Write a business report on the 'Kentucky Fried Chicken Corporation (KFC)', one of the world's largest chicken restaurant chain. Include SWOT analysis and Industry & Competition analysis.

3747 Words Jan 28th, 2004 15 Pages
SWOT Analysis ¡V KFC's Resource Strengths and Weaknesses and its External Opportunities and Threats

In evaluating how well a company's present strategy is working, a proper understanding of the company's resource capabilities and deficiencies, its market opportunities, and the external threats to its future is essential. The really valuable part of SWOT analysis is understanding and evaluating the strengths, weaknesses, opportunities, and threats and drawing conclusions whether a firm's business position is fundamentally healthy or unhealthy. In a nutshell, SWOT analysis is a basis for action.

KFC, being one of the world's most recognizable brands, has its own internal strengths and weaknesses and external opportunities and threats,
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This was a result of low unemployment, since U.S. economy began to expand during early 1980s through 2000. Such environment is again an external threat for KFC's profitability. Also, the labor costs made up about 30 percent of a fast-food chain's total costs. Mounting competition made it difficult to increase prices, since consumers made decisions about where to eat primarily based on price. Such labor costs and increasing intensity of competition among industry rivals which squeezed profit margins posed external threat to KFC's profitability. However, the demographic trends offered KFC with a potential opportunity by which costs could be lowered and operations made more efficient by increasing the use of technology. 'According to the National Restaurant Association, most restaurant operators viewed computers as their number one tool for improving efficiency' (Krug 2001, cited in Thompson and Strickland 2003, p. C-213). Hence, computers which could improve labor scheduling, accounting and payroll can be identified as KFC's external market opportunity which is a big factor in shaping the company's strategy. However, higher costs and poor availability of prime real estate was one of the adverse demographic change that negatively affected profitability of such fast-food chains and hence posed an external threat.

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