Kentucky Fried Chicken, more commonly known as “KFC” has existed in the world since its inception in 1952 (KFC, 2018). Colonel Harland Sanders established the brand in North Corbin, USA which has grown exponentially and expanded globally with revenue in excess of 3 billion dollars in 2017 throughout its 21,487 stores (Statista, 2018). Recently in 2018, KFC underwent a crisis within the United Kingdom due to a supply shortage of chicken in 750 (80%) of its 900 UK outlets (Topping, 2018). This communication plan will address how the crisis could be addressed in the internal and external environment.
1.1 Situational analysis of a crisis
Griffin (2009:80) states that a crisis is something that happens suddenly that poses a risk to reputation and Ashcroft (1997) also discusses that a crisis plan should be implemented prior in an effort to mitigate potential risk to brand reputation. Kotler (2001) developed a framework for communications starting with a situational analysis that will be followed throughout.
1.2 SWOT analysis – Organisation viewpoint and crisis viewpoint
Valentin (2015) states that a SWOT analysis is the identification and assessment of an organisations strengths, weaknesses, opportunities and threats that’s primary goal is to yield strategic insights into these sectors. Thompson et al., (2007) also goes on to state that a SWOT is a powerful tool for sizing up “resource capabilities, deficiencies, market opportunities and external threats” thus making it effective to help some up and even build an organisations strategy as well as its competitive strategy. Below are both a SWOT analysis for KFC’s core business and the 2018 KFC chicken shortage crisis that can help identify internal and external factors.
KFC:
Strengths: Weaknesses:
- Global presence
- Brand
- “Original” recipe
- Food promise
—
- Parent company Crisis
- Controversies
- Suppliers
- Unhealthy options
- Managing of franchises
Opportunities: Threats:
- Healthy food options/trends
- Globalisation/expansion
- Vegetarian rising market
—
- Crisis response
- Competitors
- Legal issues
- Raw material price rises
KFC global brand presence could be argued as the most important aspect of its strengths as continuation of growth allows for more profits to be made in its 20,500 worldwide stores (Forbes, 2018). Crises are a huge weakness for any business as it can directly affect shareholder value, income revenues and damage brand reputation (Auer, 2018). Nonetheless, opportunities can arise from crises responses and tapping into new trends in the market such as increased healthy food options or introduction of new trends (i.e. vegan menu) allows for a larger consumer base to be captured and possibly lead to further business expansion (Kessler, 2018).
Crisis:
Strengths: Weaknesses:
- Experienced PR team
- Previous crisis experience (2013)
- Many resources available
- Highly regarded spokespeople
—
- Crisis always conveys negativity on brand image
- Unknown turnaround time
Opportunities: Threats:
- Brand exposure
—
- Public backlash
- Negative press
- Loss of income
Crises often sway towards weaknesses more than strengths as Ashcroft (1997:325) states that an organisation’s reputation is as important as any other corporate asset. Conveying negativity on brand image is potentially the most destructive outcome that can be incurred in a crisis (Salvador et. Al., 2017). Although it also offers some brand exposure, public backlash is worrying to KFC as losing market share is not ideal in terms of revenue or shareholder wealth (Seymour, 2018). Negative press will again hurt brand image, damaging the company brand and leading to a knock-on effect on income streams (Sickler, 2017).
1.3 PEST analysis
A PEST analysis or STEEP analysis as sometimes referred to is a framework of the macro-environmental factors that can affect the business environment (Voros, 2001: Cited by: Peng & Nunes, 2007). Ward and Rivani (2005) also discuss that a PEST analysis expects that external and indirect circumstances that help define the business environment are able to impact organisational capacity to deliver value and provide a “satellite view” over the external environment. Below is a PEST analysis on the United Kingdom that will help define external influencing factors of KFC.
Political: Economical:
- Government stability
- Brexit
- Tax laws
- Trade restrictions and tariffs
- Environmental regulations
—
- Unemployment levels
- Interest rates
- Taxation
Social: Technological:
- Age demographic of population
- Disposable income
- Population growth rate
—
- Internet availability
- Innovation factors
- Effective intellectual property laws
Brexit is the most worry-some for KFC’s UK franchises as it may cause a spike in business rates i.e. wages, delays in timeframes at customs etc. leaving uncertainty within businesses operating on a short turnaround timeframe within the United Kingdom (McLaughlin, 2018). KFC’s target audience is the 6-65 age range; the UK population ageing from 16-64 years of age is forecasted to decline over the next 10 years, possibly causing issues on income for the targeted demographic (ONS, 2017). Internet availability is also important as cutting costs on marketing i.e. social media and online word of mouth etc. allows more retained profits within the business to which 89% of all UK adults have weekly access although a risk of negative social media usage has grown and can affect the company if not used correctly (ONS, 2018). Usage for addressing crisis issues is also highly productive. Political factors offer more concern than other areas of the PEST analysis.
2. Audience identification
Identifying an audience allows the intended company to find and target specific groups or stakeholders when needing to convey business communications. Audience segmentation is the process of breaking down an audience into smaller groups with the goal of tailoring specific communications to the identified groups (Harrison, 2018). Targeting the correct audience in the correct way also allows more information to be consumed, if communicating incorrectly or to the incorrect audience, the desired information may not be perceived in the intended way (Yagnik, 2012). Gammelmark (2011) goes on to state that identifying company’s primary stakeholders who have the ability to influence the overall operation of a business allows specific targeted messages to be used in an effective means, and by targeting each individually mitigates potential stakeholder conflict from arising by providing personalised and vital information (Jensen, 2001). A stakeholder analysis can help identify these stakeholders that offer the most importance in relation to a business (Freeman, 1984). Below are the segmented and identified stakeholders that KFC must target in a crisis plan.
KFC’s most important identified stakeholder is their customers as Drucker (1993) explains that a business’s specific purpose is to create customers, therefore, will be addressed in the crisis plan as they are the primary means of income. Customers will need to know what the crisis is, be kept up to date on the matter as well as the specific stores being affected.
Employees will also be targeted as the internal workforce deliver the consumed goods to the customers therefore need to be kept “in the know” or customer service may suffer (Parsi, 2016). Employees are as important as operations in times of crisis as they will be disrupted, and it is vital they have information affecting their job role in real time.
Shareholders essentially own portions of KFC and will need to be kept up to date with capital aspects during times of a crisis or internal management reworkings may become an option i.e. CEO replacement etc. and whilst not concerned primarily with business operations or image, capital issues will be the primary concern (Marin, 2012). Not offering updates may cause loss of shares and a drop-in stock price thus leaving KFC at a worse monetary deficit due to lack of shareholder faith.
Finally, the press/media will need to be targeted as comprehensive and accurate information will need to be conveyed to the public to ensure that updates on business practice and operations are followed by potential consumers as well as being relayed to other stakeholders and is of great importance (GICT, 2018).
3. SMART communications
Businesses often use “SMART” (specific, measurable, achievable, realistic, time-bound) objectives to guide the development of goals and objectives (Jung, 2007). Objectives are often seen in crisis plans as it allows the communication strategy to be conveyed to the targeted stakeholders efficiently as it offers shorter term planning and are more tangible to use (MacLeod, 2012:68). MacLeod also states that fixed objectives in an everchanging and uncertain environment can cause issues as well as conflicting objectives and appropriate feedback being major limitations of the SMART format. KFC should use SMART objectives to issues specific statements to their identified priority stakeholders to inform and deliver information in times of crisis. Customers, employees, shareholders and the press can be informed as provided below:
- To inform UK customers about the crisis situation using Twitter and Facebook to address their 12 million followers. To be done within 6 hours of crisis, on the 17th February 2018.
- Managers of UK stores to inform employees of situation, explaining impacts and details of their next shifts. To be completed face-to-face or via provided contact details. To be completed by 3pm on the 17th February 2018.
- HR to produce a detailed email report addressed to all shareholders providing an explanation of crisis and how KFC aim to deal with said crisis. To be completed by 8am on the 19th February 2018.
- HR to organize press release, providing up-to-date information regarding the crisis. Information to be given explaining how KFC aim to handle the crisis and positives. To be completed by 12pm on the 17th February 2018.
4. Design of the messages
The Osgood-Schramm model of communication is often used when developing how the intended audience will receive the message in a circular motion of communicating (Schramm, 1954). This can often be disrupted by sematic noise that will need to realistically be kept to a minimum as well as keeping the differences and misunderstandings of the message as low as possible (Julian, 2018). Julian (2018) also states that albeit having drawbacks, the dynamic nature of the model is of great use in situations such as times of crisis as the sender of the message also becomes the receiver in a simple motion based directly on feedback. In continuation from the use of the Osgood-Schramm model, the tone and voice of a message is an important aspect of the intended perceivability. The word choice and sentence style could carry a different effect on the message as workplace messages will need a more professional voice and tone than addressing its consumers (Lombardo, 2018). Coombs (1999) also states that the severity of damage and the type of audience directly correlates on how the company should address the issue. Also, message strategies that reflect compassion are often the most influential crisis communications approach (Coombs, 2014). Stakeholder mapping also allows an overview to how each stakeholder should be addressed from KFC’s viewpoint as seen below (Walker et al., 2008).
High influence, high interest (shareholders) must be fully engaged in communication and ensure their views are considered specifically in a formal, business tone. Compassion must be used to ensure capital issues will be kept to a minimum and conveying of the message will be respectfully put forth with maximum emphasis on addressing the crisis at hand. Full transparency and complete information are critical.
High influence, low interest (customers) must be fully aware of what is happening and kept engaged, but not so much that they become bored with the message. A more informal tone will need to be used as 65% of business consumers prefer a casual tone of voice to being addressed formally (VR, 2015). Compassion needs to be used throughout and the addressing of the crisis will need to be presented. Humour can add to a more positive perceivability in times of crisis. The most effective way to deliver the bad information is with a solution.
Low influence, interested people (employees and the media) need to be kept informed and insured that the crisis is being addressed. Employees will need complete up-to-date information on any progression in a formal manner and kept fully engaged with any progression in real time. The media will be updated formally, with any progression being updated respectfully and with compassion conveyed and put forth with KFC’s customers in mind. A positive outcome will need to be put forth with a solution emphasised fully.
Addressing the stakeholders in these ways can help minimise brand damage and ensuring the tone and design of the messages being kept professional helps how well the company is perceived in time of crises (Lombardo, 2018). Feedback may also be kept in the same manner as it is relayed.
Considerations of strategy choice include the target audience, the type of crisis, available evidence, severity of damage, the company’s performance history, and legal issues (Coombs, 1999).
5. Defining the media
In an everchanging business environment, stakeholder needs and how they should be addressed often change through communication and the current media platforms available (Agnes, 2016). Seltzer and Mitrook (2007) state that the technological potential of blogs and twitter are suited to modern day two-way communications within the public relation setting than classic media as they are often regarded as more authentic and credible. Below are different media platforms that can usefully address different stakeholders:
New media; more specifically social media posts will be used to ensure customers are kept up to date with the crisis at hand. A social media press release will first be used on Facebook and Twitter and will be updated regularly with updated posts and advertisements with humour implemented throughout as Shultz et al., (2011) reported that respondents to a crisis tweet or post were less inclined to boycott the business than respondents to a newspaper or blog post. KFC delivering the post through verified accounts gives credibility to the audience. Veil et al., (2011) discusses that the technology enables the crisis to spread and thus develop, and that social media helps “change” the obdurate conditions of the crisis before, during and afterwards. Sellnow et al. (2011) also argues that social media enables a closer connection with stakeholders and has the ability to lessen the effects of a crisis on a brand. This method is also a good way of notifying the brands identified target audience.
Employees will have interpersonal face to face meetings with managers to discuss implications of their job roles as Coombs (2014) states that assistance must be used to great effect to help employees overcome obstacles of a crisis and being delivered by a highly regarded source issues more credibility. Being “human” and speaking with the essential staff that generate the income for the brand helps and apologising will enable staff overcome crises issues as well as receiving valuable feedback (Rodrigues, 2017).
Shareholders need specific and accurate emails that offer full transparency addressed from HR. Other options of communication will be offered i.e. social media post and press release as Payton (2017) discusses that shareholders have different ideas of preferred communications.
The general media will have a direct press release issued as this allows the crisis to be specifically promoted to the public and other customers via a credible source (Wolfe, 2018). Both traditional newspapers (The Guardian and The Telegraph) and television stations (BBC and ITV) will be provided copies of said press release as this ensures a wide variety of stakeholders are notified. Social media posts will be seen and more than likely reported on by the press, and this further exacerbates spread of the media on the KFC chicken shortage crisis.
Engaging in different types of media communications using the Osgood-Schramm model allows different types of stakeholders to be targeted and notified as well as important feedback to be received afterwards with reduced sematic noise as multiple methods are being used and less ambiguity will be portrayed (Julian, 2018).
9.1.2019