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SWOT analysis: The tool of organizations stability (KFC) as a case study

Article in Journal of Process Management New Technologies · January 2018

DOI: 10.5937/jouproman6-19188

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 (JPMNT) Journal of Process Management – New Technologies, International
Vol. 6, No 4, 2018.

SWOT ANALYSIS - THE TOOL OF ORGANIZATIONS STABILITY (KFC)

AS A CASE STUDY

Soran K. Omer
Department of Administration and Accounting, Faculty of Humanities and Social Sciences,
Koya University, Koya KOY45, Kurdistan Region – F.R. Iraq.
soran.kakarash@koyauniversity.org

Original Scientific Paper

doi:10.5937/jouproman6-19188

Abstract: The study is an effort to test the role of matter of fact familiarize their purposes
SWOT analysis as a marketing implementation and goals of the organizations and matter
strategy to provide stable condition for
organizations. In more detail SWOT analysis is
of importance know or get their inform of
independent variable and organization stability is the organizations vision and mission.
dependent variable. The methodologies depend on
One of the crucial steps is reviewing in any
the several problems by reviewing books and
journals, as well as tracking down the information organization to obtain optimal performance
the KFC (Kentucky fried chicken) as a global brand and organize their aims and goals; they
and chain food. The result shows that accurate need to check out or review internal and
information which is obtained to managers through external factors regularly that would
the analyzing and classifying with the application
directly affect the organizations
of SWOT and PEST has the importance role to
make strategic plan and stable the organization for a accomplishment and general
longer time. To conclude, these strategies are improvements. The skillfulness of
playing and leading the essential role the management is to study these external and
organizations to conduct the best or at least optimal internal factors. Also evaluate and properly
solutions with time and location respectively.
apply these skills to sketch or distinguish
Key words: SWOT analysis, Organizations stability them from organizations or purely makes
Abbreviations: them stand out.
KFC – Kentucky fried chicken. Organizations that have mission and vision
will make effort towards achieving their
SWOT - strengths, weaknesses, short term and long term missions and
opportunities and threats. visions. The goals and objectives are need
PEST - Political, Economic, Socio-culture to pursue strongly with high sense of
and Technology factors. commitment and passion in order to realize
stability continuous progressing. It is
4p - Product, price, promotion and worthy to annotation that the managing an
placement organization to confirm stability, in the
other hands the particular strategic
planning process should be employed for
1. Introduction
this purpose of this exercise SWOT
To understand and create better condition analysis which is part of strategic planning
for stability in an organization, the board instrument will be considered.
of any organization have to understand the

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1.1 Study problems and questions

One of the most important threats which is
conflicting the managers of organization is
when they will make a decision they
cannot make a right decision, especially
decide through their products price and
choosing the place to take the out puts of
the companies, at the recent days, there is
an effective way or reality tool to sort the
strategic plan for the companies which
are called (SWOT Analysis), and depend
on this position the study problem include
some of the questions which are this study Figure (1) SWOT matrix designed by
attempts to find out suitable and acceptable (Author, 2018)
solution, such as:
In addition, “SWOT is the acronym for a
Q1) What are the significant of SWOT company’s strengths, weaknesses,
analysis in companies planning especially opportunities and threats. According to the
Kentucky Fried Chicken (KFC)? advocates of SWOT, strengths refer to
Q2) How can the SWOT analysis stabilize inherent abilities to compete and grow
the organization for a longer time globally strong. Weaknesses are the inherent
compare to the others? deficiencies that cripple growth and
survival. Strengths and weakness are
Q3) Does organization needs to apply
mostly internal. Opportunities are the good
SWOT Analysis for running their business
chances and openings available for growth.
or is there an alternative?
Threats are externally wielded challenges,
which might suppress inherent strengths,
2. The concepts of SWOT analysis accelerate weakness and stifle
(definitions and visions) by the opportunities from being exploded. To
recent scholars. succeed in any field, weaknesses must be
overcome through strengths and threats
SWOT analysis is a technique which is must be transferred into opportunities. The
used to analyze the strengths, weaknesses, four elements of a SWOT are analyzing
opportunities and threats of business undertaking as part of a wider strategic
(Ommani, 2011) and it is one of the several planning.” (Kaczmarek, 2016). Also
strategic planning implements that are used “SWOT refers an acronym of strength,
by businesses and the other organizations, weakness, opportunities and threats. The
on the other hands, all factors (Internal and first two factors (strengths and
external) are related to the effort, both weaknesses) are related to internal
positive and negative see fig (1) and it's organizational factors, while opportunities
identified and addressed. In order to and threats cover a wider context or
achieve this task, the process involves four environment in which the entity operates.
areas of consideration: strengths, The first are likely to be under control of
weaknesses, opportunities, and threats. It the organization but the latter one,
should be noted that, when identifying and although they are no less important when
classifying relevant factors, the focus is not looking at the impact on the enterprise, are
just on internal matters, but also external not.” (Oreski, 2012).
components that could influence the
success of the project. (Osita et al, 2014).

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Vol. 6, No 4, 2018.

In addition, (Kaczmarek, 2016) focused the organization. The strengths and

on that SWOT elements in more detail are weaknesses belong to the internal field of
divided into internal and external elements business, and threats and opportunities
which are clear in other words, the SWOT belong to the external environment. The
analysis is based on two pillars: the tables (1, 2) are clearly show explanations
internal analysis and external analysis of below:
Table 1. Internal Factors. (Kaczmarek, 2016)
Strength and description
- Employees with in high level of Knowledge and capability.
- Good foundation and basic for team work and delegation of responsibilities.
- High engagement external services.
- Strong leadership of top management.
- Attractive maintenance department for new employees.

Weaknesses description
- Number of employees with low willingness for personal development.
- Too much focus on “daily activities and problems” and low planned maintenance and
innovation.
- Dealing with high numbers of priorities.
- High fluctuation of production planning.
- Ineffective and unclear communication.
- Lack of appropriate rewarding system.

Table 1. External factors. (Kaczmarek, 2016)

Opportunities description

- Continuous personal development.

- Advanced technology.
- Long term relationships with supplier.
- Friendly and safe workplace.
- Standardized equipment.
- Lean organization.
- Further new diagnostic method development.
- Supporting software tools for activities

Threats description

- Lack of availability operators for clean, inspect, lubricate and tighten, and preventive
maintenance.
- Centralization of decision making investments and modifications.
- Limited value of stock spare parts.
- No time for preventive maintenance (only weekend).
- Decrease of maintenance budget.
- Lower availability external services.
- Decrease on employee's engagement and motivation.
- Higher dependency on external services.
- Legal constraints.
- Aging machinery and installations.
- Aging employees.
- Decrease of quality and life time of components

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But its difference, according to Eggerts with the firm made it clear that the sales
viewpoint (2012) with service sector which manager had no idea of how to structure
is focused on that SWOT analysis of bank the complex situation. As the authors see
is here: it, there were not real alternatives to
SWOT. With only one participating
1- Strength
person, a rather restricted time frame (for
It includes good financial fundamentals, interviews and the number of interviews
good domestic brand recognition, strong that could be expected), SWOT seemed as
and growing presence, loyal customer, the best option. As mentioned earlier, the
experienced executive management application of SWOT was made through
2- Weaknesses several meetings allowing the sales
manager to reflect on both the issues and
Focused on eroding market position, the situation and on the methodological
presence performing below expectations, approach for structuring the problem. The
heavy reliance on wholesale funds, high time between meetings made up a more
cost brick and mortar infrastructure. productive and interactive analysis. By
3- Opportunities starting out discussions one day, the sales
manager became more attentive to the
Export of image to other markets, global SWOT factors discussed, and at next
growing wealth, well positioned to benefit meeting he could always add on new
from improving conditions. relevant issues. However, it was also clear
4- Threats that the analysis could not have been
applied without the technological
The fourth element is threats which is
knowledge of the facilitator. Application of
include increasing global regulation and
SWOT requires a good information and
foreign target markets
sound knowledge base to succeed. The
2.1 The Advantage and disadvantages of sales manager did not have sufficient
SWOT analysis knowledge especially about the external
(Oreski, 2012) emphasizes that the SWOT SWOT factors, and the direct engagement
analysis is simple and useful for organizing of the facilitator as an expert was a
information, especially for preliminary requirement for carrying out the analysis.
research, on the other hand, it also as a In terms of using SWOT with an
basis for more applied and theoretical illustrative purpose, it is the authors’
work. One of the advantages but at the perception that the manager did get so
same time disadvantage of SWOT analysis much insight into SWOT methodologically
is the fact that it is the method of valuation. that he could be able to apply it himself or
The emphasis on the evaluation of the take on a facilitator role.” (Vega, 2004).
work seems more applied than theoretical. “Typically used at the enterprise level, but
SWOT has proved very useful in can be applied at higher levels, for
understanding the environment of the example, in strategic plan in tourism of the
organization and, consequently, in the destination. Strategic planning for the
strategic planning of their growth and destination could be a difficult task as there
development.and SWOT is use to assess a are many possible strategies derived from
business or a proposition. This shouldn’t the assessment of environmental factors.
be restricted to a business you own, but But the decision without a systematic
also to use it for your competitor’s approach would result in less effective
business. (Fine, 2009). strategies.” (Oreski, 2012). As well as,
On the other hands the “SWOT analysis SWOT analysis is used commonly in firms
was used simply because the first contact and classrooms.

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Vol. 6, No 4, 2018.

Normally, it's the centerpiece of situation Furthermore, PEST analysis is a scan of

assessment. (Valentin, 2005). the external macro-environment in which
an organization exists. It is the one of the
In addition, Downey & Technical
beneficial tools for understanding the
Information Service (2007) concentrated
political, economic, socio-cultural and
on when using SWOT analysis, it should
technological environment that an
be ensured that the internal and external
organization operates in. It can be used for
factors are prioritized so that time is spent
evaluating market growth or decline, and
concentrating on the most significant
as such the position, potential and direction
factors. This should include a risk
for a business.
assessment to ensure that high risk or high
impact threats and opportunities are clearly 1- Political factors: this factor is
identified and are dealt with in priority consisting of government
order. Also the analysis is pitched at the regulations such as employment
project or business activity level rather laws, environmental regulations
than at a total company level, which may and tax policy. Other political
be less actionable. While, the issues factors are trade restrictions and
identified are retained for later in the political stability.
strategy formation process. 2- Economic factors: These affect the
cost of capital and purchasing
2.2 SWOT and PEST analysis and
power of an organization
strategy formulation
3- Economic factors: this feature is
(Fine, 2009), emphasis that the questions including economic growth,
are crucial even today in business, and interest rates, inflation and currency
should be the starting point when looking exchange rates.
at either a new product, or to see how to 4- Social factors: this factor also has
improve the net profit for a company or an impact on the consumer’s need
organization. and the potential market size for an
1. What product/s are we selling? organization's goods and services.
2. What is the process we have in Social factors include population
place to sell the product? growth, age demographics and
3. Who are our customers, who are attitudes towards health.
going to be interested in our 5- Technological factors: this factor
product? is influence barriers to entry, make
4. What ways can we deliver the or buy decisions and investment in
product to the customers? innovation, such as automation,
5. What are the finances needed to investment incentives and the rate
create and sell this product? of technological change.
6. Who will oversee all the stages In addition, PEST factors can be classified
from having an idea, to having as opportunities and threats in the SWOT
enough finance to complete the analysis. Figure (3) shows full detail about
task? it. Also, it is often useful to complete a
However, a well-established SWOT PEST analysis before completing a SWOT
analysis can benefit a company to analysis. (Downey & Technical
understand itself better and it is an Information Service, 2007).
important guideline for making a proper
marketing strategy plan (Huiru, 2011).

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Vol. 6, No 4, 2018.

Figure (2) Strategy formulation (Author, 2018)

Figure (3) it can be seen SWOT Analysis vs PEST Analysis (Author, 2018)

3. Illustration of KFCs SWOT 3.1 Introduction to the KFC

analysis Kentucky Fried Chicken which is
To illustrate the theories of this termed to KFC is a chain of fast food
research, formulating marketing restaurants based in Louisville,
strategy with using SWOT analysis, Kentucky, in the United States. Plus
PEST and 4p of KFC. the KFC products are involves fried
chicken, grilled chicken, related
southern foods see fig 4.

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Vol. 6, No 4, 2018.

Figure (4) demonstrates KFC’s products (web page)

Furthermore, the 4 p’s of KFC marketing and total KFC chicken pieces sold annually
as a marketing mix are include: is 5.89 billion and total retail sales is $8.9
billion.
1. Product: KFCs products have the
special raspy for chicken products. 3. Promotion : KFC uses the bill boards
the major source of advertisement and one
2. Pricing: during pricing the KFCs
of the most important thing that they uses
products keep the different points in the
media especially the newspapers to
mind like they adopt the cost base price
promote their products.
strategy. Likewise, pricing of the product
contains the government taxes and excise 4. Placement: placement of the KFCs
duties and then they come at final stage of product is not important but the placement
control the price of their products. Then, of the restaurant is key that it can easily
KFC prices of products are a bit high judge that the KFC target the place for
according to the market segment and it is their restaurant, which is well known and
also compatible to the standards of their is in the Porsche area where the income
products. On the other hands the total level of the people is high then the middle
pounds of chicken served in KFC class level.
restaurant annually equal to 1.914 billion,
Table (2) SWOT analysis of KFC

Strength Opportunities
1. -Undeveloped markets in many countries.
1. Delicious and well liked recipes.
2. Increased 18-25 age groups.
2. Strongest category among nearest competitors.
3. Increasing trends to take meal out of homes.
3. Well global penetration.
4. Well recognized brand logo.
5. - Strong cash flow via franchisee and license fee.
Weaknesses Threats
1. Other cheap alternatives available.
1. Most KFC items have close substitutes in market.
2. Bird flu.
2. No product innovations.
3. Cannibalization of own products.
3. Lack of control in joint venture arrangements.
4. Changing health trends of customers.
4. - Inconsistent quality of service in many outlets.
5. - High calorie food.

Source: (Author, 2018 )

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Vol. 6, No 4, 2018.

4. Conclusions 4. Hurino, D. (2011) the importance of

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Website:
using your strength to overcome
weaknesses, using opportunities to www.KFC.com
overcome threats, Kick It, LLC.

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