SWOT analysis paper - Essay Example

(Insert Introduction Kyochon USA Incorporated is a franchise company of Kyochon Food and Beverages Company Ltd.. Kyochon Food and Beverages Company Ltd. is a South Korean fried chicken restaurant chain that was founded in 1991. For this reason, all its franchise restaurants are based on chicken products. Kyochon is one of the largest fried chicken restaurants in South Korea and the company has its head office in Osan, Gyeongi-do. The company operates several restaurants in the United States. It established Kyochon USA Incorporated in 2007 and incorporated it in New York.

The restaurants in the eastern side, that is Manhattan and Flushing, and those in the western side, that is Mid-Wilshire, Ceritos, and Culver City, are all under the control of the main office in OsanGyeongi-do. The company’s expansion plan over the next two years is to do a franchise for the public. SWOT Analysis of Kyochon USA Incorporated Strengths Kyochon USA Incorporated deals with chicken products that are prepared in a traditional Korean method. Korean chicken is prepared in such a way that removes all of the fat from the chicken’s skin.

The resultant of this is a thin, crackly and almost transparent skin. The manner in which they produce their chicken is a derivative of strength in the market. Due to the alarming increase of cancer cases resulting fat levels in foods, Americans are pursuing healthy foods that are fat free. Therefore, Kyochon USA Inc. has a competitive edge over its competitors because they are offering what the consumers are looking for.Secondly, Kyochon F & B Company Ltd. has centralized its management operations for the US based restaurants.

Through this, the company has been able to cut on costs that they would have otherwise incurred if there middle men were included in the whole supply chain. This in turn translates to an increase in the company’s profit margins. Weaknesses In South Korea, chickens are usually small in size as compared to the chickens found in the American fried chicken restaurants. In Korea, the chickens are fried whole and then hacked in to smaller pieces. This means that the Korean restaurants are only conversant with smaller chicken pieces unlike those available in the US.

As a result, many Korean fried chicken restaurants in the United States usually serve wings and small drumsticks. This is a weakness for the company because consumers will opt to be served by other restaurants, not on the basis of quality, but that of quantity. Though the company reaps financial benefits from the centralization of management operations in their headquarters, there are weaknesses that impede from this strategy. This is so because decisions in the headquarters will be made on the basis of what the managers think is best, rather than on the basis of how the company is performing on the ground and the current trends in the market that they are operating in.

Opportunities The American market is full of opportunities for any business that is operating in it including the Kyochon USA Incorporated Company Ltd.. As pointed out earlier, the American people are seeking for substitute foods that will be beneficial to them in terms of health and disease avoidance. This consumer need is an opportunity for the company to expand business because their trademark meal, the fat free Korean fried chicken, meets the consumer need in terms of quality. The company plans to seize this opportunity by creating a franchise for the public over the next two years.

This way, they will be able to reach to the people more easily and hence serve a wider market. Threats The company’s main threat are the established fried chicken restaurants such as Kentucky Fried Chicken (KFC). With the increasing consumer consciousness about the health facts of what they are eating and the implications that they will reap from them, these other fried chicken restaurants have made some alterations to their menus to fit the health specifications of the consumers, for example, fried chicken that is low on fat.

Coupling this quality enhancement together with the quantity of the meals poses a huge threat to the company of losing their customers to their competitors. The centralization of operations also poses a threat of losing consumers, to the company. This is because the managers will not have an in depth understanding of the ground in comparison to other companies whose management operations are based within the area in which their market is in. Conclusion For Kyochon USA Incorporated Ltd. to remain competitive and retain its market share at the same time increasing it, the company has to mitigate its weaknesses, increase their pursuit of opportunities, and counter the threats that are targeting it within the market.

One of the company’s main weaknesses is the quantity of their chicken. The American market is accustomed to large pieces of chicken and the company needs to increase the size of their chickens in order to have a satisfied market, therefore making it easy for them to retain their market share. Secondly, the company should consider delegating management operations to the work force in the market. This way, they will be able to serve the needs of the consumers better because of the close relation and proximity to the market.

Also, the company will be able to know of the strategies that their competitors are using and develop strategies that will bring favorable competition in the market. The company is already taking advantage of the opportunities that are there in the market through creation of franchises. This way, the company will be able cut on expansion costs and increase market coverage. Work Cited Kyochon F& B. 2010. Web. November 30, 2012.