OB- KFC

1. NAME OF MEMBER IN GROUP:
KALAIVAANI D/O JAYARAMAN ST1302BD2477
MALATHI D/O GOVINDASAMY ST1209BD1622
KANIMOLI D/O JAYABALAN ST1302BD2438
VIMALA D/O RAMACHANERAN ST1209BD1599
SUBJECT: BAGB1023
ORGANIZATION BEHAVIOUR
LECTURER: MISS.LIM CY

2. Background KFC Corporation
Kentucky Fried Chicken was founded by Harland Sanders in Corbin, Kentucky. Harland Sanders
was born on a small farm in Henryville, Indiana, America, in 1890. Sanders loved to cook and to
invent a new recipe. One day he tested to mix eleven herbs and spices with wheat flour until he
got success and he had a secret recipe for cooking chicken. Sanders opened the first facility with
a 142-seat restaurant, a motel, a gas station. During the 1930s an image that would became
known throughout the world began to develop. First Sanders was named an honorary Kentucky
Colonel by the state’s governor; second, he developed a unique, quick method of spicing and
pressure –frying chicken.
In 1950s a new road was built, most of people used another new road, so; Sander’s customers
decreased. Eventually, Sanders decided to close his restaurant then he invested the first franchise
in 1952 also 105 USD with the secret recipe and the method throughout America. Colonel
Sanders sold 5 cent per piece chicken for copyright. Through the promise between Sanders and
partner was signed by handshake.
In 1963 Sanders’s recipe was franchised to more than 600 outlets in the United States and
Canada.
In 1964 Sanders sold Kentucky Fried Chicken to an investor group headed by John Y. Brown, Jr.
and Nashville financier John (Jack) Massey that Colonel Sanders still was Kentucky Fried
Chicken Goodwill Ambassador for helping and giving suggestion. After on 16 January, 1969
Kentucky Fried Chicken Corporation was renowned in the New York Stock Exchange that there
were 3,000 chains worldwide.
In 1971 Kentucky Fried Chicken merged with Connecticut-based Heublein Inc., a specialty food
and alcoholic beverage Corporation.

3. In 1982 R.J Reynolds Industries, Inc. (or RJR Nabisco, Inc. in the present) merged with Heublein
Inc. So, Kentucky Fried Chicken was shared of R.J Reynolds Industries, Inc.
In 1986 Kentucky Fried Chicken was a big change that Soft-Drink giant PepsiCo, Inc bought
Kentucky Fried Chicken for $840 million from RJR Nabisco, Inc. Reasons cited were KFC’s
superior performance and its 1980-85 increase in worldwide revenue and earnings.
In 1997 PepsiCo prepared to separate KFC, Pizza Hut, and Taco Bell to be a new Corporation
under name Tricon Global Restaurants, Inc that was 30,000 chains in 100 countries worldwide.
On May in 2002 Tricon Global Restaurants, Inc. was changed Yum! Brands, Inc. till the present
after the acquisition of a restaurant tries John Silver and A & W. The company is making up a
food brand with 5 brands include KFC, pizza Hut, Taco elegant bell , try John Silver and A & W.
is why the company changed its name to match the number of network operations at the
restaurant also named Yum! This name is also called a company's stock in the New York Stock
Exchange.

4. VISION OF KFC
To be the leading integrated food services group in the Asia Pacific region based on consistent
quality products and exceptional customer-focused service.
MISSION OF KFC
“To be the leader in western style quick service restaurants through friendly service, good quality
food and clean atmosphere”
• To maximize profitability improve shareholder value and deliver sustainable growth year
after year.
• KFC are committed to customer satisfaction through offering high quality with excellent
services and good value.
• KFC take great pride in serving their customer.
• They also seek continuous improvement in facilities.
• The company keeps employees longer, they are happier; they work better for the KFC
Company.

5. STATED OBJECTIVES OF KFC
Every organization and company has some certain goals laid down by them to achieve to make it
renown and have value added services to satisfy customers. Build an organization dedicated to
excellence. Consistently deliver superior quality and value in our products and services. Maintain
a commitment to innovation for continuous improvement and grow, striving always to be the
leader in the market place changes. Generate consistently superior financial returns and benefits
our owner and employees. KFC is consistently providing a pleasant dining experience, with fast
friendly, in a clean and convenient location. Every moment dedicated to providing excellent and
delighting customers.
 *Product development
 *Increase variety of menu
 *Introduce desert menu
 *Introduce buffet to restaurants

6. OWNERS AND SHAREHOLDERS OF KFC
The Group recognizes the importance of keeping shareholders and investors informed of the
Group’s business and corporate developments. Such information is disseminated via annual
reports, quarterly financial results, circulars to shareholders and the various announcements
released from time to time. The management holds discussions and dialogues with analysts and
investors on a regular basis. During the discussions and dialogues, presentations based on
permissible disclosures are made to the analysts and investors to provide details on the Group i.e.
financial performance, any major developments and future plans. Apart from the mandatory
requirement to make public announcements via the Bursa Securities, the Group also disseminates
information through press releases on corporate events, product launches and any significant
developments of the Group. In addition to the above, the Group has an interactive web-site
available at http:www.kfcholdings.com.my to communicate with investors and the investing
public. The web-site is being used as a forum to answer inquiries and provide information on the
activities of the Group. The Annual General Meeting is the principal forum for dialogue and
interaction with the shareholders of the Company. Besides the usual agenda of the Annual
General Meeting, the Board presents the progress and performance of the business. Thereafter,
the shareholders are presented with the opportunity to participate in question and answer sessions
with the Directors.

7. STAKEHOLDER ANALYSIS
1.1 Internal stakeholder of KFC
• Managers
Managers of KFC want the company to succeed Better chance of promotion. They
know that successful company may reward them by paying them higher salaries,
giving them a bonus, better fringe benefits and if company fails they could lose their
job.
• Employees
Employees of KFC want the company to succeed more likely to get better pay,
chance of promotion, better facilities. Because they know if the KFC fails, then the
company will threaten their jobs and possibly cut their wages.
• Suppliers
KFC has numerous suppliers among which K&N supplies the major chickens are
further processed to serve into their chain of restaurant all over the countries. Proper
steps and methods are applied to evaluate the suppliers and their products as suppliers
largely affect the overall operation and business of KFC. Suppliers must want the
company to succeed to get more orders for them and more success for their business,
as KFC is the supplier’s main buyer of their chickens in huge mass.

8. 1.2 External stakeholders of KFC
• Customers
Customers do have a say in the working of KFC are so loyal. No company can afford
to lose its customers. Although, the customer base is huge and one single customer
does not have much bargaining power, KFC tries to listen to each every buyer via
feedback and opinion cards. Mass customization is what KFC is trying to do to
whatever is possible to cater to the needs of customers. Customers continue to return
to the KFC because of the good quality and same taste of their food products.KFC
provides their customers best quality, good services and they always introduce
innovative products to attract their customers.

9. 4 P STRATEGIES IN KFC (MARKETING MIX)
The major KFC marketing management decisions can be classified by four categories which
included with Product, Price, Place, and Promotion. These variables are known as the marketing
mix 4 P’s of marketing. They are the variables that KFC marketing managers can control to best
satisfy customers in the target market. The KFC attempts to generate a positive response in the
target market by blending these four marketing mix variables in an optimal manner.
PRODUCT AND SERVICES OF KFC
Product can be offered to a market to satisfy a want or need. The core benefits of KFC are to kill
people hunger. KFC’s specialty is fried chicken served in various forms. KFC’S primary product
is pressure-friend pieces of chicken made with the original recipe. The other chicken offering,
extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep
flying in a standards in industrial kitchen type machine. The hectic due to the lifestyle of office
goings individuals the fast food concept saves times of preparing food and gives the customer a
null meal quickly. The KFC foods help to kill famine of the customers. They offered variety of
foods that is burgers, chicly meal, nuggets, desserts, combo meals, bologna, smoked chicken,
satay, sausages and chicken ball. There are some features in KFC such as different and better
taste, hot and spicy version of chicken and superior quality.
KFC providing superior service also experience high levels of customer satisfaction and positive
rumor. Reliability here means the accuracy of the services; that is not making mistakes and
delivering what has been promised in the set up time. Responsiveness means that the service
provider is being helpful to the customers, and notifies customers when then service will be
provided. Employee’s behavior making customer feel secure and that employee are always polite
and have some information to assist customer requirements. Although people enjoy the taste of
KFC and it remains a popular chicken product, having “good” focus to the detriment of the
service process means that other important attributes of a fast food restaurant not been dealt with
satisfactorily. Customer would like to customized their purchases and create their own service
value and service providers could help to customize in the process. Example of KFC service is
delivery services, catering services, meal vouchers and so on.

10. PRICE
Price is the any amount of money that customers have to pay while purchasing the product. Price
is the only element in the 4P’s that brings money to the KFC. All other P's are costs to the KFC.
More broadly, price is the sum of all the values that consumers exchange for benefits of having
or using the product or services. KFC during pricing their products keep the different points in
the mind like they adopt the cost base price strategy. Pricing of products include the government
taxes and excise duties and then they come at final stage of determine the price of their products.
KFC prices of products are a bit high according to the market segment and it is also compatible
to the standards of their products.
PROMOTION
Promotion decisions are those related to communicating and selling to potential consumers.
Since these costs can be large in proportion to the product price, a break-even analysis should be
performed when making promotion decision. Promotion is the method used to inform and
educate the chosen target audience about the organization and its products. With using
advertising, sales promotion, public relations, events and experience, coupons, discounts and
bundled packages an organization finds most of its meanings and survival. KFC also use the bill
boards the major source of advertisement and one of the most important thing that they uses
media especially the newspapers to promote their products. They are also creating awareness
among the masses about their existing product range as well they tell us about the future projects.

11. PLACE OF KFC (LOCATION)
Place decisions are those associated with channels of distribution that serve as the means to
getting the product to get the target customers. The distribution system performs transactional,
logistical, and facilitating functions. This is a listing of countries with KFC franchises. There are
over 18,000 KFC outlets in 120 countries and territories located across the world. The first KFC
franchise opened in the United States in 1952 and in Canada a year later. The first overseas
franchise was established in the United Kingdom in 1964. A large number of Caribbean and
developed Western markets had been entered by the early 1970s. This was followed by
expansion throughout the Middle East and developed Asian markets from the mid-1970s and
into the 1980s. China was entered in 1987. Expansions were made into Eastern Europe and
South America in the early 1990s. The most recent area of expansion is Africa, where the
company is targeting that continent's growing middle class.
The major markets for KFC include the United States (4,500 units), China (4,200 units), Japan
(1,100 units), the United Kingdom (800 units), South Africa (700 units), Canada (650 units),
Australia (600 units), Malaysia (550 units), Thailand (450 units) and Indonesia (450 units).
The global operations are overseen by Yum! International, which is headquartered in Louisville,
Kentucky. Yum! Typically grant a master franchise to a local operator, or take a stake in a joint
venture between such a company and itself. In 11 locations, Yum! International manages KFC
directly, including China, Russia and India. Worldwide, major franchise holders range from large
local conglomerates such as Jardine Matheson and Doosan Group, to companies specifically
established to run restaurants franchises, such as AmRest. In Japan, Malaysia and Indonesia, the
major franchise holders are publicly listed companies. On the other hand, in smaller markets
such as some Caribbean islands, the franchises may be operated by a single individual.
Besides that, for KFC the placement of the product is not important but the placement of the
restaurant is important we can easily judge that the KFC target the place for their restaurant,
which is well known and is in Porsche area where the income level of the people is high then the
middle class level.

12. Because the prices of the KFC products is high with comparison to the local products
manufacturer who are dealing in the same kind of product in which KFC is dealing but the prices
of the KFC is high due to special taste, high quality, and due to international brand, it is the
world recognized fast food restaurant all around the world. So, for the placing strategy, KFC
chose the well income class area for their restaurants.

13. OB PRACTISES IN KFC
Organizational change and stress management
Most organization around the world has tried to change themselves and some more than once
during the past decade. Yet for every successful change, there is an equally prominent failure.
KFC develop food according to the customer’s taste. KFC organization is well positioned to
change will prosper but those that ignore change will flounder. For example, the customers do
not accept the changes made in KFC food made by the organization. There is almost infinite
variety of pressures for change. That is globalization of markets, spread of information
technology and changes in the nature of the workforce employed by organizations.
All effective and relatively KFC requires changes in organization design. The leaders must able
to the redign by creating emotional commitments to the changes. In the synthesis leaders involve
key managers in focusing on new economic and strategic goals and debating and experimenting
with new design.
The KFC organization changed formal organization design almost immediately. The KFC
management delivered the organization at the top and through the renewal program established a
new flatter structure at the experimental stores, a structure later replicated in all franchise.
 Globalization
KFC face global competition on an unprecedented scale. Globalization means that the main
players in the world’s economy are now international or multinational corporations. Their
emergence creates pressures on domestic corporations to internationalize and redesign their
operations. Global markets now exist for most products, but to complete effectively in them,
KFC often must transform their cultures, structures and operations. The powerful globalization
forces are pushing domestic firms around the world abandon “business as usual” in order to
remain competitive. KFC industries, global strategies are replacing country-by-country
approaches. Although globalization strategies aren’t easy to implement, many organizations have
effectively moved outside their domestic markets. KFC have highly successful Asian operations.
KFC serve more customers in the world and earn more profits from these operations.

14.  Information technology
Coping with international competition requires a flexibility that May organizations often do not
possess. Fortunately, the revolution in information technology permits organizations to develop
the needed flexibility. Information technology comprises network of computers,
telecommunications and oven system and extra. IT is having a profound impact on individual
employees, teams and organizations. Changes in KFC structure, product, markets and its
processes. IT can create new social division even as it brings customer together. If the full
potential of IT is to be realized, employees must be better educated, better trained, and better
motivated than at any time in history of KFC. For example, e-online order make the customer
easy and safe the time.
 Stress management
The changes make stress. Stress is the body’s reaction to a change that requires a physical,
mental or emotional adjustment or response. Change is act, process or result of altering or
modifying. Change and stress is effect on all individual, group and organizational level because
change and stress affects every level of organization. KFC overcome the problems of change and
stress is ordering system and payment system by using the computerized system.

15. ATTITUDES AND JOB SATISFATION
Attitudes are evaluative statements that are either favorable or unfavorable concerning objects,
people or events. There are three main components of attitudes. That is cognitive component,
affective component and behavior components. For cognitive component the employee though
he deserved the promotion, affective component is the employee strongly dislike his supervisor.
For example, the KFC employee those are work hard but never get promotion is dislike the
supervisors. Behavioral component is the employee is looking for another job and in
organization, attitudes are important because of the behavioral component.
The importance of attitudes in KFC is correspondence to behavior, accessibility, the presence of
social pressure, not persons has had direct experience with the behavior and the relationship is
likely to be much stronger if an attitude refers to something with which we have direct personal
experience.
Job satisfaction refers to a collection of feelings that an individual holds toward the job and high
level of job satisfaction equals positive attitudes toward the job. High level of job involvement is
thought to result in fewer absences and lower resignation rates. Job involvement in KFC more
consistently predicts turnover than absenteeism and psychological empowerment of employee’s
beliefs in the degree to which they can impact their work.

16. DIVERSITY IN ORGANIZATION
The concept of diversity include acceptance and respect, it means understanding that each
individual differences. These can be along the dimension of race, ethnicity, gender, sexual
orientation, socio-economic status, age physical abilities and more. It is the searching of these
differences in a safe positive and development environment. For example, the KFC organization
offered many type of food that can take by any age group of people. Other than that, physical
surrounding that offered by KFC attract the customer. The physical surrounding that offered by
KFC attract customer. The physical surrounding is cleanliness. Moreover, some people were
satisfied with the environment and the friendly attitude of people at food counters.
Diversity is also a standing part of KFC quarterly Business Reviews. KFC organization focuses
on providing strong growth opportunities through increase experiential land development
assignments. It challenges individuals in corporation diverse perspective in group meeting,
managing diversity in the work place is essential. Diversity can include the working place
diversity that is working skills and personality. All these can affect performance of an
organization.
Diversity is being beneficial to the organization of the KFC and the member of the KFC
organization. Diversity brings substantial potential benefits to the KFC, such as better decision
making and improved problem solving; greater creativity and innovation, which lead to
enhanced product development and more successful marketing to different types of customers.
“Diversity is more than a philosophy at KFC; it is part of our founding “How We Work
Together” principles. KFC’s global culture is actively developing a workforce that is diverse in
style and background, where everyone can make a difference. For KFC, diversity is not a target
it’s a way of life and a way of doing business. Everyone can and does make a difference in our
organization. Believe in all People – underscores the importance of actively seeking diversity in
others; believing everyone has the potential to make a difference; and coaching and supporting
every individual to grow to their full capacity. This adds perspective and depth to everything
KFC do. KFC have also found that a diverse team makes for better problem solvers, services
all KFC’s customers more effectively, and creates a richer culture for all of us to enjoy.

17. KFC are also increasing the representation of African Americans, Hispanics and women
among our key talent or decision makers, and growing the pipeline of diversity in their mid-
level manager ranks. All of KFC’s brands have leadership initiatives focused on high-
potential diversity talent, and all leaders serve as mentors. In addition, last year each of the
brand presidents went into their communities to provide business-growth coaching for local
networks of minority businesses.
Making progress in diversity is a business priority and the work of everyone in our system.
This commitment is reflected in David Novak’s annual goals, or “Blue Chips.” KFC also
have a dedicated Global Diversity and Inclusion Officer who guides their strategy and a
number of initiatives that enhance their inclusive workplace. Part of KFC’s growth strategy
will be to ensure that our leadership team, company workforce and culture are as diverse as
our customers around the world.”
“Diversity, inclusion and engagement are simply part of KFC’s core values at Yum.’ Believe
in All People’ means tapping into the diverse skills, cultures, perspectives and experiences of
each of our associates to drive great marketplace performance. KFC strategic diversity and
inclusion vision is to grow leadership, franchisee and supplier pipelines that increasingly
reflect our diverse customer and investor base.

18. ORGANIZATIONAL CULTURE
A company culture describes the way a company’s owners and employees think, feel and act.
KFC company culture is a direct result of the company’s vision and values. For a business to
generate profits and achieve long term success it needs to build a workplace that attracts, engages
and retains the best employees.
The real culture of a company is determined by the way decisions are made on a day by day
basis, and by how it treats its employees. When a manager does not value an employee or follow
established procedures, the true company culture differs from the published version. To be
effective, the actual company culture rests on the company vision and values being believed and
acted upon by all employees. Young people today have demonstrated their commitment to
seeking widespread experiences and doing what is ‘cool’ and ‘fun’. They see the value of
teamwork and connectedness and they work to gain money, skills and experience. A company’s
culture must reflect these attributes if it is to attract and retain talented employees.
The ‘feel-good’ culture at KFC is inclusive and supportive – one where everyone is encouraged
to look out for each other. This culture is across the KFC brand, rather than being localized in a
single store. KFC is flexible around working hours to accommodate time off for exams, extra-
curricular school activities, sports and family events.
Many young employees initially join KFC in order to gain some extra cash. As they continue in
employment they realize that there are excellent career opportunities on offer. As a Team
Member, employees receive on-the-job training and the chance to cross-train within the
restaurant, enabling them to learn new skills. Employees learn communication skills, teamwork
and how to manage money. Many of these skills will have future life applications as well as
being of benefit at work.
KFC’s strong company culture benefits all its employees. Increased employee engagement
results in higher morale and productivity. This ensures excellent customer service which means
repeat visits and recommendations to others.

19. By providing defined and visible career paths, KFC retains more staff, with obvious spin-offs in
the retention of talent and knowledge. Many successful Area Coaches, Training Managers and
Restaurant General Managers started with KFC as Team Members. Retention of staff and
reduction in staff turnover has benefits for KFC as it achieves a significant reduction in spending
on recruitment and enables a greater investment in training.
KFC provides extensive recognition and rewards to its employees which mirror the company
culture. Team Members achieve money and hours, celebration of success, life experiences and
discounts. The rewards and recognition for managers include work-life balance, discounts, and
service recognition and education assistance. An additional benefit of working within the KFC
franchise network is that employees can grow their career. Career opportunities are advertised
throughout the equity and franchise network.
Since it as founded, KFC has always shown a profound respect for the cultures and traditions of
all the countries where the company markets its products. It accepts cultures and social diversity
and rejects discrimination based on ethics, religion or on any other grounds. Employees how
work at the KFCs headquarters’ come from 70 different nations. Culture within the organization
is very professional and yet flexible at the same time. Its policies, rules and regulations and inter
departmental culture is very open. Attitudes, behaviors and working environment are such that it
motivates and encourages other employees to feel comfortable and wanted in the organization.
It’s very friendly yet 30 professional organizations. KFC people call themselves a family and
thus keep their working relations accordingly. The broader the responsibility of a KFC manager,
the more the following specific criteria should be considered, in addition to professional skills,
practical experience and result focus:
•Personal commitment and courage. This includes the capacity and the willingness to take
initiatives and risks as well as to maintain composure under pressure.
•Ability to motivate and to develop people, addressing all those issues that allow others to
progress in their work and to develop their capabilities.

20. •Curiosity and open-mindedness as well as a high level of interest in other cultures and life-
styles. This also includes a commitment to continuous learning and improving, as well as to
sharing knowledge and ideas freely with others.
•A taste for initiative together with the ability to create a climate of innovation and to think
outside the box. This implies the right to make a mistake but also the readiness to correct it and
to learn from it.
•Willingness to accept change and the ability to manage it.
•Adaptability of thought and deed, taking into account the specificity and the complex it of the
environment.
•International experience and understanding of other cultures.

21. Motivation
Motivation is the process by which person’s effect are energized, directed and sustained toward
attaining goals.
SWOT Analysis
Strengths
- Strengths can be found internally in a company and can be used to the company’s advantage.
The strengths identified are as follow:
a) Name recognition and reputation
KFC’s early entrance into the fast-food industry in1954 allowed KFC to develop strong brand
name recognition and a strong foothold in the industry.
b) PepsiCo’s success with the management of fast food
PepsiCo used many of the promotion strategies that it has used to marked soft drinks and snack
food .By the time PepsiCo bought KFC in 1986, the company already dominated two four
largest and fastest-growing segments of the fast food industry.
c) Traditional employee loyalty
KFC’s culture was built largely on Colonel Sanders back approach to management. Before
the acquisition of KFC by PepsiCo, employees at KFC enjoyed good benefits, pension and
could receive help with other no income needs. This kind of ‘personal’ human resources
management makes for loyal workforce.

22. d) KFC’s secret recipe
The secret recipe has long been a source of advertising and allowed KFC to set itself apart.
Also, KFC was the first chain to enter the fast –food industry, just before McDonald’s, which
opened its first store a year later and the “secret recipe” was the initial home replacement
strategy.
e) Improving opening efficiencies
KFC is reducing overhead and other operating costs that directly affect perating profit.
Operating Efficiencies is achieved by KFC through improvements in customer service, cleaner
restaurants, fasters and friendlier service and continued high-quality products.
Weaknesses
Weaknesses are also found internally like strengths. However, can limit a company’s potential.
The weaknesses for KFC are identified as follow:
a) KFC has a long time to market with new products.
- The chicken segment of the fast food industry, innovation was never a primary strategy for
KFC. However, during the late 1980’s other fast food chains, such as McDonald’s, began to
offer chicken as a menu option. During this time, McDonald’s had already introduced the
McChicken while KFC was still testing its own chicken sandwich. This delay significantly
increased the cost of developing consumer awareness for the KFC sandwich.
Opportunities
Opportunities represent external finding which can enhance a company’s performance.
Opportunities that KFC can take advantage of are a follow:
a) Dual branding
- This strategy helps to “improve economies of scale within its restaurant operating”. For many
companies that own more than one fast-food chain, dual branding is an ideal way to expand

23. quickly and increase profit. The companies no longer need to wait for the store to be built or
spend time and money looking for the location.
b) New distribution channels
Consumers are demanding fast food in non-traditional locations, such as shopping malls,
universities, hospitals and other high traffic areas. Consumers are demanding greater
convenience when purchasing.
Threats
Threats to a company are those business characteristics that endanger the company’s position
within its industry as well as jeopardize its profits. The threats that KFC faced with include the
following:
a) Increasing competition
KFC faced slow sales growth in the fast-food industry, other segments of the industry have
turned to new menu offerings, and McDonald’s introduced its McChicken sandwich. Domino’s
has introduced chicken wings to its menu. Pizza hut has tried marinated, rotisserie-cooked
chicken.
b) Changing preferences of consumers.
Consumers began to demand healthier food and KFC was faced with a limited menu
consisting, mainly of fried foods ,KFC to change its image as a fried chicken chain, changed its
logo to KFC in 1991, KFC has introduced Oriental Wings , Popcorn Chicken and Honey BBQ
chicken as alternatives to its Original Recipe fried chicken. KFC is promoting its lunch and
dinner buffet.
c) Increase prices of wheat and corn flakes
Prices of wheat and corn have doubled over the past year or so, according to the US based
Earth Policy Institute. This means higher prices of food products made directly from them. This
directly affects the cost of KFC.

24. Threat of entry from new competitors
a) Economies of scale:
The threat of new entrants can be reduced because most of the established companies in the
industry have economics of scale advantage. For instance, PepsiCo has improved its economies
of scale within its business operation by adopting the dual branding strategy. Therefore, this
enables KFC to improve its customer base by increasing its menu offerings. This will help KFC
to reduce the threat of new entrants because they will not able to compete in the market and
hold high cost disadvantages compare to the already established firms.
b) Government regulation
Government regulation and other diplomatic procedure make it difficult for new competitors to
enter the market. The result is that renowned fast- food industry are facing competition with
local entrepreneurs who has the basic understanding of local language, culture, costumers, law,
financial markets and marketing characteristics. Many of the companies are overcoming this
problem by adopting the strategy of franchising with the local entrepreneurs. The reason behind
such as a strategy is that Fast Food Industry contains a huge profit.
c) Brand loyalty
In fast-food industry, as it is found in the case brand loyalty is the only identity here for their
presence. As the name implies like KFC, McDonald, Pizza Hut, Burger King and all the other
Fast food Chains has their strong customer base. Another important thing in Fast – food
industry is the taste of food. It is a matter of habituation. There is a natural loyalty to the brand
for the taste. So, Brand loyalty is high and as a matter of fact industry is unattractive for the
new competitor.

25. RESEARCH & DEVELOPMENT STRENGTH OF KFC
KFC has been operating for several years now, however the weakness of those
company is that they didn’t give important to the research and development. KFC must invest
forcefully in research and development for them to be at edge on technology. This could help
the company transform technological advances features are established by rivals especially
that they are now in the industry whereby technology is the prime driver of change. It is a
necessity to have focus on the research and development especially in the critical areas not
only to avoid stretching the company’s resources too thin but also to intensity the firm’s
proficiency and to master the technology for them to become the leader in a certain
technology or product category.

26. RECOMMENDATIONS
• Product differentiation
KFC faces a lot of threat from its substitutes, especially with growing health concerns among
its customer. Health and obesity issues associated with KFC food have diluted the trust
people once had in them. Hence, the reason, substitute pressure is there. KFC has tried
launching salads and promoted production using vegetable oil in the past in foreign
companies. Its served items cater the demands of this market in countries. KFC choose
differentiation strategy by emphasizing the preparation of food with high quality ingredients
as well as unique recipes and special seasoning to provide appealing, tasty and attractive food
at competitive prices. As the diversity of products in order to gain its competitiveness in the
fast food industry, it may increase the variety of menu products and give customer more
choices. Different packaging of its menu may also increase the variety of menu. So KFC
should try and differentiate its products one other lines than only chicken to capture other
segment in the fast food industry .product differentiation in the fast food industry exist but is
not quite high and generally the products are perceived as commodities so their choice
largely depends. This industry’s customer are characterized as highly price sensitive so they
can easily switch to a product that is like in quality and service but offered at lower price
.product differentiation does play a role in the growth of a business.
• Better communication channel.
Lack of communication in the operation ,would lead to many problems inconsistency of
products and services may occur due to misunderstanding of different internal departments.it
is therefore recommended that KFC should provide more communication channel for
gathering opinion so as to improve the service quality.

27. • Enhancement on valve of product and services.
As shown in the strategies of KFC, it tries to minimize the costs, the recentralized trainings
for crewmembers, the bulk purchase of production ingredients and materials and so forth. In
the other word, cost leadership is not a business strategy that it mainly takes. Quality is
always something that customer look for. With unique recipe and tasty chicken as well as
other innovative menu items, KFC may have more sustainable competitiveness achieved by
its differentiation strategy.
• Adopt different pricing strategy to attract the customers.
Price is always a primary, concern for the customer therefore, they should adopt certain
strategy to attract the customer, and it can only be done by lowering the prices.it could be by
introducing some discount packages for families, employees, students or regular customer.
The membership card can be used to provide certain extra valve to the customer.it can gain
sustainable competitive advantage by either cost or differentiation. If firm achieve
differentiation, it can charge premium prices and gain higher margins.
• Environment friendliness.
It can develop a competitive advantage for itself by introducing environment friendliness
concept as it has been introduced in Malaysia. The restaurant is designed to environmental
goals that include cutting energy and water consumption by 30%.
• Promotional campaigns.

28. KFC has large customer equity, but being a market symbol, a company should strive for
having more actual customer. KFC should work for having more solid marketing departments.
They should organize and run proper advertisement campaign. It would definitely be an
incremental factor for their sales. They can also use the brand promotions. They can set up the
promotional campaigns. All the need is an effective marketing department to facilitate the
promotional activities.
• Ways for gathering customer feedback
As mentioned in marketing strategy, marketing team relies on customer’s feedback for
choosing their marketing promotion. Customer’s feedback means high sale on volume
and positive sales revenue.it, however, may not reflect the positive customer’s feedback
on sales. Whenever a new product is out in the market, it may lead to sudden sales
increase of that particular product as customers may want to try something new .however,
it may not mean that the product is popular because product may be a fad. It therefore is
suggested that marketing team in KFC should carry out more comprehensive market
researches on product development.
• Lack of employee training.
Proper training of staff engaged in maintarance of service quality should be provided to
deal all such issues at local level. According to the manager, sometimes an issue
regarding the services happens. At present they are not focusing on the training in their
some outlets, so they should provide proper training to their employees because in fast
food.

29. • Increasing expected retaliation by establish blocking positions.
Price cuts can be done when you have cost advantage which can come from economies of
scale, vertical linkages with the valve chain of suppliers and channels, geographic location
and discretionary policies keeping in mind KFC.
CONCLUSION
KFC is a global company with a diverse and ever-changing workforce, faces significant
challenges in operating their businesses internationally but they faces those challenges
strategically, adapt with policies to these markets. KFC built a diverse foundation to operate
as a local business in international markets. Criticism work can motive toward success.
Though criticism rose about KFC but it could not hinder its success because of their policy
and strategy. A proverb goes on “prosperity’s right hand is industry” by expanding its
operations globally KFC facilitated its success and become famous to worldwide, which
proves that “Fame is the perfume of heroic deeds”. Besides that, KFC Company also has
received a good response from customers although there are still have many competitors such
as McDonald, pizza and others. KFC gives more priority to society. The main three reasons
why KFC stands out as my favorite fast food restaurant is because of the service provided,
the affordable prices, and of course the great quality food. KFC has always maintained an old
age feel and it is apparent because they still use the original recipe. Also, there are many
KFC’s around the world and I have been to one in South Korea and it was the same if not
better quality than the establishments stateside. In my opinion, KFC also has brought my

30. family together many nights and I have always viewed it as one of the best suppliers of fresh
flavorful chicken which is the reason why in my opinion it is the best fast food chain.
REFERENCES
• http://www.planetfeedback.com // Kentucky fried chicken menu choices
• http://www.psopk .com /media /new.php
• http://www.kfc diversity .com
• http://www. kfc motivation.com
• http://www.kfc organizational culture.com
• http://www.kfc organizational changes.com
• http://www.kfc organizational behaviour.com