SWOT analysis of KFC

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This is KFC (Kentucky Fried Chicken) SWOT analysis for 2013.

Company background

Name	KFC (Kentucky Fried Chicken)
Industries served	Restaurants
Geographic areas served	Worldwide
Headquarters	U.S.
Current CEO	Roger Eaton
Revenue	$ 9.5 billion (2012)
Profit	N/A
Employees	N/A
Parent	Yum! Brands
Main Competitors	McDonald’s Corporation, Burger King Worldwide Inc., Subway, Wendy’s Company.

KFC is a fast food restaurant chain, which specializes in fried chicken. It is the world's largest fried chicken chain with over 17,000 outlets in 105 countries and territories as of December 2011.
You can find more information about the business in its official website or Wikipedia’s article.

SWOT

KFC SWOT analysis 2013
Strengths	Weaknesses
1. Second best global brand in fast food industry in terms of value ($ 6 billion) 2. Original 11 herbs and spices recipe 3. Strong position in emerging China 4. Combination of KFC – Pizza Hut and KFC – Taco Bell 5. KFC is the market leader in the world among companies featuring chicken as their primary product offering	1. Untrustworthy suppliers 2. Negative publicity 3. Unhealthy food menu 4. High employee turnover 5. Lack of strong marketing efforts

Opportunities	Threats
1. Increasing demand for healthier food 2. Home meal delivery 3. Introducing new products to its only chicken range	1. Saturated fast food markets in the developed economies 2. Trend towards healthy eating 3. Local fast food restaurant chains 4. Currency fluctuations 5. Lawsuits against KFC

Strengths

1. Second best global brand in fast food industry in terms of value ($ 6 billion). KFC is known by many and is a trustworthy brand in many countries mainly due to its early franchising and international expansion.

2. Original 11 herbs and spices recipe. KFC original chicken recipe is a trade secret and a source of comparative advantage against firm’s competitors.

3. Strong position in emerging China. KFC receives half of its revenue from China, where it operates more than 4,000 outlets. KFC position in China is one of its main strengths as China’s fast food market is growing steadily.

4. Combination of KFC – Pizza Hut and KFC – Taco Bell. KFC partnership with other Yum! Brands yields some advantage as the restaurant can offer items from its partners it doesn’t have itself and satisfy more customers’ needs.

5. KFC is the market leader in the world among companies featuring chicken as their primary product offering. KFC has positioned itself clearly among other fast food chains bearing its famous slogan and trademark chicken products.

Weaknesses

1. Untrustworthy suppliers. Over the years, KFC has been contracting suppliers, which supplied contaminated poultry to KFC or were mistreating chicken, thus resulting in falling sales and damaged reputation.

2. Negative publicity. KFC receives much criticism from PETA over the conditions chickens have been raised. Furthermore, it received bad publicity for selling chicken wing with kidney. There are many more or less bad news from KFC, which damage firm’s reputation significantly.

3. Unhealthy food menu. KFC menu is largely formed of high calorie, salt and fat meals and drinks. Such menu offering prompts protests by organizations that fight obesity and hence, decreases KFC popularity. Consumers also often opt out for healthier choices.

4. High employee turnover. Employment in KFC is a low paid and low skilled job. It results in low performance and high employee turnover, which increases training costs and add to overall costs of KFC.

Opportunities

1. Increasing demand for healthier food. While demand for healthier food increases, KFC could introduce more healthy food choices in its menu and reverse its weakness into strength.

2. Home meal delivery. KFC could fully exploit (it test deliver services now) this opportunity and reach more customers.

3. Introducing new products to its only chicken range. KFC could introduce new meals to its menu and offer pork, beef or only vegetarian meals, which would target wider consumer group and would result in more costumers.

Threats

1. Saturated fast food markets in the developed economies. The fast food market in the developed countries is already overcrowded by so many fast food restaurant chains and this already proves to be a threat to KFC as it finds it hard to grow in the developed economies.

2. Trend towards healthy eating. Due to government and various organizations attempts to fight obesity, people are becoming more conscious of eating healthy food rather than what KFC has mainly to offer in its menu.

3. Local fast food restaurant chains. Local fast food restaurants can often offer a more local approach to serving food and menu that exactly represents local tastes. Although KFC does a great job in adapting its own menu to local tastes, the rising number of local fast food chains and their lower meal prices is a threat to KFC.

4. Currency fluctuations. KFC receives part of its income from foreign operations. That income has to be converted into dollars and may affect the business' profits, especially when the dollar is appreciating against other currencies.

5. Lawsuits against KFC. KFC has already been sued for many times and lost quite a few lawsuits. Lawsuits are expensive as they require time and money. As KFC continues to operate more or less the same way, there is high probability for more expensive lawsuits to come.

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