Business Strategy Yum Brands
Yum! Brands Set To Dominate the Global Fast Food Market
Over the last few years, Yum! Brands has opened up an average of 4 new brand stores per day around the globe. “The largest share of this growth is coming from its expansion in mainland China” (Burchett). According to Burchett, in 2010 alone, only counting the franchise Kentucky Fried Chicken stores of the Yum! brand empire, the number of stores open for business increased by 13% to 3,000 restaurants. When compared to global giant McDonald’s “mere” 1,500 stores in China, Yum! is in almost unheard of territory. Yum! brands as a whole have 3 times as many outlets as McDonald’s. With a superior distribution network, Yum! has a presence in over 700 cities in China, giving consumers in the 1.3 billion people population the opportunity to access its 24-hour delivery service from all corners of the country, not just its well-developed eastern coast. The company has stated that its ultimate goal is to have 20,000 Kentucky Fried Chicken stores up and running in China alone. Numbers like this show why Yum! is one of the most successful foreign brands to enter the Chinese market and why a enthusiastic outlook on stock growth is sensible. CEO David Novak’s recently famous statement, “I wouldn’t trade our long-term position with any consumer company in the world,” doesn’t seem like an overstatement as this brand has developed a robust global business strategy and plan that appears to be working. I believe that the YUM! brands global business strategy is a recipe for success. The company is customizing their food offering dependent on the location and culture. Clearly they have done a significant amount of research to find out what customers want in varying countries and successfully has implemented new stores based off the consumer research findings. Yum! brands have taken the term localization and turned it into a blueprint for success. Burchett shares that KFC has a breakfast menu featuring Chinese
Over the last few years, Yum! Brands has opened up an average of 4 new brand stores per day around the globe. “The largest share of this growth is coming from its expansion in mainland China” (Burchett). According to Burchett, in 2010 alone, only counting the franchise Kentucky Fried Chicken stores of the Yum! brand empire, the number of stores open for business increased by 13% to 3,000 restaurants. When compared to global giant McDonald’s “mere” 1,500 stores in China, Yum! is in almost unheard of territory. Yum! brands as a whole have 3 times as many outlets as McDonald’s. With a superior distribution network, Yum! has a presence in over 700 cities in China, giving consumers in the 1.3 billion people population the opportunity to access its 24-hour delivery service from all corners of the country, not just its well-developed eastern coast. The company has stated that its ultimate goal is to have 20,000 Kentucky Fried Chicken stores up and running in China alone. Numbers like this show why Yum! is one of the most successful foreign brands to enter the Chinese market and why a enthusiastic outlook on stock growth is sensible. CEO David Novak’s recently famous statement, “I wouldn’t trade our long-term position with any consumer company in the world,” doesn’t seem like an overstatement as this brand has developed a robust global business strategy and plan that appears to be working. I believe that the YUM! brands global business strategy is a recipe for success. The company is customizing their food offering dependent on the location and culture. Clearly they have done a significant amount of research to find out what customers want in varying countries and successfully has implemented new stores based off the consumer research findings. Yum! brands have taken the term localization and turned it into a blueprint for success. Burchett shares that KFC has a breakfast menu featuring Chinese
Cited: Burchett, Andrew. "Yum! Brands Set To Dominate The Global Fast Food Market." Elite Inside Trader. Elite Investment Group, 10 May 2011. Web. 06 June 2011.