A method to achieve the desired target objective is “business strategy”. It can also be considered “long-term” business planning. In the existing document, the Business strategy of KFC has been discussed based on the Ansoff Matrix. The Ansoff matrix is a tool to provide a strategic planning framework that allows the investors and business administrators to develop plans for organizational growth.
The process of strategic management and operational control is very complex in KFC. The strategic planning process of KFC is based on diversification and penetration. Be keeping in view the existing situation, the latest business plan for KFC has been developed based on Ansoff Matrix. There are four stages involved in Ansoff Matrix that include, Market penetration, Product development, Market Development and Diversification (Bhasin, 2019).
Market Penetration
The selling of goods and services in a specific market is considered as “Market Penetration”. KFC is constantly struggling to improve the quality of its products in Brazil and Argentina. Therefore, a market penetration plan may assist in doing the same through the categorization of old goods before a new market. The establishment of various outlets in different regions of Brazil and Argentina would support the market penetration strategy of KFC. An increase in the number of the franchise would increase the market share and profitability of the company (Black, 2018).
Product Development
Production of new or different products or services that provide additional benefit to the customer is called “Product Development”. The buying behaviour of the customers has been changed due to various changes in the demography and lifestyle of the consumer. Although, KFC is required to focus on the production of vigorous options by adding vegetables and free-calorie products to create variety. Consumers are more conscious about their health that’s why they prefer to eat low-fat food. Therefore, KFC must expand its product line that may help the company to grab new customers.“Try Healthy, Be Healthy” campaign should be started to launch the latest products and services. In this manner, the target market will be expanded that would increase sales growth (Cheverton, 2018).
In a product development approach, KFC may experience its hand through the production of various kinds of burgers. It has been observed that MacDonald’s is more preferable than KFC due to a variety of products like Spaghetti, Mc Pizza, and Masala Grill. In this situation, KFC is required to produce a variety of burgers in terms of taste and ingredients. Product development plays a vital role in the growth of market share because the introduction of new products attracts new customers that increase sales. For example, MacDonald has developed kids-oriented products and schemes but KFC has not introduced any product plan for a child audience. To grab the attention of customer’s at large extent, KFC may introduce special morning breakfast and combos like MacDonald’s working already.
Market Development
It deals with the selling and production of goods and services in the new market by expanding its geographical coverage. On the other hand, selling existing products into a new market at different costs may also be considered as market development. The target audience of KFC is based on youth and middle-class customers. However, the KFC to enhance its target audience needs to increase its customers and establish its business in every region across the world to reach its customers at a global level. An increase in the number of customers increases the firm’s profitability ratio and helps to recover all previous losses (Black, 2018).
Diversification
Production of unique products and services to attain competitive advantage is called differentiation strategy and the company needs to integrate all primary and supportive activities to develop an effective diversification plan. To deal with strong market competition, large firms like KFC, Hardees, and McDonalds are executing a diversification strategy to achieve competitive advantage. Over time, KFC has managed to maintain its competitive edge through the production of different products. The unique production of KFC has made it difficult for rivals to emulate. The company deals with chicken pieces, sandwiches, salads, and wraps. Although, the main focus of the company is based on fried chicken. It provides a large number of various chicken items. KFC has remained unique in the production of fast food due to eleven herbs and spices. The development of an effective diversification strategy has helped in the expansion of the firm’s customer loyalty (Bhasin, 2019).
References
Black, J. (2018, September 11). Kentucky Fried Chicken [Blog post]. Retrieved from https://ivypanda.com/essays/kentucky-fried-chicken/
Bhasin, H. (2019). Ansoff Matrix Theory Examples of Business Strategies for Future Growth. Marketing91.
Cheverton, P. (2018). Key Marketing Skills: Strategies, Tools and Techniques for Marketing Succes (4th ed.).