A.1) By using PESTEL analysis we can analyze the macro factors affecting KFC Political Factors: Political factors refer to the government policies such as degree of intervention in the economy. KFC is asked to tell the people safety and health guidelines, KFC is also asked to label the genetically modified food (GM food). It follows the Animal rights campaigns by the government.
Economic Factors: These include taxation changes, interest rates, inflation and exchange rates, economic growth.
Social Factors: Social factors can have effect on the firms availability of the products, demand of the products and the availability and willingness of individuals to work. In UK the population has been ageing. This change has affected the cost of the firms due to the pension payment to their old age employees because the firms is committed to the employees who work with the firm from a long cycle period. Some firms have started recruiting old age employees to balance the labor pool. The ageing population has also affected demand, for example the demand for medicines and sheltered accommodation has increased whereas the demand for toys and other young age products has fallen.
Technological Factors: New technology brings up new products and new processes of production. MP3 players, high definition TV, online business are all new innovations created by technological advancements. Technology can reduce the cost, improve the quality and lead to innovation of new products. These technological advancements can benefit the consumer as well as the organization.
Environmental Factors: Environmental factors include the change in climate and weather. The changes in the temperature can impact many organizations such as farming, tourism, and insurance, with major climate changed due to global warming and with more and more environmental awareness this external factor is becoming a big issue for the companies to consider. The desire of saving the natural resources and environment is having an impact on many industries such as tourism and transportation, for example more taxes are being imposed on air travel and the success of hybrid cars. and the move towards more eco-friendly products and creating an issue in demand and making new business opportunities.
Legal factors: This is related to the legal environment in which the business operates. In recent years the legal changes in UK has affected many firms. The introduction of new age discrimination and disability discrimination legislation, an increase in the minimum wage of the employees and greater requirement for a firm to recycle has affected organization. Such legal changes affect the cost of the organization