I think it's a combination of several things.
1) Your character's Strength rating
2) Your offensive striking/kicking rating
3) The opponents defensive rating in the same area
4) Your stamina and the opponents stamina at the moment.
5) Positioning of the characters when the strike hits.
I've noticed that knockouts happen two or three times as often when you catch someone in the middle of an attack. If it be a low kick or hook. I actually knocked Crocop out in the middle of a superman punch. I really wish I had recorded that too, it was so awesome the way it happened.
I was throwing weak left and right punches like mad, just trying to injure him as much as I could. Out of nowhere he goes for a superman punch and at the same moment I was going for an overhand right (playing a created character with boxing) Mirko just ran straight into it and I got the KO.