PESTEL analysis of KFC
Political Factor: Political factor discusses political stability, government influence, tax rate, subsidiary, Economic policy, monitoring and more. KFC has a wide range of businesses around the world. Each country has their own politics and decision-making style. Political environment is also different around the world. For example, Europe and western countries have strict tax policies. The monitoring system is very sophisticated. On the other hand, in Bangladesh and other Asian countries Monitoring policy is not up to the mark. This makes an impact in the service providing style in a business. It leads to downward product quality which is becoming a major issue for KFC and other food chains around the world.
In Europe and America many NGOs also play a vital role in a business. People are getting more health conscious; they are changing their food habits. These NGOs campaign and influence people about what they eat and to avoid high calorie foods. KFC was renamed from Kentucky Fried Chicken to avoid the term Fried Chicken from its name.
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PESTEL analysis of KFC |
Economical factor: economical factor is the most important among all other factors that helps to analyze a business. In a simplest way, good economic conditions help the business to grow and expand. On the other hand, a bad economy doesn't. For a huge business-like KFC, slightest change in the world’s economy may have a huge impact. In the last 15 years the world has seen two big downfalls in the world's economy, 2008-2009 recession and 2020-21’s Corona pandemic. Many giant companies and businesses record losses in 2020-2021 along with KFC and it's Yum! Brand. China and the USA are the biggest markets for KFC. A small change in these two countries economy also affect KFC’s turnover. (Jones, P., Herbert 2019)
Social factor: Social ethics and culture can influence a business on how they run it. Example of this is KFC India. They adjust their menu and include vegan options because 20 to 30% people of India are vegetarian. In the Muslim countries and culture restaurants have to make sure that the food is Halal. All the ingredients have to be permissible and prepared in a certain way. On the other hand, Communist countries have strict rules to follow. So KFC has changed their business ideology to adjust with the society in different countries. And that's why KFC in India, Middle East, Europe and America are slightly different from each other.
Technological factor: In the last few decades Technology has changed at an unimaginable rate. It helped the food and beverage industry quite a lot. With the help of technology more work can be done with less manpower and time. So, maintaining the quality has become easier. KFC adopted the technological advantage pretty well. Automatic order machines, ATM, online delivery, Cooking Technology, Freezing Technology is helping KFCs restaurant all around the world. These machines are easy to use and don't need a salary. That’s how KFC is also saving costs by using the technology.
Environmental And Legal Factors: Current world has become very concerned about the environment. The Global Warming Effect is now clear in our environment. World leaders are trying to reduce carbon emission and other things that are harmful for our nature. Big business always contributes to nature in a large way. KFC uses many products and ingredients that come directly from nature and produce CO2 and other harmful elements to nature. For this many social and environmental organizations are accusing the company. KFC, on the other hand trying to cope with the situation to solve this matter. (Sen, A., 2017)
Larger companies often fail to control all of its areas. Maintaining the top quality in all of the 24,000 restaurants is not an easy task. Yum! Records hundreds of complaints every year. Some of them even end up with legal procedures. In 2005 a KFC restaurant in the US was fined 24000 USD for serving unhygienic food. However, KFC handles these issues pretty well unless they wouldn't be able to expand their business so rapidly.
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