Internal And External Environmental Scan Of KFC Essay.

Background of Kentucky Fried Chicken (KFC)

Risk is defined as the situation or the scenario in which an individual or an organization stands to gain or lose something substantial or of value (Franks et al., 2014). In the particular context of the business world this loss or gain is generally in terms of profitability, market share, revenue, projects, image or brand name and others (Grace et al., 2015). The business enterprises during the course of their business operations often find themselves in these situations of risks and the prospects of a business enterprise depends to a great extent on the effectiveness as well as efficiency with which it being able to mitigate the risk (Farrell & Gallagher, 2015). In this regard, the process of identification of risk or business environment scanning becomes very important since they provide an overview to the organization regarding the kinds of risks that it is facing currently (Bromiley et al., 2015).

An effective knowledge regarding the risks and the stakeholders who are affected by these risks is important since it helps the organizations to formulation the strategies or the measures that can help it to mitigate the adverse effects of these risks. Wu, Chen and Olson (2014) have opined that the various risks are actually future opportunities which if utilized in an effective manner can contribute in a substantial manner towards the growth of the concerned organization. This report will discuss about the concept of risk management and its affect on the stakeholders (internal and the external) in the particular context of the organization Kentucky Fried Chicken (KFC).

Kentucky Fried Chicken (KFC), founded by Harland Sanders in 1952, is an “American fast food restaurant chain” and has its headquarters at Kentucky (KFC.com, 2018). The food chain specializes in the genre of fried chickens and as a matter of fact the entire brand or the market image of the company has been established on the basis of the these fried chickens that the company offers to the customers (Owens, 2018). The company initially began its business operations in Kentucky however after gaining success in this city the food chain expanded into the other cities of the nation (Davis et al., 2018). Furthermore, the food chain is currently operational in more than 100 different nations of the world and in addition to the standard fried chickens which had made the company it offers other kinds of food items to the customers as well depending on the kind of city or nation it is operational in (Talwar, 2018). For example, some of the most popular food items offered by the company to its customers are “chicken fillet sandwiches and wraps, as well as salads and side dishes, such as French fries and coleslaw, desserts, and soft drinks” (KFC.com, 2018).

The company in order to expand the prospects of its business in the recent times has undertaken collaborations with companies like PepsiCo, Pizza Hut, Taco Bell and others (KFC.com, 2018). In addition to these, the company under discussion here also takes the help of effective promotional as well as marketing strategies for the promotion of the food items offered by them to the customers (Chan, 2015). The various promotional slogans used by the company over the years like “’It's Finger Lickin' Good!”, “Nobody does chicken like KFC”, “So good” and others have contributed in a significant manner towards the success gained by the company (Zabeen, Wei & Lu, 2016). For example, the company is the 2^nd largest private food chain of the world just behind McDonald’s with annual revenue of US$26 billion (KFC.com, 2018). Furthermore, the food chain has more than 20,000 outlets in different nations of the world (KFC.com, 2018).

Stakeholders of Kentucky Fried Chicken (KFC)

Jones, Wicks and Freeman (2017) have stated that the stakeholders are the entities who not only take an active interest in the business activities of a particular organization but at the same time are affected by the strategies or the business decisions of the concerned organization as well. In the majority of the cases, it is seen that there are two kinds of stakeholders who are associated with a particular organization, namely, the internal stakeholders and the external stakeholders. As per Tantalo and Priem (2016), the internal stakeholders refer to the individuals who are already associated with the business enterprise in the capacity of board members, staff, donors, volunteers and others. The decisions or the strategies that an organization decides to pursue had a direct impact on the internal stakeholders of the company and thus it is important for an organization to formulate the different strategies that they are going to use in discussion with the internal stakeholders of their business. The external stakeholders, on the other hand, are individuals, communities, constituents and others which are impacted by the business activities of an organization (Tantalo & Priem, 2016). Jones, Wicks and Freeman (2017) are of the viewpoint that both of these stakeholders are important for a particular business enterprise and thus they need to take into effective consideration the perspective and also the needs of both of them for making decisions.

  An analysis of the internal and the external stakeholders of the company KFC is likely to reveal important information regarding the business operations of the organization. The internal stakeholders of the KFC are the various members of board of the organization, the regional managers, the waiters, cooks, ground staff, cleaning staffs and the other individuals who are associated with the business of the concerned organization (Talwar, 2018). On the other hand, the external stakeholders of the concerned organization are the customers who opt for the food items offered by the company, the constituents in which they are operational and others (Owens, 2018). These in short are the main internal and the external stakeholders of the company KFC.

A SWOT analysis of the company would reveal the following details-

The different kinds of risks that the company KFC faces currently on the score of its business operations can be broadly categorized into two categories, namely, the internal risks and the external risks.

Grace et al. (2015) are of the viewpoint that the internal risks are the ones which an organization faces on the basis of its internal affairs like the management of the business, internal stakeholders and others. However, at the same time, it needs to be said that these internal risks are as catastrophic as the external ones and thus the organizations need to adopt adequate mitigation measures or strategies for the resolution of the same (Franks et al., 2014). The internal risk that the company KFC is facing currently because of the human factor is the high employee turnover rate (Chan, 2015). This has been one of the major issues of worry for the company and it is seen that every year thousands of employees switch over the other companies complaining about the uncongenial working environment of the company. The internal risk that the company KFC is facing currently because of the technological factor is the inability of the company to take the help of the emerging technologies within the fold of their business operations (Zabeen, Wei & Lu, 2016). The competitors of the company by virtue of taking the help of these emerging technologies pose a substantial amount of threat to the company. Another physical factor because of which the company faces a substantial amount of risk is the fact that the physical locations of most of the outlets of the company are a bit far away from the heart of the city and this adversely affects the business of the company (Zabeen, Wei & Lu, 2016). A look at the competitor of the company McDonald’s reveals that most of their outlets are located in the heart of the cities and this as a matter of fact has contributed towards the success gained by them (Zabeen, Wei & Lu, 2016).   

Risk Management and Stakeholders in Kentucky Fried Chicken (KFC)

As per the opinion of Soltanizadeh et al. (2016) the external risks are the kind of risks that an organization faces on the basis of the external business environment in which it is operational. The majority of the nations of the world are still reeling from the adverse effects of the economic recession that it faced a while and this had affected the buying behavior of the customers in a substantial manner (Cole, Giné & Vickery, 2017). The company KFC faces a significant amount of economic risk on the basis of this particular fact. The people of the contemporary times have become much conscious regarding their health and also the kind of food products that they offer to the customers (Cole, Giné & Vickery, 2017). In this regard, it needs to be said that the majority of the food items offered by the company belongs to the category of junk foods (Owens, 2018). Thus, the company faces a substantial amount of natural risk on the basis of this factor. KFC is currently operational in more than 100 different nations and it is seen that the company does not gets the same kind of congenial political conditions in all these nations. A stable congenial political environment is one of the most basic requirements of the business enterprises and thus the organization faces a significant amount of risk because of the uncongenial political condition of some of the nations in which it is operational (Davis et al., 2018).     

Conclusion

To conclude, the business enterprises on the score of their business operations face various kinds of risks which can affect the prospects of their business in an adverse manner. These risks can be categorized as internal and external risks and have the potential to hamper the long-term as well as the short-term goals of an organization in an adverse manner. Thus, it becomes important for the organizations to take the help of diverse kinds of mitigation strategies so as to mitigate the effects of these risks. The mitigation of these risks is not only important from the perspective of the business prospects of an organization but also from the perspective of the stakeholders as well. Thus, it can be said that the success or the failure of an organization depends to a large extent on the ability of the organization to mitigate the different risks that it faces.

References 

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