Business Strategy Yum Brands Essay

Words: 892
Pages: 4

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
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Yum! has launched its own unique Chinese food restaurant, East Dawning, to further dominate the food industry in China, serving only traditional Chinese food cooked in Chinese style pots and dishes. “Chairman and CEO of Yum! China Division, Sam Su, expects East Dawning’s brand association with KFC to have a strong, positive effect on Chinese consumers” (Burchett). Yum! also recently issued a preliminary proposal to take full control of China’s largest hot pot chain, Little Sheep. Already owning a 27.2% ownership stake in the company, Yum! is seeking to capitalize on the average sales growth of 14% seen in all Chinese restaurants in the first half of 2011 by acquiring one of the most prominent Chinese brands in the food industry. Overall, investors who value diversification within large corporations are praising company’s strategies similar to Yum!’s moves into new markets. These global business strategies are likely helping these companies avoiding another big hit like the one it took during the recent economic crisis. Many companies need growth in stock that will steadily increase the dividends it pays out to its investors. Yum! Brands among many other companies is successfully reinvesting what it earns to achieve additional earnings which demonstrates further highlighting the strength of its expansion internationally in emerging markets is critical to its success. Yum! Brands is riding high on the globalization wave and is leveraging its