Swot analysis of KFC. Kentucky Fried Chicken (KFC) is a US fast-food chain restaurant brand. Pete Harman and Colonel Harland Sanders laid the foundation of KFC on March 20, 1930. The headquarter of the company is at 1441 Gardiner Lane Louisville, Kentucky, USA.
Fried chicken, milkshakes, hamburgers, breakfast, chicken sandwiches, desserts, wraps, soft drinks, French fries, Kentucky grilled chicken, and salads are some of the major products and services of KFC. Yum! The brand is the parent brand of KFC.
KFC has a network of approximately more than 22,621 chains of hotels and restaurants in more than 150 countries worldwide. Approximately 24,000 people are working for the brand. The annual revenue of KFC was 2.6 billion dollars
Today, we’ll discuss the swot analysis of KFC. The swot analysis would help you to understand the strengths and weaknesses of the chain restaurant business. For macro-environmental factors, check out the pestle analysis of KFC. Here’s the swot analysis of KFC as follows;
Strengths of KFC
According to the ranking by Forbes, the brand value of KFC in 2020 was 8.3 billion dollars and it was the 96th world’s most valuable brand in 2020. In the fast-food and hotel and restaurant business, KFC is indeed one of the world’s leading brands.
KFC has a special recipe to make crunchy delicious and tasty chickens and the company has kept it a trade secret all these years. It comprises a specific amount of 11 spices and herbs and the public doesn’t know about the combination.
Loyal Database of Customers
The spicy crunchy and delicious chickens have attracted many people to KFC’s hotels. That’s how the brand has established a loyal database of customers worldwide. They always prefer to visit the company’s restaurants. The growth rates of the brand’s loyal customers have been increasing consistently.
The product portfolio of KFC comprises of diverse menu both for meat lovers and vegetarians. The company provides food items in such boxes where people could see the food. The menu includes family meals, signature combo, kid’s meal, hot wings, classical meal, popcorn nuggets, and many other items.
Lead over Competitors
The trade secret of the recipe has helped KFC to have a competitive edge over competitors. The brand has made exponential growth in the developing markets except for China.
High Growth Rate
KFC has established 22,621 chains of hotels in more than 150 countries across the world. The company plans to establish more in the upcoming future. It shows that the company has been growing consistently ever since its foundation.
KFC has been managing its chain franchises very effectively in more than 150 countries worldwide. The high numbers of franchises in different countries show the company’s strong presence in the global market.
Along with the famous delicious crunchy chickens, KFC also offers a vegetarian menu comprising of vegan food items. The way the young market is shifting towards the healthy food and diet control menu, the vegetarian menu provides the company with a competitive edge.
Weaknesses of KFC
Supply Chain Issues
Inconsistent supply of chicken at the hotels has been a major issue with KFC. It resulted in the form of shutting down some of the chains in the UK. The closing down of any franchise means a permanent loss of revenue to the company.
The logistic, marketing, and supply chain require a lot of resources. When a franchisee could deliver the product on time, it’s a failure of the business.
Franchisee not careful
If franchisees don’t maintain the quality standards and follow the operational procedures like they have a disagreement on the menu and other management issues. All of this falls back on the negative reputation of the parent brand, KFC. The company loses revenue consequently.
The company uses a lot of oil in the cooking of fried crunchy delicious chicken. Salty, oily, and sugary food items cause health issues like blood pressure and fats. The younger generation is very health and diet conscious. Now they want food that contains low-calories. The high calories fried chicken is not a plus point of KFC anymore.
Opportunities available to KFC
KFC has started offering vegan food items to the health conscious customer market. It’s an appreciative step of the company. The brand should add more vegan food items to the vegetarian menu just like many other competitors are offering. It would attract the non-meat lover customer market.
The priorities and demands of the customer market have become precise. For instance, they want better food with quality service at an economical price range. KFC should deliver the same product whatever the customers demand, it would attract customers.
The millennial customer market is saying no to the tasty oily food because it creates a lot of health issues later on. If KFC offers low-calories food to health-conscious customers, it would attract a lot of profit to the brand.
Some of the emerging markets like Russia, India, and China have got a huge customer market with a plethora of growing potential. The franchising business of KFC should exploit the opportunity in the emerging markets by opening up more chain franchises.
Threats KFC has to face
The waste management and scarcity of resources have increased operational costs like raw material and labor costs. The increasing operational cost leads towards rising retail price, and it impacts the overall sale of the company. Compliance with the law and regulations also increases the cost.
McDonald’s and Burger King are the major competitors KFC and their market growth rate poses a great threat to the business of KFC. Many other new and old brands offer unique items in their menu and they also attract the market share. Overall the competitive environment has made it difficult for KFC to remain profitable.
The franchising business model is very profitable as long as it works fine. Whenever franchisees make a poor business decision, it falls back on the parent brand. The word of mouth marketing in the world of social media spread even faster.
The pandemic of covid-19 has shut down all the chains hotels and restaurants of KFC and many other brands. Social distancing still continues. The government and the media are encouraging people to avoid public places. All of these things are jeopardizing the business of the brand.
After a careful study of the swot analysis of KFC, we have realized the KFC is indeed one of the world’s leading brands. The pandemic of covid-19, high-calorie oily food, and increasing cost are serious threats to the brand. KFC should capitalize its brand name and trade secret to avoid them.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.