Kentucky Fried Chicken Essay

The report is mainly focusing on Kentucky hot up Chicken (KFC) social club and has been divided into three categories at the aim of identifying the leadership and management issues in the play along and suggest appropriate solutions to it. The tool that entrust be apply in the first phase is the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis which is used to academic degree out the strengths and weaknesses of the come with and alike to identifying the leadership and management issues that exist at heart the organization.The import part of the report consists of the evaluation and rationalization of the management and leaderships issues determine in part 1 by using the McKinsey 7S Model to dish to identify what types of changes that should be made and implemented in order to attend to the alliance to improve. In the demise phase of the report, an oerview of the comp each situation will be presented postdateed by suggested sets of recommendation and acti ons for KFC in order to overcome the mainstay issues identified.Company BackgroupKentucky confederation (KFC), also known as Kentucky Fried Chicken, is a grasp of quick aliment restaurants based in Louisville, Kentucky, in the joined States which was started in the 1930 by Col binglel Harland Sanders as a small franchise operation. Kentucky Fried Chicken is a very well-known restaurant in the worldly concern. It is rated at number 60 as the world to the highest degree well-known daub by the BusinessWeek, while McDonald at number 9 and Nestle at number 23 (Badrishah, 2007).KFC remained the largest chicken restaurant chain and third largest solid-food chain. It held over 50 percent of U.S securities application in terms of the gross tax income number and ended the year 1995 with over 9,000 restaurants worldwide. By end of the 1995, KFC film clear 234 new restaurants and is operated in 68 countries. In the year of 1997, the company has become a discoloration of YUM Bran ds Inc. which is the world largest fast food chain who also ope place Taco Bell, Long John Silver and Pizza Hut. Currently, the company owns and franchises more than 16,200 outlets in about 100countries and have employees of more than 24,000. KFC was the first fast-food chains to enter international food commercializeplace and has now developed one of the worlds most recognizable distinguishs.KFCs early entry into the fast food industry allowed the company to gain a strong brand notice in the industry and dominate the chicken industry. KFCs nearby antagonist Boston Market (formerly Boston Chicken) and Pop midsections held market luck of 12. 3 and 10. 2 percent respectively while KFC held a market sh be of 58 percent in the chicken segment (KFC. com, 2007). KFCs global success is credited to its note management which is the Quality, Service and Cleanliness (QSC) political program to review the quality of the service offered to the guests and to evaluate the company perfo rmance.Other than that, the apprehension of the customers and satisfying their needs also contri only whened to KFCs global success (Reynolds, 2001). not only so, KFC also has also uses a special merchandise tools to go on its harvest by means of combining PepsiCo product which is the beverage and the products of KFC itself, with these marketing idea, both company KFC and PepsiCo ar both generating profits and it is an advantage for KFC since they no longer purchase beverages from outside company. KFC primarily sells chicken pieces, wraps, salads and sandwiches.While its particular focus is hot up chicken, KFC also offers a line of grilled and cook chicken products, side dishes such as mashed potato, sweet corn, coleslaw and desserts. KFC also uses the localization strategy while designing the carte du jour in KFC as a way to adapt to the local taste and culture by also offering beef based products such as hamburgers or kebabs, pork based products such as ribs and other reg ional fare. On the other hand, judging by the current market growth in China, KFC have absorbed the Chinese cultural elements into its western management style, accordingly forming an inter-cultural management mode.Chinas rapid economic development has opened its door for the fast-food industry and enable KFC to use localization strategy to let Chinese to have the chance to experience western lifestyle with traditional Chinese cultural embedded in it (China Daily, 2004). At present, there are more than 1,000 restaurants in China and they are now increasing at the rate of average 200 stores per year. In 2010, Yum Brand, the parent company of KFC Corporation expects 36% of their global $2 cardinal operating profits from 3700 restaurants in China.The success of KFC in China has lead Yum Brand Inc to be the most successful foreign company in China with 40% market share outstripping competitors like McDonalds (Turner, 2011). Such management mode by KFC has prove that the company has t he flexibility to adapt to various cultural and environmental changes. alternate Analysis SWOT is a tool for auditing the strategies and the environment of an organization for ending making. And it can be classified as Strengths, Weakness, Opportunities and Threats. (Pahl & Richter, 2007)Strengths KFC is recognize as the second largest fast food chains in the world, the first which being took by its main competitor, McDonalds * Holding over half of the market shares in the fast food industry. * Occupied the china market, KFC defeat McDonald and become the largest fast food chain in China market which contain 1. 3 billion population. * It have been globally recognized and experienced and having strong market in Mexico, Middle East and Asia such as China, Japan, Korea, Thailand and Malaysia. * Earn huge revenue from the franchises and licensing fees. The most major strength of the company is their Brand Equity.* Its secret chemical formula allowed KFC to set itself apart in the in dustry and maintained supremacy in the fast food market. * Every year, the profits of the company increases. * KFC have a quality management which called Quality, Service and Cleanliness (QSC) program use to judge the quality of its service offered to the customers and to measure the company performance. Weaknesses * Least focus about their product research and development, they more concerned about their branches expending. Inconsistent quality of function in many outlets by few of its franchises had damaging the brand name and company reputation.* Inflexibility of prices makes it unaffordable to middle class people. * Imbalanced entrance of the franchises to different markets at one time especially too concern the Chinese market has extremely decreased its global growth rate. Opportunities * Besides grow its target market focus to family and friends of all age brackets, KFC also targeting and bid the young customer which age between 18 to 24 geezerhood old. Dependability of th e chicken meat used as the people are scared of infections from eating beef globally.* Focus in Chinese market which known as the worlds faster growing market. * change magnitude and effective go specially home delivery and drive though services * Induction of new products other than chicken including fish and vegetable in most of its menu in reality the whole menu is balanced and healthy which aim to attract the customers considerably. * Position itself strongly in the global markets, with a vision of increasing market value and market share.Threats * Customer began to demand more healthy and fresh food only when KFC was faced with a limited menu and majority consist of fried foods * Faced by slowed sales growth in the fast-food industry, other segments of the industry have turned to new menu offerings, as they have very few products other than their selection Fried chicken. * Customer chemise to other brand that offering the same products which in lower rates on the prices. * Less economical deals are being offered compare to its biggest competitor McDonalds who offer more cost-effective products.KFCs Key Challenges KFC Corporation, being one of the largest fast-food chains in the world usually will have challenges that the company will have to overcome in order to retain their market share and reputations. But however, KFC restaurants around the world have various complaints regarding its services provided. It has been reported in United States that a customer was offended by the manner in which she was served. Customers complained that the employees were rude, lazy and negligent to her family and other customers.In the eye of management, a good services will help for t he long term customer relationships. But however, KFC in USA failed to recognise the importance of it as employees were not given a proper prepare regarding good customer services (Eisenback et. al, 2008). According to some of the staff in KFC, there is a lack of communication between the marketing surgical incision and the operation of KFC. Marketing department may not give close details on the new promotions and new products to the KFC operation nor clearly explicate to them about the campaign.This lead to many problems for the operation team as they may be confused about the promotion or coupon and wherefore might not be able to explain the details to customers with enquiries. In addition, it could affect the efficiency and effectiveness of operation as crewmembers may not be familiar with the new marketing strategies and may not be able to sell the products as the corporate wanted them to be (Lan & Mahmood, 1995). Additionally, KFC in China has also been reported that some KFC restaurants have failed to change their heat oil for four days and also failed to provide fresh soybean milk for customers.The restaurants has been caught for changing the dates for replacing the oil for the purpose of passing trial run by district inspectors from the company, an d whats more, the employees also tailor and changed the time on unsold items to make customers believe that they were eating freshly prepared products. The configuration of kitchen is also reported to be very unclean and the employees did not follow the food safety regulation such as wearing caps when preparing foods. (China Times, 2009). disrespect of the corporate rules on standard operation and regulations, employees at KFC practically ignore them.Such incident in KFC would destroy the companys brand reputation although KFC Corporation claimed that they did provide training booklets which include questions on cross-contamination of food, but because of the lack of supervision, the employees would act whatever they want and ignoring the rules set by the management. The mission of KFC is people be the first, customers be the focus (Yum Restaurant International, 2003) but however, it is put together that KFC did not take proactive approach on listening to customers and employe es. at that place is no systematic customer survey for its products and services. It relies on the branch managers and universe relation officers to get the customers opinion. Although the website of KFC has a customer service comment boxwood for customers to send suggestion, but KFC ignore those customers who are not computer savvy. many customers were complaining that customer did not have access to a customer service number and those who were able to reach customer service often received no response.The failure of KFC to deliver efficient service be that the management does not show concern to their customers and did not make any improvement to take care of the customers complaints and thought. Customers are viewed as an important asset of a company and therefore any complaints or opinions from them should be valued by the company (Eisenback et. al, 2008) Other than that, even though KFC has adequate human resources but they are lacking the capabilities.Its mother ompany, Pepsi Co, makes incorrect decision in its corporate level strategy. They centralize and tightens the control over existing KFC managers and such actions causes the shake of the employee morale. In addition, PepsiCo also limits the rights and military forces of the franchisees right and power and intents to compete and acquire the franchisees units. Such incident has caused a dispute which last for 7 years until 1966. This also make the company performance to drop and drive down KFCs market shares (Chu, 2003).