(Subject) KFC and the Global Fast Food Industry
External Remote Environment Analysis of a Global Fast Food
From an outsider’s point of view, the global trend of food consumption greatly influenced our values, our lifestyle, and the young generation. In this research paper, we will try to find out the effects of the fast food chain industry with regards to our environs whether on the political, social and economic aspect, technological and ecological as well.
The subject industry for this study is the Kentucky Fried Chicken ranks 5th among the globally known chain restaurant business that was owned by Colonel Sanders. KFC has its beginnings in California even before the 60’s and in 1974 the Association of Kentucky Fried Chicken Franchisees, Inc. (AKFCF) was formed which became the pivotal point to what it is viewed today. The National Association mission statement adopted in September 12, 1993 at Washington D.C. stated that members are “…united to protect, promote and advance the mutual interests of all franchisees and the Kentucky Fried Chicken System (The Association of Kentucky Fried Chicken Franchisees).”
That was the beginning of fast food chains in which the needed concept of protecting a growing business lead the franchisee whom the first owner called “the family”, towards a development far greater than they have envisioned and has reached every corners of the world.
The Social, political and Economic Aspect of a Fast Food Chain Industry
When families’ eats out for lunch or go for a takeaway, who is asked what to eat? Normally it will be the children who would say “Pa or Ma buy me a fried chicken”. In the anthropological study of Fuji Lozada he stated that “children are decision makers whether an urban family will patronize a KFC restaurant (Lozada). For these reason, any institutions or social groups implement their visions by using children’s consumption for both material and cultural goods. In many instances it has been the trend on which influence the shaping of children’s experiences. Birthdays and gatherings for children more or less ended in a fast food or the KFC restaurant. It is usually a fun experience for kids to bring out some Sanders toys and play with the mascots.
Since the industry is rapidly growing and it has been there for more than two generations, a woman at age 45 would recall that her mom brought her to KFC when she’s a kid. The business was able to find its way sleekly to everyone’s consciousness whether it be positive or negative, people say a lot about it. However, there are ups and downs in business, and to KFC their company mission was able to surmount its valleys and peaks. Its long history was able to face challenges that brought them out of its realm. Challenges that they manage to discover the world outside.
KFC market share is more than 50% that makes it hard for new company to enter the market (Essay). However before 2000, KFC began to address its declining market by building smaller outlet located in airports, shopping malls, cinemas, and even hospitals. Merging with PepsiCo contributed to its decline because of cultural issues regarding problems with employees who are used to a self governing management to a system who commands tighter control on operations (Essay).
Growing competition due to market saturation of the branded chicken business made it difficult for KFC to raise their prices (Fratfiles). Also, the new line such as the crispy strips and sandwiches overthrow the sale of the fried chicken. Cholesterol conscious consumer’s also think that it is a bucketful of fried medical trash. To some it is an easiest way to feed a hungry appetite.
It was a long way that KFC Corporation eventually created a contract acceptable to the U.S. systems of franchisees. Supply and distribution was governed by the National Purchasing Cooperative now part of LLC and Unified Foodservice Purchasing Co-op. It was the combination of AKFC and NFAC efforts to address the problem on competition and distribution that would benefit all its franchisees (The Association of Kentucky Fried Chicken Franchisees). Together with their renewed share of the traditional sense of family and purpose, annual convention of about 2,500 members gathers to review and construct its company mission in promoting its members investment the healthy way towards the new millennium.
The Global fast food industry grew by 1.5% in the year 2006 and forecasted in five years to have a value of U.S. $125 billion assuming there is an increase of 22% (Datamonitor). The Americas generates 63.1% of market revenues making it the biggest market worldwide (Datamonitor). Fast food operates on sale of set meals or a combination of food and drinks, consumed immediately on the premises such as food courts or for consumption elsewhere and food deliveries. Sales are valued in the amount spent by food service operators and not the amount of food consumed by consumers, these gives price differences depending on their other costs that would generate them a profit.
Those above valuing determine the amount of money a food and drink manufacturer will compete with the rest. Pricing in other parts of the world are converted into annual exchange rates. Volumes on sale are classed by a number of visits of customers to any foodservice locations and that means even multiple purchases are counted as one transaction. For these reason, we encounter value or set meals and a cost of a piece quite expensive than more palatable. It is a real different thing when compared to a dine-in or fine dining restaurants.
Also there are issues about passed regulation on public nutrition information being blocked by a federal judge but was preempted by federal law (Health). Legal councils or framers whatever it means probably diluted their brains to the so called the “chicken diet concept”. The nutrition law requires food chain with 15 units to provide nutrition information on their menu. That is providing consumers with informed choices that could help them and their families in making the right choices.
The Technological and Ecological Aspect and Economic Situation of Consumers and Producers
Though the industry created more jobs and a modern technology that makes preparation of mass produced meal easy and convenient, it has been declared that meat packing is one of the most dangerous jobs in the world. Young people also resorted to this work and are underpaid. Some labor practices are affected not only in terms of compensation but on tenure and job security. Truly it makes the gap of the rich and poor wider. The bias of society between the working poor and the global tycoons could be seen in economic situation of the families of working class between the business entrepreneurs.
While in spending, teenagers allowances goes to fast food consumptions. More money is spent daily on food than in education. The Americans spend U.S. $110 billion in the year 2000 alone (Schlosser). How many billions of people consume chicken everyday around the world? And since it is a fad, where are those volumes of white meats come and go? The demand of this commodity has affected the supply and deregulated the cost in the market. It has implications on the entire industry from the breeding of the chicken to the poultry farms. Feeds and operations cost of the producers was high and the profit became very law as the demand grows. The buyer dictates the price without giving due respect to the amount of time and operations of its business support group.
Environmental and technology research programs are being conducted to focus on the procedure on how to reduce emissions and wastes caused by consumption and production for its sustainable use of natural resources. These are major concern needed to be addressed immediately. A research on integrated product policy is needed but it is still in the initial stage (Programmes). Efforts on companies and consumers with the government are greatly needed at this stage in order to prevent any conditions that would further contaminate the soil and ground waters. Though waste-management is one of the major concerns of each locality today and major services where tax are spent, improvements and its efficiency should be clarified. In malls or commercial establishments, grease trap located in every sinks are being imposed on franchisees but this is the least that Sanitation or Health Officer can do. Management of the environmental impacts of consumption and production contaminating soil and water should be reviewed so that remedy can be applied for example, treatment of waste water and drinking water and the installation of sewage treatment facilities.
Based on the above scenario, there are no easy way to get a profit, the fast food industry was institutionalized and has greatly influenced how the present generation adapted to the new environment. Family tradition on meals prepared at home is now becoming unfamiliar. All is fast moving including the food we eat.
In conclusion, there are more negative effects in over consumption of one type of food, or the fast food chain revolution. It dictates the demand and consumption and it creates a fad that may not be healthy in the long run. The New York City Board of Health informed the general public that beginning 31 March 2008, food chain should include in their menu board a calorie list (Health). This is to guide the consumer in making decision when it comes to the purchase of food.
Positive effects can be seen in the rapid expansion of commercial establishments and manufacturing of the products, it has provided many millions of dollars to investors and propelled the expansion in real estate businesses even globally. It also added to the government revenues but in the long run may also create huge expenses for the state to remedy its impacts on many the many environs of a particular state. However, it mitigated the disvaluing effect on how well people spent their earnings and how producers and workers are paid.
Datamonitor. “Fast Food: Global Industry Guide “, 2007.
Essay, Mega. “Kfc Swot Analysis.”
Fratfiles. “Kentucky Fried Chicken and the Global Fast-Food Industry.” 2008.
Health, NYC Board of. “New York City Board of Health (Again) Votes to Put Calories on Chain Restaurant Menus and Menu Boards.” 2008.
Lozada, Fuji. “Anthropology Research Projects.” 2007.
Programmes, Research Department. “Research at the Finnish Environment Institute.” 2005.
Schlosser, Eric. “Fast Food Nation.”
The Association of Kentucky Fried Chicken Franchisees, Inc. “AKFCF History.” 2006.