...Yum Brands, Inc. is a United States-based Fortune 500 corporation. This world largest fast food company owns more than 39,000 restaurants around the world in over 125 countries. Well-known brands including Taco Bell, Kentucky Fried Chicken, Pizza Hut, and WinG Street all belong to the Yum Brands, Inc. Yum Brands Inc.’s total sales for 2011 was more than $12 billion, and they are definitely one of the leaders in the fast food industry. Yum Brands, Inc. was actually the Tricon Global Restaurants, Inc., which was renamed in 2002. Tricon Global Restaurants, Inc. was founded in 1997 as an independent company from the former fast food division of PepsiCo. PepsiCo purchased Taco Bell and Pizza Hut in 1970s and Kentucky Fried Chicken in 1980s. After becoming an independent company from PepsiCo, Tricon Global Restaurants, Inc. continues to grow and has acquired Long John Silver’s and A&W All American Food Restaurants. Yum Brands, Inc. is not only a strong player in the domestic market; they are also very successful in other foreign markets, such as China and Canada. With more than 1.4 million associates all over the world, Yum Brands, Inc. is confident with their position in the global market. Although the global fast food industry is very competitive, Yum Brands, Inc. is holding an advantage position. China is a good example to look at Yum Brands, Inc.’s successful expansion in the global market. Although their competitor, Mc. Donald’s also performs very strong in the Chinese...
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...Environmental Analysis Yum Brands University of Phoenix Strategic Planning and Implementation STR / 581 March 17, 2014 Both external and internal environmental analyses are very important components for any organization’s strategy plan. A review of both of these environments enables the company to identify which ways to compete in the industry they operate. With this planning an organization may also identify what the companies’ weakness and strengths are. Both the internal and external environments are just as importantly equal. In today’s business the external environment is receiving an increasing amount of attention because of the recession being now a global concern. Yum Brands has suffered some changes by the external environments. Analyzing some important factors like external operating environments, along with remote, and industry are some topics covered. Identifying strengths is important and finding the weaknesses of Yum Brands of which may impact their ability to manage these factors will be discussed. Yum Brands is one of the top 10 fast food companies in the U.S. A clear leader in the quick-serve industry, Yum Brands operates about 18,000 restaurants domestically and almost 15,000 locations internationally. Yum Brands company sales accounted for $11million of annual sales in the fast food industry. This does not include franchise sales. Franchise fee accounted for $1.8 million which is approximately 4.5% of franchise sales. Yum Brands has obtained...
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...Strategy Report for Yum! Brands Deirdre Chew Karen Bonner Mitchell Amsler April 14, 2010 Yum! Brands Table of Contents Executive Summary ...................................................................................................... 3 Company Overview ....................................................................................................... 4 History ......................................................................................................................... 4 Business Model ........................................................................................................... 5 Competitive Analysis .................................................................................................... 6 Supplier Power ............................................................................................................ 9 Buyer Power ................................................................................................................ 9 Entry and Exit ............................................................................................................ 10 Substitutes and Complements ................................................................................... 11 SWOT ........................................................................................................................... 12 Strengths .............................................................................................................
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...Executive Summary Industry and macro-environmental analyses of the international restaurant industry provides an overview of the industry and reveals the conditions that impact competitiveness and profitability of the industry’s players. The industry is split in two sectors: full-service restaurants (FSR) and limited-service restaurants (LSR). FSRs typically have a wait-staff; LSRs do not have wait-staff. The top five countries, in terms of total number of foodservice outlets, are: China, India, Brazil, Japan, and the US. The industry is of low concentration. Combined, the top industry players make up less than 3% of total global industry revenues. In terms of size, 2013 global sales were $2.6T, up 4.9%. The 2013 global labor force was 62.4M employees, up 2.4%. In accordance with Porter’s Five Forces framework, the forces that shape competition in the restaurant industry have a moderate to high impact on competitiveness. There is a moderate threat of new entrants and a high threat of substitutes. Buyers have a high degree of bargaining power and suppliers have a moderate degree of bargaining power. The restaurant industry is highly competitive and experiences intense rivalry. In terms of macro-environmental factors, emerging markets around the world over are having an impact on how restaurants execute strategy both domestically and abroad. The growth of the middle class in emerging markets, such as China and India, presents a new demographic and an opportunity...
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...Jenny Ku Management 340 Professor Gervais April 24, 2012 Yum! China Case Analysis Yum! Brands China, a division of the Yum Brands Company, is a fast food restaurant company that owns several restaurant chains such as KFC, Taco Bell, Pizza Hut and Long John Silvers overseas. Yum! China first opened its KFC in Beijing in 1987 and over the years has successfully expanded its operations and other chain restaurants throughout Mainland China, becoming one the largest fast food companies in that region. Seeing the success of Yum! overseas has spawned other western chains to open up in China. With growing competition from Subway, Dairy Queen, Starbucks, McDonalds and Burger King, Yum! China has been able to successfully manage the pressure and increase their presence in China. 1. What were the special challenges in business environment that Yum! had to overcome it he 1990’s to develop its business in China? When Yum! started its operations in the early 1990’s the company has barriers to overcome in launching their operations in China. Yum! had to get through the government restrictions, handle their missteps in advertising, invest in a supply chain, expand company growth, organize a team, and contend with ownership. Government ‐ When Yum opened restaurants and wanted to expand faster, the company had to follow regulations imposed by the government. At that time, government was more interested in bringing in foreign companies that could bring technology into China...
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...Financial Management Group Assignment Team 9 - Bayswater Andrés Lema Eric Shoubridge Farhana Aslam Felipe Hessel Rosa Montes Todd Hanlon 5th December 2012 1: The Financial, Business and Economic Environment for McDonald’s Introduction: The Fast Food Industry and McDonald’s The modern system of fast food franchising is believed to have started in the mid 1930’s when Howard Johnson franchised his second location to a friend as a means to expand operations during the Great Depression. In addition, the drive-thru concept brought explosive growth through delivering food-on-the go. “Fast Food” was added to the Merriam-Webster dictionary in 1951, and U.S. fast food companies are now franchised in over 100 countries. In the U.S. alone there are over 200,000 restaurant locations. Revenue has grown from $6 billion in 1970 to $160 billion in 2011, an 8.6% annualized rate (Sena, 2012). Fast food franchises focus on delivering high volume, low cost, and high speed products. Frequently, food is preheated or precooked and served to-go, though many locations also offer seating for onsite consumption. With all stands, kiosks, or sit-down locations, food is standardized and shipped from central distribution points. Consumers enjoy being able to get a familiar meal in each location, and menus and marketing are the same across all stores (Sena, 2012). McDonald’s (MCD) was founded in California in 1940 under the name “McDonald’s Bar-B-Q”. The original founders, Dick and Mac McDonald...
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...Yum! Brands, Inc. Yum! Brands, Inc., (NYSE: YUM), has managed to gain the large share of the world market of fast food restaurants. I believe this is because they have cornered several types of cuisines. They have the Southern style the Italian, and the Tex-Mex. On a smaller scale they have some of the hamburger market with A&W and the same amount in seafood with Long John Silvers. At the present moment the company unites several very powerful and well-known brands such as KFC, Pizza Hut and Taco Bell. KFC is mainly known for its fried chicken. Also KFC has a long history and is traditionally considered to be one of the most popular fast food restaurants competing with McDonalds one of YUM brands largest competitors. Yum! Brands also owns Pizza Hut which is a restaurant chain and international franchise based in Addison, Texas. They specialize in Americanized pizza along with side dishes including pasta buffalo wings, bread sticks, and garlic bread. At the present moment, Pizza Hut is the world’s largest pizza restaurant chain. Also, Yum! Brands has Taco Bell which is mainly based on Tex-Mex cuisine. Pizza Hut was established in 1958 in Wichita, Kansas. Within a little more than a decade, the company became the largest pizza chain in the world in terms of both sales and number of restaurants. The company had an initial public offering in 1972 on the NYSE. It continued to fuel its growth by purchasing smaller restaurants and supply and distribution companies. Shortly...
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...the focus of this plan will be the El Salvador franchise. The strategic management process is vital and a well laid out plan is necessary. Consequently, by evaluating the background of KFC, the outcome should lead to a clear mission and vision statement outlining the purpose and goals of the company. Also, the mission and vision will keep all shareholders informed of the objectives that should be met by KFC. “Defining the company mission is one of the most often slighted tasks in strategic management” (Pearce II & Robinson Jr., 2009, p. 42). A mission lays out the organization’s goals and basically specifies the purpose of the organization. Decisions and strategies can be established after environmental scanning is done along with a Situational Analysis (SWOT). The strategic process also involves frequently assessing the industry structure and choosing strategic plan options that help expand global operations. The two chosen strategic options that will be discussed will be product differentiation and cost leadership. This plan should give clarity on how the options and recommendations fit with both the competitive situation and the organizational situation. Background Based in Louisville, Kentucky, Kentucky Fried Chicken (KFC) corporation is touted as the “world’s most popular chicken franchise” (KFC, 2011). KFC serves over 12 million customers in 109 territories and countries throughout the world (KFC, 2011). Famous for its Original Recipe Fried Chicken, there are “more than...
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...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...
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...REPORT ON THE FINANCIAL EVALUATION: MCDONALD'S CORPORATION AND YUM! BRANDS REPORT ON THE FINANCIAL EVALUATION: McDONALD'S CORPORATION AND YUM! BRANDS TAMARA AYRAPETOVA The aim of this paper is to perform financial analysis by using financial ratios and to comment, evaluate, and understand the origins of the results by using the comparison of two companies chosen as a case study. The McDonald's Corporation is the largest fast food restaurant in the world. McDonald's Corporation statistics base it in over 119 countries and it serves more than 68 million customers daily. The company's revenues are coming not only from its primary products like hamburgers, cheeseburgers, etc., but also from rent, royalties, and fees paid by the franchisees. This report will look at the financial statements of the McDonald's Corporation over the past 3 years starting from 2010 through 2012. The author of the paper will apply financial ratios to analyze company's position and to identify patterns and trends. She will then compare the results of the analysis with one of the biggest competitors of McDonald's - Yum! Brands Inc. and the industrial averages. Yum! Brands Inc. is a US based corporation. It includes famous brands like KFC and Pizza Hut in their chain. Currently Yum! Brands are the largest competitors McDonald's has in the fast-food industry. To compare the two companies financial statements will be taken from Yahoo Finance (2013). Unauthenticated Download Date | 12/14/14 11:28 PM ...
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...Analysis of an International Organization: Yum! Brands Inc. Kimberly A. Waters BUS310 Professor Dianna Anderson May 9, 2014 With over 40,000 locations in more than 125 countries that span across six continents, Yum! Brands Inc. is the world’s largest restaurant operator in terms of the number of locations it owns. Yum! Brands, based in Louisville, Kentucky is ranked #201 on the FORTUNE 500 list with revenues of more than $13 billion. It was named among 100 Best Corporate Citizens by Corporate Responsibility Magazine in 2013. The restaurant brands - KFC, Pizza Hut and Taco Bell are leaders of the chicken, pizza and Mexican-style food categories globally (Yum! Brands Inc., 2014). With this kind of credit and stature this company has, who would think Yum has any challenges within their company? Yum! has their fair share of common human resource challenges. They also have some uncommon challenges. These challenges include but probably are not limited to; low wages for employees, food safety issues, high turn-over, wage/hour violations and child labor rules. Challenges such as these have cost Yum! Brands thousands on top of thousands in fines, as well as bad media. Low wages is one of the biggest challenges in the fast food industry as a whole. Yum! Brands seems to have it worse than most. Reports show that a substantial amount of Yum’s domestic employees are paid very little and causes them to have to seek government or community assistance, just to feed their families...
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...classic BMT, the 7 under 6 menu which featuring seven submarine sandwiches with 6 grams of fat or less, fresh veggies which already boasts lettuce, tomato, red onion and green peppers (Subway, 2012). Subway also brings in a line of new crab-controlled wraps in 2004 and the product itself has only 5grams Net Crabs. Moreover, in the year 2005, a new menu has been added to Subway’s menu that is a delicious fresh toasted sub and the menu still in consumer demand until now. 1.0.2 PRICING The potential element of marketing mix is the price of the company offered because it is direct impact on the company, consumer and economy as well. Subway uses a little higher of upscale pricing than normal subs in the market. Subway offers different pricing strategy with value pricing. But create value products by service in terms of quality. 1.0.3 PLACE This is concerned with activities needed to move the product or service from the seller to the buyer (Lancaster & Reynolds, 2003). Subway use nontraditional places such as supermarkets, airports, convention centers and business center and also another new market development as their major selling location as a franchise. People who in any kind of Subway sales point are on hand to ensure customer’s demands are coordinated with the right product and to elucidate the distinct options are obtainable. Moreover, Subway does research for their market on the location preference and predatory franchises regarding customer satisfaction. 1.0.4 PROMOTION ...
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...McDonald’s industry is a decent option that Blue Sky Portfolio Management can take in to consideration. Analysis: In McDonalds it can be seen that operating margin is increasing in the past two years. This would show that the McDonald’s revenue before tax after deducting direct costs and overhead is increasing. High operating margin shows that McDonald is earning more per dollar of sales that is more favourable compare to similar corporations. However, operating margin include McDonalds ordinary business operations and excludes other revenue, losses and liabilities. Now by observing net profit margin it is noticeable that McDonalds is getting stronger in enforcing their pricing policies, cost structure and production efficiencies. Also, net profit margin for McDonalds illustrates lower long-term loan liabilities compare to year 2008. These ratios can be observed in exhibit 2. By looking deeper in the vertical common-size balance sheet (Exhibit 1) it is observable that total asset of McDonalds is increasing from 2008 to present. Therefore, the total equity or liability of the company need to change to match the increasing total asset. McDonald’s total equity have decreased and total liability have increase in the last two years. This shows that return on equity increases because there are less outstanding equity. Even though increase in liability can raise the risk of a company, McDonalds is a trustworthy company and play as a first mover in the food industry, which it...
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...Business Strategy Analysis: McDonald’s Corporation is the world’s largest fast-food chain in the restaurant industry, serving on average 69 million customers a day. Their stores are corporate or franchised owned, with franchising being highly beneficial to their success by producing 32% of their total revenue. McDonald’s is in a highly competitive industry with market saturation because of low barriers to enter. The industry competes on price, quality, and service. McDonald’s faces competition with full-service restaurants and fast-food restaurants in the area. Their main competitors are Burger King, YUM! Brands, and Wendy’s International. The industry has faced scrutiny on the quality of their products because of a more health concise society. McDonald’s strategy for success is based off of cost efficiency, product development, and marketing and promotions. These factors help form the strong brand that McDonald’s is today. Since their establishment with Ray Kroc, they have focused on driving their success from the 3-legged stool principal representing: McDonald’s employees, the owner/operators, and their suppliers. The stool needs all three to have a good balance in order to function, without either one of the legs success cannot be achieved. All three of them work together to create new products, to reduce costs, and to achieve outstanding customer service. There is commitment in helping all three legs of the stool to succeed. The suppliers play a key role by providing high...
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...Vision: 4 Objective & Goals: 5 Current Market Situation: 5 Other Leading Brands: 5 OBJECTIVE: 6 Segmentation: 6 Target Markets: 6 Positioning: 7 SWOT ANALYSIS: 7 Strength: 7 Weakness: 7 Opportunities: 7 Threats: 7 MARKETING STRATEGY: 8 1. PRODUCT 8 2. PRICE: 8 Pizza Hut Iftar Deal 2011 – All you can Eat 8 3. PLACE: 8 Pizza Hut Iftar Deal 2011 – All you can Eat 10 Advertising Strategies: 11 Media Strategy : 12 1. Television 12 2. Radio 12 3. Newspaper 12 4. Internet 13 5. Outdoor 13 Campaign Evaluation 14 1. Measure Sales Of New Products 14 2. Conduct Survey 14 3. Focus Groups 14 TOTAL CAMPAIGN BUDGET 14 EXECUTIVE SUMMARY The word "pizza" may be a derivative of the Latin word "picea", a Roman word used todescribe the blackening of bread in an oven. The word "pizza", in its current spelling emerged sometime in the middle Ages. It was used to describe both the sweet and saltypies that were becoming popular among Italian aristocracy. Pizza is basically a meal prepared in a plate made of bread. There are four main components of a basic pizza pie. There are different objectives of every organization. In order to achieve these objectives different targets are set. Targets pass down the hierarchy depending on the nature of the business. Therefore, in order to achieve the objectives, management decides on different strategies. These strategies are divided into many sub-parts and are useful for the running of the business. The...
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