Keywords: kfc porters five, value chain kfc, information system kfc
Introduction
To analyse the impact of information management within KFC, it's important to understand and apply various ideas. This article will begin through the use of the five force models set up by to KFC's competitive position in the relevant market. This will help in identifying KFC's influence and strategy in the market place, whilst acknowledging the constraints to the theory. Next the worthiness chain model theorised by will determine how KFC's organisational framework aids in adding value to its various activities. Hence, these models determine the insight of computer management that is required to satisfy KFC's requirements, to be able to compete against its competitors over an extended period of time. Finally the utilization of ICT within KFC's management will be talked about to determine the competitive benefit that is achieved and defended using the Strategic thrust model that has been advanced by Whilst talking about the current uses of it within KFC, the article will conclude by recommending improvements to information management procedures, which could enhance the organisation's efficiency and competitiveness.
2. Five Forces Model
is an important tool in analysing an organisation, such as KFC. This tool aids in evaluating the success of its current and future products. Hence, partly, it helps to ascertain strategic functions especially in a competitive industry. The Five Pushes can be summarised the following.
- Competitive rivalries within the marketplace place
- Bargaining power of customers
- Bargaining capabilities of suppliers
- Threat of substitution
- Threat of new competitors getting into the industry
KFC
"KFC is a multinational company that provides fast food to 12 million customers in 109 countries. Kentucky Fried Fowl was formerly founded in 1930 and changed its name in 1952. Globally, KFC is positioned amongst the most notable 10 fast food restaurants in the world and has an internationally total annual turnover of $11 billion. Although KFC has performed extraordinarily well over a sustained period of time, the franchise ranks behind McDonalds and Fowl Cottage, Burger King, which illustrates that the industry is competitive. "
The JUNK FOOD industry is within a competitive market especially in the UK. KFC has numerous branches within the united kingdom and the branch situated in Southall will be analysed. Southall is located in West London and it is a vibrant commercial area. KFC provide a diverse range of products which range from chicken, to salads, which increases their scope on the market place.
Competitive Rivalry:
KFC have a variety of fierce competitors through this industry with the marketplace share being distributed. KFC's direct rivals in Southall are McDonalds, Chicken breast Cottage, Burger King as well as the Fried and Barbeque grill. Creativity and competitive prices become the center point for KFC in their strategy. However, any competition based mostly entirely on price can be dangerous within an Oligopoly market, as reactions from competitors will tend to be swift and can trigger a price conflict. There is an understanding within the industry to not be competitive on price.
The indirect competitors to KFC are Subway and Pizza hut. These fast food branches bring about the necessity for KFC to innovate and diversify their product range, in order to negate the effect that their indirect rivals have about them.
KFC's innovations including the great buy bucket have made certain that customers are given with diverse products to differentiate them from their main rivals. Also, the utilization of information management systems to connect secret formulas (old or new) and intellectual property protection under the law to the Southall branch from head office ensures efficiency and success.
Bargaining powers of Customers:
The bargaining power of customers is determined by a range of factors and also will depend on the product range.
KFC's customers are likely to be consumers i. e. households or individuals. Customers are likely to change tastes over increase of price. Also, since there exists fierce competition, this provides customers with choices and gives the impression of strong bargaining electric power.
However, KFC is globally recognisable and face to face relationship with customers raises brand devotion. KFC's slogan "finger licking fowl" sums up their identity and uniqueness. Also the diverse selection of products means that there is a decreased opportunity for substitutability, which weakens bargaining electric power.
Bargaining Position of Suppliers:
KFC's use of economies of size to buy their raw materials enhances dependency of the suppliers on them. Hence, suppliers get a good proportion with their business from KFC and must remain loyal also to offer the best possible deal to wthhold the junk food restaurant as their customers. This reduces the bargaining electricity of customers.
However, your competition in Southall is fierce with limited range of suppliers in the region. KFC can cover the delivery costs from other areas of the united kingdom, which allows it to weaken the bargaining position of its suppliers in the neighborhood area. Plus, the franchise would require quality raw materials to maintain the typical and trustworthiness of its brand.
Threats of new entrants:
KFC have a large market share in Southall, which is achieved through reliable information management of their accounts, products, suppliers and marketing. This enables those to streamline their procedures and to maximise their profitability.
Also, brand image and marketing permits KFC to increase brand devotion amongst customers, which creates difficultly for new companies to enter into the market place. KFC's logo design is shielded by intellectual property protection under the law and this inhibits other companies replicating or keeping an identical name or slogan. Already the marketplace for junk food is saturated, which diminishes the opportunities to enter in the marketplace.
All these factors prevent new entrants stepping into the marketplace place. Despite this, there are smaller companies that can enter into the market and provide lower prices.
Threats of Substitutes:
The substitutability from KFC products to other products is determined through market research, which is conducted every year by the company.
KFC have varied their product range, which enables them to regulate the transition in one product to another. This is evidently obvious from the change from fast food to much healthier food i. e. the benefits of salads and reduction in salt in their food.
Current trends suggest that customers within the united kingdom have become more health conscious and KFC have responded consequently by increasing their product range.
Despite this, there remains a risk that customers changes in one product to some other i. e. from chicken to pizza, nevertheless the charges for this that occurs remain high. Instead the threat of substituting similar products remains the largest danger, because of the high level of competition.
3. Value Chain Model
The Value String Model was created by which is a conceptual tool used to boost profitability through proper planning. Porter states that competition of any company is not solely dependent on bettering sub functions.
Value chain analyses the levels of a competitive strategy. This permits an organisation to comprehend its activities and also to build each level of the value chain in the most effective way. The value string assists in understanding behavior of costs and resources of differentiation.
KFC market Analyze by Location
For KFC to efficiently develop in the fast food market, they need to add value with their activities. This is achieved through improving products, training personnel, looking after customers and bargaining with suppliers. KFC creates value through procedures, which are divided into interrelated economic activities and these add value to the company. Also, KFC conducts other related pursuits like creation, marketing and advertising, which creates a value chain. These activities assist in managing the company, thus setting up a chain.
A competitive strategy is important for the continued lifestyle and development of KFC, especially within Southall, where competition is fierce.
Southall is busy industrial area situated in Western London. This area is populated by 90% of Asians and bulk are muslim. Just lately KFC introduced new products and services into geographic and demographic areas. The product launched by KFC indiscriminately targets all age groups. KFC have a recognisable brand image and the price of their products are affordable.
The company divides into two dissimilar value activities process.
- Primary activities.
- Support activities.
Primary activities are worried with production
- Inbound logistics
- Outbound logistics
- Operations
- Marketing and sales
- Service
The Support activities are the inside activities of the business, which include:
- Firm Infrastructure
- Human Source Management
- Technology Development
- Procurement
Both activities work together and add value that passes on the price tag on adding the product to the clients, hence resulting in a profit.
Primary Activities
Inbound Logistics: The head office or the branch in Southall use economies of range and its reputation to receive discounts for recycleables saving costs. Also the location of the branch in Southall enables easy access saving travel costs for the supplier, who's apt to be located locally, subject to quality assurance. There is a direct hyperlink between various products i. e. fowl and chicken breast burgers, meaning the same raw material can be used.
Outbound Logistics: KFC's completed product is maintained in a refrigerator, such that it can be cooked and dished up by staff using the gear within the branch. The info to cook the merchandise is provided by headquarters in substitution for royalty repayments. This links with personnel training and even infrastructure layout of every branch, which justifies the prices that are billed to customers.
Operations: The raw materials utilized by KFC are mixed together to make the completed product, which heightens its value i. e. spicy hen or combination meals. This links with differentiation and innovation to provide KFC with a competitive benefits.
Marketing and Sales: KFC have a number of methods for recording customer choices. The organisation comes with an internal procedure, where they analyse their sales figures for every product over the period of time to establish a style. Also, there is an external process where market research is carried out each year. This allows KFC to target specific progressive products to specific consumer sections through Tv marketing.
Service: KFC provide successful customer service to include value to the company. This requires detailed personnel training, development and providing the right equipment for the branch in Southall. Also, the branch provides a unique facility for free delivery in the region. The infrastructure and control from head office needs to be honored rigorously. This permits KFC more overall flexibility on price, based on brand devotion, despite competition.
Cost advantage:
KFC aim to decrease charges for their products by utilizing the value chain. This commences with the primary activity of ordering recycleables i. e. materials from headquarters or from local sources at the best price possible. Since over 40% of customers/consumers are Muslims, it is essential to obtain supplies from the right source. The extra activity is procuring the order beforehand from head office or for Halal meats supplier making certain it complies with the Halal Food Power requirements. Also, KFC uses scientific developments to include value i. e. using streamlined creation operations to increase profit margins.
Infrastructure of KFC: (By interviewed)
- KFC eyesight for high quality products.
- Highly impressive and even design framework.
- All services under one roof.
- Trained & trained staff.
KFC's market strategy and development plan. The Infrastructure of KFC is exciting and charming all over the world. Ideal colour schemes, pleasurable lighting stores, comfortable sitting set up, trained staff and their proper department of work, skill interior beautiful, quick cooking process, special block for kids, etc. by survey
- Customer
- Place Order
- KFC Franchise principal activity Process: by surveyRaw Material
- AssembleWork in Progress
- Cook
- Deliver
Restaurant Supervisor KFC Franchise staff Infrastructure:
Kitchen Staff
Shift In Charge
Counter staff
Assistant Manager
Delivery man
Area Managers are sourced internally, which means you will need to earn this position in the business through promotion.
Support Activities
Human Tool Management:
"KFC's perspective is to keep up a world category organisation, which is accomplished through building people quality, creating commitment and motivating company efficiency. The role of HR is to recruit and work with operational staff. In addition they provide training for management and operational team by head office. KFC recruiting method is easy and they have online systems, where they may have all available vacancies by post, location or area". (Accessed time frame 26-11-10)
Technological Development:
Many companies use technology across the world to save cost and then for process management. KFC use information system to their advantage plus they have designed two types of systems. One can be an electronic check out system, which they use for sales functions and maintain daily sales record. The other can be an "Inventory Control System, " which is very beneficial and helps the franchise to formulate their strategy. The Inventory Control System is immediately integrated with KFC headquarters. KFC headquarters received sales records on a daily basis via the machine. The system is called "ARMS System". Also, the machine has important features installed, such as stocking information in relation to meals, cost of products, purchasing management e. t. c. KFC have an internet site. , where information in relation to all products and their nutrition value is provided in line with a health conscious society.
Procurement:
KFC headquarters have a homogeneous policy for all their franchises. The branch found in Southall is required to acquire all its raw material, cooking substances and equipment from KFC approved suppliers. KFC buy products in volume to control purchasing costs and offer brand from suppliers. KFC regularly review delivery, quality and cost from their suppliers to increase efficiency and streamline the process of procurement. KFC is immediately linked with their franchise and obtains orders for way to obtain raw material. The franchise in Southall can place purchases through Information system or by mobile.
4. KFC Information System
KFC have over recent years adopted and evolved their information system structure through streamlining their procedures and utilizing amendments in line with evolving requirements. KFC, as an company have utilised their information system for different operational processes. This assists in reducing the cost of raw materials and recruiting less working personnel. All the necessary information, such as supply string management, franchises or new campaign stores is area of the system. Also, KFC have a thorough online website, which assists in increasing business benefit. On the website there may be information in relation to upgrading prices, latest activities, campaigns, advertisements and comments from customers.
Recently, the Southall franchise has improved their information system software to include credit card payment facilities. This rises payment way for customers and allows the company to gather customers' information. This an innovation that KFC has followed to remain competitive in the market.
Also, Information system can be used to organise time management. Technology evolves each year and new technology will involve many communication system programs, which can be digital or by activities.
5. Competitive Advantage
Differentiation:
KFC have differentiated their manufacturing process to ensure that they maintain a competitive gain by using information system and also have created their own unique requirements, which is different of their main rivals. Key activity involves creating products that are unique. The strong distribution channels enable these to procure or produce within a short time and for reduced rates, relative to quality confidence. KFC have included with some aspects of its supply chain i. e. getting farms within the UK, which allows the organisation to regulate quality. This unifies produce across all the branches including Southall, thus justifying its prices and recognized consumer benefits. Creativity in new products requires maximising the use of technological improvements.
Innovation:
KFC services creativity is "Popcorn Variety Bucket Rooster, ITWIST with two flavours and All Stars Box Meals, " which creates an identity that can be differentiated off their main competitors.
Growth:
KFC is the largest worldwide junk food organisation and operates a globally successful business. The international expansion of KFC is recognised through the positioning of restaurants across 100 countries. KFC have 700 restaurants in UK together.
Cost:
KFC restaurants are well renowned for offering products at affordable prices, which web links along with efficiency and streamlining information management. Particularly, KFC are able to offer special bargains, which provide affordability and allow the organisation to compete with its rivals.
6. How can increase the IMS
By analyzing KFC's information management systems in the framework of the existing market, it is clear that there is room for improvement. The marketing strategy i. e. advertising, planning and course is currently insufficient to compete with the likes of McDonalds and Pizza Hut. KFC should introduce more promotional materials i. e. reward credit cards for customers, which has been used by other fast food resturants. Additionally, KFC can expose coupons or souvenirs, which includes all customers' related information.
7. Conclusion
Overall it is clear that the five makes model, value string and proper thrust have been used by KFC to achieve a competitive advantages over its rivals. The theories help out with establishing the information management requirements for the company to operate successfully and effectively i. e. the use of the ARMs system. The five causes model allows KFC to analyse its competitive position within the junk food market and to formulate a competitive strategy to increase its influence in the market. It could be seen that for example KFC has strengthened its bargaining position with suppliers by integrating with some areas of its supply string. The value chain enables KFC to add value to its activities to justify the prices it charges customers and the recognized benefits. The principal and secondary activities web page link with one another to provide perception into how to increase efficiency within the value chain. The proper thrust has an perception into how KFC can differentiate itself and its own techniques from its competitors to gain a competitive advantages. Minimizing costs and providing unique products are the center point for distinguishing KFC in the fast food market by utilising its brand reputation. Information management systems such as effective communication between head office and the franchise in Southall allow analysis of online marketing strategy. Also the utilization of new technology, such as chip and pin systems have benefited the branch in the region of Southall, as more payment methods are covered. However, it is obvious that there is still room for improvement through using coupons and/or souvenirs to attract customers.
