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BSMAN 3007
International Business Management

Assignment 2: Group Report/Written Report


Topic:
To research three multinational companies located in Asia-Pacific
region. Discuss and compare international business strategies used by
these three companies.


Group Members

Fritz Adi Nugroho 30106963
Lan Jing 30106970
Sameera Perera 30106950
Vu Phi Hung 30101727011
Zhang LiLi 30106971

17
th
May, 2012



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Table of Contents

1. Summary..3
2. Description of the business activities..4-10
2.1 McDonalds...4-6
2.2 KFC.6-8
2.3 Subway sandwich shop.......8-10
3. Summary of the business strategies..10-12
3.1Business level strategy...10, 11
3.1.1 McDonalds cost strategy..11
3.1.2 KFC cost strategy.11, 12
3.1.3 Subway cost strategy..12
3.2 Market entry strategies..13
3.2.1 Joint ventures. ..13, 14
3.2.2 Franchising...14, 15
3.3 Global strategy.15-17
3.4 Differentiation strategies.........17-19
3.4.1 McDonalds: Value meal; Breakfast menu; 24-hour operation..17
3.4.2 KFC: Chicken expert; Product offerings differentiation.18
3.4.3 Subway: Healthy product; Customizable menu offerings.18, 19
3.5 Cultural Strategies....19-21
3.5.1Service system...19, 20
3.5.2Communication System.20
3.5. 3Menu planning. . 20, 21
3.5.4Merchandising..21
3.5.5 Decor, interior planning...21
4. Theoretical concepts...22, 23
4.1 Porters 5 forces in McDonalds.22
4.2 Porters 5 forces in KFC..22, 23
4.3 Porters 5 forces in Subway...23
5. Conclusion24
6. Reference..25




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1. Summary




























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2. Description of the Business Activities
2.1 McDonalds
McDonalds is a famous fast food restaurant known in 119 nations around the
world. They are best known for their hamburgers and strong branding. Their most
recognizable brand is the Golden Arches closely followed by the clown character
called Ronald McDonald.

Dick and Mac McDonald were two brothers who started the McDonalds brand
in California after moving their hotdog stand to San Bernardino from Monrovia
Airport. After realizing that hamburgers were their most popular product, the brothers
reinvented their restaurant using their Speeded Service System in 1948. It was a
concept that created a production line of hamburgers that were made before being
ordered. This concept pioneered the fast food industry and was in complete contrast to
most restaurants that only prepared food after the customer had placed their order.

A history was created by McDonalds system that helped them to undercut
competitors by as much as 50%/. The growing volumes helped them to reduce more
costs from the economies of scale. This was an advantage that is a success for
McDonalds till now.

The entry of Ray Kroc into the business was a significant development in the
history of McDonalds. He brought the rights that helped McDonalds to expand their
concept outside California and Arizona. A restaurant chain was quickly built and more
than 100 restaurants were in operation by 1959.

Ray Kroc bought the McDonald brothers in 1961. However the negotiations did
not went well and McDonald brothers lost all the royalties and rights to the brand they
had started. The separation ways between Kroc and the McDonald brothers was not
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very pleasant. This resulted in Kroc building and then managing the opening of a new
outlet of McDonalds near the last remaining store of McDonald brothers.

The historians and biographers had perceived this move as incredibly
insignificant. They compared it with kicking a man when he is already down. Any
malicious behaviour on the part of Kroc was denied by McDonalds Corporation.
They preferred to strike out McDonald brothers from the corporate history. Family
members of McDonald have written about the deal between the brothers and Kroc.
They appeared on talk shows for promoting their side of story.

McDonalds Corporation pioneers the training of its franchise owners in 1961
with the opening of Hamburger University. This move was aimed to maintain
manager and franchisee loyalty in spite of a highly competitive market.

The introduction of Ronald McDonald as a brand face and the release of the Big
Mac burger were seen in the 1960s. The launch of Big Mac has grown turning out to
become the most popular burger of McDonalds.

One of the greatest attributes of McDonalds is everyday affordability message
that drives customers to McDonalds restaurants. Think of your children they know
McDonalds by the time they are two years old. Chanting Mickey Ds, you cant
possibly drive by a Gold Arches without having to stop.

For McDonalds it will continue to be a year of innovation, according to CMO
Mary Dillon: We are the kind of business and brand that is never happy with
yesterday. We are always looking to tomorrow and how do we get better? This type
of thinking and marketing philosophy has always kept the fast-food giant in the black.
By combining fundamentally sound operational practices with innovative
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marketing strategies, Ray Kroc laid the foundation for McDonalds global success.
Today, McDonalds values transcend borders and cultures. Each and every day, 47
million consumers worldwide visit McDonalds because they know and love the
Golden Arches, Ronald McDonald and Big Mac sandwiches.

2.2 KFC
Kentucky Fried Chicken, usually known as KFC, is a chain of fast food
restaurants based in Louisville, Kentucky. KFC was a wholly owned subsidiary of
Tricon from 1997-2002, and has been a wholly owned subsidiary of Yum! Brands
since 2002. The chain also advertises itself as Poulet Frit du Kentucky or PFK in the
province of Quebec in Canada.

KFC primarily sells chicken in form of pieces, wraps, salads and burgers. While
its primary focus is fried chicken KFC also offers a line of roasted chicken products,
sides and desserts. The popularity and novelty of KFC has led to the general formula
of the fried chicken fast-food restaurant being copied by restaurant owners worldwide.

The company was founded as Kentucky Fried Chicken by Colonel Harland
Sanders in 1952, though the idea of KFCs fried chicken actually goes back to 1930.
The company adopted the abbreviated form of its name, KFC, in 1991. Starting in
April 2007, the company began using its original appellation of Kentucky Fried
Chicken again for its signage, packaging and advertisements in the United States as
part of a new corporate re-branding program, newer and remodelled restaurants will
have the new logo and name while older stores will continue to use the 1980s signage.
Additionally, the company continues to use the abbreviation KFC freely in its
advertising. Internationally the company is still known as KFC.
Harland David Sanders was born September 9, 1890 in Indiana, USA. The young
Harland Sanders had many jobs such as a farmhand, a bus conductor, a steam boat
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driver, a soldier, and a salesman. Eventually he became a business man owning a
petrol service station in Kentucky, one of the 52 states of the USA.

Many travelers stopped at his service station wanting refreshments and food. The
Colonel saw this as a business opportunity and decided to offer food to these
customers. The Colonel enjoyed making his customers happy he was passionate
about entertaining them with excellent food and superb service.

Its food and service was so good that he was mentioned in several newspapers
around the country. As a result he had to expand this dining room to keep up with the
increase in new customers. This Customer Mania experience made people drive
from far away just to visit the Colonels restaurant.

After careful testing for many years to find just the right combination of
ingredients, the Colonel knew that he was at last onto a winning recipe. When he
added the 11
th
and final ingredient, he was truly satisfied that he had created the best
chicken he had ever tasted he wanted to share it with the world.

To this day, the Original Recipe of 11 Herbs and Spices needed to be introduced
to people further from his home and from his state. At the age of 66, he started selling
his idea of Kentucky Fried Chickened by travelling from town to town, preparing his
famous chicken recipe for restaurants and their employees. Soon everybody wanted to
try it families stood in queues to try his great Original Recipe.

Colonel Sanders appeared on national Television promoting the idea of Kentucky
Fried Chicken. He always licked his fingers as he described the Original Recipe taste
to viewers this is how the slogan Its Finger Lickin Good developed.

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KFCs specialty is fried chicken served in various forms. KFCs primary product
is pressure-fried pieces of chicken made with the original recipe. The other chicken
offering, extra crispy, is made using a garlic marinade and double dipping the chicken
in flour before deep frying in a standard industrial kitchen type machine.

KFC has outlets internationally and sells its products according to geographic
needs of the customer. Their customer age is between 6 and 65, gender is both males
and females and family lifestyle is almost all.

In KFC feedback is taken from the customer in order to know the customer
demands and then improvements are made in products. KFC focuses on pure and
fresh food in order to create a distinct and clear position in the minds of customers
KFC has a strong brand name and they are leading the market in fried chicken.

KFC globally enters the market using market skimming. Their products are
priced high and target the middle to upper class people. Gradually they trickle down
the prices focusing on the middle to lower class people to penetrate both sides of the
market.

2.3 Subway Sandwich Shop
In recent years, Subway may best be known for Jared, the advertising face of
Subway who lost a great deal of weight, it is said, by eating healthy at Subway
Sandwich Shops. In fact, Subways and Jared have now teamed up with the
government to fight childhood obesity, opening another page in Subway history.
However, over four decades ago, before the tens of thousands of stores and before
Jared, there was Fred Deluca, a high school graduate looking for a way to fund his
college education. Subway history begins with DeLuca.
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Subway Sandwich shops began in 1965 when a recent high school graduate
named Fred DeLuca decided he needed to find a way to pay for his college education.
Working at a minimum-wage job, he realized that something more would be needed
to achieve his goal of attending college. Fortunately, that summer, an old family friend
moved back to town and came to visit his family. DeLuca took a change on asking the
doctor, Peter Buck, for some advice about paying for college.

The idea of opening a submarine sandwich shop actually came from Buck as a
way for DeLuca to make enough money to go to college. Buck offered DeLuca
$1,000 as an investment in the business that DeLuca was to plan, open and operate.
DeLuca rented a store, built in a sandwich counter, bought some used kitchen
equipment and shortly thereafter opened his doors. DeLuca says that he learned as he
went, no business plan, just ambition, luck and listening to his customers.

Subway menu offered a wide variety including salads, pasta, dinners, soups and
desserts. They offer wider menu and better quality fresh products. In 1996, the chains
flagship sandwich the classic BMT is first introduced. In 1997, the 7 under 6 menu,
featuring 7 submarine sandwiches with 6 grams of fat or less, is first introduced. In
2001, other fresh veggies, the cucumber are added to the Subway menu, which
already boasts lettuce, tomato, red onion and green peppers. 2004 the Subway chain
introduces a line of new crab-controlled wraps. The wrap itself, has only 5 grams Net
Crabs. In 2005, delicious fresh toasted subs are added to the Subway menu. Quality of
food Subway prides them on always having the freshest ingredient available for sub,
and they hide nothing from the customer. All their products are made on the spot
while the customer chooses what toppings she wants on the sub. Unlike most fast
food franchises, nothing is deep-fried or frozen.

Subway brand position is a very healthy fast food chain providing healthier and
fresher food brand value and positioned between a stripped down version of subs and
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full theme restaurant. Service is more like a fast food style but in terms of food quality,
quantity, presentation and fresh, puts it closer to theme restaurant.

3. Summary of the Business Strategies
3.1 Business Level Strategy
An organization's core competencies should be focused on satisfying customer
needs or in order to achieve above average returns. This is done through
Business-level strategies. Business level strategies detail actions taken to provide
value to customers and gain a competitive advantage by developing core
competencies in specific, individual product or service markets.
According to the Michel Porters business level strategy shows that the plan of action
that strategic managers adopt for using a companys recourses and distinctive
competencies to gain a competitive advantage over its rivals in a market or industry,
such as hotel, restaurant or cruise industry while corporate strategy can be used
among different industry.
Alan C Wei C (2009)


Factors effect to our three organisations.
This is the time to have look of our three fast food restaurants and identify its
Businesss
Leadership
Strategy
Cost
Leadership
Strategy
Differencia
-tion
Strategy
Focus
Strategy
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effect in detail. Fast food restaurants are which food that can be prepared and served
very quickly and it with low preparation time. These are the ways they manage their
business level strategy.

3.1.1 McDonalds Cost Strategy
Cost control and same time minimise waste.
All businesses face challenges on a daily basis. One of the major challenges
facing McDonalds is managing stock. Stock management involves creating a balance
between meeting customers needs whilst at the same time minimizing waste.

Waste is reduced by:
1. Accurate forecasting of demand so that products do not have to be thrown away
as often.
2. Accurate stock control of raw materials.
Identify the best employees and ask for their ideas on ways to reduce office
waste.
Use the recyclable packaging and light weight materials.
Use Information technology to the restaurants and the whole the areas of
productions.
Employees outsourcing.

3.1.2 KFC Cost Strategy

KFC has developed strong relations with suppliers that use cheap ingredients.
The organization has the capital required to increase production in assets.
Locating premises in low rent areas.
Minimizing other costs including distribution, R&D and advertising.
Pay low wages for employees.
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3.1.3 Subway Cost Strategy
Keep good relationship with suppliers which provide materials for industry.
Lowest distribution cost.
Controlling the overhead cost accordingly.
Outsource the staffs.
Use lowest advertising and marketing methods. E mailing, website posting.

Modern world organizations are always looking for their output from lower
input cost. This strategy can help organisations to achieve average profit by providing
what customer need and by saving the cost accordingly.

This is how one of the description of cost leadership strategy by notes,
Lowest-cost producer and distributor in the industry. Company strategies aimed at
controlling costs include construction of efficient-scale facilities, tight control of costs
and overhead, avoidance of marginal customer accounts, minimization of operating
expenses, reduction of input costs, tight control of labour costs, and lower distribution
costs. The low-cost leader gains competitive advantage by getting its costs of
production or distribution lower than those of the other firms in its market. The
strategy is especially important for firms selling unbranded commodities such as beef
or steel.

When we look at the all three organisations they have many similar cost
leadership strategies between those organisations. Mc Donalds, KFC, Subway are the
popular fast food restaurants in the world. It has seemed so easy to save cost through
maximising customer satisfaction for those restaurants.
All restaurants are use staff outsourcing, good relationship with suppliers and
get benefits, use IT to operations, and keep reducing the overhead cost in the outlets
to make profit by maximising customer satisfaction.
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3.2 Market Entry Strategies

There are six market entry strategies for marketing entrance for the foreign
business. Those are,
I. Wholly owned
II. Joint Ventures
III. Strategic Alliance
IV. Franchising
V. Management contract
VI. Consortia

According to our organisation I identified that all the three fast food
restaurants belongs to Joint ventures and franchising category. Mc Donalds, KFC,
Subway are the direct investment that two or more companies make and share the
ownership.
3.2.1 Joint Ventures
A typical joint venture is where two partners come together and 50% responsibility
each for running the new venture
Alan C Wei C (2009)
There are some advantages and the disadvantages of the joint ventures.
Advantages:
Easy access to other countries markets.
Sharing of risk and cost.
Achieve synergy by combining different value chain strengths.
It is the only way to enter a country if governments favour local companies
and impose high tariff on foreign investments or regulate the level of foreign
control that is acceptable.
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Disadvantages:
Conflict of interest may occur.
Partners must share risk as well as rewards.
A company incur significant costs associated with the control and coordination
issues of joint ventures
One of the companies lose control over its know how and therefore could
establish a potential driver.

3.2.2 Franchising
All the three restaurants are the franchising companies in the Asia pacific
region. It is a similarity of those restaurants according how they enter to the market.
Franchising in the hospitality industry is a concept that allows a company to expand
more rapidly by using other peoples money.
(Walker 2004)
When any company think of the franchising it help them to get many things
which belonging to the mother company as like certain rights, use brands, trade mark,
signs, operation systems, products and marketing plans.

There are some advantages and the disadvantages of the Franchising.
Advantages:
Low financial risk.
Low cost way to access market potential.
Avoid tariff, NTBs, restrictions on foreign investment.
Maintain more control with licence
Franchise provides knowledge of local market.
Disadvantages:
Limits market opportunities
Dependence on Franchisee
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Potential conflicts with franchisee
May be creating future competitors.

3.3 Global Strategies
According to Hill and Jones (2004), there are four global strategy options which
are international strategy; multi-domestic strategy; global strategy and transnational
strategy, to help these companies to keep their multinationals competitive advantages
in foreign markets. Referring to the research, this table is purposed to show the global
strategy selection by McDonalds Corporation, KFC and Subway restaurant.
Global Strategy Options
High
Global Strategy Transnational Strategy


International Strategy Multi-domestic Strategy
McDonalds Corporation KFC
Subway Restaurant
Low High


Source: Adapted from Hill and Jones (2004)
Similarly, McDonalds Corporation and Subway restaurant both pursued an
international strategy into their business in order to transfer the skills and products to
foreign market. Meanwhile, they undertake some limited local customization as well.

McDonalds Corporation and Subway set up their business in foreign market.
Under international strategy, they provide their products and service with a certain
standard throughout the world. This helps in maintaining their product and service
P
r
e
s
s
u
r
e

f
o
r

l
o
w

c
o
s
t

Pressure for local responsiveness
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consistency. McDonalds and Subway aspire to enter and stay in foreign market, so
they are interested in looking for local suppliers to support their cost saving strategy.
Thus, McDonalds and Subway, especially the former, always hold large amount of
market share in the foreign market.

On the other hand, one standard may not fit all customers needs. For instance, in
western countries, McDonalds is not as popular as in Asian. The reason is that western
people have more concerns with their obesity issues. Hence, McDonalds has to take
account of the social responsibility and health, resulting in investing more than
million dollars into developing new meal options and to help educate customers about
nutrition and fitness in maintaining good health. But Subway rarely encounters those
health issues, such as obesity problem. The core product they sell is sandwiches
which are considered as healthy food.

Differently, KFC Corporation mainly selected a multinational strategy, instead of
the international strategy. KFC pursues a multinational strategy in order to customize
their product offering, marketing and other business strategies to national conditions.
This sort of strategy helps in cutting down product cost through looking for local
suppliers as well as the supply chain system adopted by under international strategy.
But KFC invested money into differentiating their product to enter foreign market.
For instance, KFC in China sells beef and sea fish burger meal besides of chicken
meal. This differentiation strategy helps KFC gain large amounts of market share as
much as McDonalds gained, or even more.

Not all business strategies which KFC Corporation adopted are successful. In
India, KFC used to face with serious ethical issues. There is a case that the regulatory
authorities found that KFC's chickens did not adhere to the Prevention of Food
Adulteration Act, 1954.Chickens contained nearly three times more monosodium
glutamate (popularly known as MSG, a flavor enhancing ingredient) as allowed by
the Act. Since the late 1990s, KFC faced severe protests by PETA Act. PETA accused
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KFC of cruelty towards chickens and released a video tape showing the ill-treatment
of birds in KFC's poultry farms. This case indicates that due to lack of management
and poor quality control system of KFC in India, the KFC Corporation has to reenter
the India market and waste huge number of time and resources.

3.4 Differentiation Strategies
3.4.1 McDonalds: Value meal; Breakfast menu; 24 hours operation

McDonalds differentiated their product and operation by pricing lower, providing
more menu options, creating demands and operating 24-hour. By these business
strategies, McDonalds achieved their main goal which is to enhance their competitive
advantages. For instance, in every country that McDonalds has entered no matter how
different the local culture and needs are, McDonalds has paid considerable attention to
the children market. They built happy lands for the children and provide them
options of happy meal with novelty toys. This strategy helps them to open a new
and giant customer group which can build stable business to McDonalds and will
encourage the whole family to McDonalds. Therefore, a giant economic source has
been established and greatly helps McDonalds in revenue generating.

But the increase of menu selections and operation hours directly created more
pressure for service providers, chefs and even management team, etc, in workplace.
Those stakeholders have to take account of some problems may occur in future and
resolve them. The main issue is how to remain consistency of product and service
quality. And this will cost the corporation much money to solve the problem.
3.4.2 KFC: Chicken expert; Product offerings differentiation

In fast food industry, KFC differentiate its product with competitors as a chicken
expert. All chicken products are cooked to the Colonel Harland Sanders recipe with
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eleven different herbs and spices. They also keep developing and introducing new
products to public such as zinger burger and BBQ honey wings.

Based on their chicken expert image, KFC has set up a distinctive image for
their products. As well as McDonalds strategy, KFC also invested a lot on product
development and still focus on chicken. McDonalds menu expansion seems like
horizontal direction which means they develop new products focusing on different
customer market and creating demands. On the contrary, the direction of product
development of KFC is more heading to a vertical way, because, KFC seems like
preferring their chicken expert road. However, the efforts they put do create lots of
revenue for the company and help to build up a worldwide fast food brand.

Nevertheless, like McDonalds used to face with the Mad Cow Disease problem,
KFC is actually faced with a much more severe challenge which is Avian Influenza.
Due to the core product of KFC is chicken, KFC corporation will never give up being
concern with break-up of Avian Influenza. Once if it occurs, KFCs competitive
advantages will no-longer exist and has to spend much money and time to re-establish
its brand image.

3.4.3 Subway: Healthy product; Customizable menu offerings

Comparing with McDonalds and KFC, Subway is offering much healthier fast
food than these two giant corporations in fast food industry. McDonalds and KFC
mainly are providing fired food items which are considered as junk food under
contemporary healthy trend, such as fried fries, fried chicken and other high-heat
offers. But Subway is different. Subway sandwich shop offers healthy and fresh varies
of sandwiches and several options of roasted menus to public. According to research,
among these three fast food companies, Subways food provides highest average
calories 276.4, KFCs 274.45 and McDonalds 253.3. The average fat weight that
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provided by Subway is the lowest 5.2g, comparing with KFC 13.75g and McDonalds
6.3g.

Hence, providing healthier food helps Subway stay away from those healthy
issues, such as obesity problem and makes Subway brand more and more popular in
the consumers groups which are sensitive to their healthy status. But, monitoring and
controlling hygiene and freshness of the raw materials became a new severe financial
issue. The company has to look for reliable suppliers and spend plenty of money on
establishment of quality inspection and controlling system. Hence high cost of goods
sold and lack of menu offerings became the main barrier which causes many people
do not select Subway to dine in.

3.5 Cultural Strategies
3.5.1Service system
Similarities
KFC, McDonalds, Subway have the same culture in giving the best services to
the customer, they do things efficiently, means as fast as they can, with the good
quality of services.

On the other hands, those 3 companies also have the same way of threaten their
customer, the things are customer have to queue in a line, choose the food and
beverages, pay, and then lastly getting their food and beverages.

Moreover, the employees in these 3 companies have the same job description
that done same wherever these companies located. Their job divided into few
stations, such as staff that is doing the cashiering may also take care of beverage,
serve and pack the food for customers. The rest will be located in the kitchen.


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Differences
In this case, subway staff station may have a bit different compared to KFC and
McDonalds, its because they have no kitchen at all. So a staff may do cashiering, the
rest may make the sandwiches and nobodies doing beverage because it is self
services, means customer just given an empty glass and they have to pour the drinks
by themselves, its good because they may choose any drinks provided.

3.5.2 Communication System
Similarities
Between these 3 companies, KFC and McDonalds have the same way for the
employees in different station to communicate. They use either a bill printer that
directly print the orders in both cashier and kitchen or use a microphone to tell which
food ordered. Furthermore, persons who do interaction with customer is only the
cashier, theyll serve each customer from ordering until the food serve.

Differences
Subway has a communication system that different with KFC and McDonalds.
Subway has no kitchen and the transaction done by phase such asking type of menu
wanted, type of bread, add ones, then the last would be the payment. In those phase,
around 2 or 3 involve in the process, means customer not only interact with the
cashier but also the others.

3.5.3 Menu planning
Similarities
These three companies using both ala carte and package menu or meal, so
customers may choose it easily


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Differences
KFC, McDonalds, Subway are three different restaurant that have their own
authentic menu. KFC offer their best fried chicken, McDonalds offer their burgers,
and Subway offers their sandwiches.

3.5.4 Merchandising
Similarities
Most merchandise used are toys, because they target family with kids to come

3.5.5 Decor, interior planning
Similarities
The interior design of the restaurant are family friendly, because they are
specially target in a market segment only, but they target on most people, so the
interior design in the restaurant are a family friendly ones.

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4. Theoretical Concepts
4.1 Porters 5 forces in McDonalds
4.1.1 What is the threat of new entrants
High threats of new entrants such as newly established fried chicken stores, burger
store located in mall, shopping centre, food court, hawker centre, office, hotels

4.1.2 What is rivalry among existing companies
High levels of rivalry: KFC, burger king, subway, Wendys could be the threats

4.1.3 What is threat of substitute products of services
High level of substitute threat of product: McDonalds have different types of menu
offer in different countries, moreover McDonalds also have a Mc cafe targeting
people who likes to drinks coffee or tea besides having McDonalds burgers.

4.1.4 What is bargaining power of buyers
Moderate level of buyers bargaining powers because McDonalds is a trusted fast food
brands that makes people want to consume it more and more, but on the other hand
McDonalds also have a lot of competitors.

4.1.5 What is bargaining power of suppliers
Low suppliers bargaining power: A lot of suppliers exist nowadays and suppliers that
cooperate with company such McDonalds may have a roundness of being their
suppliers

4.2 Porters 5 forces in KFC
4.2.1 What is the threat of new entrants
High threats of new entrants such as newly established fried chicken stores, burger
store located in mall, shopping centre, food court, hawker centre, office, hotels
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4.2.2 What is rivalry among existing companies
High level of rivalry: McDonalds, burger king, Texas fried chicken, A&W, Wendys
are the most competitors
4.2.3 What is threat of substitute products of services
Moderate level of substitute, it is because people still seek the fried chicken if they
come to KFC, but some people also want some desserts, salad, burgers
4.2.4 What is bargaining power of buyers
Low bargaining power of buyers occurred because KFC never depends on any group
of buyers
4.2.5 What is bargaining power of suppliers
Low bargaining power of suppliers: KFC never depends on one supplier. There a lot
of chicken farm exist in every countries.

4.3 Porters 5 forces in subway
4.3.1 What is the threat of new entrants
High threats of new entrants: Newly established burgers, pizza, sandwiches, kebab,
taco store located in mall shopping centres, office, hotels
4.3.2 What is rivalry among existing companies
Existing burgers, pizza or sandwiches store such as, Pizza hut, Quiznos, Burger king,
mos burger
4.3.3 What is threat of substitute products of services
High threat of substitute because a lot of others fast food provider existed nowadays.
4.3.4 What is bargaining power of buyers
Buyers bargaining powers are in moderate level, its because Subway never depends
on an exact target market, but on the other hand Subway have a lot of competitors,
thats why it is moderate
4.3.5 What is bargaining power of suppliers
Suppliers bargaining powers are in the low level. Its because, nowadays a lot of
bread manufacturer exist, a lot of ham, bacon, beef and vegetables suppliers
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5. Conclusion


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st

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Fire (2011). McDonalds VS Subway Menu Facts. The Calories & Nutrition War
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