PROJECT KFC INTRODUCTION OF MANAGEMENT MGT400 PDF

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CHALLENGES FACED BY “KENTUCKY FRIED CHICKEN HOLDINGS MALAYSIA BERHAD”...

Description

UNIVERSITI TEKNOLOGI MARA FACULTY OF BUSINESS MANAGEMENT

(MGT400) INTRODUCTION TO MANAGEMENT GROUP PROJECT 2 TITLE: CHALLENGES FACED BY “KENTUCKY FRIED CHICKEN HOLDINGS MALAYSIA BERHAD” Prepared by: BIL

NAME

STUDENT ID

CLASS

1.

AINUR SHUHADA BINTI ABDUL SHUKUR

2019219112

CS2484A

2.

ALIF HAIQAL BIN ASRUL

2019415228

CS2484A

3.

MUHAMMAD FARIZ BIN FIRDUS

2020836964

CS2483B

4.

MUHAMMAD ZAID BIN ZUBIR

2019405922

CS2484A

5.

NOOR NADHIRAH BT ZARKHSI

2020455664

CS2483B

Prepared for: PN. MAZIAH BINTI MOHAMED ARIF Date of Submission: 16/7/2021

Table of Contents

1.0) 1.1) 1.2) 2.0) 2.1) 2.2) 3.0)

INTRODUCTION........................................................................................................................... 3 Background Of Company .......................................................................................................... 3 Organization Chart ..................................................................................................................... 5 CHALLENGES ............................................................................................................................... 6 Limited Operations Hour ........................................................................................................... 6 Sales Drop .................................................................................................................................... 7 SUGGESTION FOR PROBLEM.................................................................................................. 8

3.1)

Limited Operating hours ............................................................................................................ 8

3.2)

Sales Drop .................................................................................................................................... 8

4.0)

RECOMMENDATION OF BEST SOLUTION .......................................................................... 9

5.0)

IMPLEMENTATION .................................................................................................................. 10

5.1)

Provide 24 hours delivery. ........................................................................................................ 10

5.2)

Promotion .................................................................................................................................. 11

5.0

CONCLUSION ............................................................................................................................. 12

6.0)

REFERENCES .............................................................................................................................. 13

2

1.0)

INTRODUCTION

1.1)

Background Of Company

Kentucky Fried Chicken is an American fast food restaurant chain headquartered in Louisville, Kentucky that specializes in fried chicken. It is the world's second-largest restaurant chain (as measured by sales) after McDonald's, with 22,621 locations globally in 150 countries as of December 2019. The chain is a subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut, Taco Bell and WingStreet chains. KFC was founded by Colonel Harland Sanders, an entrepreneur who began selling fried chicken from his roadside restaurant in Corbin, Kentucky during the Great Depression. Sanders identified the potential of the restaurant franchising concept and the first "Kentucky Fried Chicken" franchise opened in Utah in 1952. KFC popularized chicken in the fast-food industry, diversifying the market by challenging the established dominance of the hamburger. By branding himself as "Colonel Sanders", Harland became a prominent figure of American cultural history and his image remains widely used in KFC advertising to this day. However, the company's rapid expansion overwhelmed the aging Sanders and he sold it to a group of investors led by John Y. Brown Jr. and Jack C. Massey in 1964. KFC was one of the first American fast-food chains to expand internationally, opening outlets in Canada, the United Kingdom, Mexico and Jamaica by the mid-1960s. Throughout the 1970s and 1980s, it experienced mixed fortunes domestically, as it went through a series of changes in corporate ownership with little or no experience in the restaurant business. In the early 1970s, KFC was sold to the spirits distributor Heublein, which was taken over by the R. J. Reynolds food and tobacco conglomerate; that company sold the chain to PepsiCo. The chain continued to expand overseas, however, and in 1987 it became the first Western restaurant chain to open in China. It has since expanded rapidly in China, which is now the company's single largest market. PepsiCo spun off its restaurant’s division as Tricon Global Restaurants, which later changed its name to Yum! Brands.

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KFC's original product is pressure fried chicken pieces, seasoned with Sanders' recipe of 11 herbs and spices. The constituents of the recipe are a trade secret. Larger portions of fried chicken are served in a cardboard "bucket", which has become a feature of the chain since it was first introduced by franchisee Pete Harman in 1957. Since the early 1990s, KFC has expanded its menu to offer other chicken products such as chicken fillet sandwiches and wraps, as well as salads and side dishes such as French fries and coleslaw, desserts and soft drinks; the latter often supplied by PepsiCo. KFC is known for its slogans "It's Finger Lickin' Good!", "Nobody does chicken like KFC" and "So good". The first KFC restaurant in Malaysia was opened in 1973 on Jalan Tunku Abdul Rahman. Until now, KFC Malaysia reached about 500 franchised around Malaysia and still counting. Great tasting chicken has become synonymous with KFC and has been enjoyed by Malaysians ever since. Now KFC Malaysia has developed its own distinctive Malaysian personality of its own. KFC Holdings (Malaysia) Bhd., (KFC Holdings) is a branded chicken retail chain operator. KFC Holding in Malaysia operates about 500 KFC restaurant nationwide also operates the RasaMas chain of restaurant about 35 outlets. Approximately 52 Ayamas Shop owning by the Group of KFC Holding, making this company as nation`s first branded chicken and chickenbased retail chain. Not only serve fast-food as main business, KFCH also widely involved in poultry production and processing, as well as a host of ancillary businesses such as vegetable farming, baking and sauce production. KFC Holdings (Malaysia) Bhd has emerged as strong big company in Malaysia`s businesses and retail world with high reputation for excellent product, efficient friendly service and financial strength. Undeniably, KFCH is the only KFC restaurant operator in world whose serve Western Quick Service Restaurant market greater than that of McDonald`s. KFC Holdings (Malaysia) Bhd (KFCH) operates service not only being the franchisee of KFC chain of restaurant in Malaysia but also in Singapore, Brunei, Cambodia and India.

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1.2)

Organization Chart

5

2.0)

CHALLENGES

In this pandemic whole world become suffer because of that killing virus Covid 19, and also include Malaysia who are among the country that have highest percentage of Covid 19 cases everyday and also one of the country to have a very long time lockdown. KFC are one of the business that have a big effect, effect to company, staff, and also customer. KFC have face many challenges in Managing a company during the Covid19 pandemic: 2.1)

Limited Operations Hour

As we know Malaysia have been lockdown almost 2 years, the operations hour for KFC in this lockdown have been changes time by time. Malaysia are the one of the country that have the most KFC, and half of it operate 24 hours before this pandemic. But now after we have been lockdown, KFC been operating from 8am – 10pm the most to all the KFC in Malaysia, and if the KFC at red zone place, their operating hours are from 8am – 8pm. This clearly shows, half of the operating time have been remove, and also half of working hour for the staff. With limit operations hour the customer is lesser coming to the KFC and also some KFC become too pack of customer because the limited time to buy the KFC products. For the KFC that have been pack of the customer because limited time to buy, the customer has to line up in the restaurant, the customer can’t sit at there because of the Standard Operation Procedure (SOP) except they bought their own chair. Some of the restaurant have to line up at the outside the restaurant because they have limit person in the restaurant. Because of the all customer that always come to KFC at any time before this pandemic and now they all come at one time, the KFC become pack of the customer, and also the staff have to work faster and harder at the limited time.

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2.2)

Sales Drop

For the KFC that loss of their customer, they become loss of the sales. This shows that if there are no customer coming to the restaurant their sales drop, and the company may be having to shut down or they have to make alternative to fired their staff. The staff also doesn’t have anything to do because they have no customer. The food that there has been cook may have been thrown because nobody wants to buy it.

There also have a KFC that have one owner but many restaurant, they have to shut down some of it until the pandemic cool down. With that decision many staff will be fired or been remove to others branch because they can afford to pay them. Also Malaysian love KFC so much, they each KFC anytime and anywhere, and with the loss of certain KFC in the certain place will make them sad and maybe they will find other alternative, with that solution, KFC have lost their customer.

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3.0)

SUGGESTION FOR PROBLEM

3.1)

Limited Operating hours

Based on the challenge that KFC faced is limited operating hours for customer who order directly from counter. Actually, the KFC store can open 24-hours but just thru the online order. The customer who orders online can just pick up when their order is done, like drive thru concept. Some store KFC might not have ‘drive thru’, so the staff KFC can make a spot that easier for customer take away. This faster and more efficient if practice in this pandemic. Moreover, the que that the customer waiting will be shorter.

KFC also can provide 24-hours in delivery system to all outlet KFC. It is easier for customer that who cannot go out in late night and hungry at night. Furthermore, in Malaysia mostly like eat fast food at night. So, this suggestion suitable for do during the MCO ’s that faced by in Malaysia.

3.2)

Sales Drop

KFC can create a unique menu to interact the customer to try by doing food based on chicken with Malaysian’s taste. Since in Malaysian, their love in trying a new menu that unique , in addition if the menu is from KFC where known as the best fried chicken. Furthermore, KFC can do promotion in each monthly for selected item. This would gain a loyalty customer on KFC outlet. Otherwise, KFC gift a special price on selected item to customer who celebrate their birthday on selected month.

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4.0)

RECOMMENDATION OF BEST SOLUTION

The best solution from limited operating hours is KFC should provide 24-hours delivery to the customer. Besides, it easier to customer who cannot go out in late of night. It is also easy for people who in inter-district travel ban place to purchase food from KFC. This is because one of the MCO SOPs is the prohibition of inter-district and interstate travelling which is MKN (Malaysian National Security Council) put limit movement for people within 10KM radius and time for people to go out until 8 P.M only. If we have learnt from the previous lockdown, it is that you should provide incentive to bring food to your customer if they can’t come to the restaurant. It is one of the customer relationship management technique that uses IT to develop an ongoing relationship with customers to maximize the value an organization can deliver to them over time.

Next, for the sale drop. we choose for KFC can do promotion in each month for selected item. As we know, during this pandemic many people was affected in Malaysia. Lots of them are lost their job as the company cannot afford to pay the salary or their salary only half paid. People in Malaysia really like to eat KFC especially their fried chicken. KFC serve the best fried chicken in town. Surely, if you bump into some kids, asked them about their favourite food, I bet they will say KFC! KFC is everyone’s favourite not only for adult but also the children. KFC can serve bundle meals or work from home lunch specials to attract people. For the bundle meals, since people are most likely at home with family, they will be ordering for a bunch of people. This is the perfect opportunity to provide a set meal that will caters for group meals. Last but not least, work from home lunch specials is one of the good ideas because most companies are encouraged to allow their employees to work-from-home, it is an opportunity to provide set lunch deals catered to this group of consumers. Moreover, for people who are work from home, they do not have enough time to cook during break hour because it is one 1-hour given. so, with the deals and they can do delivery, it is very easy for customer to make purchase through delivery.

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5.0)

IMPLEMENTATION

5.1)

Provide 24 hours delivery.

Two types of online platforms have risen to fill that void. The first type is the “aggregators,” which emerged roughly 15 years ago; the second is the “new delivery” players, which appeared in 2013. Both allow consumers to compare menus, scan and post reviews, and place orders from a variety of restaurants with a single click. The aggregators, which are part of the traditional-delivery category, simply take orders from customers and route them to restaurants, which handle the delivery themselves. In contrast, the new-delivery players build their own logistics networks, providing delivery for restaurants that don’t have their own drivers.

Aggregators Aggregators build on the traditional model for food delivery, offering access to multiple restaurants through a single online portal. By logging in to the site or the app, consumers can quickly compare menus, prices, and reviews from peers. The aggregators collect a fixed margin of the order, which is paid by the restaurant, and the restaurant handles the actual delivery. There is no additional cost to the consumer. With their asset-light model, aggregators post earnings before interest, taxes, depreciation, and amortization (EBITDA) margins of 40 to 50 percent. Although investment continues to pour in (Delivery Hero and Foodpanda, for example, both attracted €100 million in new investment in 2015), most of the consolidation in this subcategory has already occurred. Four players—Delivery Hero, Foodpanda, GrubHub, and Just Eat—have achieved global scale. These four players tend to focus on different regions. On a national level, there are typically two or three competitors that dominate, mostly driven by their ability to build a large user base. Consolidation is advanced in most markets and will likely continue. McKinsey research shows that just 26 percent of traditional-delivery orders are made online today, but we expect this share to increase rapidly.

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New delivery Just like the aggregators, new-delivery players allow consumers to compare offerings and order meals from a group of restaurants through a single website or app. Crucially, the players in this category also provide the logistics for the restaurant. This allows them to open a new segment of the restaurant market to home delivery: higher-end restaurants that traditionally did not deliver. The new-delivery players are compensated by the restaurant with a fixed margin of the order, as well as with a small flat fee from the customer. Despite the higher costs of maintaining delivery vehicles and drivers, the new-delivery players achieve EBITDA margins of more than 30 percent. Players include brands that operate globally such as Deliveroo and Foodora, which are continuing to capture new regions. We believe the addressable market for new delivery will reach more than €20 billion by 2025. 5.2)

Promotion

By definition, a sales promotion is an activity applied for a predetermined, limited period of time, with the aim of increasing consumer demand and stimulating sales. Sales promotions give potential customers an additional reason to consider doing business with you and your company. The idea is once customers are willing to take that first step and try your product — whether through limited trial periods, discounts, special offers, free shipping, branded gifts, loyalty programs, or digital coupons — they’ll be happy enough with the results to be willing to spend more of their hard-earned cash with you down the track. Offering a discount is a tried-and-true way to win over customers, boost sales, and move stock. Not only do 77% of shoppers say discounts can influence where they shop, almost half (48%) admit a discount has sped up a purchasing decision. Discounts can be limited to a specific point in the customer journey — for example their first online order — or a seasonal or holiday promotion. Or consider an alternative, such as offering a special price — for example, “nothing over $20” — or a buy-one-get-one deal.

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5.0 CONCLUSION

To meet the challenges posed by the pandemic, businesses around the world had to react in agile and decisive ways. As we move into the next phase, now is the time for businesses to seek out and seize the opportunities emerging in the recovery. This involves conducting an “after-action review” to collect data and insights on lessons learned from the pandemic, and then using these to prioritise actions to enhance business value today and build strategic resilience for tomorrow. The purpose of this research is to identify the challenges on KFC company during the Covid19 pandemic. Based on the analysis conveyed, it can be concluded that the company has faced some challenges during this Covid19 pandemic. However, there are several solutions that can be done by KFC to overcome the challenges faced by their company. The challenges that KFC has been faced during the Covid19 pandemic are Limited Operation Hour and Sales Drop. This are 2 main challenges that we are focusing on this research. However, there are few solution that can be done by KFC to overcome the challenges faced by their company which is for the limited operation hours, KFC can provide a spot for customer to pick up order easily such as drive thru concept and 24 hours delivery option for the customer since people cannot go out late night since Movement Control Order had been held by the government since March 2020. The solution for the next challenges which is drop in the sales of the company, KFC can create a new menu to attract customer to try their new taste of fried chicken and KFC can also provide some promotion for customer so that they are more attracted to buy the menu offered by KFC.

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6.0)

REFERENCES

1.

https://www.contagious.com/news-and-views/a-banjo-among-violins-the-stratkfcs-

2.

https://www.storehub.com/blog/cmco-save-fnb-...