A Case Study

About

Yum Brands
Question No 1 Answer

When it comes to the industry of quick-service restaurants, it is safe to say that the Yum! brand is

among the most well-known of all of them. This corporation has a number of different subsidiaries,

including KFC, Pizza Hut, Taco Bell, and even Little Sheep. It should not come as a surprise that Yum

Brands, which owns a large number of well-known restaurants, has a strong presence in a number of

countries throughout the world. Yum Brands has more over 41,000 locations, making it the most

obvious choice for the title of largest fast food chain in the world. Yum! Brands rated #228 on the

Fortune 500 with sales of approximately $13 billion in 2014, and the company was chosen by Corporate

Responsibility Magazine as one of the 100 Best Corporate Citizens. Yum! Brands was recognized for its

commitment to social and environmental responsibility.

Strength:

The fact that Yum is a well-known fast food restaurant is an asset for the company. KFC, Pizza Hut, Taco

Bell, and Little Sheep are all under its control. It should come as no surprise that Yum brands have

expanded their operations to other countries given the success they have had in the retail sector. The

well-known global brand, extensive retail presence in China, early entrant advantage, large market

share, widespread consumer recognition, and familiarity with Chinese customers are the case study's

main strengths. Other strengths include an early advantage in the market (Bell, 2011).

Weakness:

The reputational damage caused by food safety scandals, a loss of credibility with chicken sourcing

issues, lower margins using yellow chicken, the controversy surrounding Little Sheep, a decline in market

share, a slowdown in the opening of new stores, and out-of-date Pizza Hut sores have put Yum's brand

in a precarious position.

Opportunity:
Customers come from all walks of life and Yum's KFC accommodates them. KFC altered a number of

their menu items, including burgers and other dishes, to better suit the tastes of the locals. Changing the

wording of Taco Bell and Pizza Hut requires a significant amount of effort. The improvement of

localisation will result in an increase in a brand's sales. Yum Brands needs to expand internationally if it

is going to keep growing. Establish your brand's presence by building new stores in areas seeing strong

population growth. Emerging markets typically have greater disposable income and are more open to

trying new things. Because of this, new franchises are an absolutely necessary component of developing

economies. This is the demographic that Yum need to be targeting in their marketing efforts. Yum

Brands has been able to raise its profitability as a direct result of its processes becoming more simplified.

Yum needs to make certain adjustments to its procedures in order to guarantee that each franchise

meets up to the expectations established by the main firm. The door to growth will open when it does

this.

Threats:

This has an impact on YUM Brands, in addition to having an effect on the rest of the fast food business.

The fact that sales at KFC China fell during times of food shortage demonstrates how important it is to

reassure customers about the safety of food, particularly in China, where there has been widespread

dissatisfaction. Food safety concerns pose the greatest threat to the organization; hence, it is essential

for the firm to have a dependable system in place to deal with any circumstances that may arise related

to food safety. Small businesses that are successful eventually grow so that they may provide their

consumers improved service as well as a taste that is more genuine and representative of the local area.

Competitors who are not well organized are a problem for the parent brand (Mylonakis, 2016).
Question no 2 Answer

The fast food sector is recognized for having tough competitors due to the nature of the industry. Every

company that wishes to continue achieving the same level of financial success must make it a priority to

stay abreast of the continuous changes that occur in the external environment. This is because to the

fact that businesses are constantly being presented with new opportunities and challenges from the

outside world. The preceding remark should not come as a surprise to anyone given the turbulence and

unpredictability that characterize the Chinese market. This is especially true in China, where the market

is fluid and is always sensitive to change.

The market in China is extremely fluid and sensitive to change. Yum China, the largest fast food

company in the world, has experienced incredible success in China, where it operates restaurants all

across the country. In particular, success can be attributed to the company's adaptability in satisfying the

ever-shifting requirements of China's enormous consumer market (Starvish, 2011). Recent efforts in

China have been directed toward enhancing both the overall health of the country's population as well

as the caliber of the food that is made available to them. This attempt to improve the nutritional content

of the Chinese food will be beneficial to the Chinese population as a whole. As a direct response to this,

Yum China has made it a key priority to establish marketing techniques that highlight the higher quality

and dependability of its products. In other words, they are trying to differentiate themselves from their

competitors by emphasizing these aspects.

This has been accomplished through the execution of educational programs and by collaboration with

highly valued organizations that are regarded as third parties in the context of the work being done.

Additionally, Yum China is dedicated to being truthful in all of its advertising, which instills consumers
with faith in the superiority of the goods they purchase from the company (Hexter, 2007). Because of

this, it is an essential component of Yum China's business model.

In its marketing efforts, Yum China should emphasize the consistent high quality and safety of the

products and services it provides for the food service industry. This need to be the company's primary

focus of attention. Working with reputable outside groups to get the food verified as safe and

developing educational programs that showcase the company's quality control processes are both viable

options for accomplishing this goal. The aforementioned objective is potentially attainable through the

utilization of either of these strategies (Hexter, 2007). To earn their customers' trust and gain their

loyalty, Yum China ought to encourage transparency and honesty regarding the components that go into

the items they sell.

Question no 3 Answer

KFC Instead of being beneficial to the company, China's plan to promote the restaurant as a destination

for great cuisine increased the risk that the operation will fail. Because of the high demand, the Chinese

promotion of the restaurant centered on the establishment's well-known reputation for serving up

delicious food. All thanks to China's efforts, which led to this result, to advertise the eatery's great food

in order to attract more customers. The realization of China's goals would inevitably lead to the

occurrence of this consequence at some point. KFC was eventually able to overcome the obstacles it
faced and get back on track to becoming profitable, although it took some time. A significant contributor

is the solid and well-known brand identity that KFC possesses in China (Uddin, 2020).

In addition, this is the factor that is the most important. Customers who are concerned about the safety

and quality of the meal are likely to continue coming back to KFC as a result of the reputation of the

brand. This continues to be the case in spite of their reservations regarding the food's safety. They are

concerned that they may become ill as a result of consuming the meal, and they are unsure as to

whether or not it is healthy for people to consume. This is the case in spite of their worries that they

could become ill if they consume the food because they are uncertain as to whether or not it is safe for

people to consume. KFC, which is owned by Yum China and is one of the most well-known fast food

franchises in the world, has also had enormous levels of success in China. Yum China is home to the

headquarters of the company that owns KFC.

Yum China is currently one of the largest food companies in China. It shouldn't come as a surprise that

Yum China's most lucrative market is its home country of China's domestic market (Uddin, 2020). At this

point in time, the company has successfully established itself as a brand name that is well known across

the country. Customers are likely to continue patronizing KFC because they have a high level of trust in

the brand, despite the concerns we've highlighted above regarding the quality of the food at the

restaurant. Why? Because they are confident that KFC will fulfill its promise to provide food that is both

tasty and good for you. This is the case as a result of the fact that these consumers, as we have seen,

have had their attention focused to the quality of the food that they are buying. Customers who have

faith that KFC will look out for their best interests are more inclined to continue doing business with the

company. Because of this, KFC has been so successful in luring new consumers and keeping the ones it

already has.
References
Bell, D. E. (2011). KFC’s radical approach to China. Harvard Business Review, 89(11), 137-142.

Hexter, J. &. (2007). Operation China: From strategy to execution. Harvard Business Press.

Mylonakis, J. &. (2016). Towards an assessment of globalization and localization of Western East-food
chains in China: The case of KFC. European Journal of Business and Innovation Research, 4(3), 17-
28.

Starvish, M. (2011). KFC’s explosive growth in China. HBS Working Knowledge.

Uddin, S. M. (2020). Operational strategies and management of KFC: An enquiry. EPRA International
Journal of Research and Development (IJRD), 5(4), 172-179.