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  • Internal Code :
  • Subject Code : MGT201
  • University :
  • Subject Name : Management

Strategic Management

Table of Contents

Introduction.

Driving force in the industry.

Three strategic actions for KFC Australia to combat any negative impact

KFC‘s competitive strategy.

Conclusion.

Reference.

Introduction to KFC Australia Assessment

KFC Australia was established in Australia in the year 1968, in Sydney. It has 650 restaurants and over 2 million customers (KFC Australia 2020). The company is offering service in delivery, pickup, and dine-in service in Australia. The average user base of the fast-food industry has increased with a jump in sales by 16% (Business new Australia, 2019). The company is employing over 34000 employees in its store service (KFC Australia 2020). KFC has been operational in the Australian retail chain market with its business capabilities and operations. Driving forces in the industry are essential for understanding the industry changes. Innovation, marketing, and social behavior impact communication and marketing and impact business operation. The brands face competition and industry substitute availability as a challenge. This report highlights the driving forces and company analysis of KFC Australia by understanding the impact on the business and strategic changes that can be adopted to decline the negative impact of driving forces.

Driving Force in The Industry

The industry conditional are not static and subject to change in the environment that determines business continuity and impact the company performance and management decisions (Harrison 2016).

  1. Emerging new technologies- The emerging new technology in the industry impact business operations. The use of online technology has taken a shift from brick and mortar to online click and pay shift (Harrison 2016). The use of internet technology in the digital payment system has increased customer knowledge power and research. Use of data analytics and performance operations.
  2. Increase in globalization- Increase in globalization has been facilitated by barriers of trade and tariff by the government. KFC is based out of the USA has successfully impacted the existing business environment and has been advantageous with globalization. The business player entry and use of resources available in the host country are favorable for Australia.
  • Innovation in communication, marketing, and rise of social media use – The impact of communication and marketing has been significant in the industry with the rise of social media marketing. The brands have created digital campaigns associated with the brand association on a more engaging partnership to stay top of the mind. The online presence of KFC has been strong and the rise of digital users will lead to new user growth in the company customer base (Forbes 2019)
  1. Manufacturing and product innovation- Product differentiation and unique selling point can deliver new market players and tough challenges for existing players to stay relevant (Wunder 2016). Design and product innovation in the industry is a high threat for the industry players. A new delivery service development and cause existing business to become unviable.
  2. Existing competition in the market- The industry has branded with a hungry jack, McDonald's, and subway. These brands offer quick meal options and provide fast food options. The consumer switching cost is high in the market with an available option on the basis of the food choice option, pricing location, and service parameter. KCF has increased store strength and promotional activities to stay competitive
  3. Availability of substitute -Restaurants and other eateries poses as threats to fast food joints. The threats of substitutes are high with product differentiation and substitute’s price value offered in Australia. The business environment has been dynamic with retail store operators have made changes to the menu for fast food options to attract customers
  • New product entry- The barrier to entry is high with large capital investment involved and a unique selling proposition required for the industry. A new brand presence can impact business profitability and market share. KFC has a first-mover advantage in the non-vegetarian food segment. KFC has a strong presence in the existing segment
  • Change in societal attitude and lifestyle- The average user base of the fast-food industry is its appeal to younger generation users. The change in societal attitude towards healthy food and lifestyle focused cut on fast food to shift for health salad and healthy lifestyle will potentially lower the product. This will lead to brand repositioning and re-product designing to retain the customer base resulting in customer drop. The recent advertisement regarding sexist comments is an example of a firm s brand message not taken well by the consumers and was duly removed. Customer sentiment has a high impact on rand decision making and value proportion.
  1. Regulatory and government intervention- Government intervention in societal welfare is critical. The regulatory body can change the industry approach and customer practice. The government penalty and tightening provisions can impact the business adversely (Wunder 2016). They can regulate control on work practice, quality standard, and regulatory company license on its operation. Australian government controls the food and regulatory procedures of the industry partner any deviation will result in a heavy fine to KFC (Fox news 2020).

Three strategic actions for KFC Australia to combat any negative impact.

The identified driving forces in the industry will impact the KFC current business with a rise in competition, current product variants, and change in consumer needs identified.

  1. Change in menu design to healthy – The meu design in the current KFC menu is predominantly focused on meals with indulgence on bread patty and chicken dish items. KFC should adopt to local healthy design in its boxed meal to increase reliance on consumer taste and preference for localization touch. The use of sandwiches, beacons, and new patty will add to product innovation to create a fresh menu look over competitors such as Hungry Jacks. This will add to the brand product line and new customer service options. The use of low carb options and the vegan option will diversify the brand into adding consumer base. Predominantly brands are non-vegetarian meals focused through its use of ingredients as optimize value brand can create a health design menu head with 4 variants as entirely in menu with salad option in chicken variant as not deep-fried. As a pilot runs for hyper pure and healthy variant can be encrypted in the menu with combo deals other than separate menu list designed.
  2. Marketing promotion- KFC has used the lines of finger-licking well with its adverts (Financial review 2020). The brand can use its promotional activities in diversity and new design segments for its structuring and value to the audience. The company can place the use of veggies in the burger as a highlight to diversify itself with healthy food and not necessarily cause adverse health. Similarly, brands can target families other than the youth appeal for an increase in sales. The sale by family’s average more than a young adult for the average meal purchase. The promotional mix has majorly targeted youth and no indicative focus on young families. Promotion through using media tool Instagram, twitter, and youtube with polls with using short videos and taglines in billboards as the offline channel will positively impact in changing consumer perception towards the brand. The brand promotional channel with using customer engagement will attract user visits and customer insights on the web search for the brand.
  3. Use of digital channel- The company has seen a push in digital sales in the year 2019 and a rise in online delivery. Australian consumers have adapted to online order service through food order applications. The lucrative option will help in marginal saving for the brand to use the model to increase accessibility and create an ecosystem for service. Accelerating on online sales through online delivery capabilities. The brands can remove focus from food aggregators for online delivery, this can result in payment 15-20% that is paid to food aggregators and consolidating business (Statista, 2020). Own service development has integration in enhancing service delivery and performance excellence. Consumer loyalty points, application design offers will help in retaining customers. Drive-thru, the takeaway will benefit will accelerate with consumer data and customization for consumers through relationship building. The distributional field through the digital channel will result in higher revenue with QSR sales in inbound channel distribution. The layout and design will strengthen the pickup and drive-thru service operation business line also. The development of application compass and promotions for the rebate will be central to push customers to use the application service. First user rebate, discount through app ordering scanning of QR code, and adding payment merchant will ease the company operations. The rise in digitalization will benefit the brand as mobile usage and delivery will beckon service in the area with their strong store presence across the Australian region. The adaptation with digital technology and design to use applications with customization will be a restart for the online facility provided by the application.

KFC‘s Competitive Strategy

The firm can gain its competitive advantage by offering a differentiation strategy where businesses focus on differentiation of their service and product from competitors. The target scope of the service is broad. The brand has competition from McDonald's, Red rooster & Hungry Jacks. KFC is Australia s second most profitable market. KFC emphasize on product quality and unique product feature for competing successfully. KFC has used a differentiation strategy across its consumer segment across a broad market with no specific age group. 

  • KFC has focused on the mass expansion of its store and ensuring service quality through fist mover advantage in drive-thru stores. The company has led an approach for operational improvement and transaction led sales growth with an increase in restaurant capacity across segment by 12.1% (Business new Australia 2019). It has outpaced itself with McDonald's in Australia. Its store presence has led to channeling operation capacity to effectiveness for driving business sales and customer touchpoints.
  • The company has launched the nachos box as per consumer demographic in the country with menu innovation. The brand has aimed to use the products that products for the segment which is price sensitive. KFC launched its digital drive-thru innovation in the delivery model (Financial review 2020). KFC opened a digital drive-through only restaurant to skip queues. The digital drive-thru will boost online ordering by making it easier for the customer to order or pay for reducing its operational cost in the country. The company has leveraged its design of food categories in fries. The gourmet trial store for food styling and taste exclusive design settings in Sydney.
  • Effective sales and marketing campaign has developed a brand stronghold in a competitive environment. The TV advertisement and brand promotion have kept the use of inclusiveness, product features "chicken wings". The food chain store has focused on good experience as a differentiator to enjoy meals to boost store sales. It has used southern-style hospitality experience for boosting dining and complimented with comfort. The" shut up take my money" and "FCK apology" to create image differentiator as a diversified brand apart from chicken served (Huff post 2018). The company has extensive target young audience light-hearted campaigns with Shut up take my money to create younger audience engagement fir good experience. The company has used youth culture to develop its presence in the market segment. The brand has used a dubbed KFC wedding for instore presence and response to people who plan the same in instore. The inclusive strategy in event marketing through telecasting cricket matches and wedding celebrant and photo booth engagement for it is developing to multiculturism in Australia other thereto change image (Franchise business 2019). The brand has focused on fresh food in its image and marketing to create a distinct image in the mind of the consumers as a sustainable brand unit

Conclusion on KFC Australia Assessment

From the above discussion, we can conclude that KFC driving force relates to the business environment that can impact the firm negatively. KFC has focused on the mass expansion of its store and ensuring service quality through fist mover advantage in drive-thru stores. The brand has expanded in Australia and its region accounts for its global sales as one of the highest. . The online delivery capability option that will help in marginal saving for the brand to use the model to increase in accessibility for customer retention. Government intervention and regulatory bodies can change the industry approach and customer practice that will be unfavorable for business. The competitive environment and consumer sentiments with lifestyle are growing and can threaten business expansion prospects for the company. Government penalty and tightening provisions can impact the business adversely. The food chain store has focused on quality services and good experience as a differentiator to boost store sales and digital capacity.

References for KFC Australia Assessment

Business News Australia. 2019. [Online]. Collins foods report strong growth boosted by KFC Available at https://www.businessnewsaus.com.au/articles/collins-foods-reports-strong-growth-boosted-by-kfc.html. [Accessed on September 6th, 2020].

Financial Review. 2020. [Online]. KFC launches a world-first digital drive-through-only outlet in Australia. Available at https://www.afr.com/companies/retail/kfc-launches-world-first-digital-drive-through-only-outlet-in-australia-20191118-p53bgn#:~:text=KFC%20Australia%20has%20opened%20a,the%20KFC%20app%20or%20website. [Accessed on September 6th, 2020].

Forbes. 2019. [Online]. A look at the menu innovation driving KFC global sales momentum. Available at https://www.forbes.com/sites/aliciakelso/2019/07/22/a-look-at-the-menu-innovation-driving-kfc-globals-sales-momentum/#1ff6d8be598b. [Accessed on September 6th, 2020].

Fox news. 2020. [Online]. KFC apologies for the sexist Australian ad. Available at https://www.foxnews.com/food-drink/kfc-apologizes-for-sexist-australian-ad. [Accessed on September 6th, 2020].

Franchise business. 2019. [Online]. Available at KFC weddings unveiled; Chicken chain announces catering service https://www.franchisebusiness.com.au/kfc-weddings/. [Accessed on September 6th, 2020].

Franchise business. 2020. [Online]. Hungry Jack fresh choice menu.Available at https://www.franchisebusiness.com.au/hungry-jacks-fresh-choices-menu/ Accessed on September 6th, 2020].

Harrison, A. 2016. Business environment in a global context. Oxford University Press: London, UK

Huff post. 2018. [Online]. KFC Says 'FCK' In Full-Page Ad Apologizing For Chicken Shortage. Available at https://www.huffingtonpost.in/entry/kfc-says-fck-in-full-page-ad-apologizing-for-chicken-shortage_n_5a9034b1e4b0ee6416a2adfb?ri18n=true [Accessed on September 6th, 2020].

KFC Australia. 2020. [Online]. Available at https://www.kfc.com.au/about-us. [Accessed on September 6th, 2020].

Statista. 2020. [Online]. Online food delivery. Available at https://www.statista.com/outlook/374/107/online-food-delivery/australia. [Accessed on September 6th, 2020].

Wunder, T. 2016. Essentials for strategic management. Schaffer Poeschel

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