Brand Management Yum
9-606-041
REV: JANUARY 9, 2006
FRANCES X. FREI AMY C. EDMONDSON
Yum! Brands, Inc.: A Corporate Do-Over
This culture that we have is our secret weapon. It’s why I think we can recruit the best people in the industry, it’s why our turnover is going down, it’s why we’re making progress in every aspect of our business. … Every day we go to work, trying to build a great, powerful culture and build the business around the basic building blocks that we know will drive the business. — David C. Novak, Chairman, Chief Executive Officer and President1
In early 2005, David Novak had ambitious plans for the giant fast food company he had led for the past eight years: We want to have a performance orientation of a General Electric, the people orientation of a Southwest, the recognition orientation of a Mary Kay, and the field orientation of a Wal-Mart. And out of those things, we are creating Yum! Brands, which we hope will become a great company over time. Novak had played a leading role in the creation and organization of Yum! Brands. Previously, the large restaurant business had stalled as a division of PepsiCo. After a 1997 spin-off Yum!, under Novak’s leadership, had grown rapidly, paid off significant debt, and distributed a dividend to shareholders for the first time. Despite this record of rapid growth and success, Novak was not yet done. He had set his sights on a growth platform that he believed would help Yum! – the world’s largest restaurant company in terms of system units – expand further: Given the fact we are the only restaurant company to have a portfolio of leading brands, we have the unique opportunity to offer our customers two great brands in one restaurant… [O]ur customers tell us they prefer multibranding over single brands because it provides more choice and convenience under one roof…However, our biggest challenge for multibranding remains the same. We must continue to get better and better at building the operating capability to successfully
REV: JANUARY 9, 2006
FRANCES X. FREI AMY C. EDMONDSON
Yum! Brands, Inc.: A Corporate Do-Over
This culture that we have is our secret weapon. It’s why I think we can recruit the best people in the industry, it’s why our turnover is going down, it’s why we’re making progress in every aspect of our business. … Every day we go to work, trying to build a great, powerful culture and build the business around the basic building blocks that we know will drive the business. — David C. Novak, Chairman, Chief Executive Officer and President1
In early 2005, David Novak had ambitious plans for the giant fast food company he had led for the past eight years: We want to have a performance orientation of a General Electric, the people orientation of a Southwest, the recognition orientation of a Mary Kay, and the field orientation of a Wal-Mart. And out of those things, we are creating Yum! Brands, which we hope will become a great company over time. Novak had played a leading role in the creation and organization of Yum! Brands. Previously, the large restaurant business had stalled as a division of PepsiCo. After a 1997 spin-off Yum!, under Novak’s leadership, had grown rapidly, paid off significant debt, and distributed a dividend to shareholders for the first time. Despite this record of rapid growth and success, Novak was not yet done. He had set his sights on a growth platform that he believed would help Yum! – the world’s largest restaurant company in terms of system units – expand further: Given the fact we are the only restaurant company to have a portfolio of leading brands, we have the unique opportunity to offer our customers two great brands in one restaurant… [O]ur customers tell us they prefer multibranding over single brands because it provides more choice and convenience under one roof…However, our biggest challenge for multibranding remains the same. We must continue to get better and better at building the operating capability to successfully