... 1. Market Size Pizza Hut's smaller format store is about half the size and cost of its iconic red-roofed buildings. Chain began developing smaller stores three years ago. It so far has opened more than 300 and sees potential for 2,000 more in next five to 10 years. Pizza Hut is ordering up smaller restaurants. The iconic red-roofed chain, which saw its heyday in the 1980s, says downsizing and remodelling will allow it to open more restaurants and turn a profit faster for franchisees. Pizza Hut began developing this new model, dubbed Delco Lite, about three years ago when it realized delivery--which is the way most people prefer to receive their pizza--wasn't representing as much of the business as it once did. The new model opens up another 2,000 potential sites for Pizza Hut over the next five to 10 years. Pizza Hut, which is part of Yum Brands Inc. YUM, +0.60% has about 8,400 locations, most of which are the traditional, dine-in restaurants. Delco Lite trades the red roofs and dining rooms for a more contemporary design that fits in to tighter places and focuses more on delivery and carry-out. Pizza Hut has opened more than 300, and is mostly building them, in favor of the larger, stand-alone ones. The new model is about half the size of Pizza Hut's traditional restaurants and costs about half as much for franchisees to build, opening up more potential sites in the U.S. 2. Market Trends (Past 3-5yrs) Pizza Hut, Domino’s Pizza and Papa John’s once again...
Words: 3863 - Pages: 16
...FASTFOOD / RESTAURANT INDUSTRY Introduction Indian QSR (quick service restaurants) Industry is growing very rapidly. It is a reflection of the change in the lifestyle, food habits and consumption pattern of the population. The incidence of Dining out, ordering from home as well as takeaways is rising creating an opportunity to cater to a wide mass of population. What was the domain of upper class, singles or forced bachelors, has percolated to all echelons of society. The incidence and value differ substantially, but penetration of such consumption habits is wide spread and is on the increase. Although largely an urban phenomenon, the pattern is also emerging in rural areas with better road connectivity, increased vehicle ownership and rise in income levels. In a country with more than a billion people, opportunities in India are abound. This has led to a rapid growth of the QSR industry. However, simultaneously, it has also created a canvass that has many failures and carcass. Several outlets have been closed, a large number are struggling, still a large number are just about surviving and lot many of them have not been able to find their feet. There are a lot who are successful, but, more importantly, there is almost a complete absence of national chains. This indicates to the fact that just having a lot of opportunities is not enough. These opportunities need to be harnessed and converted into profitable enterprises. This paper is an attempt to understand the industry, its...
Words: 6779 - Pages: 28
...Nicholas Duerson Whitney Snyder Business 112 February 24, 2014 30 Years of Papa’s Pizza It all started 30 years ago, when John “Papa” Schnatter crafted the idea to knock out a broom closet inside of his father’s tavern located in Jeffersonville, Indiana (Papa Johns International 1). After receiving a business degree from Ball State University and turning his father’s failing tavern around with an idea of pizza, Mr. Schnatter would wind up selling his beloved ’71 Camero for a $1600.00 investment towards pizza equipment. (Papa Johns International 1) It was that entrepreneurial move which would eventually solidify an excellent business model to launch what is now known as “Papa John’s” and currently the third largest pizza franchise. Taking a look at how Mr. Schnatter rose his company to that achievement; you will see that popular partnerships, international expansion, and a first-class outlook on “quality over quantity” pays out in the long run! Papa John’s was conceived on October 2, 1984, when Mr. Schnatter knocked out a broom closet inside of his father’s tavern. (Papa Johns International 1) The business was nearly bankrupt, but Mr. Schnatter took initiative and planned to sell $5 dollar pizzas and 50 beers up front in his father’s business. It was that entrepreneurial move to start his own business that would keep that drive going. Only after a short and successful year, Mr. Schnatter would open his first Papa John’s store. Papa John’s started franchising their...
Words: 1703 - Pages: 7
...The rising number of restaurants does not present a significant opportunity for imported food products given relatively high tariffs and import restrictions on key products, but restaurants are introducing new cuisines and changing consumer tastes and preferences, a trend that could result in long-term opportunities for exporters. This report provides an estimated census of foreign and domestic casual and quick service restaurant brands operating in India. Things Have Changed Over the Past 20 Years It has been nearly 20 years since the first foreign quick service and casual dining restaurant chains and franchises opened in India. The initial opening was met with a mixture of anti-globalization opposition and consumer curiosity regarding how the restaurants would adapt their menus and operations to the Indian market where many consumers are vegetarians or do not eat beef. At the time,...
Words: 3740 - Pages: 15
...YUM! BRANDS, PIZZA HUT, AND KFC Teaching Note Overview This case describes the evolution of the global fast-food industry and Yum! Brands, Inc.’s development of the Pizza Hut and KFC franchises worldwide. It focuses on international business risk assessment and develops a model of country evaluation that students can use to analyze international business and market entry decisions in a variety of industries, regions, and countries. Teaching Objectives 1. Develop skills in industry analysis 2. Develop skills in global industry analysis. 3. Develop knowledge of franchising and the costs and benefits of expanding globally using franchises versus company-owned stores. 4. Develop skills in international business risk analysis. 5. Develop skills in country portfolio evaluation and assessment. Suggestions for Using the Case This case has been used successfully in undergraduate, MBA, and Executive MBA classes in strategic management, marketing management, and international business. It can be used in undergraduate courses to develop student skills in industry structure analysis, strategy analysis, and international business risk assessment. The teaching note is designed to give students practice in each of these three areas. Instructors may choose to use the case to discuss only one of these three areas during a single class period or to cover all three areas over two class periods. The case can be also...
Words: 6023 - Pages: 25
...products; and the ease, or not, of entering and exiting the market. the common market structers are Monopoly: are Companies which are goverment owned or when a single company or group owns all or most of all the market for a given product or service.entry for other players are not allowed or have very high barriers. example in the us for microsoft is a monoply becuase it owns all or most of the software market and has a high barrier to gain entry into the market. Oligopoly:the Uk and other countries the people buy their food from different franchises for example mcdonalds,kfc,pizza hut and nandos etc. in this structure the buyers are many, sellers are few, and competition is high. Monopolistic Competition:for an example in your community you may have pizza hut on one side of the street and nandos on the other side of the street they might be producing the same kind of recipes on their pizza but nandos pizza is more expensive becouase of the branding.many buyers, many sellers almost same product but different branding and high level of competition ....
Words: 2022 - Pages: 9
...Chipotle Mexican Grill, Inc. in Beijing, China Goal The goal of the well-known fast food restaurant chain, Chipotle Mexican Grill, Inc., is to introduce the franchise to a brand new market, Beijing, China. The market is totally different for many perspectives, such as Asian culture and different customer base. It will be very important and challenge to find effective ways to attract dinners. Hence, Chipotle Mexican Grill, Inc. has to build and promote a new definition for fast food, which is healthy. People in Beijing, China become more and more pay attention to the food they eat and whether it is safe and healthy. The developing process will definitely not be easy, so the corporation needs to seek ways to overcome all the possible barriers and problems it may happen in the future. The ultimate goal is to survive and to be successful in the new market, and slowly and stably expand franchises in Beijing, China, and growing 15 percent of the market share within one year. Introduction Chipotle Mexican Grill, Inc. is a fast food restaurant chain that was founded by Steve Ells in 1993. Ells used his father’s loan, $85,000, to open the first Chipotle restaurant in Denver, Colorado. It became a huge success by selling over 1,000 burritos a day. The second store opened two years later, also in Colorado. The father of Ells invested $1.5 million, and then Ells used the funds to expand Chipotle by creating a board of director and business plan. In 1998, McDonald’s made a small...
Words: 2526 - Pages: 11
...India Introduction Fast Food Industry Overview India is blessed with one of the fastest growing fast food market of the world. It is estimated to be nearly worth of 41.3 billion USD and it is a healthy growing industry at a compound annual growth rate (CAGR) of 11%. The Organized Food Service Industry is worth $13.79 bn (approx. 33% of total Indian Food Service Industry), which is growing towards at 17%. (Industry report 2014) By year 2017 this bench marks will reach by other category, like as follows: (Ref) Category | Current Market Share | Compound Annual Growth Rate (CAGR) | Expected Market Share by 2017 | Organized | 30% | 12-14% | 45% | Unorganized | 70% | 8-10% | 55% | In present situation Indian GDP is around 6 % for last couple of years. As a result there is a significant numbers of monthly disposable Income are growing gradually. Now a day people of India spend on eating outside almost Rs.33, 000 Crore according to the size of the market. Some recent research study is expected this growth will reach US$68 billion by 2018. (Ref) On the other side delivery segment is an integral part of the Indian Food Service segment. The size of Organized Indian QSR delivery market is US$0.62 billion, growing at a healthy CAGR of 20% and is expected to reach US$1.1 billion by 2017-18. (Ref) In major cities comprise of large workplace clusters and high density residential areas people and young Indian consumers are highly price sensitive, through online they compare the...
Words: 7527 - Pages: 31
...11.1 Logistics In both vertical and horizontal marketing systems, systematised information contributes to the efficient flow of goods and services from the point-of-origin to the point-of-consumption. This process of regulation begins with customer service and extends to the procurement, handling, and processing of resources aimed at delivering customer satisfaction. All ways in which resources are procured, handled, and processed fall within a set of activities known as logistics. Logistics is a process of systematising information to facilitate the efficient and cost-effective flows of goods and services to produce customer satisfaction. Each member in the supply chain must be involved in logistics activities. Logistics flows may begin with the supplier/manufacturer relationship, but efficient logistics activities are needed throughout the marketing channel. Relationship marketing epitomises the interac-tive process necessary to achieve customer satisfaction by maintaining a participative exchange of information with all of a firm’s channel partners. In addition, develop-ments in electronic retailing are now aimed at making this whole process more effective and efficient. The Council of Logistics Management defines logistics management as: ‘The process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information from point-of-origin to point-of-consumption for...
Words: 3844 - Pages: 16
...and the minuscule 1% growth in the US restaurant industry per year has resulted in KFC¡¦s focus on expansion of their international markets. 2.0 Secondary Problems 2.1 Short Term - New product introductions are slow. - Market research inefficiency. Eg. Germans were not accustomed to buying takeout or ordering over the counter. McDonalds performed better in this aspect. - Crispy strips and chicken sandwiches cannibalized the fried chicken sales. 2.2 Long Term - Differences between the PepsiCo and KFC corporate strategy and culture. - PepsiCo/KFC poor relationship with franchisees. - Increased competition from direct and indirect competitors. - Reduction in market share in the US market. - Risks involved in international operations: long distances made it difficult to control quality and service, increased transportation and other resource costs, and time, culture and language differences increased communication and operational problems. - Fast food sales grew at a slower rate (5%) in comparison to other sectors in the restaurant industry. - Shortage in staff. - Higher costs and poor availability of prime real estate. - Increased labor costs. Intense competition made it difficult to increase prices to cover these increases in cost. - Other chicken chain competitors differentiate their products. For example Boston Market introduces new restaurant chain that emphasized roasted chicken rather than fried chicken. 3.0 Analysis...
Words: 3507 - Pages: 15
...Problem Statement 5 3.0 Literature Review 5 3.1 The Concept of Internationalization 5 3.12 The Entry Mode 5 3.13 The Factors That Influence Entry Mode Choice 6 4.0 Findings 7 4.1 Mode of entry 7 4.12 Autonomy in Operations 8 4.13 Conditions of Franchising. 8 4.14 Restaurant Ownership 8 4.2 Location 9 4.21 Mission as the Guiding Principle. 9 4.22 Market share 10 4.23 Pricing Strategy 10 4.3 Functional Strategies 11 4.31 Marketing Problems 11 4.32 HR Problems 11 4.33 Training 11 4.34 Adapting to Pakistani culture 12 4.35 Promotional strategies 12 4.4 Environmental Scanning 12 4.41PEST Analysis 12 5.0 Conclusion and Recommendations 14 6.0 References 16 Abstract In this age of internationalization, people are able to share any kinds of food from different parts of the world, thanks to the global business of food and beverage companies. As the leading driver of global growth in consumer food service, the fast food industry is reaching new consumers continually through improved menus, dining experience upgrades and rapid worldwide expansion. As representatives of this industry and experienced multinationals, the American fast food restaurant groups like McDonald’s. The report discusses how the strategy of globalization affects large multi nationals like McDonald’s. It later elaborates upon...
Words: 4411 - Pages: 18
...Thanks to Jim Skinner’s no-nonsense leadership, the global restaurant juggernaut is doing better than ever. Luckily for McDonald’s, Skinner is an operations whiz who has turned the restaurant giant into a well-oiled machine, insisting on planning and accountability throughout the company. Skinner isn’t a micromanager. He’s simply intensely focused on the efficiency and performance of McDonald’s MCD 0.68% 33,000 restaurants worldwide and the enormous, complex infrastructure that supports them, a managerial trait that has resulted in nothing short of a Golden Age for the Golden Arches. Since Skinner, 66, became CEO in 2004, the company has delivered an annual growth rate of 5%, with revenue topping $24 billion last year. Same-store sales, a closely watched industry metric, have climbed each of the seven years of his tenure, and in that time the stock has returned more than 250% — even after the early-August equities selloff — vs. 16% for the S&P 500 (SPX). [Click here to read our 2005 story about how McDonald’s got CEO succession right.] If you haven’t been in a McDonald’s lately, you might assume that the company simply has been the beneficiary of the struggling economy in the U.S. and elsewhere in the world, and that cost-conscious consumers are flocking to fast-food eateries instead of sit-down restaurants. But to post the kind of impressive numbers McDonald’s has — and to weather the current turmoil — Skinner has had to find ways to attract new diners while retaining the...
Words: 2368 - Pages: 10
...Globalization and me: what impacts could it be? According to Word Power Dictionary, globalization comes from word globalize which means develop (business, society, etc.) so as to make international influence or action possible. Other than that, globalization can be define as the increasing connectivity and interdependence of the world’s economies, societies, and cultures because of advances in communications, technology, trade, international investment movement of currency, and migration. In my opinion, technology is the big roles or function that brings the globalization. Same as Kenichi Ohmea words, globalization as a borderless world seeks to change the world into a single unit only. This process is easier with the advances in communication technology. There are numerous ways in which globalization has impacted the world. The globalization has impacted on education, economic, culture, language, food and others. Globalization also means the phenomenon that makes the world seem smaller in terms of human relations due to the speed of development of information technology. Human easily get information and difficult to filter the negative elements that permeate the hearts and minds. Some terms such as “borderless worlds” and “open skies” make such as trade, the development of political and economic power towards the development of civilization. Education is the process of receiving and giving systematic instruction, especially at school and university. There are positive and...
Words: 2004 - Pages: 9
...responsibility 9 Challenges for McDonald 10 Conclusion 11 Reference 12 The Impact of Globalisation on Multinational Companies Introduction Globalization is a term used to describe the trend of growth; trade practices between undertakings perform beyond the geographic and economic boundaries, so that they exist (Waters, 2001 Brinkman, Brinkman, 2002). Globalization is used to describe the nature of the dominant international trade and business, as they are no longer limited to serving specific groups of consumers in the country (Levy, Hammond and Gross, 2003), the globalization of the increase is due to the expansion of economic and capitalist drive to achieve growth, and taking existing resources , improve the degree of efficiency of the operation. Thus, globalization is also very closely related to the outsourcing companies seeking to existing units, the production moved to another country, economically sensitive wage labour. A typical example of this is the first McDonald's in 1955 as a company in California, opened in 2013, is now in 195 countries and has more than 30,000 restaurants. This process, because it is difficult to control, some multinational companies responsible for the operation of globalization, it is obvious that there are a variety tasking do it. On the other hand, there are also negative effects of globalization has overshadowed a number of advantages. An example of this is the positive impact on economic development and the more general ideas and experiences...
Words: 3182 - Pages: 13
...KFC & FAST FOOD INDUSTRY Strategic Management PRESENTED BY SHAHRYAR HASSAN 4517 KHALID YOUSUF 3724 SAQIB RAHIM 5286 TOUSEEF ALI 7363 RAFIQUE AHMED 5445 EXECUTIVE SUMMARY The case is about KFC, which is the third largest fast food chain with over 12,200 outlets in 99 countries. The outlets comprise of franchises, company owned and affiliated. One of the issues faced by KFC was that it offered only chicken related products and they were facing stiff competition globally where they suffer great losses but they continued there business even where they were facing losses to maintain there presence in the region due to which its customers were related to a certain segment. This issue can be resolved by diversifying its menu. Other issues like customer’s taste and preferences changes could be resolved by introducing new menu items that cater to their preference and innovating the product line. Complaints of bad customer service can be reduced by training the employees for proper customer dealing. Industry’s Dominant Characteristics Market Size and Projected Growth The total sales for the top US Fast Food industry were $422 billions in the year 2003. The top 7 chicken chains sales were 9861 million. Growth was around 3.3% in 2003. Scope of Competitive Rivalry Companies having presence globally by offering franchises and company owned outlets but now companies prefer to have joint...
Words: 1546 - Pages: 7
