Posted at 11.17.2018
To analyse the impact of information management within KFC, it's important to comprehend and apply various ideas. This essay will begin by applying the five power models set up by to KFC's competitive position in the relevant market. This will help in identifying KFC's influence and strategy on the market place, whilst acknowledging the limitations to the theory. Next the value string model theorised by will evaluate how KFC's organisational composition aids in adding value to its various activities. Hence, these models determine the input of computer management that's needed is to gratify KFC's requirements, to be able to compete against its competitors over a long time frame. Finally the utilization of ICT within KFC's management will be discussed to look for the competitive edge that is achieved and defended using the Strategic thrust model that is advanced by Whilst speaking about the existing uses of it within KFC, the essay will conclude by recommending advancements to information management routines, which could add to the organisations efficiency and competitiveness.
2. Five Causes Model
is an important tool in analysing an company, such as KFC. This tool facilitates in assessing the profitability of its current and future products. Hence, in part, it helps to determine strategic techniques especially in a competitive industry. The Five Makes can be summarised as follows.
Competitive rivalries within the market place
Bargaining power of customers
Bargaining forces of suppliers
Risk of substitution
Menace of new competitors going into the industry
KFC is a multinational organisation that provides fast food to 12 million customers in 109 countries. Kentucky Fried Poultry was formerly founded in 1930 and modified its name in 1952. Globally, KFC is placed amongst the very best 10 junk food restaurants on the globe 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 Chicken breast Cottage, Burger King, which illustrates that the industry is competitive.
The Fast Food industry is at 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 positioned in West London and it is a vibrant commercial area. KFC provide a diverse selection of products ranging from chicken breast, to salads, which heightens their scope in the market place.
KFC have a variety of fierce competitors in this industry with the marketplace share being distributed. KFC's direct rivals in Southall are McDonalds, Poultry Cottage, Burger King along with the Fried and Barbeque grill. Development and competitive prices end up being the center point for KFC in their strategy. However, any competition based exclusively on price can be dangerous in an Oligopoly market, as reactions from competitors will tend to be swift and can bring about a price warfare. There is an understanding within the industry to not be competitive on price.
The indirect rivals to KFC are Subway and Pizza hut. These junk food branches bring about the requirement for KFC to innovate and diversify their product range, to be able to negate the result that their indirect competitors have in it.
KFC's innovations such as the great deal bucket have ensured that customers are given with diverse products to differentiate them using their company main competitors. Also, the use of information management systems to connect secret meals (old or new) and intellectual property privileges to the Southall branch from headquarters ensures efficiency and profitability.
Bargaining powers of Customers:
The bargaining ability of customers depends upon a range of factors and also depends on the merchandise range.
KFC's customers will tend to be consumers i. e. individuals or individuals. Customers will probably change preferences over increase of price. Also, since there may be fierce competition, this gives customers with alternatives and provides the impression of strong bargaining power.
However, KFC is internationally recognisable and face to face connections with customers boosts brand commitment. KFC's slogan 'finger licking chicken' sums up their id and uniqueness. Also the diverse range of products means that there surely is a decreased range for substitutability, which weakens bargaining ability.
Bargaining Position of Suppliers:
KFC's use of economies of range to purchase their raw materials improves dependency of the suppliers with them. Hence, suppliers receive a good proportion with their business from KFC and must remain loyal and also to offer the best possible deal to retain the junk food restaurant as their customers. This reduces the bargaining ability of customers.
However, your competition in Southall is fierce with limited range of suppliers in the area. KFC is able to cover the delivery costs from other parts of the UK, which permits 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 reputation of its brand.
Threats of new entrants:
KFC have a sizable market show in Southall, which is achieved through effective information management with their accounts, products, suppliers and marketing. This enables them to streamline their operations and maximise their success.
Also, brand image and marketing allows KFC to increase brand commitment between customers, which creates difficultly for new companies to enter in the market place. KFC's emblem is secured by intellectual property protection under the law and this prevents other companies replicating or keeping an identical name or slogan. Already the market for fast food is saturated, which diminishes the opportunities to enter in the marketplace.
All these factors minimize the risk of new entrants joining the marketplace place. Not surprisingly, there are smaller companies that can enter into the market and offer lower prices.
Threats of Substitutes:
The substitutability from KFC products to other products is determined through market research, which is conducted each year by the organisation.
KFC have diversified their product range, which enables them to regulate the transition from one product to another. This is obviously evident from the changeover from junk food to much healthier food i. e. the release of salads and decrease in salt in their food.
Current trends claim that customers within the united kingdom are becoming more health mindful and KFC have responded accordingly by extending their product range.
Despite this, there remains a risk that customers changes in one product to some other i. e. from chicken breast to pizza, nevertheless the costs for this that occurs remain high. Instead the threat of substituting similar products remains the largest danger, due to the advanced of competition.
3. Value Chain Model
The Value Chain Model was launched by and is a conceptual tool used to boost profitability through strategic planning. Porter states that competition of the organisation is not only dependent on increasing sub functions.
Value string analyses the periods of the competitive strategy. This allows an organisation to understand its activities and build each stage of the value chain in the most effective way. The value string assists in understanding action of costs and resources of differentiation.
KFC market Analyze by Location
For KFC to effectively develop in the junk food market, they must add value to their activities. That is achieved through bettering products, training staff, looking after customers and bargaining with suppliers. KFC creates value through operations, 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 string. These activities assist in managing the company, thus setting up a chain.
A competitive strategy is crucial for the continuing existence and development of KFC, especially within Southall, where competition is fierce.
Southall is active industrial area situated in West London. This area is populated by 90% of Asians and majority are muslim. Recently KFC introduced new products and services into geographic and demographic areas. The merchandise created by KFC indiscriminately targets all age groups. KFC have a recognisable brand image and the price tag on their products are acceptable.
The organisation divides into two dissimilar value activities process.
Primary activities are worried with production
Marketing and sales
The Support activities will be the internal activities of the company, which include:
Human Resource Management
Both activities work together and add value that goes by on the price tag on adding the product to the clients, hence resulting in a profit.
Inbound Logistics: The headquarters or the branch in Southall use economies of scale and its reputation to get discounts for recycleables keeping costs. Also the positioning of the branch in Southall permits easy access saving travel charges for the supplier, who is likely to be located locally, at the mercy of quality assurance. There is a direct website link between various products i. e. poultry and fowl burgers, which means that the same natural material can be used.
Outbound Logistics: KFC's finished product is maintained in a fridge, such that it can be prepared and offered by staff using the gear within the branch. The info to cook the products is provided by headquarters in return for royalty repayments. This links with personnel training and uniform infrastructure layout of every branch, which justifies the costs that are billed to customers.
Operations: The recycleables utilized by KFC are merged together to help make the completed product, which raises its value i. e. spicy chicken breast or combination dishes. This links with differentiation and invention to provide KFC with a competitive advantages.
Marketing and Sales: KFC have a number of methods for saving customer preferences. The organisation comes with an internal method, where they analyse their sales statistics for each and every product on the period of time to determine a style. Also, there can be an external process where market research is completed each year. This enables KFC to target specific ground breaking products to specific consumer segments through Television marketing.
Service: KFC provide productive customer service to include value to the company. This requires in depth staff training, development and providing the right equipment for the branch in Southall. Also, the branch offers a unique facility for free delivery in the region. The infrastructure and control from headquarters should be honored rigorously. This permits KFC more versatility on price, based on brand loyalty, despite competition.
KFC aim to decrease costs for their products by putting into action the value chain. This starts with the principal activity of ordering raw materials i. e. substances from headquarters or from local options at the best price possible. Since over 40% of customers/consumers are Muslims, it is vital to obtain items from the right source. The extra activity is procuring the order in advance from headquarters or for Halal beef supplier making certain it complies with the Halal Food Specialist requirements. Also, KFC uses scientific developments to add value i. e. using streamlined production techniques 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 structure.
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 layout, trained staff and their proper section of work, art interior beautiful, fast cooking food process, special stop for kids, etc. by survey
KFC Franchise primary activity Process: by survey
KFC Franchise staff Infrastructure:
Human Source of information Management:
KFC's eye-sight is to maintain a world school company, which is gained through building people quality, creating commitment and motivating company effectiveness. The role of HR is to recruit and work with operational staff. They also provide training for management and functional team by head office. KFC recruiting method is easy and they have online systems, where they have got all available vacancies by post, location or area. (Accessed time frame 26-11-10)
Many companies use technology all over the world to save lots of cost and then for process management. KFC use information system with their advantage and they have incorporated two types of systems. One is an electronic check out system, that they use for sales procedures also to maintain daily sales statement. The other is an Inventory Control System, which is very beneficial and helps the franchise to formulate their strategy. The Inventory Control System is straight included with KFC headquarters. KFC headquarters received sales accounts on a daily basis via the system. The system is named Hands System. Also, the system has important features installed, such as stocking information with regards to dishes, cost of products, purchasing management e. t. c. KFC have an internet site, where information with regards to all products and their nutrition value is provided consistent with a health conscious society.
KFC headquarters have a standard policy for almost all their franchises. The branch situated in Southall is required to purchase all its natural material, cooking materials and equipment from KFC approved suppliers. KFC buy products in volume to control purchasing costs and offer series from suppliers. KFC regularly review delivery, quality and cost off their suppliers to increase efficiency and streamline the procedure of procurement. KFC is directly associated with their franchise and receives orders for supply of raw materials. The franchise in Southall can place orders through Information system or by cellphone.
4. KFC Information System
KFC have over recent years adopted and changed their information system composition through streamlining their procedures and employing amendments in line with evolving requirements. KFC, as an organisation have utilised their information system for different functional processes. This assists in reducing the cost of raw material and recruiting less working staff. All the necessary information, such as supply chain management, franchises or new campaign stores is part of the system. Also, KFC have a comprehensive online website, which helps in increasing business gain. On the website you can find information in relation to updating prices, latest activities, deals, advertisements and customer feedback.
Recently, the Southall franchise has upgraded their information system software to add credit card payment facilities. This raises payment way for customers and permits the company to gather customers information. This an development that KFC has implemented to remain competitive in the market.
Also, Information system can be used to organise time management. Technology evolves every year and new technology involves many communication system channels, which can be electronic or by actions.
5. Competitive Advantage
KFC have differentiated their developing process to ensure that they preserve a competitive benefit by using information system and also have created their own requirements, which is different using their company main rivals. Key activity requires creating products that are unique. The strong distribution channels enable those to procure or produce within a brief time and for marked down rates, in accordance with quality confidence. KFC have integrated with some aspects of its supply string i. e. owning 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. Advancement in services requires maximising the utilization of technological innovations.
KFC services technology is Popcorn Variety Bucket Hen, ITWIST with two flavours and All Stars Box Meal, which creates an identity that may be differentiated from their main rivals.
KFC is the greatest worldwide junk food organisation and runs a internationally successful business. The international development of KFC is recognised through the positioning of restaurants across 100 countries. KFC have 700 restaurants in UK by themselves.
KFC restaurants are well renowned for offering products at affordable prices, which links in with efficiency and streamlining information management. Particularly, KFC are able to offer special discounts, which provide affordability and enable the organisation to compete with its rivals.
6. How can enhance the IMS
By analyzing KFC's information management systems in the framework of the current market, it is clear that there is room for improvement. The marketing strategy i. e. advertising, planning and route is currently insufficient to compete with famous brands McDonalds and Pizza Hut. KFC should add more promotional materials i. e. praise cards for customers, which includes been used by other junk food resturants. On the other hand, KFC can create coupons or souvenirs, which contains all customers related information.
Overall it is clear that the five makes model, value chain and proper thrust have been employed by KFC to achieve a competitive advantages over its competitors. The theories help out with establishing the info management requirements for the organisation to operate effectively and effectively i. e. the utilization of the Hands system. The five pushes model permits KFC to analyse its competitive position within the fast food market and also to formulate a competitive technique to increase its affect on 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 string enables KFC to add value to its activities to justify the prices it charges customers and the identified benefits. The principal and extra activities web page link with one another to provide perception into how to increase efficiency within the value chain. The proper thrust has an understanding into how KFC is able to differentiate itself and its own functions from its rivals to get a competitive gain. Minimizing costs and providing unique products will be 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 marketing strategy. Also the use of new technology, such as chip and pin systems have benefited the branch in the area of Southall, as more repayment methods are covered. However, it is evident that there is still room for improvement through using coupons and/or souvenirs to attract customers.