COMPANY ANALYSIS

KFC Holdings Malaysia BHD

TECHNOLOGY ENTREPRENEURSHIP (ENT600): CASE STUDY

FACULTY & PROGRAMME : CS248 - BACHELOR OF SCIENCE (HONS.)

MANAGEMENT MATHEMATICS

SEMESTER
:6

PROJECT TITLE
: KFC Holdings Malaysia BHD Case Study

GROUP MEMBER
: Nur Ainina Najwa Bt Zamzuri

LECTURER
: Madam Zaidatulhusna Binti Mohd Isnani
ACKNOWLEDEMENT

Assalamualaikum w.b.t

Alhamdulillah praises and because of His Almighty and His Supreme blessings, thanks to
Allah, I was able to complete this case study within the time period specified. I would like to
take this opportunity to express my appreciation and indebtedness during this entire process
to my beloved parents and siblings for their support and affection.

I would like to express my sincere appreciation to all those who provided me the possibility
to complete this report.  To all those who gave me the opportunity to complete this report, I
would like to express my sincere appreciation. I give my ENT600 lecturer, madam
Zaidatulhusna Binti Mohd Isnani, a special gratitude for providing me with a good guide,
suggestions and motivation for this task during numerous consultations.

Other than that, I thank all the individuals for their direct and indirect assistance in
completing my task. Many people have made valuable comments on this proposal,
particularly my classmates and friends, which gave me motivation to intensify my mission.
EXECUTIVE SUMMARY
This is an endeavor to know how the theories can be applied to useful circumstance. As a
degree students in UiTM Shah Alam, it is a necessity of study for everybody to experience a
case study project. Along these lines, for this reason, I got the chance to do a research on
an organization which offer types of assistance conveyance to the customers which is
Bungkusit Company, right now situated in Megan Ambassy Jalan Ampang. General
information of the organization has been gathered where all information are assembled
through the essential and optional source also. Goal of the project is to deal with the
background, organizational structure and services that Bungkusit gives.

Next, I am learning about the item that the organization give and other supporting services
so as to keep up the stability of the company, just as business, marketing and its operational
strategy utilized by the company to advance their delivery services which I discovered very
fascinating.

Ultimately, I have done some exploration about the company financial achievement in
regards to how they deal with their budgetary just as accomplishments gain from the money
related management. Goals demonstrate what a business unit needs to accomplish.
Strategy is an action plan for getting the goals. Each business must plan a strategy for
accomplishing its goals, comprising of a marketing strategy, and an effective management.
For this case study, I have investigated the strength, weaknesses, opportunities, and threats
of this company in genuine business world by utilizing SWOT analysis.
1.0 INTRODUCTION

1.1 Background of the Study

On semester 6, all students of CS248 are compulsory to take subject ENT600 as one
of the important subjects in the syllabus. The course is entitled to present the current
industry towards the student. It is necessary for the student to learn as much
knowledge as can to develop the thinking ability and introduce student to the real
business world and how to work with it. For the new semester, students are required
to search a company that we want to analyse. We need to create a written case
study report based on the company's research. The case study is provided to
students who want to open a company as early preparation or mind-set. We must
use the SWOT analysis we've gotten through in our lessons in the case study. I
thought it would be most beneficial to research the fast food company that is popular
with people in Malaysia to find solutions for business issues or problems in the
company, in order to find an appropriate company for a case study.

1.2 Purpose of Case Study

The purpose of this case study is to provide the student with a case study approach
to the actual working industry. In this mission, students needed to evaluate the
selected business without interviewing the company since, due to a pandemic
Coronavirus-19 disease (COVID-19), we have an Open and Distance Learning
(ODL) in our homes because of Movement Control Order (MCO). In this case
students can select any small to medium business enterprise category. This business
also can be chosen from any background of business such as property company,
electronic company, food industries and many more company that have potential for
the student to generate technological solution for the business. Students can also
learn how to handle and keep the company stable when it comes to business issues
and challenges. When this research is finished, it is intended to assess SWOT
analysis for power, vulnerabilities, opportunities and risks.
1.3 Problem Statement

A problem statement is a statement of a current issue or problem that requires timely action
to improve the situation (How to Write a Problem Statement Step by Step (with an
Example), 2020). The problem statement is used to describe, understand and establish
potential solutions to the problem. There are few current business issues or problems of
KFC Holdings Malaysia BHD are:

a. High competition in the industry

b. Bad service quality
c. Lack of attractive promotion
2.0 COMPANY INFORMATION

2.1 Company Background

Kentucky Fried Chicken (KFC) is one of the famous fast food restaurants in Malaysia,
selling chicken-related products. The KFC Malaysia story began with the opening of
their 1st restaurant on Jalan Tunku Abdul Rahman in 1973. KFC Holdings (M)
Berhad is now a subsidiary of QSR Brand (M) Holdings Berhad while Johor
Corporation is currently the major shareholder of QSR, with a 51% stake, while the
EPF holds 25% and CVC Capital Partners Ltd holds 24% shares of QSR. There are
currently over 600 KFC restaurants nationwide serving Malaysians great tasting
chicken 365 days a year.

As the No. 1 fast food and leading QSR brand in Malaysia, KFC are constantly
working to better serve their customers with great moments, excellent services and
Finger Lickin' Good food. The target customers of KFC are those chicken lovers from
different age group. KFC guarantees full halal compliance in all of the Group’s
markets. Every aspect of the food manufacturing processes, including raw materials
procurement, preparation, packaging, storage and utensils follow strict controls. The
main product of KFC is pressure-fried pieces of chicken with original secret recipe in
different flavours. It also offers other chicken-related products such as burgers and
wraps as well as side dishes such as French fries, whipped potato, coleslaw,
wedges, nuggets and desserts. KFC is known for its slogans "It's Finger Lickin'
Good!". In addition, they also provide a service of delivering their food to the
customer’s place as soon as possible.
2.2 Organizational Structure

Figure 2.2.1: Organizational chart

2.3 Products

Box Meals

Figure 2.3.1: The type of Box Meals

 Figure 2.3.2: New product of KFC The One Box

Table 2.3.1: The price for Box Meals at KFC Malaysia

MENU ITEM PRICE

One Box A RM 19.90

One Box B RM 17.90

Snacker Box RM 9.20

Twister Box RM 13.90

Signature Box RM 15.50

Nuggets Box RM 11.20

 MENU ITEM PRICE

9-pc Soy Chicken Garlic Drumette RM 18.50

Chicken 5-pc Soy Chicken Garlic Drumette RM 10.50 Meals

Table 2.3.2: The price for Chicken
Meals at KFC 3-pc Soy Chicken Garlic Drumette RM 6.30 Malaysia
Popcorn Chicken Combo RM 12.90

Popcorn Chicken À La Carte RM 8.90

1-pc Set RM 8.20

1-pc Rice Plate RM 8.90

2-pc Set RM 13.20

2-pc Rice Plate RM 14.30

Snack Plate Combo RM 14.30

Dinner Plate Combo RM 18.60

2-pc Chicken RM 10.40

3-pc Chicken RM 15.30

Snack Plate (Without Drink) RM 12.90

Dinner Plate (Without Drink) RM 17.50

Figure 2.3.3: The Chicken Meals of KFC Malaysia

Burger and Wraps

Figure 2.3.4: The burger and wraps

MENU ITEM PRICE
of KFC Malaysia
Zinger Stacker Combo RM 16.90
Table 2.3.3: The price for all
burgers and Zinger Stacker À La Carte RM 14.90 wraps at KFC
Malaysia Zinger Burger with Egg Combo RM 13.90

Zinger Burger with Egg À La RM 11.40

Carte

Colonel Burger with Egg Combo RM 10.70

Colonel Burger with Egg À La RM 6.70

Carte

Colonel Burger Combo RM 9.70

Zinger Burger Combo RM 12.90

Cheezy Twister Combo RM 10.90

Colonel Burger RM 5.70

Zinger Burger RM 10.40

Cheezy Twister RM 7.20

Family Meals

Figure 2.3.5: The Bargain Feast of KFC Malaysia

Table 2.3.4: The price for Family Meals at KFC Malaysia

MENU ITEM PRICE

Bargain Feast 12-pc Combo RM 55.90

Bargain Feast 10-pc Combo RM 47.90

Bargain Feast 6-pc Combo RM 28.90

15-pc K-Drumette Bucket RM 83.50

9-pc K-Drumette Bucket RM 58.50

5-pc K-Drumette Bucket RM 36.50

5-pc Combo RM 34.50

9-pc Combo RM 53.80

15-pc Combo RM 79.30

5-pc Chicken RM 25.90

9-pc Chicken RM 45.30

15-pc Chicken RM 73.70

Sides and Snack

Figure 2.3.6: The sides and snack at KFC Malaysia

Table 2.3.5: The price for all sides and snack at KFC Malaysia

MENU ITEM PRICE

Romano Cheezy Fries (R) RM 4.50

3-pc Crispy Tenders Combo RM 10.20

6-pc Crispy Tenders Combo RM 15.80

6-pc Nuggets Combo RM 10.90

9-pc Nuggets Combo RM 14.50

6-pc Nuggets RM 8.20

9-pc Nuggets RM 11.80

3-pc Crispy Tenders RM 6.80

6-pc Crispy Tenders RM 12.80

Crispier Fries (R) RM 3.90

Crispier Fries (L) RM 5.20

Cheezy Wedges (R) RM 3.90

Cheezy Wedges (L) RM 5.90

Wedges (L) RM 5.20

Whipped Potato (R) RM 3.00

Whipped Potato (L) RM 6.90

Coleslaw (R) RM 3.00

Coleslaw (L) RM 6.90

Colonel Rice RM 3.20

Butterscotch Bun RM 0.80

Jalapeño Cheese Sauce RM 1.50

Chipotle BBQ Sauce RM 1.50

Drinks

Figure 2.3.7: The drinks at KFC Malaysia

 Table 2.3.6: The price for drinks at KFC Malaysia

MENU ITEM PRICE

Pepsi Black (R) RM 3.50

Pepsi (R) RM 3.50

Mountain dew (R) RM 3.50

Mirinda Strawberry (R) RM 3.50

Mug Sarsapirilla (R) RM 3.50

Pepsi Black (L) RM 3.90

Pepsi (L) RM 3.90

Mountain dew (R) RM 3.90

Mirinda Strawberry (R) RM 3.90

Mug Sarsapirilla (R) RM 3.90

Iced Milo (S) RM 4.30

Iced Lemon Tea (S) RM 4.10

Tropicana Twister Orange (S) RM 4.30

Tropicana Tropical (S) RM 4.30

Sjora Mango-Peach (S) RM 4.30

Iced Milo (R) RM 5.10

Iced Lemon Tea (R) RM 4.10

Tropicana Twister Orange (R) RM 5.10

Tropicana Tropical (R) RM 5.10

Sjora Mango-Peach (R) RM 5.10

Hot Milo RM 4.50

Hot Premium Coffee RM 3.90

Hot White Coffee RM 4.50

Hot Tea RM 3.90

2.4 Business, Technology, Marketing and Operational Strategy

2.4.1 Business Strategy

Products in the fast

foods remain
undifferentiated, KFC added
their own secret recipes in
their fried chicken to make it
different
from other restaurant foods
Products in the fast
foods remain
undifferentiated, KFC added
their own secret recipes in
their fried chicken to make it
different
from other restaurant foods
 Products in the fast
foods remain
undifferentiated, KFC added
their own secret recipes in
their fried chicken to make it
different
from other restaurant foods
Products in the fast
foods remain
undifferentiated, KFC added
their own secret recipes in
their fried chicken to make it
different
from other restaurant foods
Fast food products remain undifferentiated, with KFC adding its own hidden recipes to their
fried chicken to make it distinct from other restaurant foods. And no other restaurant so far
has beaten the taste of KFC fried chicken. Because of its 11 herbs and spices, KFC also
uses the resources to be better at chicken. It is actively promoted to compete and achieve a
competitive advantage in the industry. In addition, in many countries, KFC restaurants are
expanding their outlets to attract more customers and to increase their sales growth. The
price range for KFC is much lower than for other restaurants. Besides, KFC also provides
customers with food for their various age groups. For example, kids set for children with
including toys. Last but not least, KFC restaurant has delivery services that is fastest than
other fast food restaurants.

2.4.2 Technology Strategy

To bring more convenient to the customers, all of the KFC had been equipped by credit card
machine so that the customers can pay by cash and credit card. Beside that due to most of
the people bring their smartphone and laptop when they go out, so KFC also prepare the
plug for them to charge their phone and laptop when they dine in the restaurant.

Moreover, KFC Delivery is taking the lead in quick service restaurant delivery sector by
using eco-friendly electric scooters. The environmentally friendly scooters emit no carbon
dioxide, smoke or noise. It is also cheaper to run and sturdily built, the new eco-friendly two-
wheelers are set to increase KFC Delivery’s speed and quality of service ensuring its
customers receive hot, fresh food while at the same time reducing its carbon footprint.

2.4.3 Marketing Strategy

A marketing strategy refers to a business's overall game plan for reaching prospective

consumers and turning them into customers of the products or services the business
provides. KFC Malaysia used marketing mix as their marketing strategy. The marketing mix
refers to the collection of actions or strategies used by a company in promoting its brand or
product in the market. The 4Ps form a typical marketing mix, for example Product, Price,
Place and Promotion. The 4P’s are Product refers to the goods and service, Price refers to
the value of a product that is set, Place refer to the point of sale and Promotion refers to all
the activities undertaken to make the product or service known to the user and trade. All
4P's are included in the KFC marketing strategies. It Involves all that KFC do it to influence
the people and demand for their products.

Products Strategies

i. Value of the product

Their current added value is in partnership with hotlink, which means that customers
can spend for a discounted food product from KFC Malaysia if they receive an SMS
from hotlink. Free gifts and beverages upgrade to larger portions are also the value
added of their products. Now, KFC highlighted the Muslim community in Malaysia,
where "Halal Chicken" is provided to meet customer demand.

ii. Scope of the product

 The extent of their current product is multi-product, which is adjusted to the particular
target market of each product. Every segment of the customer receives the
advantages of this product. For example, they have a Kids meal for children. In KFC,
generally there is not limit focus. The target and focus is on each and for every
individual in a society.

iii. Design of the product

Their current approach is to adapt standardization as the design strategy. The scope
of a product is multiplied in individual designs but the method of the production,
which is the design customization, has been standardized.
 iv. New Product Development

KFC Malaysia will come out some time with the new product; KFC Zinger Cheezilla
and Zinger Stacker Burger were the promotional items launched. The development
and sometimes elimination of a new product allows them to gain numerous market
shares because people try the product until it disappears again. In its current range,
KFC adds new products based on its competitors, adequate product demands,
fulfilment of key financial requirements and their environmental compatibility. All
chicken products, burgers like the Colonel burger and Zinger burger are on the
product list of KFC'S. The combo products include chicken meals and family meals,
and of course some side and snacks, like rice, Cheezy Wedges, etc.

Pricing Strategies

i. Maintaining the pricing for existing product

Pricing is important for KFC as it has an impact on the profit of the business. For the
company, having the right price will bring sufficient benefit. They maintain the price of
their product with respect to KFC's existing products.

ii. Segmented pricing for customers

KFC has developed a segmented pricing approach for SBU customers. Children can
enjoy a special discount when buying products from KFC, particularly children's
products. And kids who are enrolled as participants have some special surprise gifts
as well. Membership cards for children (Chicky Club) have been used for a long time.
Other than that, KFC is currently offering different times pricing. For instance, from
Monday to Friday, KFC now has snacks at a cheaper price in the afternoon. This
actually encourages customers in Malaysia to have a culture of tea time.
Place or Distribution Strategies

iii. Indirect Channel

Currently, KFC is selling fast foods using an indirect channel. KFC is distributed with
only one channel. It distributes its product to the consumer directly and does not
need an intermediate. It distributes quality to the customer directly. KFC Corporation
is the franchisee with an Ayamas Breeder, Life Sauce Factory etc. acting as the
supplier of fast food restaurants for KFC. This is the flow of indirect distribution of
channels:

Suppliers Retailers
(QSR (KFC Customers
Brands) Restaurants)
iv. Selective Distribution
KFC restaurants are selective because the amount of such restaurants in each
region is limited. The tough competition in the same region is to be kept to a
minimum. KFC is affected the geographic distributions. They have little outlets in
certain regions and McDonalds are their competitor. Over the past 30 years KFC
Restaurants in Malaysia, Brunei and Singapore has done well to gain market share in
over 390 restaurants.

Promotion Strategies

v. Advertising

The most important way to promote KFC products is through advertising. KFC
derives the desire to come and enjoy its meal through its advertising. Presently, KFC

is advertising in television, newspaper and radio. KFC mainly publishes its new
food or promotion during the business break on television. The ad also broadcasts on
its own website: www.kfc.com.my. For instance, the latest ad showed 2 Malay
couples using a hilarious and comedic chit-chat to promote the new KFC meal,
Combo Ria with satay sauce. For the newspaper, KFC announces new meals and
 offers free vouchers for discounts. For radio station, KFC advertises by convincing
and persuading and reminding customers to dine in KFC restaurants.

vi. Sales Promotion

The sales promotion is always used by KFC to promote its new menu. By it is always
practised by KFC to provide free voucher cutting from newspaper to get a discount
for new foods. In addition to the free discount vouchers, KFC also has free
newspaper vouchers for free gift redemption, such as soft drinks, etc. In addition,
KFC also works with Maxis Hotlink to provide special meals when dining at KFC to
Maxis prepaid users who hold KFC promotional SMS.

vii. Public Relation

Another way to reinforce the organisational image is sponsorship. A lot of NGOs and
other social welfare organisations sponsor KFC. Every Saturday morning KFC has
more than 5 years of TV sponsoring programme just for children such as Chicky
Hour on TV3. Chicky Hour by KFCs demonstrated a fantastic cartoon programme
that enabled KFC to successfully capture the children's market. In addition, KFC also
carried out numerous corporate social duties, such as having a KFC Charity
Collection Box in every outlet that could allow customers to contribute to orphanage
charities. In addition, Furthermore, KFC has 3 restaurants with speakers and hearing
impaired staff who help them to build their life 's trust and self-respect.

2.4.4 Operational Strategy

The role of the operations strategy is to provide a framework for the function of operations so
that it can make the best use of its resources. The operations strategy describes the
strategies and objectives to use the resources of the company in favour of its long-term
competitive strategy.

Three projects to improve operating efficiency were initiated by KFC Holdings Malaysia
BHD. At Wisma KFC, a new Kitchen Display System (KDS) had its trial run. The KDS is a
packing monitor efficiently, and its use has resulted in much better service time, especially
during lunch and dinner time. Having packers at each cash counter during peak periods
have meant shorter queues and higher transaction counts.

KFC has also installed a test-based Self-Order Kiosk at Wisma KFC that cuts queue time by
allowing customers to position their orders using the kiosk, then collect food and pay at the
counter. Initial findings were positive. The third quality initiative of the company was to create
two 'squads' for customer service. This definition explained management positions in
restaurants through the creation of the Mania Customer Squad, which included cashiers and
dining staff, and the Product Champion Squad for the cooks and back-up teams. Every
manager is responsible for hiring, training, engage and encourage his team to provide the
most productive service. The aim in the restaurants is to achieve better standards of training
and working atmosphere.
5. COMPANY ANALYSIS

SWOT Analysis

STRENGTHS WEAKNESSES
1) Original 11 herbs and spices recipe 1) Franchisee operations problems
2) Variety in menu 2) Does not cater to a healthy-conscious
3) Loyal customer base population
3) High employee turnover

OPPORTUNITIES THREATS
1) Menu update to attract health-conscious 1) Competition with small business
consumers 2) Many people are switching to
2) Opportunities for market penetration healthier foods and starting to stop
3) Missing products of cost consume ‘junk food’.
3) There are many fried chicken spice
flour products that encourage people
to make their own fried chicken rather
than purchase.
4) Rising cost of resources

Strengths
Original 11 herbs and spice recipe
Until this day, the trade secret for KFC which is used in its planning, the "original 11 herbs
and spices recipe," behind its delicious crunchy chicken recipes remains a public mystery.
Maintaining private information like the world of today is quite a feat, so it's not too shocking
to think that Colonel Sanders wrote down the formula and locked it in a vault.

Variety in menu
The range of food that KFC delivers to its customers is one of KFC's major strengths. With
its menu, KFC has grown to extreme levels. In order to attract consumers, it offers both
vegetarian and non-vegetarian food on its menus. Among the eaters, their numerous menus
in lunch boxes have great visibility. Few of its products are:

 Box Meals
 Chicken Meals
 Family Meals

Loyal customer base

KFC has its own loyal number of followers and this thanks to its hidden chicken recipe. All its
customers love its secret crunchy chicken preparation. The brand sees rapid growth due to
its huge consumer base, thereby highlighting its profit.

Weaknesses

Franchisee operations problems

A franchisee management scheme is preceded by KFC, meaning each one is individually

managed. Franchisee-related problems are popular throughout the different brands of
restaurants. If the franchisee does not maintain identical operating practises, the brand's
reputation is likely to be lost. There are concerns relating to the menu and other operational
problems and a lot of trouble has been faced by the franchisees owners. Because of this, the
management and the franchise owners are disappointed and unhappy. It is a big weak point
that will hit the sales when certain problems occur with the brand.

Does not cater to a healthy-conscious population

For fast food brands, food quality has been a concern. The KFC menu consists primarily of
high-calorie foods and beverages, salt and fat. KFC has faced a lot of criticism over
concerns surrounding its food in recent years, such as the use of trans fats in non-veg food
cooking. In the modern generation, people are so aware of their wellbeing and it is their
priority. This is also a challenge for clients and appears to fall back from the brand.
Customers should look for products that are healthy and cook food in hygienic oils. The fats
of KFC food stay in the fast-food goods and it is a weak point for the brand to get more
clients.

High employee turnover

Employment in KFC is a low paid and low skilled job. This results in poor performance and
high turnover of staff, which raises the cost of training and increases the cost of KFC.
Opportunities

Menu update to attract health-conscious consumers

The present generation is so aware of health, a big opportunity for KFC is to improve and
adapt to their needs. In order to add low fat and low-calorie ingredients, baked goods, and
other nutritious snacks and foods, this means diversifying their menu. Other than that, the
partnership between KFC and health-conscious and vegetarian customers would be
strengthened by introducing new vegetarian choices. Today's increasingly urbanised lifestyle
has generated many issues, including obesity, health threats, and others. KFC would
definitely see an improvement in reputation by introducing a new part of the menu for these
customers. This improvement will gain a larger audience and earning more benefit.

Opportunities for market penetration

There are a lot of opportunities for KFC to expand its number of outlets and improve its
presence, with many areas increasingly changing to an urbanised lifestyle. All the main
factors that play a major role in the food industry today are rapidly evolving economic
conditions, population boom, and urbanization.

Missing products of cost

The tastes of consumers have largely changed. Apart from healthy food, they want better
service with lower prices for products. KJC should also concentrate on reducing the cost of
food and nutritious food to boost its sales. More customers for the company can be seen.

Threats

Competition with small business

The economic viability of fried chicken is difficult to deny. Fortunately, there is no need for
huge money to get into the fried chicken market, so there are several roadside stalls that sell
fried chicken at a more reasonable price than KFC. The budget-conscious entrepreneur will
get a sense of owning a fried chicken franchise for as low as RM3,000, even in a night
market.

Many people are switching to healthier foods and starting to stop consume ‘junk
food’.

Junk foods are ideally defined as processed products with a negligible value of nutrients and
often have a high content of salt, sugar and fat. Junk food is found all over the place. It is
available in supermarkets, convenience shops, offices, schools, and vending machines. It is
difficult to restrict or prevent the supply and convenience of junk food. Higher consumption of
junk food increases excess fat intake, simple carbohydrates, and processed sugar, which
among other chronic health issues can contribute to a higher risk of obesity and
cardiovascular diseases. Because of that, most people are switching to healthy food and
avoid eating 'junk food’ that be a threat to KFC.

There are many fried chicken spice flour products that encourage people to make
their own fried chicken rather than purchase.

Many brands begin to manufacture their own fried chicken spice flour products, such as
Bestari, Seri Aji, Nona and others. Most customers tend to purchase rather than purchase,
as they save more money and can change the taste of fried chicken by adding other
ingredients. In addition, make their own fried chicken at home can get more quantities with a
low budget.

Rising cost of resources

At the global level, the prices of raw materials, labour, and operations are rising. This is the
brand 's biggest threat. The key fields that need more attention have been environmental
conservation and waste management. Various laws on food enforcement also raised the
operating costs of the brand. Therefore, an increase in the various operating costs indicates
a serious challenge to the brand.
6. FINDINGS AND DISCUSSION

6.1 Problem Findings

6.1.1 High Competition in the industry

The fast food industry 's growth shows that competitions and threats on the market are
significantly growing (Kai Sin, Hung Kee, Keo Shin, Tze Qing & Jia Ying, 2019). Competition
is becoming much greater among emerging players than before. Malaysia's fast food market
is already overcrowded with many fast food restaurant chains, and under the circumstances,
KFC finds it difficult to expand. KFC is now challenged by rivals such as McDonald's, Burger
King, Pizza Hut and Domino's Pizza. Unlike McDonald's, which also supplies customers with
fish and beef, KFC only supplies customers with chicken-related products. KFC is very
repetitive in their dishes, from chicken baskets and/or chicken nuggets to chicken burgers,
although the tastes of each region are different. Besides, McDonald is actually rising faster in
Malaysia compared to KFC Malaysia based on the situation analysis. If this issue will not be
resolved, McDonald's market shares will be rising and rivalling KFC Malaysia (“This project
will perform the analysis of marketing plan of KFC,” n.d.).

6.1.2 Bad service quality

According to Parasuraman, Zeithaml & Berry (1988), service quality has been largely
recognised as an important factor influencing such products or services' consumer loyalty
and future buying intention. It is difficult to ignore the effect of service quality on business
performance, customer satisfaction, customer loyalty and company profitability (as cited in
Kai Sin, Hung Kee, Keo Shin, Tze Qing & Jia Ying, 2019, p. 4). Kai Sin et al. (2019) found
that compared to KFC, McDonald's employees have a greater ethnic disparity and are much
faster, more motivated and very efficient; in other countries, the quality of service is as great
as their counterparts. The service of KFC, however, pales in comparison. Employees are
slow, demotivated and inefficient. Opening more franchises is equal to being busier with
employee control and training. If one small KFC franchise has a problem, its reputation will
be significantly affected.

6.1.3 Lack of attractive promotion

Kai Sin, Hung Kee, Keo Shin, Tze Qing & Jia Ying (2019) found that McDonald’s have more
reducing price and promotions compared with KFC. For example, the McDonald App, which
you can download from the App Store and Google Play, has great sales and reductions on a
constant basis. Their staff will present applications to their customers on a daily basis. While
KFC still owns its own app, its employees have not taken steps to encourage less than
McDonald's apps and discounts. As regards the current KFC products, instead of adapting it
to market demand, they retain their commodity pricing. It is time for KFC to make some
adjustments and improvements in order to resolve the problems if the company wants to
remain ahead of the competition.

6.2 Discussion

Main Problem 1: High Competition in the Industry

The first main problem of KFC Malaysia that I choose to analyse is High Competition in the
Industry. There is continuous growing demand for fast food throughout the world
(Ravichandran, 2018). From the routine, it can be seen that many fast food joints open daily
in various places. KFC is one of the popular fast food restaurants for a significant time in the
industry. KFC faces a wide variety of direct and indirect competition because the fast food
market in Malaysia is highly competitive. Fast food chains such as McDonald's and Pizza
Hut, which are already well known in Malaysia, are KFC's main competitors. Many of these
restaurants are also the most famous for their aspects of this specific fast food market, which
include sales costs, monthly customers, yearly salaries, number of shops and overall
revenue. All this competition makes it very difficult for KFC to retain or even expand their
customer base (Kfc One Of The Famous Fast Food Restaurant Marketing Essay, 2018).
Today, all these are fast-service restaurants operating in nearly every major city and country
as possible (Ravichandran, 2018).

McDonald's is a top competitor that has the biggest impact on KFC Malaysia. McDonald's
have much more branches globally than KFC (McDonald’s As Top Competitors Of KFC
Company, n.d.). (Osman, 2014) found that in 29th April 1982 McDonalds enters the
Malaysian market for the first time on 29th April 1982 and now they already have
approximately 271 stores in Malaysia. Furthermore, McDonald's will always change and will
continue to change the menu to maintain their customer tastiness towards their company.
Different food products will be released according to the season. For their customers,
McDonald's menu has much more options compared to KFC, selection. They are going to
have more seasonal menu and promotion like they have recently launched Rio menu series
collection for the FIFA World Cup, Durian season come out with durian McFlurry and CNY
with Prosperity set.

Other rivals, however, are Texas Chicken, but it  does not really bring a lot of tremendous
impact to KFC due to their population is not as many as KFC in Malaysia. In 23 countries
worldwide, Texas Chicken has outlets in more than 1,700 cities. Here we can clearly see
that the branches of Texas Chicken in the world are not as many as KFC and McDonald's
since Texas Chicken only had its first branches in Malaysia in 2013 (Texas Chicken History)
until now Texas Chicken in Malaysia for only five years. So do not really have so much
people familiar with Texas Chicken and not much people have a favour on Texas Chicken
due to unfamiliar.

This analysis has led us to conclude that KFC is not well prepared for a tough competition,
and that KFC must make every effort to resolve its competitors sincerely by finding best
solutions.

Solutions

Solution 1: Sales Promotion

To boost sales and compete with its competitor, KFC can have more discount deals.
Together with the launch of new products, KFC could launch its sales promotional activities.
As the introduction of new products would definitely encourage customers to come, so the
sales promotion such as free lucky draw and sweepstakes would certainly grab the mind of
customers to dine in KFC restaurants or take away. Other than that, KFC might organise an
event like a restaurant drawing competition. This could be done by giving the children a
drawing paper to draw and fill colour after meal purchased by customers, and after the due
date the list of winners will be told. As children seem to like drawing and colour filling, this
could encourage more kids to participate.

KFC mobile application is less appealing with less exclusive customer orders, unlike
McDonald's app. By providing free gifts when downloading and giving free incentives and
special deals when using the application, KFC will redesign its application. In addition,
special discounted rates can be offered from 12 am to 5 am at midnight to link customers
who want to stay up late to KFC. Last but not least, loyalty cards can be built to reward
clients who visit KFC regularly to ensure their continued buying actions. To make proactive
changes and increase customer loyalty with KFC, reviews and suggestions can be gathered
from loyal customers. In order to ensure that KFC is always "so good", KFC should make
some changes to improve its growth.

Solution 2: Public Relation

Public relations (PR) refer to the variety of activities conducted by a company to promote
and protect the image of the company, its products and policies in the eyes of the public (S,
n.d.). To promote KFC meals through advertisements, KFC should endorse talented
musicians or celebrities. It could also be achieved through a singing concert to be sung by
popular singers. During the school holidays in November and December, KFC may hold a
singing concert. As this is the peak time of visits to KFC restaurants by consumers. By
collaborating with the rising popular singers in Malaysia, KFC could look for opportunities
and it would help boost KFC 's sales. When consumers buy individual meals at KFC
restaurants, this could be achieved by offering half price concert tickets. In addition, the
actions of customers would seem to like discount and half price incentives and that would
ensure that KFC could capture the markets effectively.

Solution 3: Produce new product based on consumers’ taste

KFC 's products are rather repetitive and serve only to its customer chicken-related food.
Today the taste and desire of people, particularly young teenagers, change inconsistently.
They like trying out new stuff and following the newest trend. KFC should break the
permanent tactics and enable new products with flavours and varieties to catch the eyes of
people in order to keep pace with them. KFC is specialised in chicken and should therefore
encourage new tastes, based on the taste of Malaysian.

In addition, customers with high public health consciousness tend to eat nutritious foods to
prevent obesity so that KFC can provide these consumers with healthy foods. For example,
KFC can produce the high nutrient "chicken salad bowl" with calorie-free.  This will fulfil the
consumer's appetite, as they will enjoy the tasty and nutritious chicken. That will also reduce
the proportion of our country's obese populations.
Main Problem 2: Bad Service Quality

Each customer has the ideal service expectation when they go to a restaurant or shop.
Compared with client expectations, service quality measures how well a service is delivered
(Service Quality: Definition & Dimensions., 2016). There are so many customers that
complaint about bad services from the staffs at KFC (KFC Malaysia Marketing Plan, n.d.).
From the situational analysis, KFC noticed that there were protests from customers saying
that eating meat is dangerous and it contain toxic, during the avian flu outbreak few years
ago. This eventually will bring poor images for customers which convinced by them, thus
leading bad images for KFC Malaysia.

Besides, Jing Kiat et al. (2019) found that the delivery time is also not fixed by KFC in
Malaysia. For example, when they try to order, the customer will only know if the KFC
nearby offers the delivery services via the website or apps and the delivery time is not the
same as that listed on the website from 10.00 am to 10.30 pm. This will cause consumers a
lot of hassle and their profits will ultimately be affected. So this issue is related to KFC's
service quality. It is because KFC will use their human power from the shop to be the
delivery man.

In addition, Jin Kiat et al. (2019) mentioned that attitudes of the employee often play
important roles in a business. KFC is a food service company, which is why employees have
an important attitude, because most employees must serve clients particularly those working
as cashiers. They must accept the customer's order and the customer's payment. In other
words, they have to approach the clients so that they have to be patient and talk to the client
politically all the time.

For the purpose of improving the levels of the quality of services that they offer. The service
generating organisations are required to identify the reasons entailed behind mounting
dissatisfaction amongst the users and to activate appropriate measures (technical or

functional) to minimise it (Bhargava, n.d.).

Solution 1: Increase Manpower

KFC should hire more staff, whether full-time or part-time staff, especially during the peak
season, as one of the ways KFC can boost their service quality. Although this would
increase the company's expenses, it is possible to boost efficiency inside the organization.
This is because when the company has enough staff to manage some departments, the
specialisation of work within the organisation is created. In doing their work, workers would
also be more effective as they do it every day. Furthermore, customers visiting the
restaurant would also be pleased with the services offered.
The concentration of work within a company, however, will cause the employee to feel bored
and tired each day of doing the same job. This will lead the workers in the company not to
last long. By practising work rotation in the company, this issue can be solved so that
workers do not do the same job every day. One of the advantage of work rotation is they will
also know more about other branches and the whole organizational process.

Solution 2: Incentives and Rewards

 The happiness of workers is one of the key mechanisms for the company to achieve
success and maintain the standard of service. In the case of KFC, it should offer benefits to
workers that will improve job performance. In addition, it would also inspire the workers to
work harder to get the bonuses. KFC can grant a bonus or promotion to those employees
who earn recognition from customers. For problems regarding delivery, KFC can solve it by
giving employees good feedback from the customer certain rewards. The rewards can be
in terms of money, coupons or products. The advantages of these incentives would inspire
workers to better do their job and to deliver the order to the customer on time.

Solution 3: Increase Employees’ Attitudes

KFC should increase the employees’ attitudes by providing them a comfortable and
convenient working environment. For example, KFC can offer a relaxing room for employees
to chit chat with each other or sharing the opinion together. Besides, KFC may open a gym
for employees to enjoy their healthy lifestyles as well. These will increase their attitudes
towards their organization.

Otherwise, KFC can also offer workers who achieve higher performance an opportunity to
promote themselves as management or others in order to increase or strengthen their
attitudes. In doing so, workers feel recognized by the company and are prepared to
participate. Furthermore, KFC will give their workers with good performance higher salaries.
7. CONCLUSION

In conclusion, KFC Holdings Malaysia BHD are facing problem in high competition in the
industry, bad service quality and lack of attractive promotion. In order to survive in
competitive markets, the company should to take actions by making some changes in their
business plan. This case study explained how to tackle the problem by coming out with new
ideas and multiple solution in order to solve and minimize the problem. By doing the SWOT
Analysis, the company can see the issues clearly so they can develop a new strategy
planning. Therefore, this case study will help the company to summarize the major problem
face by them. After recover these three problems, we need to choose 2 main problem of
KFC Holdings Malaysia BHD and then suggest 3 solutions for each problem.

The 3 solutions for first problem which is high competition in the industry are sales
promotion, public relations and produce new product based on consumers’ taste. While the
solutions for another problem which is bad service quality are increase manpower,
incentives and rewards and increase employees’ attitudes.
8. RECOMMENDATION AND IMPROVEMENT

In order to solve the problem of high competition, the best solution is to expand into
international market as explained in the above section. KFC may also want to differentiate its
products and compete at non-price strategies, such as service and variety of menu. In this
way, KFC escapes from potential price wars. On the other hand, KFC may want to reduce its
cost so that it will survive in case of price wars.
REFERENCES
https://www.thestar.com.my/business/sme/2014/04/05/business-smells-yummy-fried-
chicken-as-entry-point-to-entrepreneurship/ threats small business

JUNK FOOD BAD https://healthywa.wa.gov.au/Articles/J_M/Junk-food#:~:text=Eating

%20junk%20food%20on%20a,kilojoules)%20comes%20from%20junk%20food.