Hence, price-quality combinations offered by substitutes may tend to motivate customers to shift, especially with increasing health concerns. Supplier concentration In Fast food industry there are lots of suppliers available as the raw materials needed for the end products are widely available across Pakistan.
So, they do not have to monitor all the firms for their actions and they can make moves without the risk of severe retaliation. This makes rivals to operate for single goal of profitability and hence their actions are not destructive for existing rivals. The rivalry overall remains moderate. Moreover, it is the most experienced firm in chicken production.
Same is the case with KFC; the substitutes available have low price, comparable quality and long expiry life than the products of KFC. Diverse competitors and high strategic stakes There exist diverse competitors in the fast food industry as it consists of local franchises to huge multinationals.
However, most products already exist in the market and so anything provided by the entrant would have to be well differentiated to motivate customers to pay the high price.
Becoming A Global Citizen: Therefore, as the differentiation itself, the bargaining power also remains moderate. However, few large players that compete against each other have resources for vigorous retaliation when some close competitor makes an important move.
Therefore, the capital for entering the industry is a barrier to entry and poses a threat to new comers. Hence, the customer buying power is low unless a major action of the company causes distress to a group of buyers like the incident of opera coupons, where the customers got upset by the non-functioning of the coupons and KFC has to reimburse them along with a public apology.
Rivalry in fast food industry can be measured by analyzing the following: Therefore, there is not a high threat to entry into the industry. Social If we try to search about the social issues that concern these fast food chains the most then three top most would be paying workers on the minimum wages, unethical treatment of animals and luring children to their food.
Therefore, entry is not highly difficult, and new firms can enter the industry making the competition fierce and increasing the threat of entry.
Hence, industry analysis is carried out by taking the industry to be fast food franchise. Storage costs are also high due to expiry and quality issues.
Firms can easily switch suppliers. Although, when food products are produced at large scale economies of scale occur as fixed cost is spread over large volume of products, however, due to the nature of the industry products these economies are constrained by the volume of sales. Therefore, there is increased pressure of substitutes because customers can easily switch from products on the basis of low prices.
Similarly, for its close competitors the costs are similar, as they are about equal in scale, size and operations. Also, range of products at different prices is available. However, economic effects will be negative and people will lose jobs. Its revenues are not dependent upon the buying power of a single customer.
Nutritionists have claimed that advertising of fast food should be banned as of cigarettes as more people die of heart diseases every year than of lung cancer.
KFC has to rely solely on Pepsi for drinks because there is no other quality supplier except Coca-cola that is the major supplier to McDonalds.Introduction of Company KFC is the world largest and most well known chicken restaurant - KFC Pest Analysis introduction.
Every day, more than 12 million customers are served at KFC restaurants in countries and territories around the world. KFC operates more than 5, restaurants in the United States and more than 15, units around.
The political factors includes the government policies as KFC being a foreign company, but they have to obey the policies of the Government laid by the government of Pakistan, the country where the business activities are being carried out.
We will write a custom essay sample on KfC Pest Analysis specifically for you for only $ $/page. PESTEL/PEST Analysis of KFC. by adamkasi | Dec 19, | Companies It was initially named “Kentucky Fried Chicken” after the location from where it first started but later on it was changed to KFC, in order to eliminate the association of the restaurant with fried stuff.
They are selling essentially the same but in order to make people. Essays - largest database of quality sample essays and research papers on Kfc Pest Analysis In Pakistan.
Kentucky Fried Chicken had PESTEL (Political, Economical, Social, Technological, Environmental, and Legal) analysis that can change their International Business strategy. POLITICAL Kentucky Fried Chicken provides the fast-food service. The SWOT analysis of KFC talks about the major contributing factors in the success of the brand and the weaknesses and opportunities which are existing.
Although KFC is known for its finger licking Chickens menu but recently they ventured out in Vegetarian category which is helping them in increasing their business.Download