Detailed PESTEL Analysis of KFC
KFC is a well-known brand of fast-food joints with its origin in Kentucky, United States. After Mcdonald's, it is the second largest chain of fast-food restaurants operating in over 150 countries with around 22,621 locations. A KFC PESTEL analysis would bring forth the varied elements responsible for its huge success and the ones where the brand needs to work more.
1. Lead-in
If the question, what is PESTEL (analysis) is bothering you, this article would be of particular help in your studies. PESTEL analysis's meaning lies in the concepts of marketing principles. It is a powerful marketing tool, and PESTEL analysis evaluates the performance of a company in its various macro-environments. Also referred to as PEST analysis, and is used to assess the commerce of the company working in a particular geographical area. Certain factors influence the operations of a business.
PEST analysis targets these factors to eliminate the negative ones and put stress on the positive ones to enhance its growth. The factors may be political, economic, societal, technological along with environmental and legal issues.
KFC is a well-known brand of fast-food joints with its origin in Kentucky, United States. After Mcdonald's, it is the second largest chain of fast-food restaurants operating in over 150 countries with around 22,621 locations. A KFC PESTEL analysis would bring forth the varied elements responsible for its huge success and the ones where the brand needs to work more. So, let us do the evaluation on PESTEL KFC and learn everything about the company's macro-environments where it operates.
2. About KFC
2.1 Introduction of KFC
KFC or Kentucky Fried Chicken is an American brand of a fast-food restaurant chain with its headquarters in Louisville, Kentucky. KFC is a well-liked brand specializing in fried chicken and is the second largest chain of fast-food joints in the globe after Mcdonald's. It is a multinational corporation with its presence in 150 countries with over 22,621 locations globally. The brand is well-loved for its exclusive spicy and aromatic fried chicken recipes.
A detailed PESTEL analysis of KFC will let you explore the brand's external macro-environmental factors that affect the business. The KFC PESTEL analysis primarily focuses on the Political, Economic, Social, Technological, Environmental, and Legal factors directly impacting the functioning of KFC. It analyses the overall industrial environments in which the company operates. It is a subsidiary of Yum Brands which also owns brand names such as Pizza Hut and Taco Bell.
2.2 Overview of KFC
| Company Name/b> | KFC (Kentucky Fried Chicken) |
| CEO | Mukesh Pant |
| Company type | Restaurants, subsidiary |
| Year founded | 1930 |
| Number of employees | Over 800,000 employees |
| Annual revenue | US $ 27.9 billion as of 2020 |
| Founder | Colonel Harland Sanders and Pete Harman |
| Area Served | In 150 countries across the globe |
| Headquarters | Louisville, Kentucky, USA |
| Operating Income | Yen 622 million, for the quarter ended in March 2022 |
| Subsidiary brand of | Yum! Brands |
| Competitors | McDonald, Subways, Wendy's, Burger King, Dunkin Donuts, Pizza Hut, and others |
3. KFC Pestel Analysis
The study of KFC PESTEL analysis will let you understand how some external factors are essential influential aspects of the proper functioning of a giant corporation like KFC. The external factors are studied through the management framework of PESTEL analysis, while you can learn the internal factors with the help of SWOT analysis.
The PESTEL factors in this article will explore the primary external factors that will help you understand the market dynamics that the company functions and how it can improve its business consistently. So, here is the analysis of PESTEL KFC for you to study.
Political Factors:
- Government regulations: The company functions across various geographical locations and thus must maintain a good relationship with the respective governments. The government's regulations vary from nation to nation. Most governments emphasize the health factor when it comes to regulations related to food. Till now, KFC has been successful in keeping up with the government regulations, but the new vegan and healthy diet trend might affect it adversely.
- Getting involved in political dialogues: Once, KFC had mocked the President of the US, Donal Trump, in one of their tweets. Though the comment was harmless to the nation's politics, Donald Trump's fans did not like it. This kind of situation is enough to cost the image of a corporation affecting its sales negatively.
- Political dispute: In another instance, KFC unwantedly got involved in a political dispute. One must remember the infamous dispute between Steve Cohen and Willian Barr. Here, KFC's brand name and logo without the brand's permission. Such an incident may cost the brand's image.
Economic Factors:
- Post pandemic recession: A KFC PESTEL analysis will tell you how the pandemic of Covid-19 dropped the revenue of the food chain corporation by a large margin. The primary reason was lockdown, social distancing awareness, and the worldwide shutdown of eateries, and the corporation had to face massive financial damage. It would continue until the world completely recovers from the hit through vaccinations.
- Struggle in China: Due to government regulations, limited market response, and others, KFC could not flourish in the Chinese market. Though the brand received massive success worldwide, it is yet to make a mark in China.
- Changing the brand name: Earlier KFC was named 'Fried Chicken'. The brand name did not go well with the health-conscious customer base. For them, the name suggested unhealthy food and also that it served only fried chickens and nothing else. Changing the name to KFC helped the brand to come out of the image while selling the same products.
- Vegan food: KFC recently introduced a menu for vegans. IT expanded the brand market among vegan food consumers. It is a commendable shift in the brand, which would surely help add to its market share, sale, and revenue.
Socio-cultural factors:
- Cultural beliefs : Food varies from culture to culture. The same ingredients take a different shape in a different culture. While halal chicken is a compulsion for Muslims, cow meat is an absolute no-no for the Hindu customer base. Thus, introducing halal meat for Muslims and a vegan menu for the Indian market by KFC is a great marketing strategy.
- Negative Factors: Some issues like low wages and employee treatment have been associated with the brand. Also, some animal welfare organizations have pointed out the ill-treatment of chickens on poultry farms and have boycotted the brand.
- Anti-calories crowd: KFC sells food preparations high in calories, salty and oily. Health-conscious people often avoid these food items that may cause obesity, blood pressure, or other serious ailments. For fast-food brands like KFC, this is not good news. Many blame the fast-food centers for obesity and other health-related issues.
Technological factors:
- Tech-savvy: Being up-to-date with technology is a positive business strategy for KFC. Since most of its employees comprise young people, the latest technological advancement is good for improving the workplace environment. KFC uses some advanced tech tools like Kiosks to sell its products.
- Social media: Some KFC franchises in Australia have adapted to social media. They have allowed employees to promote their products and connect with customers through social media platforms.
Environmental factors:
- Eco-friendly trends: Most of today's customers diligently follow eco-friendly trends. They go for environmentally conscious brands. KFC is aware of this trend and provides eco-friendly and sustainable businesses. Thus, reducing carbon waste.
- Avoiding plastic waste: KFC has started avoiding plastic packaging and has introduced biodegradable packaging paper and other recyclable material. It is known to have reduced 14,000 tons of plastic usage.
- Cogeneration system: KFC introduced a small-scale cogeneration system named CHIP with the help of the organization Tidy Planet. It helped the massive brand to save 4000 tons of carbon emissions annually.
Legal factors:
- Rules and regulations: The brand must follow the various rules and regulations of different governments because it operates in 150 different countries. The firm should follow the labor and wages laws, health and safety standards, and other laws to keep the fast-food joints running in a particular location.
- Penalty: KFC PESTEL depicts legal factors as essential external factors influencing the brand's smooth growth or decline. For instance, when poor hygiene was established against the brand by a food inspector, it cost the brand's image and high monetary penalties. Also, many customers have complained about the poor quality of food served by the brand
4. How to Do a PESTEL Analysis in EdrawMax
- Step - 1: Preparation
- Step - 2: Template Selection
- Step - 3: Add Textual Information
- Step - 4: Customize
- Step - 5: Export & Share
If you are using the offline version of EdrawMax, open the tool in your system. If you wish to access remote files, head to https://www.edrawmax.com/online/ and log in using your registered email address. If this is your first time using the tool, you can register with your personal or professional email address. Go to 'Marketing' diagrams under Business diagram type and click on 'PEST Analysis.'
EdrawMax has thousands of free templates. Head to the Template section on the left and type 'PESTEL Analysis' to see all the pre-built PESTEL Analysis templates like Netflix PESTEL Analysis, Amazon PESTEL Analysis, IKEA PESTEL Analysis, and more. Check the template that resonates closely with your business model. Click on 'Use Immediately' to import the template's contents to the EdrawMax canvas. You can start customizing the PESTEL analysis diagram as per your requirements. If you want to draw the PESTEL analysis diagram from scratch, you can click '+.' It will open up the user-friendly canvas of EdrawMax that has several features that ease your efforts in making PESTEL analysis diagrams.
PESTEL Analysis diagram requires you to add Political, Economic, Sociological, Technological, Legal, and Environmental content so that the reader will understand what influences an organization. Use the PEST symbols from the left side and add the content to your PESTEL analysis diagram.
EdrawMax gives you ample options to customize your PESTEL Analysis diagram. From changing the background to adding content, you can customize the diagram in any way you desire. In addition to this, you can go ahead and change the background color, modify the text, add hyperlinks, add multiple pages, add images, and even add vector-enabled texts to your PESTEL analysis diagram.
Once satisfied with your PESTEL Analysis diagram, you can export it into multiple formats, including Microsoft, JPEG, PNG, Visio, HTML, and more. EdrawMax lets you share your PESTEL Analysis diagram on social media platforms, like Facebook, Twitter, Line, etc.
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5. Key Takeaways
The KFC PESTEL analysis study has shown us how the company has to consider the political, economic, socio-cultural, and technological factors to keep it afloat. Also, the brand should not avoid environmental and legal issues. Issues like changing health regulations due to the growing trend of low-calorie diets require immediate attention by the brand. Following the latest technological advancements and exploring the vegan menu may save the corporation from legal issues.
When it comes to PESTEL analysis and other diagrams, over 25 million people prefer EdrawMax. This PESTEL Analysis diagram creator comes with an in-built template community that offers a wide range of templates that you can use to create over 280 diagrams, way more than MS Visio and other similar software. From PESTEL diagrams to networking diagrams, EdrawMax has a customization option for every business-related diagram. Head to the download section and get yourself a copy of this amazing PESTEL Analysis diagram creator today.
Reference
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Frue, K., 2022. SWOT Analysis of KFC. , [online] PESTLE Analysis. Available at: https://pestleanalysis.com/swot-analysis-of-kfc/ (Accessed 19 August 2022).
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Team, M., 2022. KFC PESTLE Analysis | MBA Skool., [online] MBA Skool. Available at: https://www.mbaskool.com/pestle-analysis/companies/18067-kfc.html (Accessed 19 August 2022).
