BSS059-6 Digital Technology Management
BSS059-6 Digital Technology Management
Introduction
Networks, computer systems, digital technologies, and other types of technology are crucial to an enterprise’s survival and expansion in the modern global economy. These technical advancements could help organisations achieve both of these objectives. The degree to of a company foresees the future usually affects the speediness of its expansion and adopts new technology. Therefore, if executives incorporate technology at this time, they may be able to integrate innovative elements in their designs.
The amount of time, money, and resources a company must invest in creating an effective information system can have a big impact on how successful it is at maintaining a competitive edge. Businesses can use SIS to assist clients in foreign markets by learning about their preferences and need through client feedback in other areas. As the digital age has advanced, businesses have gotten better at synchronising their IT planning and information systems. The chosen company for the study is KFC depending upon which the strategic management of the information system will be evaluated. In order to serve the purpose of the report, a brief company background, and strategic positioning of the company will be provided. The SIS opportunities for the company and the impacts of it on the strategic position will be provided in the following sections.
Company background
KFC is a world-class chicken restaurant chain, which is known for its fast services. The company was first started in Kentucky, US, in 1952 by Colonel Sanders (Kfc.co, 2023). The company is found to be operating in 149 countries throughout the world along with an estimated brand value of $154 92 billion as of 2021 (Statista.com, 2022).
KFC’s “brand awareness” in the UK was 97% whereas its popularity was 53% (Statista.com, 2022). Besides that, there was a 51% usage rate and 34% buzz around the company along with 43% customer loyalty seen among the UK customers towards the brand (Statista.com, 2022).
The strategic position of the company
The “strategic position” of the company in the competitive market needs to be analysed to understand the current situation of the company. This can be beneficial for the brand to create better value in the upcoming times of the business (Calabrese et al. 2019). The following “Porter’s five forces” analysis can help to understand the current market position and competitive structure of the market.
| Porter’s forces | Strength |
| “Competitive rivalry intensity” | High |
| “Threats from new entry” | Low |
| “Bargaining power of suppliers” | Low |
| “Bargaining power of buyers” | Moderate |
| “Threat of substitutes” | Moderate |
Table 1: “Porter’s five force analysis”
The primary rival of KFC in the fast-food restaurant industry is Mcdonald’s. Thus, there is intense competition. The company has thrived because of its high-quality products and development into new markets, including those for regional dishes like Thai, Japanese, and Biriany. The company would have benefited and added more subscribers if it had been able to reach an agreement on a contract with the local market. KFC has responded by teaming up with Yam! and creating a “7-minute service” Pizza Hut, Taco Bell, and other well-known brands provide the former more flexibility to grow its network and increase market share (Kfc.co, 2023). A new entry in the market needs to invest a lot of capital to build out infrastructure across the nation and in the promotion. To recover the costs of market entry, a new entrant needs to create a “sizable client base” and invest more in creating a strong foundation and related infrastructure.
Due to the overcrowded nature of the market and KFC’s strong position as a result of its customer base, it will be difficult for the new entry to compete against KFC without drastically lowering prices (Husna et al. 2020). KFC is famous for its in-house chicken-related recipe. The company has no significant logistical partner as they are a self-sufficient company ensuring its efficiency to perform all logistics operations relating to reaching out to every customer. This makes the market supplier’s power very low for this particular company (Guinto and Alcantara, 2022). There are two types of buyers in the industry in which some are found to be loyal and show heavy dependence on the company while some are floating in nature. However, the buyer power is moderated as the switching cost is none for the industry. However, the target market for KFC sees in-store services as a valuable aspect which helps them to feel more confident about purchasing decisions (Husna et al. 2020). In addition, there are several substitutes for fried chicken but no substitute for food and thus, the threat of substitution is moderate.
“Strategic Information System (SIS) Opportunities”
With the aid of fast-growing technology, worldwide businesses are becoming more reliant on the use of information systems. For example, KFC uses an information system in managing its customer-related data and preferences. In this regard, a “Strategic Information System (SIS)” can help the business-related information system to feature a systematic approach in collecting, storing, managing and retrieving the data in line with other systems used in the business like payment, feedback and others (Husna et al. 2020). The usefulness of information technology is acknowledged by all stakeholders in the supply chain, including top management, employees, suppliers, cooks, and service providers, as well as marketing analysts, warehouse managers, and others. It is challenging for a corporation to evaluate its performance and advancement towards its goals without access to historical data (Sudrajat et al. 2020). An enormous quantity of data may be gathered by the database, which is a subsequent statistical analysis to generate insights for decision-makers at every level. Top management analyses the related data and then passes it along to the subordinate teams for addressing and averting the most significant issues.
KFC is aware of how crucial having well-managed information systems is as a multinational corporation. All divisions and tasks at KFC use the IT infrastructure. In this regard, the SIS opportunity comes with features like the security of information and the integrity of data while aligning the process with different channels of the brand (Aydiner et al. 2019). For a number of reasons, including inventory management and control, as well as the maintenance of appropriate refrigeration and freezing temperatures, intricate computer networks are crucial in supermarkets. “Local area networks (LANs)” are frequently used in supermarkets to connect various computer types. These tools are mostly used for clearing and managing stock (Husna et al. 2020). Their combined utility is remarkable when the powers of additional gadgets are included. These databases are accessible to anyone with the right approvals.
The SIS related to strategic management involves a process of planning, monitoring and implementing information to support the organisational mission. As opined by George et al. (2019), this can help an organisation to gain a competitive edge by offering competitive information through advanced technology like “Artificial Intelligence (AI)“. This can help the company to improve its organisational structure while allowing the company to tackle different competitive forces in the industry and can prepare the company for environmental changes. A portable reader and the specific barcode on a product can be used to scan it in order to get useful information about it. Each register is equipped with an electronic point-of-sale terminal. Modern “electronic point-of-sale (EPOS)” systems frequently come with a monitor, keyboard, barcode scanner, printing device, and credit card reader. Each product needs a unique identification in order to be properly classified. Even though a product comes in multiple sizes, it is still important to give each size its own unique character.
SIS-related impacts on the strategic position of the company
Customers anticipate that KFC is bound to everything they require in stock, charges fairly, and employs amiable, knowledgeable staff members. To better serve customers, the company has made major investments in three key areas: “streamlining supply chains, improving self-service options checkouts, and coupon technology at the till”. Self-service checkouts have been installed in approximately 85% of KFC locations to provide consumers greater freedom and speed up their transactions, particularly for those purchasing smaller products (Kfc.co, 2023). Self-service checkouts are used by more than 23 million shoppers who frequent more than 20,000 stores each week (Kfc.co, 2023). Each time, a consumer or company employee uses AI technology, the procedure ought to be made easier or better (Husna et al. 2020). Because of technological improvements, business-customer relationships nowadays are less personal.
Degree of competitive advantage
The large number of well-established competitors currently present in the fast food market makes it difficult for new businesses to break into the industry. KFC stands out in comparison to other major fast chicken fry service providers since it caters to clients with quality and service.
Geographical Portfolio Diversification
The company has a highly successful market capture in 149 of the most populous countries in the globe. The brand currently has over 12 million devoted customers ensured by some considerable and knowledgeable staff to answer queries as one of their priorities (Kfc.co, 2023).
Streamlining the “service system” on a regularly
KFC has set a number of marketing objectives in order to keep one step ahead of the competition. The organisation hopes to accomplish these goals by increasing the variety and calibre of its current product offerings.
Leading provider of non-vegetarian fast food in the world
42% of the company’s revenue comes from sales of internal chicken services within bundles, while 27% comes from sales outside of bundles (Kfc.co, 2023). Since they have significantly improved the quality of their service for users, they have a competitive advantage over other fried chicken providers.
Service effectiveness and timeliness
When compared to rival restaurants, KFC provides some of the quickest and best service. Almost every country can obtain and rely on KFC’s service. In contrast to KFC’s 7-minute exclusive dine-in services, there is no contradiction with the more widely used standard (Kfc.co, 2023).
Cost and feasibility
Administration, possibilities, and other factors all have an impact on a company’s viability. The term “conditions” refers to the firm’s personnel and resources. The use of SIS has many advantages including the extensive use of AI, which helps to make more informed decisions (Du et al. 2019). This company offers a variety of services, including feasibility analyses, contract installation, and post-contract cost monitoring. The corporation may use modelling concessions, the renovation of existing spaces, and the addition of additional retail space as part of the project. The retail industry as an entire is growing more brand-conscious and receptive to the notion of optimising shop design. The business can implement a participative management style that promotes widespread employee involvement in operational and policy choices. One of the numerous elements influencing KFC’s operational culture is the company’s success. Customers are willing to try new things because of the market’s ongoing change (Tjahjadi and Soewarno, 2019). Due to increased competition and raised client expectations, businesses are becoming more inventive in their customer service strategies. As a result, KFC’s expansion into new markets could affect its ability to retain present customers. KFC’s “unique selling proposition (USP)” makes the company stand out from the competition and encourages repeat business. In this case, the SIS system can also help to evaluate the data requirements and helps to maintain records by which the organisation can ensure cost-effectiveness by minimising cost and maximising efficiency.
Risk
There are many risks related to the probability of sustaining the competitive advantage promised by the SIS system as follows:
System risks related to the network and security
In any network construction, whether on the inside or the outside of the system, there is a possibility of hacking. Establishing and controlling the standard operating processes of security firms and safeguarding the most valuable assets of a company fall under the umbrella of a safety problem, which needs to be organised accordingly. KFC is constantly enhancing its customer service by introducing new features and improving existing ones.
Lack of expertise risk in handling the change
Companies like KFC may now manage data and information using cutting-edge technology, which creates severe concerns for expertise. As per the resistance theory, people who lack expertise in cutting-edge technology can come with strong resistance to organisational change (Puspitawati, 2021). This system can be improved by investing in “Human Resource (HR)” development. One excellent example is educating customers, staff members, and management on the need of protecting corporate data, programmes, and other intangible assets.
Challenges related to the implementation of technology
The potential challenges related to the implementation of technology are as follows:
Challenges related to large-scale in-store technologies
The most difficult component of incorporating new technology is limiting the impact on “customer service” while ensuring the usefulness of the technology. The plan has to involve training for the next generation on how to use cutting-edge technologies. Well-designed systems generally necessitate significant organisational shifts as well as the development of new interpersonal abilities in order to be assembled and deployed. Purposeful manipulation of these differences is a notoriously difficult endeavour. Roger Clarke’s “Strategic IS Theory” should be implemented to minimise this implementation challenge (Borges et al. 2021).
Challenges related to the required time and cost
Significant changes to administrative procedures and the way social media is organised are required when creating a strategic system. Because there are several technologies available to an organisation, development takes time and money. Many techniques for gathering strategic information run the risk of being copied by rival businesses, and there is no way to ensure the protection of strategic interests indefinitely (Ibrahim and Abou Naem, 2019). It’s critical to manage the relationships between information system designs and decision-making processes.
Conclusion and recommendations
Conclusively, the examination of KFC’s SIS showed serious repercussions for the organization’s capacity to run regularly, grow, and keep its competitive edge. SIS can assist businesses in increasing their chances of succeeding by automating monotonous operations, boosting the quality of data collected, and reducing the amount of time and capital invested in these endeavours. SIS are held to higher requirements and perform more completely than management information systems, thus businesses should prioritise building specialised administrative units whose duties are performed by these systems.
Recommendation 1: Using analytic tools to ensure feasibility in the organisational operations
KFC might acquire a thorough understanding of the business and a greater understanding of its operations, client conversions, and other elements by utilising business analytics tools (Amoako et al. 2023). This helps KFC to operate more efficiently and provide a better customer experience. Due to their ability to increase customer happiness and compete, there will be a positive effect on the bottom line (Ivanov, 2023)
Recommendation 2: Using AI for the strategic design of external social media for extensive outcomes.
KFC’s external “social media strategy”‘s pillars are client service, handling crises, and sales. The business can advertise recipes and competitions on social media sites like Twitter, Facebook, Instagram, and YouTube to boost sales. The usage of AI can assist in setting up the official KFC page for sharing delicious recipes, culinary inspiration, competitions, and friendly customer care staff (Amoako et al. 2023)
References
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