Business Plan for Setting Kentucky Fastfood Center Franchise - Case Study Example

Business Plan for Setting KFC Franchise Table of Contents The Product 3 1. Benefits of the Product 3 2. Protection from Competitors 3 3. Competitive Advantage of the Product 4 2. Marketing Research 4 2.1. Analysis of Customers’ Questionnaires 4 2.2. Analysis of Market Share 5 2.3. Potential Market Growth 5 2.4. System for Monitoring Growth 5 2.5. Anticipate Changes in Demand 6 3. Processes 6 3.1. Information Flow 6 3.2. Equipment Essential for Efficiency 6 3.3. Quality Control 7 4. Personnel 7 4.1. Curriculum Vitae 7 4.2. Organizational Chart 7 4.3. Role of Management 8 4.4. Training Needs 9 5. Action Plan 10 Reference List 11 1. The Product KFC Corporation has turn out to be one of the most popular chicken and food restaurants all over the world. It wishes to increase its product line for including new items in their menu as per the acceptability of the local people (Bailey and Francis, 2008). While expanding their menu they tend to be focused on continuing innovation of healthy food products as per the demands of the domestic consumers. KFC will try to reach the goal of developing healthy food like grilled chicken and grilled chicken sandwiches and healthy dinner combo consisting steam chicken. KFC will introduce a range of edible coffee cups and food items like double down dog in London and hopes to launch them in the newly set franchise. Their coffee cups will be infused with various aromas such as coconut sun cream, fresh grass and wild flowers. They plan to introduce buckets of comfort food along with new ketchup made of marshmallows and lemonade. These newly introduced products are supposed to satisfy the demand of the local residents and result in increased sales (Lafontaine and Shaw, 2005). 1.1. Benefits of the Product Their new product ranges are supposed to come with many health benefits for people. Their innovative range of products will fall under 400 calories and below 15 grams of fat so that even if people continue eating their foodstuffs at a regular basis that will serve to be a healthy choice for them. These food ranges will contain no trans fats and will contain adequate amount of calories required to remain healthy (Stier, 2004). Their combo meals will come under healthy diet plans and will serve best in taking care of health of their consumers. These newly invented unique recipes will not compromise the quality and will be made of sustainable materials. 1.2. Protection from Competitors To gain a competitive advantage, the company will focus on expanding their business and increase its market share. Use of renewable resources will also differentiate the business to some extent. Majority of competitors tend to use plastic materials for their packaging. KFC will use edible coffee cups which will generate less waste and will confirm to be environment healthy (Tsai, Shih and Chen, 2007). It will develop new food products with great taste and value and also at the same time maintain health standards which will satisfy the expectations of the health concerned people too (Sivadas and Baker-Prewitt, 2000). The price of the new products will be reasonable and competitive with other neighbouring restaurants offering chicken menu. Also by offering unique introductory discounts, the new franchise will be able to gain large customers attraction. Variety in their healthy food choices, free home delivery and introducing a new selling concept such as having buffet style where the customers gets the option to choose the food from the shelves and make orders are brilliant strategies to achieve protection from competitors (Alon, 2001). 1.3. Competitive Advantage of the Product KFC will focus on how its target consumers accept and like it’s newly launched products. As the franchise of the company will be set up in a posh area it will target the upper and middle classes (Qin, Prybutok and Zhao, 2010). There is a variety in their new product range, serving to be an important advantage of the products. Their products are as per the quality standards and derived from sustainable resources. The packaging of the products will be done in an environment friendly way to come through the competitive market. Moreover, a wide range of new healthy food options will help them to gain competitive advantage as most fast food chains offer food containing a lot of calories and oil which is unhealthy for people. They aim to portray themselves as the most healthy fast food chain will help their products gain long term competitive advantage (Sun, 2009). 2. Marketing Research 2.1. Analysis of Customers’ Questionnaires For analysis of future growth and acceptability of the products by the local residents, a questionnaire was set up and according to that the analysis was done. A sample size of 50 people was taken and random sampling regarding the questionnaire was done. The targeted people for answering the questionnaire were the local respondents residing in the closer areas where the franchise of KFC is to be set up (Barratt and Oliveira, 2001). To analyze perception of people about their food products and the newly set franchisee, the information gathered from the questionnaire was helpful. As per the analysis, it was found that there are more people in the age range of 17 to 22 who prefer having fast food on regular basis. Therefore, the products should be invented focussing on youth. As per gender, there were more males than females in the area where the new franchise is to be set up. Among the given options in the questionnaire, the hamburger was the most preferred fast food service the locals asked for. Pizza was the major fast food services available in the area. As per the information derived from the questionnaire 30 people preferred buying carbonated beverages along with their food and they preferred having fast food between 6pm to 10pm. By analysing the results of the questionnaire it can be stated that most of the respondents prefer having fast food once in a month and a large number of people were willing to pay £15 to £50 in a month for their fast food. When asked to them whether they would prefer buying food from their newly set franchise, most of them gave a positive response. As per the information, most of the respondents reside within half a mile from where the new franchise is to be set up. As per the analysis, strategies could be implemented delivering best services to the local respondents (Stier, 2004). 2.2. Analysis of Market Share Analysis of KFCs market share can be done through primary surveys and vendor consultations along with some secondary research such as public financial revelation, industry business association material and government data. By analyzing annual business, volume in number of transactions will let the company to analyze their market growth rate (Knutson, Beck and Elsworth, 2006). KFC can check on its overall sales over the period and divide it by total sales of the industry over the same period, in order to get an idea of the size of the company’s market share. 2.3. Potential Market Growth The mangers of the company can make attempts to stretch the brand for letting the customers see KFC as an element of their local community and restaurants offering various traditional dishes that appeal the local customers. The company can focus on adding variety of food and introduce the country’s traditional flavours in their products from time to time for encouraging repeated visits of consumers (Paswan and Sharma, 2004). As the food chain will offer healthy choices to their consumers, it has the potential to gain preference of a wide range of customers as they will find the food of KFC is healthier than other fast food chains in the country without compromising its taste. This will enhance the market growth of the newly set franchise as the time passes. 2.4. System for Monitoring Growth Growth can also be monitored by changes in the demand level of their products among consumers. When the penetration of their food products with reasonable price will increase in the high income markets, the franchise will appear as a means of providing greater access to bigger segments of the population and therefore improving the demand of its products. Increasing demands will monitor increasing growth in penetration (Fearne and Hughes, 2000). KFC will regularly introduce updates of their new promotions on their facebook page as the hyper connected states possess high mobile and internet penetration rates and millions of active facebook users. 2.5. Anticipate Changes in Demand With time, the demand of products is bound to change and therefore time is an important factor to force the changes in demand. Market research serves to be an important tool which will effectively find out the variation in demand (Barratt and Oliveira, 2001). KFC can investigate the market trends in the fast food sector for anticipating the changes in demand of their food products. By predicting these changes, the company can get its pricing decisions right. Some economic factors like flourishing economy of the country will mean that people possess more disposable income. With additional money in their pockets, the demand for the products of KFC will increase in future (Knutson, Beck and Elsworth, 2006). Some social factors like changes in the social trends will affect the purchasing patterns. If people are rich, with busy lives they will not get enough time to cook so there will be an increasing demand of the ready and healthy meals offered by KFC. 3. Processes 3.1. Information Flow The marketing department of KFC will create awareness and facilitate efficient flow of information to the higher authorities. This department will provide information regarding the marketing position of the company, its market share and will provide suggestion to them regarding future improvement (Grünhagen and Dorsch, 2003). Advertising is the way through which KFC will communicate the nature of its product and services or ideas to its target consumers. They will do it through identified sponsors via different media. 3.2. Equipment Essential for Efficiency The new franchise can bring to use depreciation equipment, shops, newly designed furniture’s and decorations by keeping the joint costs equally reduced. Refrigeration equipment that will help keep their fresh chicken at optimum freezing temperature can be attached (Carlbäck, 2008). An innovative device can be attached to the refrigeration coils to increase the efficiency of the equipment. Steps can be initiated in order to refine both the amount of lighting for providing substantial energy savings and developing the look of the dining rooms of KFC. 3.3. Quality Control KFC can cook their food at the minimum temperature as per the recommendation of World Health Organization. They can develop a standard method that will help in reducing the risk of cross contamination between raw and cooked products. For frying their products, they can use non hydrogenated palm oil which contains fewer amounts of transfat and is cholesterol free. The supply of their raw materials can be from highly sustainable resources (Liu, Bhattacharyya, Sclove, Chen and Lattyak, 2001). To ensure high quality, KFC can maintain cleanliness, produce quality food and guarantee speed of service. 4. Personnel 4.1. Curriculum Vitae Henry Steves Position: Sole owner Qualifications: MBA, Information Systems Skills: Supervising shifts, maintaining food safety, workplace health and safety, financial and operational accounting, interaction management and recipe improvisation. 4.2. Organizational Chart Figure 1: Organization Chart of KFC As per the organization chart of KFC, at the basic level there will be maintenance technicians, customer service personnel, food service personnel, counter person, fast food team member, training team member and refrigeration team members. At the above level will be the team members of unit managers, assistant unit managers and shift managers. Above them will be the assistant general manager and at the top position of the company there will be a general manager (Kalnins, 2004). 4.3. Role of Management The general manager’s role will be to manage the franchise in accordance to the company’s policies and directing the tasks of the workforce in maximizing profit and efficiency. The assistant general manager’s task will be to ensure that the operation systems are implemented correctly (Mikkola, 2008). The shift manager will be responsible for ensuring that the procedures are implemented accurately for protecting safety of employees. The unit manager’s role will be to ensure that the customers’ expectations are met and if any training is required among their employees. The team members will ensure that the quality standards are met, service delivery is efficient and the food is cooked as per the quality standards (Mikkola, 2008). 4.4. Training Needs The training requirements will be designed and facilitated by the internal and external professionals in order to ensure that all the employees of the company gain the abilities for operating successfully in the new franchise. The company can provide training on leadership development, in the areas of culture, communication management, food safety management and monetary and operations book-keeping systems (Fava Neves, Zuurbier and Cortez Campomar, 2001). 5. Action Plan Action Plan Action By when Acquire equipment May 2015 Product development June 2015 Implementing protective strategy July 2015 Analysis of customers questions September 2015 Ensuring quality control and efficiency of equipment January 2016 Analysis of market share March 2016 Monitoring growth in penetration April 2016 Analyze potential growth market June 2016 Reference List Alon, I., 2001. The Use of Franchising by US‐Based Retailers. Journal of Small Business Management, 39(2), pp. 111-122. Bailey, K. and Francis, M., 2008. Managing information flows for improved value chain performance. International Journal of Production Economics, 111(1), pp. 2-12. Barratt, M. and Oliveira, A., 2001. Exploring the experiences of collaborative planning initiatives. International Journal of Physical Distribution & Logistics Management, 31(4), pp. 266-289. Carlbäck, M., 2008. Are the chain operations simply with it?: Five aspects meal model as a development tool for chain operations/franchise organizations.Journal of Foodservice, 19(1), pp. 74-79. Fava Neves, M., Zuurbier, P. and Cortez Campomar, M., 2001. A model for the distribution channels planning process. Journal of Business & Industrial Marketing, 16(7), pp. 518-539. Fearne, A. and Hughes, D., 2000. Success factors in the fresh produce supply chain: insights from the UK. British Food Journal, 102(10), pp. 760-772. Grünhagen, M. and Dorsch, M. J., 2003. Does the franchisor provide value to franchisees? Past, current, and future value assessments of two franchisee types. Journal of Small Business Management, 41(4), pp. 366-384. Kalnins, A., 2004. An empirical analysis of territorial encroachment within franchised and company-owned branded chains. Marketing Science, 23(4), pp. 476-489. Knutson, B., Beck, J. and Elsworth, J., 2006. The two dimensions of restaurant selection important to the mature market. Journal of Hospitality & Leisure Marketing, 14(3), pp. 35-47. Lafontaine, F. and Shaw, K. L., 2005. Targeting managerial control: evidence from franchising. RAND Journal of Economics, 4(1), pp. 131-150. Liu, L. M., Bhattacharyya, S., Sclove, S. L., Chen, R. and Lattyak, W. J., 2001. Data mining on time series: an illustration using fast-food restaurant franchise data. Computational Statistics & Data Analysis, 37(4), pp. 455-476. Mikkola, M., 2008. Coordinative structures and development of food supply chains. British Food Journal, 110(2), pp. 189-205. Paswan, A. K. and Sharma, D., 2004. Brand-country of origin (COO) knowledge and COO image: investigation in an emerging franchise market. Journal of Product & Brand Management, 13(3), pp. 144-155. Qin, H., Prybutok, V. R. and Zhao, Q., 2010. Perceived service quality in fast-food restaurants: empirical evidence from China. International Journal of Quality & Reliability Management, 27(4), pp. 424-437. Sivadas, E. and Baker-Prewitt, J. L., 2000. An examination of the relationship between service quality, customer satisfaction, and store loyalty. International Journal of Retail & Distribution Management, 28(2), pp. 73-82. Stier, R. F., 2004. Tests to monitor quality of deep‐frying fats and oils. European journal of lipid science and technology, 106(11), pp. 766-771. Sun, S., 2009. An analysis on the conditions and methods of market segmentation. International Journal of Business and Management, 4(2), p. 63. Tsai, M. C., Shih, K. H. and Chen, J. C., 2007. A comparison of the service quality of fast food chain franchises. International Journal of Services and Standards, 3(2), pp. 222-238. Read More