Strategic Problems Faced by KFC
Threats from rivalry Hartz Chicken will be the problem currently faced by KFC outlet at Sarawak Plaza. The threats is in the form of substitute product which means the product produce by Hartz can satisfy the same consumer needs as another product. In this case, it will be the competition to gain or attract the same market segment for their chicken focus dishes or menu. Profit gain by the outlet eventually not enough to cover the daily operating expenses. The bargaining power of buyers increases as they seek value for their money. A buffet style dining deemed to be the ultimate value for money thus being more sellable in the market. This is something KFC outlet can’t afford to provide to their customers. Tied to the company policies, they are not allowed to change the menu to cater to the local needs. Ineffective respond to unexpected changes in environment or demand of the consumer causing KFC to loose out in this demanding market. The inabilities to guarantee or assure superior performance at all times might caused this outlet to end its operation soon.
The financial constraint faced had been the cause for them not having any chances for a research and development process in order to improve the productivity of the outlet. Suiting individual’s preferences with their menu might is a big matter since so free selection of chicken parts allowed compared to Hartz. In the spur of the moment, the minute they reach their turn at the counter, customers are required to make a selection of dishes from fixed menu. Hartz provide a 2 hour dining time for their customers to choose their meal thus making them a preference outlet compared to KFC. The outlet was slammed with the accused from their head office for not providing personal touch to their customer thus causing them to loose out to their competitors. This was not the reason at all. As claimed by Fatul the Assistant Manager of the outlet, he had tried hard to improve the sales of his outlet by handing down all his old tricks he gained from his previous successful experiences but none seems to work. En. Golokin the Manager of Hartz outlet, being an ex-employee of KFC, managed to tape on KFC’s handicaps to steal the business away from KFC. Location wise is another strategic problem for this outlet. They are situated opposite of their competitor on the same floor of the Plaza. Abang (Fatul) would prefer if they can operate away from their competitor. To make matter worse, there is a 24hours KFC stand outside of Plaza Sarawak, opposite the road, at the sidewalk of Kompleks Tun Jugah，Riverside.
In my opinion, base on my research, I believed no doubt that they are from the same brand franchise but every outlet have their own target to achieved and would not want a tight competition among each other. Situated along the sidewalk of the Plaza, I think that they managed to attract a lot of passerby along that street since it is more convenient to get a quick grab from this stand rather than heading to the lower ground if the Plaza opposite while u spend your precious time locating the outlet as well. The open air concept and visible location beside the road managed to attract hungry passerby not forgetting tourist that might have visited Taman Sri Sarawak which was not far way. I for one am the type that looks for a nearby recognized outlet to dine in after a tired day working. The nearer the venue the better it will be. Driving own car, I will try to save on the parking fee and search for bright places to park my car for my own safety reason. Hence, being stuck on the lower ground floor of a Plaza is a total disadvantage compared to a nearby same brand outlet.
When the country is facing a positive growth in economy and no inflation, the investors will invest more in the industry to make more profit. Thus this will give the outlet a higher capital to start its operation or to invest in any necessary...
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