Running head: SWOT ON KENTUCKY FRIED CHICKEN 1
SWOT on Kentucky Fried Chicken
Kentucky Fried Chicken, commonly known as KFC, has managed to become a successful global brand, due to its adaptation to local cultures, which has enabled it to compete at international level (Marinova, 2014). Just like many international fast-food enterprises, KFC has tried to join other international markets with a lot of success albeit numerous challenges. While most fast-food businesses have failed to penetrate the Japanese market, KFC, through its internationalization approach, has managed to lure the Japanese fast-food consumers. In that regard, this paper comprises of a SWOT and an in-depth analysis of the various entry modes applied by KFC to penetrate the Japanese market
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SWOT analysis of KFC
KFC relies on its strengths to keep up with the Japanese market, weaknesses that demands new and energized approach, opportunities that needs exploitation, and threats likely to make its business difficult.
Strengths and Weaknesses
KFC enjoys reliable and consistent supply of chicken products in Japan. When chicken is readily available, the company will not experience shortage, thus continue enjoying lucrative profits and more sales (Azuayi, 2016). KFC has a strong brand. In that sense, the fast-foods are believed by the locals as among the best, thanks to its strong brand and name. Its big name in the European market, gives it a competitive edge to internationalize their customer base in the Japanese market.
Even so, the company is experiencing some weaknesses in the Japanese market
Opportunities and Threats
KFC has numerous opportunities that enable it to thrive in the Japanese market. Given the rising need for people preferring healthy and clean foods, KFC has taken the advantage of that to supply the same in the Japanese market (Azuayi, 2016). Secondly, there is an opportunity for the company as most Japanese middle class are interested in buying their products. In that sense, the company has a ready market for their commodities in Japan. In terms of outsourcing, KFC has a chance to get professionals in the food industry to join their existing team to enhance their food products to suit the Japanese market.
Despite the numerous opportunities, KFC is faced with myriad threats that prevent it from entering the Japanese market in a better way (Azuayi, 2016). For instance, it faces cut-throat competition from popular brands such as McDonald. In addition, KFC faces a threat of dealing with low prices from other popular brands. For that reason, it risks being pushed out of the market.
Entry Modes
Organizations use numerous ways to enter into international markets. The strategies include exporting, licensing, strategic alliance, acquisition, and subsidiary. Exporting entails transporting products manufactured in one nation into another for purposes of selling them. KFC can use this method to gain entry in Japan (Azuayi, 2016). Strategic alliances refer to an arrangement where organizations decide to use their resources to pursue a project and benefit mutually. KFC can employ this strategy to realize new opportunities in the Japanese market. Acquisition is a state of buying shares from another company to take control. KFC can opt to buy a food company popular in Japan and take up 50% share (Azuayi, 2016). Subsidiary is owning and controlling another company partially or wholly. KFC can decide to gain entry in Japan as a parent company. KFC has to get license from the authority in Japan in order to sell their products.
References
Azuayi, R. (2016). Internationalization Strategies for Global Companies: A Case Study of Arla Foods, Denmark. J Account Mark 5: 191. doi:10.4172/2168-9601.1000191
Marinova, S. (2014). (Ed). Institutional Impacts on Firm Internationalization. New York, NY: Springer
