SERVICE DESIGN & SELECTION OF PRODUCTION PROCESS AND CAPACITY 2.1 Service design: Product service design consultancy is one of the important issues, how to be beautiful, satisfy customer
Trang 1BUILDING OPERATION STRATEGY OF KFC COMPANY
I DEFINE TARGET MARKET AND COMPETING PRIORITIES
1 Introduction of KFC
- Kentucky fried chicken (KFC), brand was pioneered by Mr Harland Sanders, has grown and become one of the world's largest fast food serving systems, with more than 1 billion KFC dinners served annually in more than 90 different countries, with over 10,000 restaurants and has created more than 200,000 labors
2 Select target market and competing priorities
- Currently, KFC has become a popular fast-food brand developed in many countries KFC has been known much in Ho Chi Minh City, Hanoi in particular and in Vietnam in general - this is a new market with around 170 stores, more and more the number of customers are familiar and accept food KFC targets to the youth market, the Vietnamese market is considered as a promising market Half of Vietnam's population is under the age of 30, meaning that young people will easily accept KFC's fast food than adults With the goal of building trust in customers through quality, reputation and food safety, KFC Vietnam just selects the material reputation and quality assurance supplier, such as CP Vietnam KFC selects to develop in major cities such as Ho Chi Minh City, Hanoi…
* Competing priorities and define competitors: As penetrating into the market,
KFC will face traditional products such as Pho 24, different fast food products (BBQ, Chicken, Lotteria, Macdonald ) KFC determined its opponents from then making brand development strategy gradually, slowly to create the trust from its customers through special quality of the products
- Awareness of consumers about the competitors: Assessing consumer awareness
about the major competitors is to assess the understanding of the information of competitors…
- Evaluation of the position of the competitors: The information research from the
market helps KFC determine its market share as well as existing competitors; Lotteria is a typical competitor threatening the market share of KFC Besides Vietnamese brands (Pho 24) are also competitors of KFC
Trang 2- Analysis of consumer preferences: Through research data (collected), KFC is the
product which is used most by groups of students, 78% and those with incomes of less than 1 million dong is 49% It shows that young people are the main consumers of KFC products and those with un-high income are main customers of KFC Also, through the obtained results, it people do not buy KFC products, Lotteria accounts for 45% of customers trust It can be seen that Lotteria is the main rival of KFC
- Making Decision: KFC has chosen for its own direction in accordance with the
Vietnamese cuisine as for new products such as soft bread, cabbage jumbo KFC confirms the quality of its products by the quarantine certificates Moreover, KFC products also make a difference with other products in the mix 11 different spices that make the difference for the KFC products…
- Monitoring implementation of the strategy: The process is to ensure the
positioning strategy of KFC is always in the right direction, goals Simultaneously, detect errors or mistakes to have immediate corrective measures…
2.1 Objectives of KFC in Viet Nam:
- Building an organization with dominant dedication
- Always bring quality and value in products and services
- Maintaining a commitment to continuous improvement and innovation for development, always strive to be the leader in the constantly changing market
- Create financial resources and strong profits for investors as well as employees of the company
2.2 Competing priorities of KFC in Vietnam.
- Health Priority: Today's customers not only need eye-catching food they are but also interested in health issues Especially in the current period, the rate of obese children is increasing The main thing is that health is a top concern in the dish selection criteria of the customer Many customers tend to go back to nature, enjoy the food and herbal flavors with bold local culture
-Price priority: The life of Vietnamese has been higher, people pay more attention
to food safety issues, especially after the bird flu, the more people have a lot more cautious when eating the dishes of chicken, and KFC is one of the trusted addresses It is
2
Trang 3said that "On average, each meal from 60,000-80,000 dong, prices are so reasonable, inexpensive compared to office rice
2 SERVICE DESIGN & SELECTION OF PRODUCTION PROCESS AND CAPACITY
2.1 Service design:
Product service design consultancy is one of the important issues, how to be beautiful, satisfy customer needs
For specific product, groups selected KFC fast food as one particular product that includes two factors: manufacturing and services
In store chef will create the right product and also provide goods and sell products to customers (consumers)
Thus, service design process is presented via 2 following diagrams by our group:
Production and service supply system
Diagram 2 -1
The specific type both of production and sales, quality and service factors are chosen and put on top Therefore, the human factor is also our interest because people will serve, contact with customers, the basic requirement is communication skills, 2nd is understanding products to better sales
Equipment
Employees
Materials
Facilities
Contact staff
Customers
Service
Trang 4We would like to make the comparison table and supply of ordinary goods
Criteria Goods production and supply
system
Service supply and production system
Customers
People who create demand for producers and distribute to customers
people who directly involve
in system
The stability of the
product in the system
Distribution channel
The distribution intermediaries sell goods directly
Customers who want to use the right products and services need go to manufacturers;
intermediaries only sell the right of using products and services
Hence need the choice of distribution more closely
a Basic products of KFC: Buckets, Burgers and Colonel Crispy Strips
There are also other products such as traditional fried chicken, boneless crisp chicken rice; Shrimp Burgers Combo, Spicy Crispy Chicken Combo, Seafood Combo
b Select product designs
When entering Vietnam market, KFC has changed the taste, size to suit the Vietnamese consumers, make a difference for other products In addition to traditional dishes such as fried chicken in general when entering Vietnam market, KFC has created few dishes to serve the food taste of Vietnamese people such as boneless chicken crisp, soft bread, carry chicken rice, cabbage mixed Jumbo
Expand products into shrimp, fish materials, and some beverages to replace freshwater products
4
Trang 5As we all know KFC is one restaurant chain offering fast food to its customers The system creates KFC as well as other systems, but has been designed to save time for customers
Be described by the following diagram:
SYSTEM DIAGRAM
Material environment
For service, KFC selects methods: improving staff capacity to satisfy customer needs and increase profits Besides KFC always commits to diversity and creates the best working environment for employees, also KFC not only pays attention to its staff but also running a restaurant system chain to bring the most convenience for customers
Product standard now used in KFC is ISO -9000 to control the quality of dishes here Fast food service is associated with physical products: foods, beverages, invisible part is the service attitude of contact staff, reliable feeling of quality, products
2.2 Selection of production process and capacity
a Theory:
Types of product process
• Sort by the number of produced products and repeated nature:
Customers go to the store
Order fast food, drinks
Payment
Serv ice staff
at stall
Listing paper
Processing equipment Kitchen staff
Selected food
Food processing
Trang 6- Single production,
- Mass production
• Sort by production organization form
- Continuous manufacturing process,
- Interruption manufacturing process
- Production under project
• Sort by relationship with customers
- Produce to reserves (production on demand)
- Production of the request (order)
• Sort by structure of products: the convergence process (assembly process) and divergent production process (The process)
Decision on capacity
Types of capacity
- The maximum capacity could be achieved under theoretical conditions that
machinery, equipment can operate 24 hours a day and 365 days/ year
- This capacity only counts the maximum limit that can not be achieved
The expected capacity - also called the effective capacity
- The capacity of the enterprise is seeking to achieve compliance with the standards, processes and technology, operating production capacity, maintenance planning, maintenance and balance activities
- Efficiency capacity is often taken up by 90% because machinery is generally impacted by outside factors
Level uses the effective
Real capacity
- is capacity that we gain in fact conditions
Performanc
e = Gained real output / Output to the expected output
Factors affects to capacity:
- Product demand,
- Nature of products
6
Trang 7- Technology level
- The human factor,
- Production plan,
- External factors: The standards and regulations
Capacity selection
Three types of decision models are:
+ Decision-making in certain conditions: in which the decision maker knows for sure consequences or outcomes of any decision to be selected.
+ Decision-making in uncertain conditions: in which decision maker does not
know what will happen to the results of each of their choices
+ Decision-making under conditions of risk: in which the decision maker knows
the probability for the result of the chosen method
Breakeven analysis
- The goal of breakeven analysis is to find cash point at which expression cost and income are the same To analyze breakeven, it is needed to assess the fixed costs and variable costs
- Fixed costs are costs that continue to exist even if no product is produced
- Variable costs are costs that vary with the number of products made
Hence choosing the production process and capacity for production KFC only upon request of customers, and products can be processed pre-order after having serving staff orders, chef has just introduced finished product to the consumers so that capacity depends on having customers or not.
3 SELECT LOCATION AND BUILD SUPPLY CHAIN
Location is the most important factor in the field of food and drinks business, especially fast food The location selection is not only prerequisite "golden key" to determine the success of the brand but also the premise and foundation for the brand to provide simple and professional standard services
First, KFC will be more flexible in opening restaurants in big cities like Ho Chi Minh, Hanoi to choose the time and place of opening This creates a competitive advantage of KFC over itsrivals
Trang 8About distribution locations, KFC selects distribution locations to open stores as buildings, supermarkets, bookstores, commercial centers such as Parkson, Diamond Plaza, Maximark Supermarket, Mark Coop, Big C
The landmark of restaurant first developed in the provinces: July 1997 - HCM City, June 2006 Hanoi, August 2006 – Hai Phong and Can Tho, July 2007 Dong Nai -Bien Hoa, Jannuary 2008 - Vung Tau, May 2008 – Hue, December 2008 - Buon Ma Thuot, November 2009 - Da Nang
* Develop distribution strategy:
- Closely manage its distribution systems from the selection of the personnel, facilities, location, purchasing, warehousing, sales ensure consistency in the quality of stores over the country
- A reality of Vietnam market today is there are not many enterprises with strong brand in the field of fast food, so KFC need to further standardize its store system
- Create different spaces to suit each object in stores: bustling, vibrant spaces suit young age…
- The waiters at the KFC restaurants should be trained and keep good service attitude even when the restaurant is crowded
4 GENERAL PLAN
4.1 General plan
8
Market demand
General Plan
Demand forecast
Production decision Process and capacity WorkforceMaterialProduction reserve
MRP material plan Production moderation
Trang 9Diagram: General Plan
4.1.1 Demand Forecast
- Demand forecast is set out from survey of market needs specifically according to criteria such as the appeal of the brand, consumer culture of the client, the population pyramid
- Demand forecast will be made according to the season As in the north, there are 4 seasons in which in summer and winter there are more customers than in spring and autumn As in the south there are more customers in the dry season than in rainy season
- KFC develops strategy to hit consumers under the age of 35 that accounting the majority population of 65%, so the demand will be so great
4.1.2 Process and capacity
Trang 10- KFC products in Viet Nam are processed according to common standards worldwide However, KFC Vietnam is also working to change the size and design, taste to suit for consumers in Vietnam such as crispy boneless fried chicken, crispy chicken salad, mixed cabbage, soft bread, chicken soup, chicken pasta …
4.1.3 Labor force
- Significant impact to the General Plan: In addition to serving employees with overall style of the KFC brand, there are employees who directly create products such as the role
of the restaurant's chef
- This force will be trained carefully to make products with the best quality and the most professional service style
- These forces in Vietnam are relatively various and cheap
4.1.4 Materials
- Quite diversify with our main economy of primarily livestock and planting in rural areas
- Can be purchased at the farm and households, however quality is uneven and quarantine procedures as well as safety of livestock is also very difficult to control
4.1.5 Reserves production
- In Vietnam, the holidays or festive occasions, the consumer demand will surge so plan to have reserves to avoid out of products
4.2 Strategies of general plan
4.2.1 Strategy to change inventory / storage
- According to this strategy, managers can increase inventory levels in low demand periods to provide and enhance for the increased demand period in the future If we choose this strategy, we will be subject to an increase in the cost of storage, insurance, maintenance, and damaged level and the investment capital We will increase the level of reserves in the timing of events such as festivals, Independence, 30/04 and 01/5 when people have days off and take their family to eat and drink out leading the increase of demand When we have this strategy, we will not affect: The production process and timely satisfaction of customer needs;
4.2.2 Strategy to change labor forces
10