Vrio for Kfc

This case analysis will be focused on the company QVC (Quality, Value, and Convenience). We will perform an analysis review, which, will provide a comprehensive insight into the company’s historical and current business structures, strategies and efficiencies in their operations. It will include a detailed SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) (Humphrey) and the primary activities of the Value Chain Analysis (Porter), to provide greater insight into the firms’ competitive advantage. These key concepts will be used to analyze QVC’s business model, define potential challenges and initiate a plan of execution. We will then recommend solutions

Conducting a value chain analysis provides a snapshot for identifying a firm’s relative competitive performance, core competencies, and for focusing on customer centric activities. Costco’s customer driven focus allows primary and support business activities to work in unity creating a stronger competitive advantage and thereby increasing profitability. Profitability and shareholder value rely on coordination of both sets of business activities to create a firm’s competitive advantage.

The first KFC was opened in Tiananmen Square, China 1987; it struggled as western food was unknown to the east. This was still a very conservative nation, not prepared for the “Fast Food” takeover. The restaurant did pretty well, but grew slowly. The Harvard business review, stated that “in 1992 the Chinese government granted foreign companies greater access to markets, KFC China’s managers gradually developed the blueprint that would transform the chain.” (Yums' China, 2017) Although they have done well for themselves they struggled, as growth was steady but slow and their customer base was shrinking. “In November 2016 Yum China Holdings, Inc. became a licensee of Yum brands in Mainland China; they have exclusive rights to KFC.” (Yums' China, 2017) Yum controls approximately 7,300 restaurants and more than 400,000 employees in more than 1, 100 cities. YUMS generated over $8bln in sales in 2015.

The case study is based on the Japanese themed restaurant Benihana (which is one of three different types of

Value Chain analysis evaluates each step business goes through from inception to finality. The goal is to maximize the value for the total cost. Costco's mission is to provide their members with quality goods and services at the lowest possible prices. The company’s mission, values and strategies suggest Costco uses a broad enterprise strategy which fits in the societal framework. To ensure employee motivation, Costco offers them a unique banquet of benefits. This include; paying health benefits for them, 50% higher wage, employee retention of over 90 percent, and maintaining employees even during recession periods (Costco, 2010). The Company’s strength is its primary value chains which split into two distinct functions: Demand fulfilment and Demand generation. Demand fulfilment includes input logistics, operations, and output logistics. Demand generation involves sales, marketing, and service department which breaks down into sub-tiers. Costco’s support activities include HRM, technology development, firm infrastructure and procurement. Costco’s weaknesses are difficult to pinpoint; one weakness is persistent low operating profit margins. Bigger profits can occur by not paying employee benefits and with demanding higher returns from their suppliers. The problem would be at what cost?  Costco receives cost advantages from value adding major (brand items) activities. However, it continues to experience a challenge

The basic principle in defining the value chain, according to Michael Porter (Porter, 1985), is that the activities include a variety of disaggregations from the below three perspectives. First, they have different economics, implying that these activities are functioning in different segments of the market. Second, even though the economics differentiation is not that evident, isolated activities should have a potential impact for it. Third, value-adding activities have significant input scale.

Value creation means increase the value of products, service and even business to meet the customers’ needs and requirements so that they can get competitive advantages. (Business Fundas, 2012) As we analyzed, fast food industry’s threat of new entrants is low and the availability of substitutes is high. It’s a fare market which the buyers have strong powers.

VRIN framework is the four criteria of sustainable competitive advantage. To identify a company’s competitive advantage, they must consider if their capabilities are valuable, rare, costly to imitate and nonsubstitutable.

Outbound logistics refers to physical distribution activities such as collecting, storing, and distributing products to buyers and involves (finished goods) warehousing, materials handling, network planning and management, order processing, and

Pizza hut is amongst the best fast food chains spread international. They offer wide varieties of pizza as well as include side dishes; salads, wings pasta, buffalo, breadsticks and garlic breads. Moreover pizza is founded in 1958 by two brothers Frank and Dan Carney in Wichita, Kansas and well-known as an American restaurant chain consist over 6000 pizza huts restaurants in the united states and have more 5600 branches in over 94 countries around the world. As the marketing strategy is based on customers centric, customers are being provided the best services, helpful services and create a pleasant atmosphere so as they come back again, as it is believes Pizza Hut make the perfect pizza with extra ordinary menu. Thus the business has adopted value chain activities to operate in a specific industry, by transforming inputs into outputs that value the customers. Customers’ value consists of concept abilities to differentiate products, lower cost and able to respond the demand of customers. Michael Porter was the first introduced the concept of value chain analysis in 1985 and this approach will develop competitive advantage.

KFC is a fast food restaurant chain that specializes in fried chicken and is headquartered in Louisville, Kentucky, in the United States. KFC was founded by Harland Sander in year 1930 and went on to franchising in 1952.

KFC Does two types of planning, Strategic Planning and Operational Planning. Strategic Planning is done to increase its market worth value of the market share and Operational Planning includes launching of new product to change or innovate its product line for the customers. Planning objectives of KFC are to expand the organization on all over the UAE, to create and build superior quality for the customers, to follow marketing mix strategies and to generate superior financial return for KFC and KFC’s employees. Menu planning is done by researching. Supply chain management planning includes the full process related to the supply of raw materials which include chicken, spices and packing material and to increase operation, the objectives of supply chain management planning is to increase the level of outsourcing, increase globalization, increase the supply, increase the competitive pressure and increase the customers.The KFC mission statement is to “sell food in a fast, friendly environment that appeals to pride conscious, health minded consumers”.

Kentucky Fried Chicken (KFC) is a popular fast food chicken restaurant chain around the world. (Bell, Shelman, 2011) It is one of the subsidiary of Yum Brand. This company also operates the Pizza Hut and Taco Bell. (Yum! Brands, Inc, 2016) KFC was founded by Harland Sanders in 1952. (Bell, Shelman, 2011) Sanders was successful in creating the brand, even the logo of KFC brand is the portrait of him. He became a notable figure in American history thanks to his great contribution on creating KFC brand. Nowadays, KFC becomes more and more popular, the sales ranking of KFC was the 11th among the worldwide restaurant brands. (The QSR 50, 2015) The sales of KFC in 2014 was 4200 million dollars. (Details in Appendix 1) It means KFC has a large quantities of consumption needs. Actually, KFC has 14,577 restaurants around the world and 70% of them are located outside America (Yum Brand Annual Report, 2015). The restaurant profit was increased year by year from 2013 to 2015. (Details in Appendix 2) Therefore, it is potential to enlarge the customer base by analyzing consumer behaviors.

The value chain analysis (shown in appendix) was also generated by Michael Porter. This model is referred to “identifying ways to increase the efficiency of the chain” (Investopedia, n.d.). Furthermore, the overall objective is to produce maximum value with minimum total cost and establish a competitive advantage.

Providing customers with the best of both worlds: west meets east. In addition to its radical strategic approach of localization with regard to its food, they extended that viewpoint when selecting their management team. By hiring Chinese executives, Yum! Brands is able to build relationships with the local suppliers more easily and quickly. It definitely helps with their competitive advantage that chicken is a staple meat in China. Given these factors, it is clear that KFC has a competitive advantage in this market. However, taking a closer look at the industry and thinking longer-term, the competitiveness is undesirable but there is still potential to improve profitability. See the analysis