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Master of Business Administration

(UNVIRISTY OF NORTHAMPTON)

Strategic Marketing
MKTM028-SPRAS

Student name: Hu Qingke

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1.0 Introduction ........................................................ 3

2.0 Company introduction ........................................ 3
3.0 Literature review ................................................. 4
4.0 PESTEL.............................................................. 5
4.1 Social.............................................................. 5
4.2 Economic........................................................ 6
4.3 Legal............................................................... 6
5.0 Recommendation ............................................... 7
6.0 Conclusion ......................................................... 8
7.0 Reference ........................................................... 8

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1.0 Introduction
Chick-fil-A is the most famous fast food restaurant in the United States and has an
excellent reputation in the United States. It is the most popular fast food restaurant in
the United States. Now the company wants to enter the Chinese market, but China is
very large, so it can choose to open the first restaurant in Suzhou. Suzhou is a second-
tier city, and all things are in developing, there are many opportunities in Suzhou. There
are many advantages to starting here. The following will use three points of PESTEL to
analysis, which are, social, economic and legal. Through these three points can be
analysed whether chick-fil-A can enter the Chinese market. And give it some views and
suggestions.

2.0 Company introduction

At present, the world’s most famous fired chicken is not from KFC or McDonald, and the
most famous hamburgers are not from Burger King, but is fried chicken burger that from
Chick-fil-A. Chick-fil-A is the second largest chicken fast food chain in the United States,
with more than 1700 stores in the United States. The company attaches great
importance to customer service and product quality, and it is often ranked first in the
magazine. Chick-fil-A has two primary characteristics, the first is personality boss, and
the second is its high-quality fried chicken. These two features are also the success of
this company. Business goal of Chick-fil-A is to provide customers with quality food,
hospitality to customers, and a good impression on everyone.

First of all, Truett Cathy is the world's most stubborn boss. From 1946, all Chick-fil-A did
not open on Sundays because the boss is a Christian and he pursues the doctrine.
Even at the Atlanta Olympics, Chick-fil-A would prefer to sacrifice revenue and still
insisted that closed on Sunday. And even today, this tradition has not changed. Truett
Cathy also keen on charity, Chick-fil-A has donated more than 60 million dollars to
charitable organisations. Of course, the boss is also a very extreme Christian, Chick-fil-
A has publicly expressed opposition to the legalisation of homosexuality and caused an
adverse comment in the United States. But Chick-fil-A has become the most popular
fast food restaurant in the United States because the delicious food saved it.

The second feature is high-quality fast food. Chick-fil-A was the first company to put
forward the concept of chicken fillet, as early as KFC, the customer's evaluation of
Chick-fil-A is a fast food restaurant with high-quality. Chick-fil-A knows how to
recommend the best combination for the customers. Moreover, expect to pay attention
to delicious, Chick-fil-A's high-quality also comes from the pursuit of health. The

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different from other fast food restaurants is that it is more emphasis on the health of
consumers. It does not add any additives, only use the best materials, to provide
customers with the best products. It is not like KFC or McDonald's, just push out some
salad or rice is healthy. To ensure the taste, at the same time, choose healthy, safe and
high-quality raw materials, which is Chick-fil-A practice. Even if the dishes as same as
other fast food restaurants, and Chick-fil-A food is more delicious, the quality is also
better. Health is already a global concern, especially food health.

Chick-fil-A is the most satisfying fast-food restaurant in the United States, ranking first in
the nation's fast food satisfaction survey. In addition to delicious food, Chick-fil-A service
is also very hard. They will meet most of the requirements of customers, and smile to
every customer. In the food sector, transparency is critical to the client, and it is also
important for Chick-fil-A.

3.0 Literature review

PESTEL analysis is a kind of environmental analysis, usually in order to reveal the
factors of the dynamic help or hinder the product marketing, P for Political, E for
Economic, S for Social, T for Technological, L for Legal and E for Environmental.
(Bivolaru, E., Andrei, R. and Purcaroiu, G.V., 2009). The PESTEL model is a
“Mnemonics used in strategic management, grouping for the macro environment factors,
to help strategist to find the origin of the common opportunity and risk". (Witcher, BJ &
Chau, VS 2010) The PESTEL framework to analyse the external business environment,
to understand the operation of the organisation so that they can use the opportunities,
minimise threats to organise business activities. (Issa, T., Chang, V. and Issa, T., 2010)
The PESTEL analysis model is a macro environmental analysis. It is a way to
investigate the external factors of an organisation. It is a useful tool for analysing the
macro-environment, it can analyse the external environment and then make the strategy.
It also identifies all the forces that have an impact on the organisation. PESTLE is an
initialism for economic, social,political, technological, environmental and legal factors,
which are used to evaluate the market for business. PESTLE provides a simple model
for analysis of an organisation and encourages the development of strategic within the
organisation. (Vovchenko, N.G., Kochka, V.A. and Pogorelenko, N.S., 2015. ) A
company on its own cannot influence external factors. But through understanding the
environment, can use the advantage to maximise opportunities, and minimise the threat
to the organisation. PESTEL analysis is a method that particularly suitable for marketing,
management and strategic control. (Kayumi, B., 2014.) PESTEL model involving that
the exterior factors that may affect the business of information collection and
description.(Rothaermel, F. T. 2012). The PESTLE model is a tool for analysing the

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macro-environment, which creates opportunities and threats. Identify external factors

that affect the organisation, and identify external factors that may change in the future,
using these changes or confront them. These are its purpose. When using PESTLE
method, SWOT is also used because PESTLE and SWOT are related business
analysis methods. The opportunities in SWOT are relevant to PESTLE because
PESTLE can help companies discover potential business opportunities and PESTLE
analytics can help companies analyse the threats of SWOT more deeply. (Srdjevic, Z.,
Bajcetic, R. and Srdjevic, B., 2012.) The PESTLE model can help companies find
opportunities and threats, and it can help companies use of SWOT analysis better. But
they also have different places. PESTLE focuses on the external environmental factors
that affect the business, it analyses the organisation's external environment, while
SWOT analysis focuses on internal and external factors, it is more about products and
services. SWOT and PESTLE can effectively analyse key areas and develop a strategic
plan. The company can use them to assess opportunities and challenges. (Van
Wijngaarden, JD, Scholten, GR and van Wijk, KP, 2012.) Using PESTLE can consider
external factors that may have a positive or negative impact on business development.
SWOT may help to differentiate between business and competitor's strategic
advantages. Both SWOT and PESTLE provide a way to explore possible business
continuity. PESTLE can be used to develop sustainable development benefits, and
SWOT can compare the company's unique advantages and the lack of market areas.
Through SWOT and PESTLE to understand the company's threats and weaknesses to
avoid major mistakes, and these threats and weaknesses can help companies avoid
barriers. Therefore, combined with SWOT and PESTLE can play the greatest role

4.0 PESTEL
4.1 Social

In Suzhou, people are increasingly concerned about their own health. Because with the
rising standard of living and income, people's pursuit is also changing. In the past, the
greatest hope was to make money and then have enough food, and now, they want to
live more healthy, eat more healthy. And chick-fil-A is a fast food restaurant, the main
product is fried foods, such as fried chicken and fired chicken burgers, perhaps it will not
become the first choice for consumers in Suzhou. But chick-fil-A also advocate healthy,
it is different from KFC or McDonald, health is not just add some vegetables, chick-fil-A
provides customers with the most nutritious food with the most nutritious food material,
while the introduction of some healthy match, to provide customers the most nutritious
food. Fried foods are very delicious, especially for children are very attractive, so in
order to meet the children, but also for the children's health, parents will choose more

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healthy fried food. And for busy officers, they do not have enough time to eat lunch, and
sometimes will also choose fried food, and if they have different choice, they will choose
more healthy fired food. Now China's most popular fast food restaurant is KFC, although
it is not health and have a lot of negative news, but there are still many people choose
KFC, the main reason is that there are no other strong competitors, and its fried food is
also very delicious. Most people like fried foods, in Suzhou, there are many consumers
eat in KFC every day, because they like to eat fried chicken. If chick-fil-A joins in
Suzhou, and it provides healthy and delicious fast food and fried chicken, and the price
is similar, the consumers will definitely choose a more healthy chick-fil-A. Most Chinese
people have a habit, that is, exorcism, Suzhou is also like this. People will think that
foreign things are good, and want to try them. Therefore, if chick-fil-A opens its first
store in Suzhou, there will be a lot of customers willing to try, and if the price is as same
as other fast food, but its food is more nutritious and delicious, and the service is more
thoughtful, then there will be more customers choose to eat in chick-fil-A. Therefore, the
promotion of health can make the chick-fil-A more popular.

4.2 Economic

The economic factor is relating to the cost-related matters for the organisation. (Witcher
& Chau 2010) In economic, Suzhou is a second-tier city and a developing city. Different
from those new Metropolia, such as Shanghai and Guangzhou. In Shanghai, the rent for
one month is 1180 per square meter, while in Guangzhou, the rent for one month is
1065 per square meter. But in Suzhou, the rent for a month is only 300 per square
meter. This price is lower than first-tier cities and lower than other countries. And the
wages of Suzhou is also lower, the average salary is about 4000 on month, while in
Shanghai and Guangzhou, the average salary reached 8000 one month. So,chick-fil-A's
investment cost is very low in Suzhou, labour costs, rent costs, publicity costs and other
expenses are not too expensive, chick-fil-A also have enough money to operate, and
less investment has also reduced the risk of front-end investment. So Suzhou is more
suitable for investment. Chick-fil-A's products are not very expensive, everyone has
enough power of consumption, and in Suzhou, the resident population is 10.61 million,
so there is a very strong purchasing power. Lower investment has the opportunity to
return to a higher return, this is a good choice for chick-fil-A.

4.3 Legal

Legal paly a critical role in marketing, many legal and regulations may not be designed
according to the marketing problems, they may have the chance to have a significant
impact on the company. In 2009, China passed a series of laws and regulations on the
fast food industry, and implemented on June 1. These laws are designed to ensure food
safety, develop food standards and production regulations, and deal with contaminated

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food. In 2011, China passed the fast food security standards to regulate the
employment, managers and process control of fast food restaurants.(Wang, Y., Wang,
L., Xue, H. and Qu, W. 2017) The introduction of these bills is to encourage fast food
restaurants to sell healthier foods, and also to reduce obesity rates. The chick-fil-A to
promote a healthy diet, which can help it based on the Chinese market.

5.0 Recommendation
Chick-fil-A promotes a healthy diet and provides customers with the best fast food. The
locals also want to eat healthy food, which is also in line with Chinese law. If Chick-fil-A
opened restaurants in Suzhou, the investment cost is very low, and the operation will
not be difficult. Suzhou has a lot of population, lots of them are willing to try, so the
purchasing power is very high in Suzhou, it has a great opportunity. So chick-fil-A can
enter China's Suzhou market, with an excellent reputation, nutrition food, and quality
service, it can base on Suzhou.

Chick-fil-A wants to enter the Chinese market, and it must consider the method of entry.
I think the best option is Greenfield investment. Because this method can ensure that
the company control all the things, and can get 100% of the profits. Chick-fil-A offers
healthy fast food, the most intimate service, rest on Sunday and so on, and these are its
characteristics. As a result, chick-fil-A opens a branch in China to ensure that everything
is under control and these characteristics will not be replaced. Chick-fil-A has become
the most famous fast food in the United States, and these features are very important.
If chick-fil-A can not take full control of all the things, then these features are likely to be
removed, the brand's reputation may also be worse, and chick-fil-A just entered the
Chinese market. If it can not establish a good reputation, the company will be getting
worse in the Chinese market and may be forced to leave in the end. So, in general,
Greenfield investment is a good choice, chick-fil-A can ensure that everything is in
accordance with the requirements of the company, 100% control all things to protect the
company's characteristics, and in the beginning to establish a good reputation, which
will help chick-fil-A develop in China. So my recommendation is Greenfield investment,
which will ensure that everything is under the control of the company, the brand will not
be bad，and ensure that the company's good reputation continues to ferment in China,
which is conducive to the development of the enterprise.

Chick-fil-A can do the mid and high quality brand in Suzhou. Now, in Suzhou, people
think that fast food is low quality, cheap and unhealthy, many people are reluctant to try,
they are willing to spend more money to eat healthy food. Therefore, to provide high-
quality services, healthy food can attract more customers, most people living here have

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enough purchasing power, and they will be willing to go to chick-fil-A to buy food. In
Suzhou, most people's lives are very precious, and they pursue a high quality of life and
eat health. They will not eat those unhealthy and low-quality fast food. So, if chick-fil-A
offers high quality and healthy fast food, it can attract more consumers. Therefore, do
the mid and high brand of fast food restaurants, to provide healthy food and quality
services can attract more customers.

6.0 Conclusion
When a company wants to enter a new market, they can use the PESTEL model, and
when the company needs to conduct strategic analysis or market research will use it.
PESTEL is a useful tool to analyse the macro environment. Which can help company
analyse the environment and then put forward the strategy. It is useful as a strategic
tool to help the company understand the growth or decline of the market, business
positioning, business potential and direction, and so on. If PESEL and SWOT are used
together can play the greatest efficiency. Like chick-fil-A, through the PESTEL model,
the company can enter the Chinese market. Because the legal, social and the economic
are beneficial to the company, chick-fil-A can develop in China. And Greenfield
investment can help company based in China.

7.0 References
Bivolaru, E., Andrei, R. and Purcaroiu, G.V., 2009. Branding Romania: a PESTEL
framework based on a comparative analysis of two country brand indexes. Management
& Marketing, 4(4), pp.101-112.

Issa, T., Chang, V. and Issa, T., 2010, January. The impact of Cloud Computing and
organizational sustainability. In Annual International Conference on Cloud Computing
and Virtualization (pp. 163-169).

Issa, T., Chang, V. and Issa, T., 2010. Sustainable business strategies and PESTEL
framework. GSTF International Journal on Computing, 1(1), pp.73-80.

Kayumi, B., 2014. PESTEL Analysis for Turkey.

Rothaermel, F. T. (2012). Strategic Management: Concepts and Cases. McGraw-

Hill/Irwin, p. 56-61

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Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for
multicriteria decision making based on SWOT/PESTLE analysis: a case study of
reconstructing a water intake structure. Water resources management, 26(12), pp.3379-
3393.

Vovchenko, N.G., Kochka, V.A. and Pogorelenko, N.S., 2015. PESTLE ANALYSIS.
SBERBANK RUSSIA. Известия Санкт-Петербургского государственного
технологического института (технического университета), (28), pp.99-101.

van Wijngaarden, J.D., Scholten, G.R. and van Wijk, K.P., 2012. Strategic analysis for
health care organizations: the suitability of the SWOT‐ analysis. The International
journal of health planning and management, 27(1), pp.34-49.

Wang, Y., Wang, L., Xue, H. and Qu, W. (2017). A Review of the Growth of the Fast
Food Industry in China and Its Potential Impact on Obesity.（accessed on 4th July 2017）

Witcher, BJ & Chau, VS 2010, Strategic Management Principles and Practice, Cengage
Learning EMEA, United Kingdom