Analysis of Kfc. The Forces and KFC

Topics: KFC, Fast food, Yum! Brands Pages: 7 (2266 words) Published: May 8, 2013
The Forces and KFC

James Watson

Executive Summary

The seven international environmental forces that impact international business are natural resources and environmental sustainability, economic and socioeconomic forces, political forces, intellectual property and other legal forces, understanding the international monetary system and financial forces, labor forces, and international competitive strategy. While some of the factors mentioned above are completely under the control and maneuverability of a country, others are inherited and have to be dealt with in order for a country to become competitive.

The focus of this report will be on KFC and how they have handled the various forces mentioned earlier and have managed to become an international powerhouse. More specifically this report will detail KFCs success in China. KFC belongs to Yum! brands which used to be named Tricon Global Restaurants, Inc., the world's largest food company. Tricon Global Restaurants, Inc. was a spin-off of PepsiCo, Inc.(KFC History). It's of interest to mention that according to KFC's history web page in 1964 the first international KFC was actually in Canada and the first oversees KFC was in England (KFC History). I assume these previous locations don't fully count as international or it doesn't seem to count as international in the restaurant world because there is not much about the obstacles or forces KFC faced while achieving the above. The chain has grown to more than 3,200 locations in 650 cities, according to Bloomberg, there is no arguing that KFC is successful.

The Forces

Natural resources and environmental sustainability are basic factors that a country inherits and either has no control or very limited control over such as topography, climate, and natural resources (Ball, Geringer, Minor, and McNett ). Terrain and climate can be wildly different in the same country, mountains, deserts, plains and bodies of water all with their corresponding climate can be present or absent in any combination in a country. Natural resources are energy sources like petroleum, coal, natural gas, and nuclear power. Environmental sustainability is an approach by businesses to operate without reducing the capacity of the environment to provide for future generations (Ball, Geringer, Minor, and McNett ). Another uncontrollable force is the economic and socioeconomic force in a country. Socioeconomic provides information on the overall number of people, the number of people who can buy a business' product, population density and distribution. While economic information is income distribution, discretionary income, currency conversion, how economically developed a country is, and gross national income.

Political forces are a country's level of government ownership of businesses, government protection, government stability, and trade restrictions. Intellectual property and other legal forces is perhaps the most complex of the forces. Just the number of laws can make it difficult for any business to successful internationally. An awareness of a country's legal system is necessary as well as the sources of international law, and litigation. Also, there are U.S. laws that affect international business like the accounting law and the foreign corrupt practices act. Intellectual property are copyrights, patents, trademarks, and trade names. The international monetary system is based on institutions, agreements, rules, and processes that allow for the payments, currency exchange, and movements of capital required by international transactions (Ball, Geringer, Minor, and McNett ).

The labor force consists of the quality, quantity, and composition of the available labor in a nation. Within the labor force things that must be acknowledged are urbanization of the workforce, immigrant labor, child labor, brain drain, sexism, social status and labor unions. Lastly there is the international competitive...
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