Abstract
This article conducts the KFC SWOT analysis by identifying the key business strengths, weaknesses, opportunities and threats. The article provides information about KFC’s internal and external business environment. Policy makers and strategists can read the article to gain insights into KFC’s business strategies, and overall industry environment. Researchers and students can also read the article to know how internal and external environment influences the business strategies of successful fast food brands like KFC in real world.
1. Introduction
This article presents the comprehensive SWOT analysis of KFC. By reading this article, we will examine the brands’ key strengths, weaknesses, opportunities, and threats- highlighting the factors that define the KFC’s strategic landscape in competitive fast food industry.
Click here to get the basic company overview
2. KFC SWOT Analysis
2.1. KFC Strengths
This section outlines the key KFC strengths:
2.1.1. Brand value
In 2023, KFC was ranked world’s third most valuable fast food brand based on brand strength, financial performance, and brand value:
Source: Brand Directory
2.1.2. Strong financial performance
KFC recorded strong financial performance. In 2022, KFC recorded $6.8 billion revenue, up by 3.92% from 2021.
KFC holds strong position in the global quick service restaurant market. In 2022, KFC held 11% market share based on revenue, and 6% market share based on number of outlets:
KFC Competitors analysis
Source: Stock talk
2.1.4. Fast growth around the world
KFC is growing fast in many countries around the world:
Source: News.com.au
2.1.5. Brand loyalty
KFC records 82% customer loyalty, is ranked #39 in top brands for Gen Z. Here is KFC net promoter score:
Source: Comparably
The net promoter score shows that compared to 31% detractors, 48% customers are likely to promote the products.
2.1.6. Market leader in China
KFC attains the first position in Chinese limited service restaurant market:
Source: Statista
KFC has successfully increased its market share from 4.8% (2016) to 5.7% (2020).
2.1.7. Strong presence in Australia
Other than China, KFC is highly popular in Australia as well. The brand is not only popular among Gen Z, but among all age groups:
Source: Roy Morgan
2.1.8. Original chicken recipe
KFC competitive advantage lies in its secret recipe (internal link<KFC marketing strategy<product strategy) of 11 herbs and spices. This trade secret has played key role in making the brand successful.
2.1.9. Strategic partnerships
KFC has partnered with Pizza Hut and Taco Bell to beat the competition. This strategic move has benefit the firm by creating valuable synergies- Business Standard reports.
2.1.10. Strong performance of parent company
KFC has a strong parent company- Yum Foods, which is consistently showing superior financial performance, as depicted in following graph:
Source: Yahoo Finance
2.1.11. Well-established global presence
KFC has strong presence at global stage. In 2022, KFC had 27,760 restaurants across 145 countries.
2.1.12. Effective marketing strategies
KFC has developed strong marketing capabilities (internal link<KFC marketing strategy<promotion strategy). In 2021, KFC launched a film featuring colonel in red vintage car. The campaign increased market share by 6.2%, reversing the two-year downward trend.
2.2. KFC Weaknesses
This section outlines the key KFC challenges:
KFC is considered considerably unhealthier (internal link<KFC marketing strategy<product strategy<recent product failures) than many other competitors. Here is the KFC-Burger King comparison based on nutritional value:
Source: Foodstruct.com
2.2.2. Failed attempt to launch plant based meat
In 2022, KFC partnered with Beyond Meat to launch plant based items. But, the new product failed to crack the market, primarily due to company’s poor understanding of interests and taste preferences of vegan/vegetarian customers.
2.2.3. Misleading/offensive marketing campaigns (internal link<KFC marketing strategy<promotion strategy<key challenges)
Although, KFC is known for launching highly successful and attention grabbing market campaigns. But in 2019, the brand received backlash for its offensive ad ‘What the cluck’. It shows the brands’ poor understanding of the viewers’ values and sentiments. To know more about this ad, click here.
2.2.4. Excessive reliance on fried chicken
Although, KFC has a diverse menu, but most of its revenue comes from fried chicken, increasing the brand’s vulnerability to changing consumer tastes
2.2.5. High employee turnover
KFC is struggling with high employee turnover rate, as depicted in its “-C” retention score. The company is among bottom 35% companies in terms of its ability to retain the employees.
2.2.6. Negative publicity
KFC at often receives criticism for various reasons.
- In 2022, KFC was criticized in China for promoting irrational consumption
- In 2023, Canadians slammed KFC for posting racially biased billboard ads
2.2.7. Non-sustainable business practices
KFC frequently receives the criticism by PETA for the conditions in which it raises the chickens.
2.3. KFC Opportunities
2.3.1. Industry growth
Global fast food industry will have 4.9% CAGR from 2022 to 2029, presenting growth opportunities to the key players including KFC:
Source: Maximize Market Research
2.3.2. Plant based meat
Globally, plant based meat market is experiencing impressive growth of 23.9%, and will hit $163 billion in next decade- Bloomberg reported.
Source: Bloomberg
Although, KFC has failed to launch the plant based meat options in 2022, a more in-depth understanding of consumers’ needs and preferences can enable the company to benefit from growing plant based meat market segment.
2.3.3. Technology integration
Pandemic has accelerated the technology integration in various sectors. Global fast food industry has also achieved its new normal. The customers have become more tech-savvy than ever before. KFC may consider adopting innovative technologies like service robots, virtual menus, and AI powered chatbots to capture the customers’ attention.
2.3.4. Ghost kitchen
Ghost kitchens are growing speedily. A recent research shows more than 51% restaurants have already shifted to Ghost kitchens.
Following graph shows how Ghost kitchen trend is growing with time:
Source: Bentobox
KFC can also experiment with the Ghost kitchen concept to expand its reach without need for the brick-and-mortar stores.
KFC has already planned to test the Ghost Kitchens in London. But, the idea is currently on testing phase only- QSR Magazine.
2.3.5. Menu innovation through healthier options
KFC may consider innovating its menu by adding healthier options. It will allow the company to access the growing health conscious segment.
Keep noted that implementation of this recommendation may involve trust and brand positioning challenges!
2.3.6. Green marketing
Considering the consumers’ growing environment consciousness, KFC may consider investing on the green marketing practices (like waste reduction, green packaging etc.) to portray a responsible brand image.
In many cases, the green marketing tactics have paid well in form of revenue growth and increased market share. Read the case of Mama Earth to know more.
2.4. KFC Threats
2.4.1. Changing consumer preferences
Consumers’ preferences are rapidly evolving. The trends of becoming vegan, health conscious, and environment conscious are on rise. Failure to strategically respond to these trends can have serious implications for KFC.
2.4.2. Food safety concerns
After the pandemic, consumers have become more concerned of the food safety and hygiene. It can put pressure on fast food brands like KFC to earn the customers’ trust regarding food quality and safety.
2.4.3. Rising inflation
Rising inflation has become a worldwide concern, even bigger than unemployment, as shown in following graph:
Source: Statista
It is reducing the consumers’ purchasing power, and is affecting the fast food industry by raising the production cost (KFC marketing<pricing strategy<key pricing challenges).
2.4.4. Emergence of cheap competitors
Due to constant price hike, fast food consumers are shifting to non-branded fast food outlets. KFC is slowly losing its market share to the independent, cheaper competitors.
2.4.5. Geo political tensions
Fast food brands like KFC can no longer ignore the intensifying geo-political tensions.
2.4.6. Negative online reviews
Negative online reviews over social media has become a key cause of concern for fast food brands like KFC:
Negative e-WOM spreads faster than positive e-WOM, and this is the concern for KFC and other market players.
3. Recommendations based on SWOT Analysis KFC
• Diversify the menu by expanding the offerings with healthier options
• Adopt a more sensitive approach while launching marketing campaigns to respect the people’s values and sentiments
• Integrate sustainability in business operations to address the concerns of organizations like PETA
• Adopt innovative tech solutions to enhance the customer experience
• Explore the Ghost kitchen trend to widen the market reach
• Consider investing on the green marketing strategies to portray a positive brand image
• Address the employees’ concerns to reduce employee turnover. Workforce stability is important to deliver the promised service quality.
• Quickly adapt to the changing consumer preferences by keeping a close eye on evolving market trends
• Maintain strict hygiene standards to win the customers’ trust over food quality and safety
• Actively monitor the brand’s online presence to timely respond to the negative word of mouth.
4. Conclusion
The in-depth KFC analysis reveals key insights into the fast food giant’s key business strategies and performance. KFC SWOT analysis revealed that while KFC has strong brand value and global presence, but it is struggling to adapt according to evolving consumer preferences. The intensifying competition from new entrants, emergence of new technologies, and changing market dynamics require a proactive and strategic response from KFC to preserve its market share.
Click here to read our article on KFC marketing strategy
5. References
Restaurants 25 2023 | Brand Value Ranking League Table | BranDirectory. (n.d.).
KFC revenue: annual, quarterly, and historic – Zippia. (2023, July 21).
Murphy, J. (2019, November 22). Secret to KFC’s incredible rise. News.
Statista. (2023, September 4). Market share of leading fast food brand restaurants in China 2016-2020.
McDonald’s, KFC, Hungry Jack’s & Domino’s Pizza are Australia’s favorite restaurants – Roy Morgan Research. (n.d.).
Report, T. (2021, December 9). Pizza Hut brings the KFC Popcorn Chicken Pizza. The Business Standard.
Redirect notice. (n.d.).
How KFC grew market share by respecting its rivals | WARC | The Feed. (n.d.).
Redirect notice. (n.d.).
La Prensa Latina Media. (2022, August 9). KFC criticized in China for promoting ‘irrational consumption.’
Yahoo is part of the Yahoo family of brands. (n.d.).
Maximize Market Research Pvt Ltd. (2023, September 19). Fast food Market: Global industry analysis and Forecast (2023-2029). MAXIMIZE MARKET RESEARCH.
Redirect notice. (n.d.-b).
Plant-based foods market to hit $162 billion in next decade, Projects Bloomberg Intelligence | Press | Bloomberg LP. (2021, December 23). Bloomberg L.P.
Plant-based foods market to hit $162 billion in next decade, Projects Bloomberg Intelligence | Press | Bloomberg LP. (2021b, December 23). Bloomberg L.P.
Gentile, V. (2023, October 4). The rise of ghost kitchens: what this means for you and your restaurant business. CloudKitchens.
Redirect notice. (n.d.-c).
Magazine, Q. (2022, May 26). KFC to test ghost kitchens in London. QSR Magazine.
Fleck, A. (2022, October 13). Inflation becomes the leading global concern in 2022. Statista Daily Data.
How KFC grew market share by respecting its rivals | WARC | The Feed. (n.d.-b).
Braw, E. (2023, January 4). Companies are paying the price of geopolitical division. Foreign Policy.
