Discuss about the Business Strategy and Organizational Behaviour.
KFC is one of the most dominant international players in the global business environment with its presence in over 109 countries and territories throughout the world. From the initial investigation regarding the background of the company, it is informed that the operations of the company are headquartered from USA to serve the needs and requirements of more than 12 million customers each day across the different locations of the globe. Hasan (2013) has informed through his examination that the continuously growing demands of consumers from the international market regarding the food and beverage products are adequately managed and fulfilled by KFC through the fundamental span of the business in the international locations. As part of the study, the company operates more than 4850 restaurants in the United States, whereas the establishing over 15000 restaurant chains in the global environment. It is worth to mention that KFC is a principal subsidiary of Yum! Brands, Inc., which is largest restaurant chain business in the world regarding the necessary stretch of operations in over 37,000 locations from more than 120 countries and territories globally (Jabeen & Katsioloudes, 2013).
From the investigation conducted by WANJA (2015), it is determined that KFC entered in the United Arab Emirates (UAE) in 1975, whereas the operations of the company have expanded to throughout the country with the help of developing 115 outlets in different locations. KFC operates by adopting a franchise model for conducting international trade activities throughout the various nations including UAE (Taras & Gonzalez-Perez, 2015). The business proceedings of KFC are franchised by Americana Group within the country.
Core Business and Strategies of Two Branches
The core business strategy of any profit making global organizations is based on promoting sales and revenues to enhance profitability and subsequently strengthening the financial position of the organization. Therefore, the particular fact leads the companies to leverage an increasing focus to the marketing strategies and policies for the chosen market environment. The marketing strategies employed by KFC is almost similar to any other large-scale global restaurant chain businesses, as critical approaches to the marketing strategies include executing rigorous customer research while conducting the market testing process at the same time (Ozturk, Joiner & Cavusgil, 2015). From the research conducted by Hanif et al. (2014), KFC adopts the combination of market and consumer research alongside an aggressive advertisement campaign throughout the nation for marketing the food and beverage products offered by the company. The similar set of approach is also defined by the company for its international operations, as the powerful commercial campaigns are observed in UAE.
Additionally, in the context of UAE, both the celebrity endorsement twinned with the social media advertising is appointed by KFC for offering significant opportunities to the customers for sharing their feedbacks related to the food items and services of the company (Hooper, 2016). In this case, the company’s strategy is based on gaining useful remarks from the customers of UAE regarding the addition of new features or their feelings or thinking related to the Halal guaranteed food items.
Importance of Understanding International Business
Based on the suggestion obtained from Kazmi et al. (2014), In order to develop a multinational product line or ensuring the expansion of business in the global environment, the marketing managers are specifically required gaining a proper understanding of the universal trading concepts and principles. More apparently, the key concepts related to the growth and prosperity of international business help the managers from different departments of the multinational enterprises to take practical decisions. Such decisions assist marketers forming ideal products for global marketing, determining the appropriate sourcing and distribution, and maintaining smoothness throughout the performance of company’s supply chain (Hoffman, Munemo & Watson, 2014). In the context of KFC, the company values the need of suitable understanding among the company’s professionals for facilitating the brand’s entry in the different market conditions of the global environment including the emerging marketplace of UAE. Based on the survey undertaken by Buerki et al. (2014), it is observed that the precise understanding of the international business activities has helped the firm over the time to ensure success of international operations along with sustaining the overall growth. Culture plays the most important role in developing a useful understanding regarding the global marketing by the managers of a multinational organization (Bremmer 2014). The team leaders and executives of KFC understands the fact that the world in not flat and the absolute demand for one product would vary extensively in another country or setting due to the changes in culture and perception of individuals. Such scenario is the particular reason substantially encouraging the marketing and operating success of KFC throughout the world economy.
Key Regulations governing International Ethics and Social Responsibility
With reference to the study formed by Baroto, Arvand, and Ahmad (2014), ethics is defined by the individual set of beliefs and perception influencing the decision making abilities, capabilities, behaviours, and activities based on their appropriateness. The study further mentions that each country has its particular set of regulations for governing the ethical and unethical behaviours for the individuals as well as the organizations operating within the industry. The key regulations arguing the alignment of ethics and social responsibilities of the conducting businesses are chiefly considered by the global market players like KFC. Considering the key features of KFC in operating in the market of UAE, it is importantly observed that the company’s policy needs is required adopting certain standards in treating their employees and maintaining specific set of behaviours with the other economic agents (Sheth, Sinha & Shah 2016).
Based on the research conducted by Balakrishnan (2015), KFC needs to introduce a unique hiring and firing approach for its employees in the course of operating in UAE. The individual work further added that shaping up the hiring and firing strategy is based solely on the ability of the indigenous people to perform the necessary job roles. On the other hand, the social policies and guidelines of UAE steer the company to develop an appropriate working environment constituting the involvement of a fair wages system (Hoffman, Munemo & Watson 2016).
Various Elements of Culture influencing International Business
With the help of the scholarly example produced by Hoffman, Munemo, and Watson (2016), it is estimated that language, taste, regional values, and consumer habits are the key cultural factors from the business environment influencing the nature and direction of the operations of a global firm. The particular work has also signified that the combined effect of the mentioned factors varies based on the variety of economic and geographical conditions. Language plays one of the pivotal roles in creating an aggressive advertisement and promotional campaigns by the marketers of KFC. The marketers need to indulge in rigorous market research process regarding market testing and consumer behaviours for building precise mix of messages that should be translated and embedded into the formulation of marketing message (Zailani, et al., 2015). At the same time, KFC had faced an enormous challenge in entering the marketplace of UAE, where the environment is highly influenced by the environmental values and tastes among the residents. Zailani et al. (2015) argue that companies like KFC encounter multiple threats during the entering the international market because of the whole new eating habits on the inhabitants require adequate awareness of the global marketers. As part of the process, the company has to redesign its image by adopting an entirely different viewpoint, as the country looks for the Halal tag in their consumption of meals from the outside sources (Baroto, Arvand & Ahmad 2014). Similarly, the changing regional values must need to be considered by the organization in designing various marketing approaches. Lastly, citing the work of Bremmer (2014), it is acknowledged that culture and personality are the factors that jointly responsible for shaping up the consumer behaviours in a particular region. The particular research indicates that a multinational restaurant chain business like KFC must need to determine whether the given location is part of an individualistic society or a collective society. Based on the nature of culture in Middle East region, it can be proposed that UAE is comprised of a collective society, where the peer groups have their potential power on the buying decision of the entire nation (Balakrishnan 2015). Hence, the certain factors from the cultural environment have their dominant influence over the rise and progress of KFC in the food and beverage industry.
Usefulness of Main Cultural Clusters for International Managers
From the analysis performed so far, it is estimated that adapting to the different cultural norms and perspectives in an efficient manner is one of the primary challenges facing the international businesses. Referencing the findings of the study formed by Sheth, Sinha, and Shah (2016), it can be significantly assumed that cultural perceptions, diversity, values, and beliefs are the principal factors associated with the cultural environment of a country that require proper awareness from the marketing managers of a global business organization. The managers must need to define, describe, indentify, and discuss each cultural cluster for constructing a culturally and socially approved approach for the overall business (Kazmi, Naaranoja & Worlin 2014). Therefore, the specific understanding suggests that gaining a superior perception about the various cultural groups aids the firm to introduce socially and communally conformed business activities facilitating the desired growth in the chosen market. Apart from that, it was discussed earlier that an economy like UAE, the buying decision of the entire nation is significantly controlled by the cultural groups and peers suggesting the usefulness of extracting detailed insight by the marketing managers of KFC for proliferating the valuable decision making in the international marketing environment.
Explanation of the Emergence of Cultural Conflicts
KFC and McDonald’s are two popular companies representing the American fast food brands have their operational hubs in UAE. It is primarily understood that the fundamental cause of cultural conflict is a failure to adapt the cultural difference through the business models and approaches in a well-fashioned manner. With the help of the work developed by Hooper (2016), it is informed that KFC has faced a significant degree of cultural conflicting issues during its operations in China and Brazil due to the misconception in the promotional and advertisement campaign to disregard the respective tradition of the nations. Hence, it can be observed that failure to comply with the traditional and cultural values during the preparation of the commercial activities would not only hampers the brand image of the company, but also create a considerable hurdle in the evolution of international business (Buerki, et al. 2014). On the other hand, through the involvement of the work of Hoffman, Monemo, and Watson (2014), it is reported that specific revenues of KFC substantially dropped during its Brazilian operations due to the failure to determine the perception of the local consumers during consuming chicken items. Therefore, the global restaurant chains must need to engage in the constant research to recognise the specific tastes and eating habits of the consumers for striving to add new or customised features in the delivery of food items and associated services.
Managing Social Responsibility across Borders
With the application of Taras and Gonzalez-Perez (2015), corporate social responsibility (CSR) is a continuously emerging resonance in the global economy gaining attention from the marketers worldwide. The particular study reflects that CSR specifies shaping up the approaches and actions of the company for ensuring the delivery of maximum benefits to the community in which the operations are involved. Based on the analysis of the CRS statement of KFC, it is determined that the organization persuades its managers as part of the international venture to play certain set of roles comprehensively addressing the overall social system followed by the country (WANJA 2015). Additionally, the restaurant chain also holds the managers and executives responsible for their duties and respective effects in the individual social settings.
International Trade between Two Countries
The information disseminated throughout the paper points out that setting up an international business is often a challenging task for the organizations, as the managers and executives relating to the scenario must need to be highly competent and capable of understanding the demands of the target market located in the foreign environment. Here, the variation can be observed between the set of actions and approaches adopted by KFC in UAE and China because of the difference of values, perception, tradition, and cultural conceptions in the two separate geographic locations. KFC assumes two distinct types of customised features for the two separate countries. In China, KFC has to provide increasing stress on using marketing message and developing advertising contents, whereas in UAE, the food items are required complying with the social norms and notions outlined by the cultural cohorts (Hanif, et al., 2014).
The Middle East is one of the lucrative markets for the western corporations due to the significant growth opportunities provided by the economy. UAE is one of the most popular commercial destinations for raising the standard of an international business model of multinational corporations throughout the world. Because of the entire nation profoundly dominated by the Islamic cultural values, KFC embeds cultural needs and requirements during the formulation of its food items and serving them to the increasing base of customers. For example, the company offers Halal Guaranteed foods to the consumers for capturing the growing opportunities from the particular market environment. Hence, the marketing efficiencies are proved to be the key success factor for the fundamental rise of KFC in the contemporary global environment.
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