This strategic approach aims at reduction in costs. KFC is a publicly traded company with responsibilities to all shareholders. By becoming socially responsible, it tries to attract a new type of stakeholders. KFC is a subsidiary of Yum! Brands, one of the largest restaurant companies in the world. According to the research, it earned estimated $ 9.2 billion in sales revenue. According to the findings, in 2011, there were over 17, 00 KFC outlets in 105 countries around the world. In China and United States have half of the total KFC restaurants and China accounts for 49% of the company’s revenue. KFC’s main motive is to manage profitable customer relationship.
Professor Michael Porter suggests that strategy formulation requires an analysis of the attractiveness of an industry and the company’s position within that industry. This analysis becomes the basis for formulating generic strategies.
In the analysis of the industry, Porter identified five forces: 1) the competition among companies (21 the threat of new companies entering the market. (3) the possibility of using substitute products or services, (4) the bargaining power of suppliers, and) 5 the bargaining porter of buyers or customers. On the basis of the industry analysis, a company may adopt generic strategies. These strategies are generic because they may be suitable on a broad level for different kind’s o organizations. Ark’ enterprise, however, may use more, than one strategy
Overall Cost Leadership Strategy
This strategic approach...