Challenges Related to the KFC Charter in Australia - Research Paper Example

A Business Research Project for KFC in Australia Name Class Unit Executive Summary KFC started in a remote service station in Corbin Kentucky in 1930, and Harland Sanders who was forty years old started cooking for hungry customers who stopped to purchase gas. He commenced by serving his southern-style fried chicken from his kitchen table. Soon, word began to go around, and Sanders' fame began growing. He spent the next nine years perfecting his secret recipe, which was a blend of eleven herbs and spices. Interested individuals began to travel from far and wide just for a taste of that food. KFC is currently operating the world's biggest brand of chicken restaurants, with some 11,000 restaurants in locations in about 80 countries worldwide. It has territories across the globe. The headquarters of KFC are in Kentucky. This is where the brand started from. The charter gets about half its returns from global sales. KFC operates about 5,300 local restaurants. The largest unit in its global division is its China operation. It consists of over 1,600 restaurants. Yum fully possess KFC Corporation Brands, Inc. Yum also runs the Pizza Hut, Taco Bell, Long John Silver's, and A&W restaurant charters. In Australia, the KFC store opened in 1968 in Guildford, NSW. It began by hiring 25 employees. Today, KFC has grown to more than 600 restaurants across Australia. KFC Australia owns and runs around 160 stores with the remainder are kept by a community of over 60 franchisees. In total, it has employed around 30,000 Australians and serve more than 2 million customers weekly. Introduction and literature review KFC’s major offices are situated at Louisville, Kentucky. It is famous internationally for its restaurants that sell chicken. It majors in Original Recipes. The recipes consist of freshly made sandwiches, Colonel’s Crispy strips chicken with home-made cooking and other lovely dishes. The research project is in Australia. KFC Australia is part of the YUM brands. The first KFC store started in 1968 in Guildford, Sydney NSW. At the moment, KFC is one of the biggest fast food stores in Australia. KFC has both chartered and equity owned stores and serves 2 million customers weekly (KFC, 2016). This paper proposes a research and analysis to assess business growth opportunities for KFC in a dynamic and growing consumer market. This project aims at showing business growth opportunities for KFC in an active and expanding consumer market. The market has witnessed changes in the consumer preferences over the years. The increase of the emerging markets has shifted the way KFC has been conducting its business in its established markets such as Australia and New Zealand. For example, there has been a steady movement in the developed market from the fast foods into casual dining. The research will, therefore, evaluate the micro and macro-economic factors that have a potential to impact KFC-SOPAC business over the next five years. The data achieved is through gaining information and data on economic trends, demographic trends competitive rivalry, shifting consumer preferences, emerging market segments, consumer lobby groups (publics), media trends, legal and government legislation, Corporate Social Responsibility (CSR), natural environment (sustainability), marketing intermediaries, suppliers. The conclusions from the St will assist the organization in future strategic choices and target markets. This report also aimed at studying and critically evaluating the customer's satisfaction towards the quality and services provided to them by the KFC branches in Australia. To provide remedies for the issues that are affecting the consumers. The stores can gain higher customer satisfaction. They will provide their clients with proper service quality. The research plan is to use different types and methods of the quantitative research methods for collecting data. Quantitative data is to be collected by questionnaire. Methodology This study was conducted using questionnaire and examined KFC Australia staff members' and customers. The research takes aim at investigating the market and business trends. A total of 412 questionnaires were distributed among the interviewees. The survey used Likert gauges to assess social fast food consumption and provided open-ended responses for additional notes. Assessment collection boxes were located in many branches for a four week period. No personal information was collected; the survey was voluntary and anonymous. Data analysis There was an 85% response rate to the questionnaire. It can be clearly seen from the results that there are emerging trends in the market. The data collected by interviews and observations was analyzed qualitatively using thematic analysis. The objective of the study was to provide insight into the challenges and strengths faced. Thematic analysis involves analyzing the content of the interviews (transcriptions) line by line, and identifying patterns and meanings which finally categorized into themes, are coded to facilitate consecutive analysis Thematic analysis is an in-depth method that draws results from data. Discussions In Australia, KFC does not broadcast their foodstuffs too much due to its character that has been earned in other countries. They promote their products through individual packages. They stimulate their products through a billboard, brochures, and other ways of creating awareness about the products. KFC has categorized their customers according to different markets. They have categorized them according to customers with different stresses, flavors, and practices. Furthermore, there are those who require separate goods or marketing mix. In Australia, the forte marketing is being used for distinct classes of people. They have made sections of the market on three pedestals. Behavior, demographically and geographically. These customers have a need to satisfy their needs through an exchange. These requirements make up the mandate for particular services and products. Numerous constituents must be considered. It is a combination of all these factors that lead to the success of KFC. Variations in the below-described components over the last few years have led to significant changes in people's beliefs towards hale and hearty meals. It demonstrates why Australians today want to ingest foods that do not affect their health but at the same time the foods should be delicious so as to keep fit and therefore KFC must restructure their means of production in order to take care of these expectations from their customers. KFC business finds it’s self in a loftier macro environment of forces that bring about opportunity and as well create competition which is a threat to the franchise. The macro forces are beyond the control of KFC.Below are several significant macro-environmental trends KFC has to take into record The micro environment comprises of all those factors that are closely related to the franchise and those that it has control or power over, they are those that KFC can change because they are not beyond its control. Three vital components affect KFC's microenvironment: Competition The fast food market in Australia is highly competitive. KFC faces stiff competition from its rivals who include Mc Donald’s which is a brand that is widely known in Australia and has a lot of customers. The Dominos is also another major competitor of KFC. McDonalds's is especially a major threat to KFC because they have managed to introduce to the market a line of salads which is meant to target the health aware citizens of Australia. However, KFC can match up to their competition if they strategize their on how to produce healthy products and introduce them into the market. Customers KFC's customers consist mostly of Individuals who can be males, females, singles, or the whole family unit. They are the ones who purchase KFC'S foodstuffs. Therefore, the product range that KFC offers should be pleasing to as many customers as possible. They should be acceptable to the target market as possible. This is to ensure that a large quantity of the products is purchased. The features that distinguish these individuals and their classification are done on this report. Weaknesses and strengths of other competitors Strengths: heavy marketing strategy, they are able to meet their budget, a variety of products ranging up to thirty eight, appealing food stores, a variety of entertainment for children. Weaknesses: Identical type of Menu, No Home Distribution of their products to the customers’ location. KFC contests its rivals through different strategies for example, hiring efficient marketing team, offering different packages for customers for example holidays like Christmas or even enticing offers during specific times of the day like midnight. KFC is also involved in strategies to motivate their employees for example by increasing their salaries and giving them days off. Socio-cultural Australia's population is composed of both old and young people with the young people taking more than half of the population. 0 to 15 years take about 32% of the country’s population; 16 to 65 years take about 63% while the people aged above 65 years are less than 5% of the population. This explains the major transition in the behavior of the people into consumption of food from the fast food stores. Most people have busy schedules and thus fast foods have become their only solution because they have no time to cook. Technological The Australian fast food Business is warming up with a lot of foreign companies entering the market. The technical know-how and knowledge will also enter the market with high rivalry. While the lower rates and a change in technology the fast food, shops are attracting young men and women by giving them an incentive. For example Domino pizza and KFC. In the fast food cafeteria, advanced technology and innovation does not signify or rather is not an important aspect to put into consideration. However, KFC should be eyeing to competitors innovation and improve itself in term of integrating technology in handling its operation. For example in the book keeping system, procurement policy to ensure proper delivery of products, this will make it easier for customers to make orders and to receive their deliveries in time. Availability of internet will also enable the management to be efficient in running of the business. This will in turn help to save on time and cost. That way it will be possible for customers to receive discounts on their purchase because the business is able to save on money hence making more profits. Pricing When pricing their goods and services, they have to put into consideration various aspects for example the revenues to be paid to the government; the target market has to also be considered whether the price is fair and affordable to them. Then the cost of production has to be incorporated in the determination of the final price of the products. Total Pounds of Chicken consumed in KFC per annum are 1.913 Billion Full KFC Chicken Portions purchased per annum are 5.88 Billion Total Sales are 8.8 Billion dollars per year. During pricing, there are variable costs and fixed costs that are looked at to determine the total cost of production. Variable costs are those that keep on changing during production while fixed costs are those that remain constant throughout the production process. Profits are determined once the expected returns or revenues are subtracted from the total cost of production and after subtraction of taxes going to the government. Competitive advantage KFC Mc Donald’s Spicy Product. People like spicy food rather than boiled food French Fries and also different types of burgers are their specialty. KFC deals with two products Arabian rice and also the famous Zinger burger. Specializes with Big Mac KFC does free delivery of its products to customers. Mc Donald’s charges a fee on its delivery. Every community eats chicken Some communities have banned beef consumption Mostly employ local staff because they can deal with customers in a better way. The staff is mostly graduates who are trained on the job. The approach of their management is either highest to lowest or lowest to highest approach. Mc Donald’s approach to management is from the highest to the lowest in the hierarchy. I did an analysis of KFC on people whose age lies between twenty to twenty five years. All of them were aware of the recipes and what they preferred from the KFC recipes and foodstuffs. As seen below KFC has shown a good report on all the aspects that I put into consideration. I also enquired from the individuals if they would like KFC to begin home delivery services and the proximity between their home and the closest KFC food outlet. I also wanted to know whether the customers preferred to eat from the store or from their homes. Conclusion This report has identified and analysed challenges related to The KFC charter in Australia. The SWOT analysis shows evidence that the strongest pillar within the facility is the delivery service pillar. The leadership and governance support are well-structured. The organization has a management structure in place and the superiors keep in constant communication with their subordinates. The finance system is quite robust in that the financial system has been automated thus leading to an increase in accountability and transparency. It has helped promote the other factors because there is no loss of revenue needed due to corrupt practices. The workforce is efficient because the staff has a high qualification and everyone does what they are trained to do. The members of staff are also courteous and welcoming thus giving the clients ultimate quality service. The information pillar being the weakest one is due to the lack of integration of the advertisement. Lessons learned Leadership and governance play an essential role in the management of the KFC brands. Without proper guidelines and policy, any organizations' success is likely to fail. A facility that is regularly assessed not only measures the quality of specific services but also helps to diagnose strengths and weaknesses, and identify priority areas regarding improvement. It helps in quality improvement within the facility. Challenges affecting the firm seemed to have a direct or indirect effect on the other building blocks. For example lack of specialized services within the facility leads to losing of revenue due to the need to refer customers to other facilities. There is need to partner and collaborate with other stakeholders who are vital in the delivery of quality services to enhance accessibility, availability, and continuity Recommendations Improve partnership with other stakeholders such as the government, NGO's and other firms. Strengthening the supply chain and designing methods to improve forecasting, quantification and timely demand of food and other commodities. Improve collection, analysis and use of data through training, supportive supervision and provision of adequate infrastructure. Enhancing access to service delivery through reducing the cost of expensive goods to the clients who cannot afford the services due to poverty. Ensure the integration of other departments within the chain's system. Management Recommendations Decisions made based on quality information. In a typical environment, the higher you are, the less contact you have with people doing actual work and having a direct impact on company products /services. Usually, the superior manager exists in information bubble devised by managers under him. As news is passed up the stream from the floor workers to decision makers, it becomes selective, biased, generalized and political. One cannot, therefore, make sound decisions based on skewed information. To counteract that they need systems and managerial practices that will provide them with the right information to act. So they make decisions based on hard date and not on one generalized case or expert opinion. There is always an urgency to perform at senior management level. As soon as a presentation of an idea is made, everyone is expecting that the change will commence. Many cases don't require change often; they need a deeper analysis. That is not the typical mind frame of a senior manager. To offset that, they should always question whether it was a single incident. Do we need to do something about it? Is it the right time to move or we can monitor things and wait? Do we understand and agree with root causes? Should we put some new countermeasures in place or we should ensure that the existing ones are in place? References Alon, I., 2004. Global franchising and development in emerging and transitioning markets. Journal of Macromarketing, 24(2), pp.156-167. Banwell, C., Hinde, S., Dixon, J. and Sibthorpe, B., 2005. Reflections on expert consensus: a case study of the social trends contributing to obesity. The European Journal of Public Health, 15(6), pp.564-568. BIS Foodservice Foresight, 2013, Fast Food in Australia 2013, retrieved 29th February 2016 from, http://www.bis.com.au/verve/_resources/Fast_Food_in_Aust_Brochure_2013.pdf Bordens, K.S. and Abbott, B.B., 2002. Research design and methods: A process approach . McGraw-Hill. Burns, R.B., 1997. 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