Abuzar Dawood
Registration No. 2093163
Introduction to Retailing
Assignment #2
Submitted to:
Miss Saima Hassan
National College Of Business Administration
and Economics.
What are KFC’s competitive advantages? What
environment threats might it face for the next ten
years? How could it prepare for these threats?
Competitive Advantages:
When a firm sustains profits that exceed the average for
its industry, the firm is said to possess a competitive advantage over its rivals.
The goal of much of business strategy is to achieve a sustainable competitive
advantage. Achieving Competitive Advantage strengthens and positions a
business better within the business environment.
Examples of company characteristics that could constitute a sustainable
competitive advantage include:
Customer focus, customer lifetime value
superior product quality
extensive distribution contracts
accumulated brand equity and positive company reputation
low cost production techniques
patents and copyrights
government protected monopoly
superior employees and management team
KFC’s Competitive Advantages
Branches:
KFC’s large quantity of its branches (more than double of its competitors)
and the popularity of its brand logo is a competitive advantage for the firm
Prices:
KFC provide products and services to the consumers at low cost than its
competitors which gives the firm the ability to generate a larger margin on sales.
Every meal available at KFC is of a premium price, easily affordable by every class
coming to the outlet. Cheap as well as expensive meals are provided at costs
which are better than the McDonalds and AFC and other competitors in the
market. They have best price competitive alternatives.
Quality:
The quality of the meals delivered by KFC exceeds those of the competing
meals by McDonalds and AFC. It enables them to create superior value for its
customers and superior profits for itself. The larger portions of people who visit
KFC are students who want cheap food. The service and variety on sale is
irrelevant to them, as they feel what they offer is enough and of a valued taste to
what they’re paying. The quality of their fried chicken is better than any other
competitor.
Customer Value and Loyalty:
Having unique modality of fast food availability, with
unmatched preparation times and providing healthy, fresh, fast, quality and price
competitive alternative meals to consumers create customer value. KFC performs
value creating activities in a way that creates more overall value than do
companies. Low-cost meals and superior benefits to consumers create value for
KFC. It offers other range of food items other than the fried chicken which is
basically its specialty to the consumers.
Management:
KFC’s effective employees and superior management team can also make a
sustainable competitive advantage for it.
Environmental Threats
The environmental threats which KFC might face over the next ten years
are that,
Fewer barriers to enter in the market so there would be more competitors.
Mergers of two small companies to become a new company.
Introduction of new meals and deals from other competitors like
McDonalds and AFC etc.
Preferences of people change. They come more health and diet conscious
and want more variety of food.
Production cost increase and difficulty to set a competitive price.
Cheaper price deals by other competitors.
Political instability in the country. If the Govt. is not doing well and is
changing than it will affect the business.
Launching of the products in a society which are not allowed in their
culture.
Technological advancements by other competitors in the future.
Natural disasters like floods, earthquakes etc can cause shortage of food
and affect the business.
KFC can overcome these environmental threats by providing the best quality
meals and deals at the lowest prices competitive to the other companies. Utilize
their resources in the best possible manner so they can manage the production
costs and earn superior profits by the sale of their products. Increase their variety
of food (fried chicken and other things) which is healthy for the consumers so
they can choose to eat for what they wish for.
Where ever they are opening up a retail outlet they need to make sure they
deliver the food which is allowed to the people by their culture. Whatever the
new technology is coming which is helpful, they should equip it before the other
competitors.
In case of political instability, the prices increase or decrease in the country, KFC
should deal with it by keeping the prices that are affordable for consumers and
profit earning for firm so that it doesn’t affect the business and if there is shortage
of food in case of natural disasters which even recently took place in the country,
it should have the supplies to meet the consumer demands.
