2. DESCRIBE PORTER'S FIVE FORCES MODEL
USING REAL ORGANISATION EXAMPLE(S) :
BUYER POWER
SUPPLIER POWER
THE THREAT OF NEW ENTRANTS
THE THREAT OF SUBSTITUTES
PRODUCT
THE RIVALRY AMONG THE
EXISTANCE FIRM IN THE
INDUSTRY
3. BUYER POWER
The factor of a lot of competitors such as McDonald, KFC,
Pizza Hut and Burger King. The loyal and potential customer
of customer starting to declined and this caused a big loss to
the KFC.
Customer can go to any fast food restaurants that offered
more affordable price especially to students which requiring a
lot of money to survived.
To attract their consumers back, KFC start to decrease their
prices and give a discount of their products to the
consumers.
KFC reward ‘My KFC Card Programed’ to their loyal
customer. By this card, the customers are able to get a
discount as much as 5% and also exclusive VIP offers.
So, the buyer power of KFC is high when this is proved
that the consumers able to influence the priced when they
has many choices.
4. SUPPLIER POWER
There are a lot of suppliers available for KFC’s raw
materials. KFC can easily switch their supplier to another
supplier since the materials need in the process of
producing KFC is easily to get such as chicken.
In 2004, KFC has some internal problems and issue
regarding of their raw chicken supplier. KFC’s supplier
was found doing something horrible when slaughtering
the chicken.
KFC decide to terminated the contract between them and
thus find the new supplier to replace them. So, chicken
supplier can’t easily increase the price for chicken since
their supplier power is low.
5. SUPPLIER POWER (CON’T)
Other than that, KFC also binding a contract with
Pepsi.co for supplying carbonate water to KFC’s
customer.
In the contract, KFC has promised to Pepsi.co that
they won’t have any business related with carbonate
drinks such as Coca Cola or A&W.
In the same time, Pepsi do supplies their drinks to the
competitors of KFC. This is lowering down the
supplier power of KFC.
6. THE THREAT OF NEW ENTRANT
There a lot of substitute’s product offered to the
consumers. Radix Fried Chicken which is almost similar
to KFC has grabbed the customers’ attention to switching
their taste to something that are more fresh than KFC and
to find something difference.
Radix Fried Chicken’s main product is chicken. So, the
existence of Radix Fried Chicken has become a new rival
to KFC.
The Radix Chicken was founded in 2008 while KFC was
found in 1930.
7. THE THREAT OF SUBSTITUTE
PRODUCT
Popeyes Louisiana Kitchen also sell the product/service
almost same as KFC.
Popeyes serves chicken dishes in mild and spicy flavors
and offers sides such as Cajun fries, mashed potatoes
with Cajun-style gravy and Cajun rice. As well as fried
chicken, other entree items include a chicken-and-
sausage jambalaya and po' boy sandwiches. Most combo
meals come with a side order, drink, and a biscuit
The price for both fast food is almost same.
8. THE THREAT OF SUBSTITUTE
PRODUCT
KFC has find another alternatives to reduce the threat of
substitutes products by providing KFC a.m where they
are operating in the morning to provide breakfast for
customer.
Other than that, they also providing free wifi for their
consumer who eat in their franchise. This will attract and
also make the customer comfortable since they can
easily surfing the internet. KFC also open for 24 hours.
The will easier the customer who starving at the late of
night to find some food. In certain place, KFC also
provide drive thru service to those who are rushing.
9. THE RIVALRY AMONG THE EXISTANCE
FIRM IN THE INDUSTRY
In Malaysia fast food industry, McDonald ranked as
the most favorite fast food in Malaysia and follow by
KFC and Pizza Hut.
McDonald that has been developed since 1980
has become a closest rival of KFC.
KFC has implement loyalty program to attract their
consumer’s attention to their brand. They have
providing their customers a card to kids. The card is
useful to obtain a discount in KFC, Sunway
Lagoon, MPH bookstore, Petrosains and also Zoo
Melaka.
