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4. SUPPLIER POWER
There are a lot of suppliers available for KFCs raw materials. KFC can
easily switch their supplier to another supplier since the materials need
in the process of producing KFC is easily to get such as chicken.
In 2004, KFC has some internal problems and issue regarding of their
raw chicken supplier. KFCs supplier was found doing something
horrible when slaughtering the chicken.
KFC decide to terminated the contract between them and thus find the
new supplier to replace them. So, chicken supplier cant easily increase
the price for chicken since their supplier power is low.
Other than that, KFC also binding a contract with Pepsi.co for
supplying carbonate water to KFCs customer.
In the contract, KFC has promised to Pepsi.co that they wont have any
business related with carbonate drinks such as Coca Cola .
In the same time, Pepsi do supplies their drinks to the competitors of
KFC. This is lowering down the supplier power of KFC.
PORTER'S FIVE FORCES KFC
5. Buyer power
The factor of a lot of competitors such as McDonald, KFC, Pizza Hut
and Burger King. The loyal and potential customer of customer starting
to declined and this caused a big loss to the KFC.
Customer can go to any fast food restaurants that offered more
affordable price especially to students which requiring a lot of money to
survived.
To attract their consumers back, KFC start to decrease their prices and
give a discount of their products to the consumers.
KFC reward My KFC Card Programed to their loyal customer. By this
card, the customers are able to get a discount as much as 5% and also
exclusive VIP offers.
So, the buyer power of KFC is high when this is proved that the
consumers able to influence the priced when they has many choices.