Value Chain Analysis of KFC

KFC (Kentucky Fried Chicken) is the world’s leading American fast-food chain restaurant brand with special expertise in crispy fried chicken. Today, will discuss the value chain analysis of KFC; primary and secondary activities involved in the process of value chain analysis example company. They’re inbound and outbound logistics; operations, marketing, and services; procurement, technology, infrastructure, and HRM as an application of value chain analysis.

Products and services of KFC

  • Soft Drinks
  • Breakfast
  • French Fries
  • Deserts
  • Wraps
  • Salads
  • Chicken Burgers
  • Milkshakes
  • Fried Chicken

Key statistical facts and figures about KFC are as follows;

  • Annual revenue –6.8 billion dollars 3.92% (2022)
  • Employees – 25,000
  • Net income – 1,325,000,000 dollars
  • Network – 24104 chain stores

KFC’s Parent Company

  • Yum Brands

Top rival companies and competitors of KFC

  • Burger King
  • Dunkin Donuts
  • Subways
  • Wendy’s
  • Starbucks
  • Chipotle
  • McDonald’s
  • McDonald’s

The value chain analysis of KFC would analyze the primary and supporting activities involved in the process of value chain analysis application. Here’s the KFC value chain analysis example company as follows;

Value Chain Analysis of KFC

Let’s discuss the primary and supporting activities involved in the process of value chain analysis of KFC. It is an application of value chain analysis based on Porter’s model; some of the key elements and components of value chain analysis are as follows;

Primary Activities of KFC

Some of the five main primary activities in the KFC value chain analysis are as follows;

Inbound Logistics of KFC

I-Sourcing

In order to gain access to fresh ingredients and cook delicious food, KFC develops healthy professional relationships with local suppliers and vendors. It would help the company to make sure the safety and quality standards of the raw supplies and materials.

II-Warehouse & Storing

KFC deals with a vast variety of products and goods in the warehouse like cooked meals, raw supplies, vegetables, packaged materials, and another ingredient. In order to avoid spoilage of cooked items and other ingredients and raw materials, the company needs to keep a specific temperature to maintain the freshness of the food.

III-In-Store Inventory Management

After receiving the supplies at the restaurant, the employees of KFC need to monitor and evaluate the inventory level and be aware of the time for restocking and reordering. The chain brand employs an in-store inventory management system to track the flow of goods from daily sales to product turnover rate.

Outbound Logistics of KFC

I-Delivery Vehicle Fleet

KFC heavily depends on the delivery service providing vehicles for quick food transport and delivery from the restaurant to the customer’s doors. The chain restaurant brand employs different types of vehicles ranging from large box trucks to small pickup trucks for long-distance deliveries. In short, the company employs different types of vehicles depending on the size of the order and distance to the customer.

II-Delivery System

In order to ensure the timely delivery of customer orders, the restaurant brand KFC employs an efficient and specialized delivery vehicle system. The company has installed GPS technology in the delivery vehicle to track their location in real-time. It allows customers to be confident that the food delivery is on the way and it will reach them.

Operations of KFC

I-Operational Activities

The significance of operational activities becomes high significant when the chain restaurant brand receives the raw supplies. It is because the raw supplies need further processing, cooking, packaging, and then delivery to the end consumers. However, some of the main activities involved at the operational level are as follows;

  • Food processing
  • Packaging
  • Cooking
  • Testing
  • Equipment repair and maintenance

II-Analysis of Operations

Analyzing the operational processes and activities also plays a key role in amplifying efficiency and productivity. It allows the company to ensure the growth and success of the chain restaurant brand KFC in terms of high profitability and economic growth.

Marketing and Sales of KFC

KFC employs various types of sales and marketing strategies for the promotion of its food items. They help the company gain a competitive edge, strengthen its market position, and brand image, and achieve the company’s goals and objectives. However, some of the main channels that the brand employs are as follows;

  • Customer relationship
  • Promotional campaigns
  • TV and print advertisements
  • KFC gaming console
  • Social and digital media
  • Integrated marketing campaigns

Services

I-Customer Service

Pre- and post-sale customer service plays a key role in establishing customer loyalty. In order to keep the attention of customers after the sale, KFC offers excellent taste, quality food, and great service. It helps the company to spread “word of mouth” marketing through social media sharing and reviews of recommendations of existing customers.

Supporting Activities of KFC

Some of the four main supporting activities in the KFC value chain analysis are as follows;

Infrastructure of KFC

The infrastructure of KFC comprises various activities and planning like strategic management, planning, financing, accounting, organizing legal issues, and quality management. Well-developed and effective management of infrastructure amplifies the value of the company and strengthens KFC’s position in the market.

Human Resources

KFC has a very large database of employees and it comprises of roundabout 25000 employees to manage its worldwide operations. The human resource department of the company deals with the following activities;

  • Personal management
  • Performance management
  • Reward
  • Training and development
  • Recruitment and selection

Effective management of HR activities of the chain brand helps the company to improve the skills and expertise of employees and decrease the competitive pressure on the company.

Technological Development

I-Automation Technology

KFC employs AGV automation and robotic arms technology in various processes like order fulfillment, inventory management, and automation of other processes. They help the company in the following ways;

  • Real access to the inventory data
  • Low labor cost
  • Accurate order
  • Low risk of human errors
  • Speedy processes
  • Picking products in the warehouses

II-Information Technology

KFC employs integration of automation technology like; forecasting software and applications, automated replenishment system, and inventory tracking system. Collectively, they help the company to beware the logistic partners about stock and ensure timely delivery to avoid delays and minimum wastage of products.

Procurement

Procurement of raw supplies and ingredients is the main area of KFC’s entire production and supply chain process. Quality of procurement ensures high-quality finished goods and leads the company toward increasing sales, growth, and productivity.

Conclusion: KFC Value Chain Analysis Example Company | Application of Value Chain Analysis Process

After an in-depth study of the value chain analysis of KFC; we have realized that KFC is the world’s leading fast food chain restaurant brand. If you are learning about KFC value chain analysis Example Company; then you should keep in mind the abovementioned primary and supporting activities involved in the process of value chain analysis application. They’re inbound and outbound logistics; marketing and sales, customer service, and operations; infrastructure, HRM, technology, and procurement.

References 

  1. https://www.glassdoor.ie/Affiliated/KFC-Companies-E7860.htm
  2. https://www.sec.gov/Archives/edgar/data/1041061/000104106117000016/yum-12312016xex211.htm
  3. https://restaurantclicks.com/food/best-kfc-items/
  4. https://strawpoll.com/most-popular-kfc-meal
  5. https://www.marketingweek.com/kfc-revenue-growth/
  6. https://www.coursesidekick.com/business/207134
  7. https://www.statista.com/statistics/1033385/kfc-brand-value-worldwide/
  8. https://www.warc.com/content/paywall/article/APG/KFC_The_Godfather_of_Fried_Chicken/en-GB/138769?
  9. https://www.warc.com/content/feed/how-kfc-grew-market-share-by-respecting-its-rivals/en-GB/5135
  10. https://en.wikipedia.org/wiki/KFC#Products
  11. https://www.nrn.com/quick-service/kfc-sees-potential-triple-size-predicting-buckets-growth-long-term
  12. https://www.ibisworld.com/us/company/kfc-corporation/429473/
  13. https://www.statista.com/statistics/205784/kentucky-fried-chicken-sales-per-system-unit-since-2006/