¶ … internal and external business environment of two fast food giants, McDonald's and KFC. The major sections of the paper include introduction to the companies; the competitive analysis of the fast food industry using five forces model; the Balanced Scorecard and SWOT analysis of the companies; and a set of recommendations in the light of these analyses.
The purpose of this paper is to present an analysis of the Global fast food industry using Michael Porter's Five Forces Model and then evaluate the past, current, and projected performance of two companies from the industry using Balanced Scorecard approach. The paper also presents SWOT analysis of the companies and recommends strategies which can help them in moving forward in the industry in a more competitive and profitable way. The companies selected for this research paper are McDonald's and KFC which are the top market leaders in the Global fast food industry. McDonald's is the number one brand with respect to customer base and market share whereas KFC enjoys the market leadership in chicken restaurant chains.
The paper starts with an ample introduction to both these companies and proceeds by discussing the competitive environment in the fast food industry using Michael Porter's Five Forces Model. After analyzing the business environment, the paper presents an analysis of the companies' past, present, and future performance using Balanced Scorecard. The four major areas where these companies focus are: customer services, internal business processes, learning and growth, and financial performance. This analysis is followed by SWOT analysis of both these firms which can help them in evaluating the core strengths and major weaknesses in their internal business processes as well the potential threats and opportunities in their external business environment. These companies can use their strengths to avail the potential opportunities, overcome the weaknesses, and encounter the possible threats which can impact its business operations and profitability in a negative way.
The final section of the paper recommends strategies to both these firms which they can use to beat the competition from both direct and indirect competitors and grow in the industry in the most tactful and effective way. The research paper concludes by summarizing the whole discussion and the recommended strategies for these companies.
Introduction
1. McDonald's:
McDonald's is the world's leading fast food chain currently operative with more than 34,000 restaurants and outlets in 119 countries. It is an American multinational corporation headquartered in Oak Brook, United States. Since its inception, McDonald's has spread its business network in all the potential markets of the world. At present, McDonald's enjoys a huge customer base with an average serving of 69 million customers every day (McDonald's, 2013). McDonald's is ranked among the top fast food brands in the world which have established their strong brand image through highest quality products and highly efficient customer services. The major products offered by McDonald's include hamburger (Big Mac), Chicken McNuggets, Quarter Pounder, chicken sandwiches, French fries, soft drinks, soups, desserts, milkshakes, breakfast items, coffee, and salads. McDonald's currently employs more than 1.7 million people in all its outlets, restaurants, production units, and offices around the Globe (About McDonald's, 2011).
McDonald's has grown its business network through self-ownership and franchising agreements. More than 80% of the McDonald's restaurants and outlets are franchised to private businessmen from the local and international markets. It is the world's largest and the fastest growing drive-through and counter service fast food restaurant chain. Since its expansion into the Global market, McDonald's has introduced a large variety of fast food products in order to meet the consumers' expectations and keep itself innovative and competitive in the industry. McDonald's has implemented the latest plants and machineries at its production units and the most advanced enterprise management systems in its offices like inventory management, customer relations management, strategic human resource management, etc. McDonald's is also the winner of various quality and favorite brand awards and recognitions at International levels (McDonald's, 2013).
2. KFC (Kentucky Fried Chicken):
KFC (Kentucky Fried Chicken) is a multinational chicken fast food restaurant chain. It is operative with more than 17,000 restaurants and outlets in 115 countries. KFC is the subsidiary of Yum! Brands -- the leading brand in the Global restaurants industry. It was founded in 1930 by Harland Sanders in North Corbin, Kentucky. The operational headquarters of KFC are situated in Louisville, Kentucky. KFC operates with a total workforce of around 190,000 employees. The successful expansion of KFC in the Global market can be attributed to its continuous growth strategy which enabled it to expand its...
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