion transactions (Amoakoet. al. 2021). By the end of 2011, the market is anticipated to have 86.4 billion transactions, indicating a CAGR of 1.5% from 2006 to 2011.

In order to grow the company the global strategy for marketing, KFC required a change in how new and younger customers saw the brand. It did not have confidence in its loyal customers who were content with the old-fashioned chip and fries. The fries must be replaced. The biggest challenge was coordinating the entire transition to the new mix of chips. It was necessary to do this so that the loyal followers who were against the change wouldn't be feeling like they lost something.

Discussion

KFC makes use of Facebook as a means to inform its customers about the latest deals, products and other offers. In addition, it responds to customer complaints via Facebook. It promotes online ordering options via social media. At times the Facebook page is home to numerous animated pictures which have received a lot of favorable feedback, and sometimes assisted KFC in establishing connections with the general public. Their posts get a high level of interaction, with comments more than 250,000 and comments over 5000. The page's engagement rate typically around five percent, suggests an excellent level of conversation and engagement. The KFC team that runs its Facebook account responds to its customers very quickly. They encourage the customers to voice their displeasure with them at their locations. KFC is a company with more resources than its competition and can spend more on advertising, compete with competitors by comparing prices, etc. The company, which runs KFC and also owns the entire range of brands allows for the combining of KFC with other brands, such like AW and Taco Bell, which results in higher sales throughout the day for the two stores summed. The principal flaw that comes out through this research, based on the analysis of the case is the working environment of the business and ineffective Human Resource management. As the story in the case, when KFC was bought from PepsiCo, Inc., the culture of the company was eliminated, and the workplace environment became very oppressive for the KFC's workers. In accordance with the definition provided by businesses "achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personal techniques".

Strategies that can be adopted by the company to run its business in the future could take the shape of funding research and development initiatives and facilities. Investing in facilities and projects that support the development of research is just one of the strategies the company could employ to run its business in the near future. The business should invest money in R&D to increase its capabilities for the launch of new products and find innovative methods to develop these products to respond to changing demands of consumers (Songet. al. 2022). 

Customers are looking for products that are nutritious and tasty. The business can invest in developing methods and strategies that provide the same delicious flavor to consumers while also being healthy for their health. Additionally, the business should offer a broad range of goods to customers across various markets. This can be accomplished by ensuring that it is in line with the latest market trends. In addition, the business should cease operating any businesses which are not profitable for them and are creating problems by reducing its capital reserves and profits. In the case of fast food that is based on chicken that has been fried and fried chicken, the US market is quite overcrowded, and the company should diversify into other areas that are profitable.

Conclusion

Based on the information that has been analyzed and discussed it is possible to formulate a number of strategies for corporate planning of KFC. Until this moment, the strategy of the company was characterized by the unification of its restaurants, relying on franchisees that are highly controlled and focusing on menus with a single concept and, at the same time, diversifying the chicken menu. If the chicken line were to remain unadvertised, the business could lose a lot of customers looking for other food. To combat this issue, in the past, KFC has begun to combine together with the other PepsiCo brands to create more differentiated.

In its International strategy KFC was primarily focused on Latin America region, due the proximity of its geographic location. After the countries have reached a better stability in their economics however, the issue is that the market is saturated with fast food chains and competition is becoming fiercer.

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