Pest Analysis of KfC Essay

1.0: introduction Kentucky fried chicken also knows as KFC, the world most large and well knows fast food restaurant that have more than 10 thousands locations worldwide in more than 80 countries. People from younger age to older age also know the slogan of KFC, which is â€Å"Finger lickin’ Good†, and the old man with white suits hand holding a black color crutch. Nowadays, we can see KFC in any shopping centre, or some popular location. We can get service or their product easily, it really convenient. I want to conduct a PEST analysis of this company. First I have to cover the history of KFC, and hat services and products that KFC provide. History of KFC KFC, Kentucky fried chicken is born at year 1950 at a remarkable pace from one road side restaurant into an internationally renowned restaurant chain. KFC is founded by Harland Sanders in Corbin, Kentucky. He was born on a small farm in Henryville, Indiana, America, in 1890. Sanders open his first restaurant in a small front room of a gas station in Corbin, Kentucky. He had names the dining area as â€Å"Sanders Court & Cafà ©.† In year 1936, Kentucky Governor Ruby Laffoon makes Sanders an honorary Kentucky Colonel in recognition of his recognition of his contributions to the state’s cuisine. Sanders also developed a unique, quick method of spicing and pressure – frying chicken. Finally, the business growth exceeded until he cannot handle, so he sold it to a group of people formed the Kentucky Fried chicken. In 1964 Sanders sold Kentucky Fried Chicken to an investor group headed by John Y. Brown, Jr. and Nashville financier John (Jack) Massey that Colonel Sanders still was Kentucky Fried Chicken Goodwill Ambassador for helping and giving suggestion. Sanders Colonel died in 1980 he was 90 year old. Although he is no longer with us, his philosophies of hard work and excellent service we provide to our customers will always be a part of KFC tradition. Products and services The main product of KFC of cause is the original fried chicken. After this, the spicy fried chicken is coming up next. Except of these products, KFC also provide many different kind of fast food. For example, salads, sides, big box meal, meal for kids, desserts, and much different type of plated meals. Now the latest product is twister, it helps KFC increase many profit. People can order depends on their wants. It really convenient for customers. KFC also provide much kind of services, such as 24 hour service, free delivery for some selected location, online ordering, outdoor catering, kid play areas, special dining facility for business customers and more. It can save customers time and costs. That why people like to have meal at KFC. 2.0 Company PEST PEST stands for political, economic, social, and technological. It is important for a business because it will influence the environmental impact of the business. Recognition is a useful way of pests, and looks forward to the external environment of commercial operation. The strategic that KFC use is demographic, the following factors are included in the demographical of the PEST of KFC. The first one is age, there is no age limit is focus by KFC, and they only target on every age of the society. But I think that KFC will target on younger more than the older. The second is household size, KFC will more target on a whole family members, that why KFC have provide many family packages meals. The next one is population. Population have played an important role in KFC. The light of population they can make their strategy. 2.0.1 Political factors Political is the first element of PEST, it will influence the business in many type of way. Political can make many advantages and opportunities for a business. For example, in government policies. KFC have to obey the policies of the government in the location they run their business although KFC is a foreign company. KFC have handled this policy very well and obey the policy of the government, in order to run this type of business in that particular location. The next policy is price policies. KFC maintain the price policy by the way of keeping in the view of income distribution of the people who living in the country. This is the reason why KFC had targeted all the  classes. 2.0.2 Economic factors Economic is the second element of PEST, all the organization is affected by the national and global economic factors. The first one is income. Income is important factor for KFC; it is because incomes will decides which class KFC is going to target. In the early year of KFC, they only forces on the upper class. After few years, KFC start to introduce some meals that target on the middle and the upper level. The next economic factor is payment methods. KFC will do some research on what payment methods is convenient for their customers, then only check whether collect money in the form of cash or plastic money. 2.0.3 Social factors The third element of PEST is society. It concentrates forces on family, friends, neighbours, colleagues, and media. The first factor is social class. Social class divide into 3 classes, there are upper class, middle class, and lower class. As I say early, KFC had targeted all the classes to increase the profit of the company. The next two factors are culture and religion. Although the culture of KFC is different, but KFC also try to adopt the different culture from different location. For example, KFC had adopted the Pakistani cultures. KFC is not only adopting the culture, but also the religion also. KFC offer Halal food to the customers, this is mean that they accepted the Muslim religion. 2.0.4 Technological factors The last element of PEST is technological factors. This is the progress of technology has been greatly changed the way they do business. The first factor of technologic is pace of change. It is same meaning of rate of change. KFC had make a strategy, if they think is time to introduce the new technologic, they only will out the technologic. The next two factors are research and development, and capital formation. These two factors are important factors of technologic. KFC support the work of research and development in order to introduce the new technology. KFC also has a stock of machinery to run their business activities. 2.1 information of PEST PEST is use to identity external forces affecting the business. This is some  example that shown the business’s political, economical, social and technological environment. To indentify the environment, the company have to compete in future, it have to understand the power ad shape variation. In the PEST analysis, it will consider every factor is involved in the entire business environment. There are some examples of PEST: Political Political factors influence organisations in many ways. Political factors can create advantages and opportunities for organisations. It had includes the legal and regulatory, elections, employment law, customer protection, environment regulations, taxes, political trend and more. Economical Economical factors included economic growth trends, consumer confidence index, government spending levels, exchange rates, taxation, disposable income, unemployment, tariffs, inflation, production levels and more. Social It included demographics, health, living standards, housing trends, fashion, lifestyle changes, diversity, immigration/emigration, attitudes to work, leisure activities, occupations, population shifts, trends, fads and earning capacity. Technological It included bio-tech, health, research, communications, inventions, internet, information technology, transportation, rates of obsolescence, manufacturing advances, genetics, waste removal/recycling, and so on. 3.0 The effect of PEST PEST will influence the company earn, there are some example of the effects of PEST factors that I want to shown below: The first element of PEST is political. Political is an important part of PEST, it will affect the price change of the company. For example, if government want to increase the taxes, business have to pay more taxes therefore, the price will increase. Just like alcoholic drink, the increase of the tax rate effect the markedly reduced. On another hand, employment law also play an important roles is political, it protect the benefit of employees, be fair to employees. The second element is economic. If the economic inflation is low, it will cause the company to cut cost and reduce the profit margins. It will affect the  company hard to pass on to the consumer. Another effect is, the demand is buyout, the cost of capital is low, and it will attract investment and growth of the company of being profitable. Although a depressed economy will generally be a treat which results in a number of organizations going out of business, it can provide opportunities for some (Robinson and et al., 1978; Thompson, 2002). The third element is social. It affects the population health, lifestyle change and more. For example, social had forces KFC to change menus because of the health consciousness. The changing of the demographics will affect the company, for example, the chaining of the population of age, regions, numbers of working and more can influence the demand for the product or service. This is the affect of the social on PEST. The last element of PEST is technological. Technological will affect the energy use and the cost. For example, the company use machine to produce the product, it will save more energy and time compare to workers. Nowadays, technology is popular of organization a business. They use internet to promote their product, it had increase the convenient of people. New technology can increase the profit of company, but before use the technology, company have to send some employees to attend the training. 4.0 Conclusion The PEST analysis is important for every business. It is very important to have PEST control in all food company. A good PEST can helps us to avoid taking the wrong action from begin, it for the reasons beyond the control. PEST is important for start business on a new area or countries. It helps you to faster adapt to the realities of the new environment. The political, economic, social and technology stand for PEST. Use PEST headlines from the characteristics, agitate countries or regions, and draw conclusions important strength, change the scope of business. PEST is a useful tool for a business to control their economic and some policies of the country. With the analysis of pests, can see the horizon of the company, and the longer to clarify strategic opportunity and threat the organization’s face. Through the observation of the potential external environment, we can see the changes on the horizon, the enterprise imminent strategic planning process from the stage and the horizon in day of tomorrow. Not a set of strict pests ideas need to be classified into the compartment. This is the best one, can  be used to fish for important facts. 5.0 References †¢ Wichudaa Hnoodaam (2009). Background KFC Corporation. [Online] Aug 7th 2009. Available from World Wide Web http://murasakibara-murasakibara.blogspot.com/2009/08/background-kfc-corporation.html. accessed: 12nd oct 2010 †¢ Tutor2u.com 2009. Strategy- introduction to PEST analysis. 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