Nowadays, KEF, still dominates the chicken fast food industry while has stores monomer than 100 countries operating vast profits. (De Witt 'et al. AAA) Although, due to increased conditions of life, and differentiation of the life style of the population around the world, there is still a lots of room for expansion, especially In countries with large population, and high development rate. KEF using the BCC matrix and SOOT analysis to analyze what is the current position of the company and identify that the company has the potentials to growth in fast food market.
In the late asses the Boston Consulting Group, a leading management consulting many, designed a four-cell matrix known as BCC Growth/Share Matrix. This tool hedgehopped to aid companies in the measurement of all their company businesses according to relative market share and market growth. The BCC Matrix made a significant contribution to strategic management and continues to be an Important strategic tool used by companies today.The matrix provides a composite picture of the strategic position of each separate business within a company so that the management can determine the strengths and the needs of all sectors of the firm. The development of the matrix requires the assessment of a business portfolio, which include an organization's autonomous divisions ( activities, or profit centers).
The BCC or growth- share matrix imposes a two- dimensional analysis on management of Strategic Business units: a comparative analysis of business strength and assessment of the environment.The business strength measure Is the business ss Relative Market share. The environmental measure is the Market Growth Rate. BCC Matrix: The market growth rate measures industry attractiveness.
Because for the case of YUM Brand, all SSW (KEF, Taco Bell, Pizza Hut, Long John Silver's, A) are located In the same fast- food Industry, the referent standard Is the Industry Roth rate measured against the SSW' growth rate. The underlying theory for exam inning market growth rate is the industry life cycle.The BCC assumes that growth rates (life cycle stages) affect a firm's finances. Placing products in the BCC matrix results in 4 categories In a portfolio of a company: 1 -Stars (=high growth, high market share).
Use large amounts of cash and are leaders in the business so they should also Frequently roughly in balance on net cash flow. However if needed any attempt should be made to hold share, because the rewards will be a cash cow if market share is kept. So, KEF Malaysia is under Star position. Cash Cows (=low growth, high market share) Profits and cash generation should be high, and because of the low growth, investments needed should be low. Keep profits high.
3. Dogs (=low growth, low market share) Avoid and minimize the number of dogs in a company. Beware of expensive turn around plans'. 4.
Question Marks (= high growth, low market share) Have the worst cash characteristics of all, because high demands and low returns due to low market share If nothing is done to change the market share, question marks will simply absorb great amounts of cash and later, as the growth tops, a dog.The Characteristics of each SIBS Type SUB Strategy SIBS profits Required Investment Net Cash Flow STAR Hold/ Increase High - Or + Cash Cow Hold Low High+ Question Mark Increase/Divest O or - Very High or Disinvest High or+ DOG Harvest or Divest Low or- Disinvest strength dimension, relative market share, is included to measure competitive advantage. The KEF is falling on cash cow where a low growth and high market share is. So, the profit and cash generation is high and because of low growth, investments needed should be low.The funds received from cash cows are often used to help there businesses within the company, to allow the company to purchase other businesses, or to return dividends to stockholders. So the KEF should hold on what it has doing now.
Three Paths to Success (star-cash cow-question mark). Continuously generate cash cows and use the cash throw-up by the cash cows to invest in the question marks that are not self-sustaining Stars need a lot of reinvestment and as the market matures, stars will degeneration cash cows and the process will be repeated.As for Dogs, segment the markets and nurse the dogs to health or manage for cash Three Paths to Failure (star-question mark-dog, cash cow-dog) Over invest in cash cows and under invest in question marks Trade further opportunities for present cash flow Under invest in the stars Allow competitors to gain share in a high growth market Over milked the cash cows Evaluation at KEF KEF has been known as the leading fast-food chain and restaurant in many countries; it serves its famous original recipe "fried chicken" that contains 11 secret herbs and spices that cannot find in other fried chicken brand.For this reason, KEF has been branded as the fast-food that serves "a finger-licking good food" that are feely processed through the company's high-quality control team. KEF quality control starts its Job from the supply of all raw materials. Then, it conducts an annual supplier audit, STAR Audit which comprises the two areas, the Food Safety and the Quality Systems Audits.
The STAR audit is conducted by either third party international auditing firm assigned by YUM or the company's own team of expert team of food technologists in the Quality Assurance Section.They are similar with ISO approach. Furthermore, these food technologists regularly do the experimentation of new flavors and do research for more creative and enticing DOD concepts in order to provide high-quality, nutritional and best choices of food for the customers. In similar way, they also developed some famous local flavors designed to enable the customers to enjoy an exciting dining experience. Moreover, the supplier quality are scrutinized and reviewed by KEF regional franchiser to enable to improve the products in continuous manner.Hence, quality reports about their products and performance.
More than that, the food technologists are also doing their quarterly QUA evaluations on in-house suppliers. The fast-food chain only uses quality raw materials from reputable suppliers. All chickens are all slaughtered by certified slaughters. The Mammas chicken supplier is closely monitored by the Department of Veterinary Service and obtains the Veterinary Health Mark (VIM) logo.
Apart from it is an ISO 9001 certified supplier.In addition to that, KEF products are cooked well over the minimum heat or temperature under standard procedure that is required by World Health Organization (WHO) in order to prevent the risk of contamination among the raw and ready- to- eat products. For all the products, KEF uses non-hydrogenated palm oil that is 100 percent cholesterol free. In this relation, KEF provides an informational campaign through media forms in order to promote the nutritional values of KEF products to the wide array of customers, as well as to promote a wholesome and balanced menu.
The fast-food chain quality of KEF mainly attributed by the CHAMPS.C- for cleanliness H- for Hospitality A- for Accuracy M-for Maintenance P-for Product Quality S- for Speed of Service SOOT Analysts of KEF This is KEF (Kentucky Fried Chicken) SOOT analysis for 2013. Company background Name KEF (Kentucky Fried Chicken) Industries served Restaurants Geographic areas served Worldwide Headquarters U. S. Rent CEO Roger Eaton $ 9. 5 billion (2012) Profit Employees Parent Yum! Brands Main Competitors McDonald's Corporation, Burger King Worldwide Inc.
, Subway, Wend's Company. KEF 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 SOOT KEF SOOT analysts 2013 Strengths Weaknesses Second best global brand in fast food industry in terms of value ($ 6 billion) Original 11 herbs and spices recipe Strong position in emerging China Combination of KEF - Pizza Hut and KEF - Taco Bell KEF is the market leader in the world among companies featuring chicken as their primary product offering Untrustworthy suppliers Negative publicity Unhealthy food menu High employee turnover 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 KEF known by many and is a trustworthy brand in many countries mainly due to its early ranching and international expansion. 2.
Original 11 herbs and spices recipe. KEF original chicken recipe is a trade secret and a source of comparative advantage against firm's competitors. . Strong position in emerging China.
KEF receives half of its revenue from China, where it operates more than 4,000 outlets. KEF position in China is one of its main strengths as China's fast food market is growing steadily. 4. Combination of KEF - Pizza Hut and KEF - Taco Bell. KEF partnership with other Yum! Brands yields some advantage as the restaurant can offer items from its ratters it doesn't have itself and satisfy more customers' needs.
5. KEF is the market leader in the world among companies featuring chicken as their primary product offering.KEF has positioned itself clearly among other fast food chains bearing its famous slogan and trademark chicken products. Weaknesses 1 .
Untrustworthy suppliers. Over the years, KEF has been contracting suppliers, which supplied contaminated poultry to KEF or were mistreating chicken, thus resulting in falling sales and damaged reputation. 2. Negative publicity.
KEF 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 KEF, which damage firm's reputation significantly. 3. Unhealthy food menu.
KEF 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 KEF popularity. Consumers also often opt out for healthier choices. 4.
High employee turnover. Employment in KEF 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 KEF. Opportunities 1 .
Increasing demand for healthier food. While demand for healthier food increases, KEF could introduce more healthy food choices in its menu and reverse its weakness into strength. 2. Home meal delivery. KEF could fully exploit (it test deliver services now) this opportunity and reach more customers.
3. Introducing new products to its only chicken range. KEF 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 KEF 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 KEF 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.
