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SWOT Analysis of KFC in 2020

Kentucky Fried Chicken (KFC) is an American fast-food restaurant chain. KFC is headquartered in Louisville, Kentucky. The company is specialized in fried chicken. This brand is the second in the world for the restaurant chain. KFC was established during the year 1930 and is spread across 118 countries having restaurants of about 18,875.

KFC is a subsidiary of the Yum brand and is a popular chicken restaurant that focuses to provide the original recipe for its products. It few of the chicken dishes are Extra CrispyTM, Extra CrispyTM Strips, Extra CrispyTM Boneless, Kentucky Grilled Chicken, Hot WingsTM, and freshly prepared chicken sandwiches.

Over the years, the brand has grown to a great extent and has generated a lot of revenue from its various franchisees across various countries. The franchise of KFC are individual business owners and follows the operation methods. The brand has various meals types that include the following:

  • Signature Combo
  • Hot Wings
  • Popcorn Nuggets
  • Classic Meal
  • Kids Meal
  • Family Meals, and so on.

The SWOT analysis of KFC discerns all the main strengths, weaknesses, opportunities, and threats that would help the company to grow further. Read out this article, to get an understanding of where KFC stands.

The SWOT analysis of KFC highlights the strengths in which the organization is good and what highlights it from its competitors, its weakness that stops the brand to perform better and should focus on to improve. It mentions its opportunities that the brand can use to increase its market share. It also throws light on the threat that has the potential to harm the brand.

To ensure that KFC meets the long-term competitive advantage it must address the various concerns highlighted in the SWOT analysis of KFC.

Let us discuss on the SWOT analysis of KFC.

Strengths in the SWOT Analysis of KFC

Strengths in the SWOT Analysis of KFC

  • Strong International Presence

KFC has seen a robust international presence and has almost 18,875 restaurants that are being run around the world. Its main strength is its parent brand, Yum that also has a good global presence.

KFC is a model of the franchise and globally it is managed well. KFC’s strong presence worldwide is a key strength to the brand.

  • Fast Growth

The brand has seen immediate growth ever since its formation. The brand has expanded well in Asia with China being the main for its Asian expansion. During the year 2015, the brand has opened about 743 restaurants in China and subsequently increased over the years.

Over the years it has set up about 5000 restaurants across 110 cities in the country. Having the potential of growth in less period is indeed a great strength to the brand.

  • Strong Financial Condition

KFC has seen a strong financial performance at the global level. During the year 2015, the company has generated an income of $16 billion. The brand has seen a tremendous performance in Europe and Russia that is a great strength for the company.

  • Outdo the Competitor

In China, KFC has developed a great lead over its competitors. Apart from China, it has also seen a tremendous increase over its competitors over the emerging markets.

  • Diversity in Menu

KFC has grown to great heights with its menu. It includes both vegetarian and non-vegetarian food in its menu to attract customers. Its various menus in lunch boxes have got great visibility among the eaters. Few of its products are:

    1. Signature Combo
    2. Hot Wings
    3. Popcorn Nuggets
    4. Classic Meal
    5. Kids Meal
    6. Family Meals, and so on.
  • Loyal Customer Base

The brand sees a huge loyal customer base that keeps KFC growing. Its secret crunchy chicken preparation is loved by all its customers. Due to its huge customer base, the brand sees enormous growth thus highlighting its profit.

  • Trade Secret

KFC has a trade secret that is seen in its preparation. Its trade secret behind its delicious crunchy chicken recipes is the ’11 herbs and spices’ recipe. The recipe is original and is unidentified to the public.

Weaknesses in the SWOT Analysis of KFC

Weaknesses in the SWOT Analysis of KFC

  • Issues on Food

Food quality has been an issue for fast food brands. Over the past years, KFC had faced a lot of criticism over issues on its food like the use of trans fats in the non-veg food cooking. People in the current generation are so much conscious over their health and it is their priority.

Hence, this is an issue for the customers and tend to fall back from the brand. Customers would look out for brands that cook food in hygiene oils and that are safe. KFC food’s fats in the fast-food items remain and it’s a weak point for the brand to get more customers.

As the brand deals with more of chicken products, all its menu is bound to contain more calories.

  • Issues on Franchisee Operations

Issues related to franchisees are common across the various restaurant brands. If the franchisee does not maintain similar operating procedures, it is bound to lose the brand’s reputation.

There are issues related to the menu and other operational issues and the franchisee owners have faced a lot of trouble. Due to this, there arise disagreement and discontent for the management and the franchise owners. When such issues arise with the brand, it is a major weak point that would hit the revenue.

  • Issues on Supply Chain and Distribution

KFC has earlier faced issues on distribution regarding the delivery of chicken to them. This issue had impacted KFC to a large extent that led to the outcome of a few stores being closed in the UK. This issue had impacted its revenue as well.

A lot of marketing and logistic effort was involved to get out of this issue. These kinds of issue are a weak point as this would lead to the downfall of the brand due to the unavailability of the products.

Opportunities in the SWOT Analysis of KFC

Opportunities in the SWOT Analysis of KFC

  • Potential Growth in Emerging Markets

The emerging markets sees full potential growth. Countries like China and Russia hold a long-term potential market for KJC. Besides, there is still a large scope to open its franchisee in these kinds of emerging markets. So, KFC sees a huge opportunity on expanding its business to more potential markets thereby leading to more revenue.

  • Changing Menu to target Health Conscious People

The current generation is so much health conscious. People prefer food that is less fat, yet tasty. Few people avoid KJC or limit to few times eating due to these factors. However, KJC should include a menu that maintains low calories on its food and maintain the taste, thereby attracting a larger crowd and get more profit.

  • Lost Cost Items

Customer preference has changed to a large extent. They require healthy food and better customer service with products being priced less. Hence, KJC should focus to include less cost food along with healthy food to increase its sales. This would see more customers for the brand.

  • Including More Vegetarian Menu

Even though KFC has started to venture into the vegetarian food category, they seem to have fewer vegetarian food items as compared to its competitors. So, having more food items on the vegetarian side also, like the way they have for non-vegetarian would help the brand to get more growth.

Threats in the SWOT Analysis of KFC

Competitors 

  • Competitors

Even though KFC has grown to a great extent over the years, it is still not at the top. KFC sees a huge competition from McDonald’s and other main brands in this industry.

Various other brands have many innovative menus in their list and have seen many ways to increase their customer base and market share.

  • Preference from Millennial

This brand sees more preferences of the millennial generation especially baby boomers. The varying demographics creates new pressures on food types. This generation requires excellent customer service together with high food quality at a feasible rate.

  • Rising Cost of Resources

The raw material, labor, and operation costs are on the rise at the global level. This is a major threat to the brand. Environmental conservation and waste management have become the main areas that require more attention.

Various food compliance laws have increased the brand’s operational costs. Hence rise in the various operational costs denote a serious threat to the brand.

Conclusion

The SWOT analysis of KFC mentioned in this article has highlighted the main strengths of the brand that comes up from its strong international presence, fast growth over the years, having strong financial stability, a lot of menu option, outperforming the competitors, a strong customer base and its secret recipe. Its weakness is highlighted in the fact of various issues on food, franchisee operations, and supply chain distribution.

KFC sees a lot of opportunities on including many options on vegetarian food, changing the menu that would suit to a healthy diet, reducing the cost of the food items, and expanding to the emerging markets. It sees a threat from its competitors and on the rising cost of various resources it has.