Financial Research Report part 2

Client description

My client Mrs.Tamale is an ambitious enterprising young lady. At 25 years of age, Mrs. Tamale is involved in several businesses in Michigan and Detroit. She owns and manages a boutique that runs with the business name ‘Tamale Boutique'. The boutique business was started three years back when she was still pursuing her studies. She raised capital to start her business by putting together her funds from her savings kitty. Through my client’s ability to identify a market gap, she exploited the opportunity and the business started off and has since grown to provide her with some stable income. This business is run averagely brings her averagely 150 thousand dollars gross profit. Her other business in Detroit is a restaurant that she obtained from her ageing father. The business runs by the name ‘Pink Man Restaurant'. My client has put the restaurant in Detroit under the management of her younger cousin who has been living in Detroit after completing her higher education. This business has relatively has not been doing particularly well in recent times and has been realizing minimal profits. This can be attributed to the rise in fast food joints as well as the market trends of the catering industry. Due to the fact that this business is performing poorly, my client wants change in business and scrap off the restaurant business. This is decision is reached as a result of the financial situation that my client finds herself in. In this respect, my client wants to venture into a new business that will enable her to continue the taste that her father had in business as a sign of respect to her ageing father. Apart from this, my client envisions that the business she ventures in will enable her to move a level higher in financial status. For these reasons, this business, therefore, has a wide scope of needs it needs to satisfy.

Client consideration

My client proposes to engage in a fast food franchising business as it fits her need of wanting a business in the catering industry as well as she thinks that the business will enable her to move forward in the financial aspect. My client also views the business a perfect fit as her cousin who has been running the restaurant business is skilled in fast foods production as her education helped her acquire the relevant skills. As a financial consultant, considering all factors of the economy and through research on comprehensive investment options, I would advise that my client continues with this plan. Fast food restaurant has risen in stock along and the financial gains obtained from this business are high. For this reason, my client will obtain maximum benefits especially by employing a franchising model of business. Although there are numerous franchising brands available, the choice of the brand to the franchise from is a critical aspect to consider. With major brands being Kentucky chicken, Mc Donald’s and Chester house company, it is important to balance the between the benefits that are ripped from associating with a certain brand as well as the amount in royalties’ fees paid to the franchiser in order to identify the estimate benefits in terms of profits.

The growth as the sustainability of a business according to prevailing economic conditions is mainly determined by the level of diverse the business becomes as well as how the business applies innovative strategies that enable it to move forward. For this reason, according to my analysis, Kentucky fried chicken would serve as a good fit for my client in this aspect. My client is comfortable investing in this business venture and is excited to move this idea forward and make it a success.

Review of Kentucky Fried Chicken

Kentucky fried chicken has been a brand under the bigger Yum brand since 1997. Currently, Kentucky fried chicken is one of the biggest brands in the fast food industry in the world. The company has employed a franchising model with as many as fifteen thousand franchises in over one hundred countries in the world (Hoffman, Munemo & Watson, 2016). In this respect, we can infer that there are over five thousand franchises across the united states of America. The company is known for primarily its trademark chicken with different recipes for these delicacies available in their stores (Coffey, Raubenheimer, Rangan, Allman-Farinelli, Simpson & O'Leary, 2019). Various recipes of the trademark chicken signature include; crispy chicken, chicken sandwiches, chicken pot pies as well as crispy chicken stripes. The company is focused on keeping up with the changing customer needs by making serial changes by diversifying its menu by making additions to the menu (Burns, 2014). For example, the company has come up with a special breakfast menu that caters for customers who are more conscious about healthy living.

Undertaking the market analysis of Kentucky fried chicken, the company enjoys the lion share of the market of the fast food industry with a rough estimate of forty-five per cent share (Rui, Huang, Lu, Wang & Wang, 2016). The company has employed a strategy of setting up different prices for their products for different regions. By doing this the company’s intent is to align itself with the financial capabilities of their customers. This is because different regions have different economic powers as well as customers having different purchasing powers. This has helped the company obtain a big share of their target market. The company has employed slogans like ‘finger licking good’ that has served as a trademark for advertising their products. The company has also employed a television advertising strategy that runs all year round (Hussin, Yusoff & Yusof, 2015). This serves well in sensitizing the masses of the availability of their products in the market.

Kentucky fried chicken financial ratios

The table below shows the income statement of Kentucky fried chicken in the last three years of business.

The above financial records of Kentucky fried chicken analyzed depict a stable company with a relatively stable financial income. This is a clear indication that my client will associate herself with a company that will facilitate her growth and fulfil her financial needs.

Below, we will analyze the balance of books of Kentucky fried chicken in a bid to identify the position of the company.

Stock analysis of Kentucky fried chicken

Stock analysis is part of the SWOT analysis that tries to identify the strength and weaknesses of a business enterprise. Kentucky fried chicken enjoys good financial fundamentals, a well-established brand with a good domestic presence (Gerhardt, Hazen & Joiner, 2016). The company also boast a strong and growing presence of customer loyalty that has formed the basis of this business. Good and experienced management has helped the company establish a management system that has enabled the growth and sustainability of the business. The discussed strengths of this franchise I believe will help my client propel her business idea into success (Salar & Salar, 2014). The opportunity provided by the company circles around the growing wealth of the company globally promotes improving conditions of business. The franchise also provides a clear and well-established infrastructure of effective doing of business as well as proving training of the workforce that is determined in providing quality service as well as the production of quality products. The table below shows the stock analysis of Kentucky fried chicken that makes it an attractive destination of investment for my client. The two tables indicate the share details.

Below is a table showing relevant data in the stocks of Kentucky fried chicken

Appendices

Annotated bibliography

Hoffman, R. C., Munemo, J., & Watson, S. (2016). International franchise expansion: the role of institutions and transaction costs. Journal of International Management, 22(2), 101-114.

This research paper is written with its wetter determined to explore issues of franchising models employed by different brands. Watsons writes this research paper with the aim of key ideas addresses being; the coast of regulation and its impact on expansion methods franchise firms adapt to economic volatility of their host country and media infrastructure and how it is essential for branded business. Watson primarily assess how having the knowledge in of a country’s climate enables manager weigh the cost of business entry. She also goes on to explain that it is important to understand the theoretical framework of doing business. she develops the theory for her paper by explaining the institutional and transactional cost effects on franchise expansion. Under this category, she assesses economic instability, government quality, corporate tax rates as well as infrastructural institutions.

J. Burns, D. (2014). Succeeding at new businesses: a matrix to measure flexibility. Journal of Business Strategy, 35(5), 23-30.

Burns discusses the various forms through which business entities fulfil customer needs. He shows the power of diversification of products satisfy customer needs. Burns writes his research with a purpose to address issues of developing alternative models, opportunity assessment methods and to assess primary issues in the strategic business environment. He also develops his research paper-based o changes of business environment and how it creates an increasing need for strategic planning. He assesses the shortcoming of applying portfolio model in todays business environment. He continues to provide a basis for developing an opportunity assessment method. He explains that with todays ever changing customer needs, identification and exploitayion of new products serves as an opportunity in the market.

Rui, Y., Huang, H., Lu, M., Wang, B., & Wang, J. (2016). A Comparative Analysis of the Distributions of KFC and McDonald’s Outlets in China. ISPRS International Journal of Geo-Information, 5(3), 27

Rui and friends venture into the marketing analysis of Kentucky fried chicken with relation to its competitors. Rui assess the competition and analysis of competitive advantages Kentucky chicken has with its competitors. The study is primarily done with its base focusing on growth and development of the company in china. Rui notes that Kentucky fried chicken has risen in its stock with over four thousand outlets established across china. With this in mind, Rui assess the growth and factors that has led to its strong market position with relation to its biggest competitor, Mc Donald’s. Rui through his findings indicate that Kentucky fried chicken has had a positive correlational statistic than Mc Donald’s in major cities across china. He indicates that Kentucky fried chicken has experience better growth rate that its competitor by choosing its target population better. it focuses on forth and fifth tiers of cities.

Coffey, J., Raubenheimer, D., Rangan, A., Allman-Farinelli, M., Simpson, S. J., & O'Leary, F. (2019). MasterChef recipes and takeaway foods: How do they compare? International Journal of Gastronomy and Food Science, 100148.

Coffey and friends delve deep into analyzing different recipes and how they are tailored to meet customer needs. Coffey assesses the importance Kentucky fried chicken of having a signature recipe for its brand. Coffey indicates that the traditional fried chicken recipe has enabled strengthen the company’s brand with its popularity spinning across the world. He also assesses the intelligence of the company’s management in developing new recipes that have helped diversify their menu as well as keeping p with new customer needs. He indicates that new recipes help in rejuvenating menus which is important for customers as they can try out new food made available to them in the respective menus. Kentucky fried chicken has added bread to its core signature recipes and several bread recipes have been developed as a result.

Hussin, R., Yusoff, S. H., & Yusof, S. N. M. (2015). Islamic representation in television advertising and its impact on modern Malay Muslim women. Procedia-Social and Behavioral Sciences, 211, 890-895.

Hussin writes his research paper trying to explain the effect of television advertising. He covers across issues including the effect of advertising on religion ad people from different walks of life. Hussin explores the role of advertising and its impact on business development. With the context of research based on Malaysia. Hussin assesses the effect of advertisement on different social institutions. He indicates that advertisement should indicate and express cultural values by applying religious elements that do not affect customer behavior. He continues to assess the effect that television advertising has towards Muslim women and how it affects their purchasing behavior. Findings from his research, indicate the impact of branding products on religion grounds and the purchasing decisions that emanate from it. Hussni assesses the way television advertising affects customers directly by providing customers with knowledge, information that is usually likely to affect the behavior and touch the hearts of people.

References

Coffey, J., Raubenheimer, D., Rangan, A., Allman-Farinelli, M., Simpson, S. J., & O'Leary, F. (2019). MasterChef recipes and takeaway foods: How do they compare? International Journal of Gastronomy and Food Science, 100148.

Gerhardt, S., Hazen, S., & Joiner, S. (2016). FAST FOOD FRANCHISING: HOW MUCH CAN YOU EXPECT TO MAKE-BOTTOM LINE? ASBBS Proceedings, 23(1), 198.

Hoffman, R. C., Munemo, J., & Watson, S. (2016). International franchise expansion: the role of institutions and transaction costs. Journal of International Management, 22(2), 101-114.

Hussain, S. H. A. R. A. F. A. T. (2014). The impact of sensory branding (five senses) on the consumer: A case study on KFC (Kentucky Fried Chicken). International Journal of Research in Business Management, 2(5), 2347-4572.

Hussin, R., Yusoff, S. H., & Yusof, S. N. M. (2015). Islamic representation in television advertising and its impact on modern Malay Muslim women. Procedia-Social and Behavioral Sciences, 211, 890-895.

J. Burns, D. (2014). Succeeding at new businesses: a matrix to measure flexibility. Journal of Business Strategy, 35(5), 23-30

Rui, Y., Huang, H., Lu, M., Wang, B., & Wang, J. (2016). A Comparative Analysis of the Distributions of KFC and McDonald’s Outlets in China. ISPRS International Journal of Geo-Information, 5(3), 27.

Salar, M., & Salar, O. (2014). Determining the pros and cons of franchising by using swot analysis. Procedia-Social and Behavioral Sciences, 122, 515-519.

Sang, H. X., Takakura, S., & Zhao, R. (2016). Demand Analysis and Optimal Production Quantities for a Short-Expiration-Date Item at a Retail Store. In Proceedings of the 22nd International Conference on Industrial Engineering and Engineering Management 2015 (pp. 703-713). Atlantis Press, Paris.