Case Study: YUM ! Brands

866 Words 4 Pages
After the huge success for YUM! Brands Inc. in China during 2015, the company announced in October 2016 their plan to execute a multi-year strategy to speed up growth, minimize instability and maximize capital return which will bring about a company that is more focused, more franchised and more efficient. This will ultimately enable YUM! Brands to lead more growth and at the same time will empower the company to convey sustainable, long-term results (Anon., 2017).
3.1 Growth drivers of YUM!:
YUM! Brands Inc. focuses on four growth drivers: “distinctive relevant brands, unmatched franchise operating capability, bold restaurant development and unrivaled culture and talent” (YUM!, 2017). YUM! Company’s distinctive relevant brands are KFC, Pizza
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Brands provide work for 1.5 million employees around the world. A unique culture is built full of energy, opportunity, and fun. Believing in their employees and giving them trust and encouragement to share their ideas, YUM! Brands also employ people from different backgrounds and with different styles, and give them the chance to grow and have an impact and love their working place (YUM!, 2017). Yum! Company also promises to ''leverage culture and people capability to fuel brand performance and franchisee success'' (Anon, 2017).
These four key drivers of growth are applied to same-store sales growth and net-new unit growth. Yum! Brands Inc. endeavor to run a more efficient business model, whereby the company intends to restrain general and administrative expenses to 1.7% of system sales and decrease annual capital expenditures to about $100 million by the end of 2019. This strategy will be undertaken by the company to make the most of the potential of its brands and to determinedly grow its global footprint in a productive way (Anon, 2017).
3.2 Growth
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This is because it is easier for competitors to emulate products or services, but it quite difficult to emulate the entire business model. Business model innovators gross four times more returns than product and service innovators, but Business model innovation may well be more challenging as every basic component of a business model has to be evaluated and then the business model can be utilized to taking the initiative to explore new growth opportunities (Bashir & Verma, 2017).
For YUM!, they took a huge step in 2015 creating two powerful, independent, focused growth companies and introducing YUM! China. Greg Creed, CEO of YUM! Brands indicated that ''New Yum! is even more highly franchised company with three leading global brands, leadership in emerging markets, clear average-unit volume and new-unit growth opportunities, less volatile cash and earnings streams, and high shareholder cash returns'' (Creed, 2016). This new business model the company has adopted is apparently leading to more growth in the emerging markets and would reflect on its Middle East market as

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