The market environment or business environment is a marketing term and refers to factors and forces that affect a firm's ability to build and maintain successful customer relationships.The business environment has been defined as "the totality of physical and social factors that are taken directly into consideration in the decision-making behaviour of individuals in the organisation." Making this a business point many fast food centres are arising in the market, were the food is served in minutes. create the successful business that McDonalds has created, there is an excellent foundation of planning, organizing, leading and controlling. Only one country has taken initiative and has stopped buying from this Paper Company but KFC as a whole needs to realize the gravity of the situation and respond immediately to it. 90% of our restaurant team members are under 25, so building confidence in young Aussies everywhere is a cause that's pretty close to our heart. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Children are the most innocent of all mankind and advertising to them, luring them through play areas and toys and showing tempting pictures of food, without mentioning the side effects is as much a crime as killing innocent people. This resulted in the company entering new markets where it had no presence before. Market Development (Existing product and new market). Due to recession the income of the KFC has consistently dropped down and most of the employees were jobless and the rest employees were employed for very few hours also the organisation had to cut down their budget. This content was COPIED from - View the original, and get the already-completed solution here! Bases on this concept many fast food centres came into existence like KFC, Burger king, pizza huts etc., among many fast food centres Kentucky fried chicken shortly known as KFC has taken its great advantage and maintained to be the top in the present market. Market penetration is the least risky way for a company to grow. While other fast foods serve as substitute to KFC, they can also serve as complements for fast foods as a whole. Company Registration No: 4964706. When KFC is made aware of the problem it is unforgiveable to continue to do business with APP. External Environment of KFC: aspects to consider for strategies . KFC Franchises Corporation was founded by Colonel Harland Sanders in 1890 thus named Kentucky Colonel. Market penetration (existing products and existing markets). Market penetration (existing markets, existing products): Market penetration occurs when a company enters/penetrates a market with current products. The suppliers like the buyers, have very little bargaining power. KFC ORGANISATIONAL ENVIRONMENT. It helps the management to have a complete understanding of the external or bigger environment prevalent in the region.It further facilitates the decision-making bodies to plan and devise the most appropriate strategies and goals; all of which shall hit the target in the given market scenario.Such a… You face six microenvironmental factors in your business activities, each made up of a self-contained microenvironment that stands alone but interacts with the others. Frozen food is not good for health and despite what so ever the standard they maintain. Study for free with our range of university lectures! From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. The work in environment is very friendly and a safe place to bring your family or love ones out to eat and enjoy a delicious meal that we provide them with. It has to disclose its financial position to them and include them in all the major investment decisions. 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. KFC secret recipe of 11 herbs and species. You can view samples of our professional work here. Diversification (new markets, new products): Virgin Cola, Virgin Megastores, Virgin Airlines, Virgin Telecommunications are examples of new products created by the Virgin Group of UK, to leverage the Virgin brand. As people are becoming more health conscious sales of this venture have been taking constant blows. With 18,000 outlets in over 115 countries, they naturally sell many products daily. It includes the cultural and demographic aspects of the external macro environment. The customers of KFC, especially as individual buyers, have almost no bargaining power because if only one customer threatens to no longer eat at KFC, the store is not going to lower its price because the cost of losing one customer is not very great. The paper company is linked to deforestation, which negatively impacts the health of the planet. Colonel Harland Sanders has motivated towards developing chicken franchising business and within no more time there were more than 600 franchises established in United States and Canada. The first time he sold his famous chicken was on a road side and gained popularity from there. KFC by considering the environmental factor has proved to be quite friendly towards environment where it uses the paper material for the food and services carrying instead of plastic to help in reducing the global warming though it cost very high for the organisation to adopt paper materials such as paper plates, paper boxes for food parcel, glasses and cups etc.. After his death the recipe for gravy was changed because it was too complicated for the standardization processes adopted for franchising. KFC (Kentucky Fried chicken) uses demographic segmentation to serve the market as per the customer needs & wants. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on then please: Our academic writing and marking services can help you! PESTEL Analysis is a strategic tool which has been utilized by the strategists and marketers to determine and analyze the external or Macro-environmental factors that could have positive and negative impact on Organization. To overcome and analyse these factors organisation can categories it in to PESTLE model which is considered as below. KFC is one of the biggest fast food companies in the world. After all they are the ones who interact with customers, keep them happy. The increasing manufacturing standards for food products have also impacted KFC businesses. All work is written to order. It is a publically listed company therefore it has some obligations to its investors as well. This articles will discuss the PESTEL or PEST analysis of KFC to perform analysis of external factors ( Political, Economic, Social, Technological, Environmental and Legal ) that have impact on the Organization. All these years, KFC has seen its own share of success and failures. While small neighbourhood restaurants generally have low barriers to entry, these are the barriers to entry for similar restaurant businesses to enter the fast-food chain market. KFC is committed to improving our sustainable footprint through green building initiatives like energy and water efficiency, packaging, food recovery and waste reduction and recycling. This is the era of technology and more and more people are becoming reliant on their mobile phones completely. Traditional United Kingdom dining, home-cooked meals, and grocery stores with ready-to-eat foods are also substitutes, as families could choose any one of these over fast food for a meal. Climate change would also render some products useless. This factor mainly deals with the government policies and procedures which is worked out through legislation and consists of all legal factors such as, Taxation policy on tax rates and incentives. As mentioned above, there are a few major competitors in the fast-food industry in United Kingdom for KFC, namely McDonald’s, Pizza Hut, Domino’s and Subway. The potential of the employees who come from different back grounds and work together in the KFC and customer trends and aspect which the KFC has to consider as per their needs and wants of the customer such as changes in lifestyles, Level of education, Value in society, Demographics (age, sex, race etc.,) and Change in consumer needs and wants. This paper company also employs underage children to a part of their workforce in order to pay fewer wages to them. The consumers of KFC are the young as well as young adults.It used to serve the same menu all around the world which means that it was using undifferentiated targeting strategy. The latest Technological methods that are used to serve the customer faster are such as digital screens, wireless headphones for the staff, cooking utensils. KFC Environmental Factors. This fast food chain started from Kentucky by a man called Colonel Sanders, whose picture we see in logo. The substitute products, in this case, would be burgers, pizza, and sandwiches. The SWOT is acronym for Strengths, Weakness, Opportunities and Threats. Retrieved December 18, 2015, from UK Essays:, Designed by Elegant Themes | Powered by WordPress. One spot showed a father and son bicycling home with 2 burgers and fries; another showed a father driving a van full of boisterous kids to 3 McDonald’s for milkshakes. Chains for its convenience and menu variety. Through this tool we can analyze an organization in strategic process. Very good environment. consists of the micro-environment and the macro-environment. Looking for a flexible role? A coalition of investors is calling on McDonald's, KFC, and other fast food suppliers to take swift action on climate change. Product development (existing markets, new products): A firm with a market for its current products might embark on a strategy of developing other products catering to the same market (although these new products need not be new to the market; the point is that the product is new to the company). Though they are competitors, their primary products differ greatly from each other, in that they sell, chicken, burgers and fries, pizzas, and sandwiches, respectively. Add Remove. To overcome and analyse these factors organisation can categories it in to PESTLE model which is considered as below. Answer See 2 answers. The KFC has to maintain the rules and regulations related to the hygiene factors such as like employee proper training regarding the food and safety, personal hygiene, clean work environment and proper use of the utensils. (Abraham, 2004). People relate it strongly with the chicken which is strength as well as a weakness for the company because when other fast food can diversify their menu to include items that are healthy, unique and add variety, KFC had to stick to its chicken as people mainly go there for it. These external factors influence the company marketing strategy in a great length.The external environment factors are uncontrollable and the company finds it hard to tackle with the external factors.The macro- environment consists of demographic factors, economic factors, natural forces, technology factors, political factors, and cultural factors.In the following ways, they affect business strategy. Retrieved December 17, 2015, from Abrahan solar:, Becoming A Global Citizen: Investigating KFC. Porter has developed the five forces in such a way that any organization or any market can be benefited or analyzed. First things first, if you are that big of an organization, operating in more than 100 countries in the world and having revenue of the size of a small country’s GDP then why don’t you treat your employees well by paying them their due share. KFC’s paper supplier is linked in many cases with deforestation, destruction of wildlife, and endangering the environment. Increase competition from local and international outlet. However, there are many factors that affect these four functions. We do so through ongoing efforts to save energy and water, recycle, purchase environmentally preferable products, and help raise awareness of environmental issues. In the early 1935 then the governor Ruby Laffoon made him a Kentucky Colonel.