Chicken franchises in Malaysia - Sample Essay
A strategic management plays a vital role which provides greater competitiveness to every company. After analyzing the external and internal factors of strategic issues that aroused by the company, a company would have the ability to identify the strategic issues that will bring potential impacts for the company’s future. A company is not able to achieve its competitive advantages for their long-term plans if there is no proper set up on the managing of the strategic in company’s objectives or visions. Hence, there is a must for a company to develop a strategy that could lead the company to achieve its own-recognized competitive advantages.
Firstly, the strong government supports in franchising sectors have granted an opportunity for the fast food restaurants to better operate within the industry.. Under the 8th Malaysian Plan (8MP), which was the country’s economic development plan, franchising has been identified as one of the growth areas for the structural change and upgrading of the distributive trade industry. Our government has allocated RM100 million to the Ministry of Entrepreneur Development to promote, market, train, and finance the Franchise Development Program (FDP).
The main objective is to establish 1,000 franchisees and 50 new franchisors (and hopefully, building 1,000 entrepreneurs) over the five-year period. Thus this policy facilitates KFC to further develop their business by providing more franchise licenses into Malaysia. There is a “win-win situation” whereby the KFC having their expansion of business while Malaysia enjoying technology transfer, expertise, entrepreneurial development, and human resource development from KFC franchises.
Disposable Income According to Malaysia Central Bank, Malaysia’s CPI inflation rate has reached the highest level in 26 years, following a deeply unpopular 41% fuel price hike last month; all Malaysian consumers are now heaving lesser disposable income. As a general rule, when disposable personal income is tight, fast food restaurants works better than their casual just because people will shift their purchases downward and consumption on other casual meal which can be much more expensive than fast food. Thus, it has created an opportunity for fast food restaurant to generate higher sales during this period.
Growth in Franchising Even the world is experiencing financial crisis, however, the franchising industry is still believed to have positive growth. Recall the 97 Asian financial crisis, the franchising industry worldwide still enjoying a 3% rise. Due to the excellent branding on top of competitive pricing, there is no surprise that franchises are very minimally affected by recession and it is proven by the International Franchise Association (IFA) stated that the franchise industry in world wide will still grew. What merit our attention are the particular fast foods chains in Malaysia are based on franchise concept.
Busy lifestyles With today’s hectic lifestyles, timesaving products are increasingly in demand. Fast food will be the greatest example for this. “Time is money”, the idea is deeply rooted in people’s minds, eating seems to become a cumbersome and as an activity that desecrate their time. With the busy, on-the-go lifestyles of Malaysian, fast food is now the quickest and most convenient way to consume food and became one of the mainstream in meal. The lifestyle of the society has generate an opportunity for the industry to further growth, due to the reason of people are demanding something that is fast and easy as their meal, so that they can put their attention on their work or academic.
Healthy Eating and Obesity According to survey, many people are getting concern in their selection of food due to the reason of Health consciousness and the obesity problem; this will be a main threat for those who operating fast food restaurants because people are now transiting from the high fat and high cholesterol diet to a healthier, low carb, high protein meal. Now, fast good are always linked with high Calories, fat, starch and sodium which might lead to heart attacks, blood clots, food borne illnesses and obesity. As the conclusion, people are now getting themselves away from what they considered as unhealthy food.
Touch screens ordering systems The touch screens ordering system are now available in most of the fast food outlets in western countries, A touch screen ordering system includes a number of transaction language selection keys; a payment type selection key for allowing payment to be made via cash, charge, debit, check, and so on.; a touch screen menu item display as well as offered menu item options display; an enter menu item selection; an enter additional menu item key; a running display showing total payment due as well as total items ordered; a submit order for preparation; an approximate order preparation time; and a total fee for meal. That went much faster than the conversations with the cashier, especially when the restaurant is crowded and loud. This will be a great opportunity for those who running or wants to run the business, because the fast food is now faster!
One of the major threats faced by the fast food industry is the Bird Flu crisis which has brought a great impact especially Kentucky Fried Chicken. The poultry industry not handling well to the birds and caused the birds infected to the bacteria and viruses. The parent company Yum Brand told the trade publication it’s bracing for a 20 percent drop in sales if infected birds. While Bird Flu crisis, people are get away from chicken, since their signature products are chicken, so Bird Flu will pluck their sales.
The requirement of nutrition labeling on fast foods had been officially announced by Ministry of Health. The requirement has made it mandatory to provide nutrition information on the wrapper, brochure, pamphlet or posters of fast foods. The nutrition information required are: 1. The amount of energy (calories), carbohydrate, fat and protein in these foods, and 2. Percentage of these nutrients compared to the Recommended Nutrient Intake (RNI) For example, for beverages, the amount of sugar in each serving must be provided. For foods such as fried chicken, burger and French fries, the amount of salt in the food must also be labelled. This will be a threat for fast food restaurants because now the consumer will be better informed of the content of the foods.
Halal products The purchasing power and population of Muslims within the nation is now having a direct contribution to the market in Malaysia. In order to capture their market, restaurants must fulfill the legal requirement and standard to become a Halal product set by The Department of Islamic Development Malaysia or JAKIM (Jabatan Kemajuan Islam Malaysia). Ban of advertisement Also, there will be a proposal to ban fast foods advertisement according to the stars.
According to Malaysian Health Ministry, he said that banning such advertisements is a way of reminding the fast food companies of their obligation to the health of Malaysians, and is a cost effective way of combating the health risks it poses. If such proposal is really run in program, the entire industry definitely facing a threat. This is because parents will take consideration whether it is worth to have their meal in KFC and they will loose confidence towards fast food industry by having an implied perception that fast food means “unhealthy” food.