However, it is generally accepted that the two companies are not owned by the same entity. 2, pp. The franchise business model of the company has managed to ensure that products and services that are offered at the franchises are consistent with services that are offered at the company-owned restaurants. This is one of the hallmarks of McDonalds success. The main items on its menu include hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, french fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCaf beverages and other beverages. So KFCs core competencies are its ability to leverage, exploit, take advantage of its recipe and its brand name. 2012, Sustainability and The Supply Chain: How to Reduce Cost and Save the Environment, Manufacturing business technology, vol. KFC (also known as Kentucky Fried Chicken) is a global chicken restaurant brand. KFC operates in the fast-food industry just like McDonalds. McDonalds has a competitive advantage in terms of cheating prices. They often result in excessive food wastes and accumulation of packaging waste. Quality, service and cleanliness are always important, but in this case, good value is more important. McDonalds is ranked first in the world, while KFC is ranked fourth. In 1987, it was amongst the first western-based organisations that opened new business branches in China. If youre the first to try something new or to address the spotted need, youll get better results. I., 2000, Marketing Theory and Practice, lecture 6). The fast-food organisation also stopped offering its eat-in foods in cardboards in 2008. McDonalds has a competitive advantage in terms of speed of service. Maloni and Brown (2006) also note regulatory directives compel organisations to conduct an analysis of how their products affect their operations. 1350-1358. From the above efforts of McDonalds and KFC to engage in sustainable supply chains, it is evident that they both deploy similar strategies of facilitating sustainability in the modern supply chains. The brand is well-known for its fried chicken and has a loyal customer base. Texas Chicken have branches more than 1,700 locations worldwide in 23 countries. Please note! Indeed, competitive advantage is one of the supply chain management strategies that act as critical success factors for sustainability in any organisation, In Miami, James McLamore and David Edgerton opened the first Instagram-Burger franchise McDonalds responded in 1985 with a new burger, the McDLT, which was a direct copy of Burger Kings best-selling Whopper, but at a lower price. McDonalds competitors in the United States and the United Kingdom are also direct competitors. The restaurant prides itself in having a differentiated process to manufacture its products and thus retain a healthy competitive advantage. Beside that, KFC company was ranked in number two in the analysis. Burger King globally generated more than $20 billion in revenue during the fiscal year ending in 2020. This is IvyPanda's free database of academic paper samples. This claim means that they must guarantee their commitment to the prevention of abuse of human rights. KFC is well-known for its fried chicken, which is made from their own blend of secret spices, which cannot be easily imitated by any one else. The government should take steps to break up monopolies in order to benefit consumers and the economy as a whole. They have a value chain that allows them to compete with other fast food chains while still providing their customers with excellent service. Web. It is why McDs spends a significant sum on marketing every year. A pancake mix that resembled Hungry Jacks was registered for by Pillsbury, which was the company that invented Hungry Jack. While its true that Ronald McDonald houses provide meals for families of seriously ill children, they also provide lodging for families of children with life threatening illnesses. For take-away foods, they must wrap customers food. Such products deserve to create value to their consumers. These three different strategies are cost leadership, differentiation, and focus. Proficient in: Nutrition & Dieting, Corporation. 2) confirms, Cheap food comes with steep hidden costs to the people who produce it, sell it, and eat it, to the environment, and to future generations. Can KFC and McDonalds operate sustainably? August 2, 2021. https://ivypanda.com/essays/mcdonalds-and-kfc-corporate-responsibility/. Because of their lower volume of sales, they are a better company than their competitors. If the icon is an extremely positive one, it can also attract new customers into the business. Even as a fast food brand, it has to retain heavy focus on customer service so as to retain them. 1. Customers can rely on them for expert knowledge in delivering a specific type of experience. For example, while McDonalds and Burger King both sell burgers, McDonalds offers a Big Mac while Burger King offers a Whopper. To compete effectively against McDonalds, it is important to have a clear understanding of their strengths and weaknesses and to develop a strategy that takes advantage of their weaknesses while countering their strengths. Other issues that have been considered in the paper in relation to sustainability of McDonalds and KFC supply chains include effects of strategies of supply chain on the environment, especially with reference to the need to produce green products to ensure protection of the environment. According to World of Buzz in 2017, a Malaysian guy has done comprehensive fried chicken review from both fast food franchise, which is KFC and McDonalds. These cost leadership strategies include economies of scale, proprietary technology, and preferential access to raw materials (Ciliberti 2009, p.119). McDonalds and KFC pay incredible focus on CSR in their derivation of strategies for ensuring sustainable supply chains, especially following the heavy emphasis from green movements across the globe for an organisation to produce and distribute green products in the effort to curb environmental degradation. A large and varied product range is meant to cater to the taste and needs of various groups of customers. You should have an apostrophe before the apostrophe in the word system. Many businesses use cross-selling to maximize sales. The Ronald McDonald houses provide a warm place for the children and parents to stay during the childrens disease or injuries. KFC, the worlds second largest restaurant chain, operates over 18000 restaurants in 120 countries. McDonalds has a long tradition of innovation. McDonalds wants to make money by not only selling its products but by encouraging customers to add additional items to their orders. McDonalds and its franchisees buy food, packaging, equipment and other goods from several independent suppliers. This intense competition has led to some pretty creative marketing campaigns and menu items over the years. Finally, McDonalds is well-known for its Ronald McDonald character, which helps to create a sense of fun and excitement around the brand. From the perspective of balance meals, KFC did a better work than McDonalds because their meal has more protein, carbohydrates, and vegetables. On July 30, 2021, the market capitalization of the company was estimated to be $181 billion. The franchisees own and operate more than 90% of McDonalds restaurants globally. The human mouth craves those flavors and that is what makes you go back for more KFC.. With a variety of meals, sides, and drink options to choose from, McDonalds For instance, KFC have chickens In its mission statement, McDonalds states that it focuses on people as most important resources that are available to enhance the success of its business objectives and goals (Wilhelm 2011). With more than 17,000 international units, KFC enjoys a strong global presence (Crittenden, Crittenden and Pierpont 2015, 610). . PRIZES FOR THE GRAND PRIZE WILL BE R50 000. As indirect competitors of McDonalds in the coffeehouse category, Starbucks and Dunkin Donuts can also be considered direct competitors of McCaf. If really want to compare, the menu of KFC is much more healthier then Texas Chicken. In the Chinese market, KFC came under criticisms for utilising a growth hormone and high levels of antibiotics in its poultry in a manner that violated the Chinese law (Hsu 2013). Consequently, it responded by collaborating with the organisation in the implementation of a zero tolerance deforestation programme. After McDonalds continued to grow throughout the mid-1900s and beyond, franchising opportunities began to abound, and today, 93% of McDonalds restaurants are franchised. To achieve this goal, the organisation advocates a bureaucratic formal management structure. Indeed, within the last few years, KFC and McDonalds have strategically focused on programmes for creating sustainable supply chains. Green technology and green products communities will be interested to know whether products that are supplied by both McDonalds and KFC through their supply networks meet the concerns of environmental protection. Differentiating between the two will help obtain the best out of the products that the two brands offer their customers. Franchising form of new market entry is utilized within McDonalds business strategy to a great extent. For instance, both organisations are immensely concerned with their environmental impacts. As time passed James McLamore and David Wendys is an international fast-food restaurant chain that is famous for its hamburgers, french fries, Frosty, chicken nuggets, sandwiches, and even its Twitter account. This strategy is driven by health professionals increased emphasis that fast foods are associated with obesity and its associated ailments, including hypertension and diabetes. This allows the fast food giant to cultivate relationships with business partners and establish a footing in regions where the competition is still struggling. McDonalds has also maintained heavy focus on customer service which has helped it engage customers and achieve a competitive advantage. McDonalds has direct competition in the quick-service restaurant industry from such companies as KFC, Subway, Taco Bell, Wendys, and Burger King. The company cares about the health of its customers. Competitive Advantage offers a beneficial position to business organisations over rivals in regards of some measure like expense, quality, or velocity. The advertising wars were unsustainable in their own right they were prohibitively expensive. KFC is an organisation that specialises in fried chickens. Cheeseman (2013, Para. KFC competes against McDonalds the most. KFC is well-known for its fried chicken, which is made from their own In the process, it also has the ability to control everything about the supply chain from beginning to end. Aggressive food service competitors threaten McDonalds and impose a major strategic challenge in this SWOT analysis. While these fast-food giants have a IvyPanda. According to a recent Business Insider report, KFC is by far the most popular restaurant chain in China, and it is not the same as the American brand. McDonalds and KFC are both popular fast food chains that have gained immense popularity over the years. It has helped McDonalds build a distinct brand image and identity among the fast food brands which works as a source of competitive advantage achieving higher brand recall and sales. This process involves transformative mechanisms that are meant to outline various comprehensive road maps for detailing approaches that are implementable to ensure that business partners remain committed to the achievement of green technology in supply chains. They are the leaders of the industry and provide training to their franchisees. McDonalds is a big supporter of the Ronald McDonald Houses. Customers of KFC rate KFCs brand as #130 on the list of Global Top 1000 Brands. It is both popular and successful as a fast food chain. Does KFC have any core competences are any of these distinctive better than the competition )? Burger King and McDonalds are two of the biggest players in the game. However, McDs has continued to grow its presence in the other significant markets too. Based on this concern, the paper has confirmed that the subject of creating sustainable supply chains entails interplay of a variety of stakeholders. Its key competitive advantages have included nutrition, convenience, affordability, innovation, quality, hygiene, and value added services. In a bid to present its supply chain as sustainable, KFC now endeavours to engage in training and development programmes in addition to apprentice programmes on sustainable supply chain (Idle 2011). You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. The competitive strategies the restaurant follows are:-. Having a focus on quality has allowed them to maintain a good supply chain, which helps ensure the high quality of their food and the safe handling of any contaminants. In this extent, Maloni and Brown (2006, p. 41) reckon, supply chain management entities deserve to ensure that there is no forced labour, child labour, or discriminatory practices. In addition, they offer a seasonal and regional menu option. The restaurant will continue to strive for quality customer service. KFC struggles to address issues that influence the sustainability of its supply chain. Fast food outlets in their chain are committed to keeping their stores clean, consistent, and enjoyable to their customers. Monopolies can also reduce competition and stifle innovation. It allows you to develop a clear and concise plan for how to best compete against them. However, apart from food, it has all focused on customer service. Cheeseman (2013) says that they spend a total of $6 billion in 1970 on purchasing fast foods. For example, KFC offers a $5 Fill Up meal which includes a chicken sandwich, a drink, and a side. The U.S. based McDs restaurants and in several international markets too offer a full or limited breakfast menu. You get what you pay for when it comes to the dining area in Applebees. Thirdly, is their ranking and sales volume. Nevertheless, the corporations CSR manager in the UK and Ireland confirms that its engagement in CSR has taken a long time to be embedded in its business model (Idle 2011). Burger King, the worlds fourth largest fast food chain, has steadily grown throughout the world. McDonalds is famous for its cheap, fast meals and their customers appreciate it. Their taste has changed a lot and they would rely only upon brands that ensure good quality. must. Richard and Maurice, 68 no. McDonalds has more locations than KFC. KFC was the first foreign fast food company that open their branches in Malaysia (KFC Malaysia). Although both chains have their own characteristics, they are widely regarded as the two most competitive in the fast food industry. The number of baby boomer customers of McDonalds is also large. Since an organisation must balance all interests of the stakeholders, owners of the corporations become disadvantaged since high operational costs imply low returns on investments. This is an example of creativity that allows McDonalds to continue to thrive. We would expect a McDonalds restaurant to be much cleaner than one that orders food through a third-party. From the perspective of balance meals, KFC did a better work than McDonalds because their meal has more protein, carbohydrates, and vegetables. The fast-food industry is highly competitive and it is important that both McDonalds and KFC continue to use marketing to stay ahead of their competitors. Creating customer loyalty is difficult in the 21st century. Next, is the their Menu. There are several major international fast food brands including Dominos, KFC, Burger King, SubWay, Wendys and similar more that are competing for market share with McDonalds. Meanwhile, McDonalds has provided more healthy meal and also vegetarian meals compare to KFC such as McVeggie, apple pie, and spinach pie but KFC and Texas Chicken only provide salads. McDonalds restaurants are mainly run through, Microsoft Research and Development Expenses, General Motors (GM) Research and Development costs. food. Yaziji and Doh (2009) quote KFC by informing that more than 60% of its paper-based products are derived from highly sustainable sources. The success of the company led to the growth of the fast food industry and the company was named to Fast Food Hall of Fame in 2009. McDonalds was named the worlds largest fast food chain based on an analysis of the top ten largest fast food chains. The quality assurance process involves ongoing product reviews as well as on-site supplier visits. This situation has an effect in ensuring that its products and services are sustainable in the short and long-term. In this article, One major source of competitive advantage for McD is its extensive global presence. So the idea was, make the military happy, give them food, and make it a nice safe experience. (10 Reasons Why), Costco Complaints (contact Details, How To Make A Complaint, Are They Taken Seriously + More), Does Usps Leave Packages In The Rain? IvyPanda. Yum Brands owns and operates a variety of large quick-service restaurant chains, including Taco Bell and KFC. KFC, second largest restaurant in the world have their outlets around 120 countries with more than 18000 outlets. Subway has more than 37,000 locations around the world and is one of the largest restaurant chains in the world. McDonalds is popular for its hamburgers. From the perspective of balance meals, KFC did a better work than McDonalds because their meal has more protein, carbohydrates, and vegetables. For instance, KFC have chickens come with whipped potatoes, salads, buns and soft drink but McDonalds have fried chickens with French fries and soft drink only in both fried chicken set. McDonalds menu have much more choice for their customer to choose if compare to KFC. Apart from intense competition and pricing pressure, there are other reasons too that businesses have to struggle to retain their existing customers and build strong customer loyalty. To run a major fast food chain, you need to ensure regular supply of good quality raw materials. It has also managed a large supply chain to ensure the availability of good quality raw material. 1, pp. Different organisations may choose to pursue different types of competitive advantages. This is where McDonalds purchases all the raw materials for its menu items, such as tomatoes and lettuce, from the same supplier. McDonalds differentiates itself from its competitors by its focus on innovation, customer service, and its global reach. An organisation can also protect shareholders from losing their investments by ensuring that risks that lead to a reduction of competitive advantage are proactively mitigated. Why is KFC the best fast food restaurant? KFC is ranked third in terms of culture and fourth in terms of gender in a survey conducted by the Pew Research Center. Barnett, M. 2010, Colonel Sanders New Modern Army of Outlets, Marketing Week, 4 March, pp. 48 no. These efforts have helped the company maintain its position as the largest fast food chain in the world. KFC is not the only fast food chain in competition with KFC; there are also competitors such as Popeyes Louisiana Kitchen, McDonalds, Wendys, and Jack in the Box. McDonalds had $19.2 billion in revenue in the fiscal year that ended in June 2020. McDonalds is constantly updating its menu to keep its most loyal customers coming back. McDonalds was always known for its great values! An important thing to realize is that the success of an icon is not limited to the business. To achieve cost savings, the company employs economies of scale all over the world. Mcdonalds Competitive Advantages (9 Different Factors) July 4, 2022 by Alex. No plagiarism guarantee. Over the long term, McDs aims to manage 95% of the restaurants in its system through franchisees. The organisation is also a subsidiary of the Yum Brands, which also owns organisations such as Taco Bell and the Pizza Hut fast-food chains. Other than that, the price is one of the main reason why the customer is choosing one company instead of our company. The two largest fast-food companies have competed fiercely for market share since the 1950s. KFC is ranked fourth in the world in terms of gender score, while Taco Bell is ranked 130th. Aronsson, H. & Brodin, M. 2006, The environmental impact of changing logistics structures, The International Journal of Logistics Management, vol. (adsbygoogle = window.adsbygoogle || []).push({}); vitag.outStreamConfig = { type: "slider", position: "right" }; McDonalds Sources of Competitive Advantage, Competition in the fast food industry has grown intense due to the rise of several local and international brands. McDonalds food and coffee business also competes with Starbucks, Dunkin, and Tim Hortons. McDonalds is the leading and one of the most popular fast food brands of the world. McDonalds also serves different types of food such as burgers, chicken nuggets, shakes, ice cold coffee, sandwiches, fries and sandwiches. August 2, 2021. https://ivypanda.com/essays/mcdonalds-and-kfc-corporate-responsibility/. Gogoi, P. & Arndt, M. 2003, McDonalds hamburger hell. They also have to factor in the quality of their hamburgers in order to keep prices low in comparison to their competitors. Some valid generic mechanisms of achieving excellence and market success include differentiation and cost leadership. 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