PESTEL Analysis of KFC

This PESTEL analysis of KFC explains how six critical macro-environmental factors influence the success of one of the world’s most known fast-food joints.

Kentucky Fried Chicken, now officially known as KFC, is a popular fast-food restaurant. Anyone in over 100 countries will recognize the familiar face of Colonel Sanders and the spicy aroma of the beloved fried chicken. But it takes more than love and popularity to keep a massive corporation like KFC running.

In this PESTEL analysis of KFC, you’ll learn how six critical macro-environmental factors influence the success of one of the world’s most known fast-food joints. Be sure to check out the SWOT analysis of KFC for more information about the strengths, weaknesses, opportunities, and threats that KFC faces today.

Political factors KFC

KFC didn’t always use an abbreviation of their original name, but once “fried chicken” became associated negatively, the company decided a change was necessary for the brand’s image.

KFC is one of the only fast-food restaurants with unhealthy food in the name — unlike McDonald’s or Burger King, in which burgers can still be healthy). KFC did the smart thing; dropped the “fried” without having to entirely overhaul their name and image. It’s a psychological change; KFC still sells the same high-calorie chicken, but eliminating the word from consumer minds can cause them to “forget” the connection between unhealthiness and fried chicken.

Over the last couple of years, KFC has been drawn into political drama. On the official Twitter page, KFC mocked McDonalds’ mascot while simultaneously parodying President Donald Trump’s tweet, where he mentions having a “bigger and more powerful” nuclear button than North Korea. Mocking Mr. Trump ruffled the feathers of his supporters, and even those who aren’t his fans weren’t thrilled with KFC’s mocking tone in general. Some did see the tweet as harmless humor, but perhaps in poor taste.

In May, KFC became the accomplish of a political dispute. Tennessee Democrat, Rep. Steve Cohen, attempted to mock Attorney General William Barr by busting out a giant bucket of Kentucky Fried Chicken during a hearing. This was Cohen’s attempt at calling Barr a “chicken.” In the press images, KFC’s logo was clearly displayed. This wasn’t a publicity stunt with KFC’s permission (that we know of) and it could’ve easily tarnished KFC’s reputation.

Economical factors KFC

Yum! Brands owns KFC and similar fast-food restaurants, including Pizza Hut and Taco Bell. All of these corporations are struggling in the Chinese market. While most can’t seem to grow, many are on a profit decline.

Part of the problem for KFC is the association with fried chicken, one they’ve tried to separate from by abbreviating the name. The health-conscious crowd isn’t interested in fatty, calorie-dense foods. And since most of KFC’s menu includes some form of fried chicken, these consumers don’t have many choices.

Luckily, KFC is creating vegan items to compensate for vegan and dieting consumers. As of a few days ago, KFC started experimenting with fried chicken sandwiches; instead of buns, doughnuts will house the fried chicken. And they’ve created two vegan fried “chicken” options, which are essentially boneless wings and vegan nuggets. Hordes of people came running to the nearest KFC location just to try these new creations. Clearly, these experiments were successful for the company, both economically and socially.

Fast-food restaurants struggle with social issues that associate negative feelings from consumers to the brands. Many people worry about the mistreatment of minimum wage food workers. They also worry about how the animals used for the menu live; many are injected with hormones, kept in cramped compartments for the entirety of their lives, and forced to carry more fat than normal. Organizations like PETA have raged against the mistreatment of these animals, boycotting the companies who follow this unethical practice.

Another issue is, of course, the high-calorie food. KFC’s menu is filled with these foods, and with the obesity crisis thriving in Western countries, restaurants like KFC are often blamed for the epidemic. Offering vegan options is one way to appease people desiring healthier options; it also introduces consumers, who otherwise wouldn’t look twice at KFC’s offerings, into the restaurants.

Technological factors KFC

Unlike many other fast-food restaurants, KFC are adopting the newest technology for workers. They believe that by improving the environment for employees, customer service may improve too. It’s a rather normal move considering how tech-savvy many of the younger workers are. They’re more likely to accept and understand new forms of technology in the workplace, such as voice-activated tests for trainees.

A KFC location in Australia is introducing communication for employees through social media. Employees are encouraged to ask questions and share ideas on this platform with each other.

Beyond the workplace, KFC is also offering advanced technology for deliveries, kiosks, and easier ordering. You can now order your meal before reaching the cash register, making the entire process much quicker for customers. This is a “click-and-collect” feature and it’s already beneficial for KFC restaurants in Australia; approximately 98% of locations offering click-and-collect have witnessed a 20% profit increase.

Environmental factors of KFC

A complicated history with KFC’s paper supplier has affected the personal opinion of the brand. The paper company is linked to deforestation, which negatively impacts the health of the planet. It also contributes to the endangerment of wildlife and similar species who are already on the brink of extinction.

Legal factors of KFC

At the moment, KFC operates in more than 120 questions around the world. To remain operational, the company must follow the laws in each location. This includes filing the proper amount of taxes, adhering to labor laws, and ensuring all restaurants are up-to-code. If they fail to follow any of the legalities, they may find themselves in court or even shutdown.