YUM Brands.pptx
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Transcript of YUM Brands.pptx
World Market
YUM Brands1General InformationHeadquartered in Louisville, KentuckyCreated in 1997Worlds largest restaurant operator in terms of system unitsKFC, Pizza Hut and Taco Bell are primary brands4 reporting segments: Yum ChinaYum Restaurants International (YRI)Yum IndiaYum United States
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KFC
Pizza HutFounded in 1958Ready-to-eat pizza product restaurant chainSells ten pizza productsToppings are suited to local preferences But menu items rarely differ muchInternationalpresenceThe leading pizzamaker in the QSR segment.Current Presence
The World is for the taking!8Taco BellStarted in 1962 in Downey, CaliforniaOffers a variety of Mexican-style foods such as tacos, burritos, chalupas, salads, and nachosTextTextTextTextTACO BELLCorporate StrategiesKey strategies Building Leading Brands in China in Every Significant categoryDrive Aggressive International Expansion and Build Strong Brands EverywhereFor the past 13 years Yum opened over 700 restaurants/ yrStrong growth in both existing markets and new markets Negative sales growth in EuropeProviding good returns to stock holdersWorld Market
The QSR segment and the restaurants industry ingeneral, recovered quickly from the economic crisis in2008 in terms of sales and profitability. Continuedinternational expansion allows companies such asYum, McDonalds and Starbucks to shift their risks. Weexpect these companies to continue with its expansionagenda, and will break into new geographic segments.Economic stability in BRIC (Brazil, Russia, India andChina) and other emerging markets provides apotential platform for a sustained global expansion forQSR companies.11YUM financial performance vs Peers
In 2012, the Restaurants industry had a global marketcapitalization of $349.10 billion with $251.52 billion inrevenues.vii Leading the industry in capitalization andrevenue were Yum, Starbucks and McDonalds.Despite having lower margins than MCD, Yum hadmore than 80% Return on equity in 2012. Yums ROEis much higher compared to MCD and SBUX, reflectingthe firms strong profitability. Yum is on the higher endof the spectrum for return on assets, indicating thecompany has been using their assets efficiently togenerate profits, which is shown by a ROA of 17.90%.By financing a third of their assets with debt, Yumindicates prosperous profitability for future projects.With operating margins consistent with the restaurantindustry, at 11.51%, Yum also shines is in their ROE,due to returning a significant portion of their net incometo the investor.12India Understanding the market: HistoryEntry of McDonald's in 1996 marked the beginning of the QSR concept in India
How large is the prize?Consumer spending to increase from $1 trillion in 2010 to $3.6 trillion 2020 Gapminder
Understanding the prize: House Hold Income
Urbanization, Nuclear families, Gen IUrbanization to increase from 30% in 2010 to 40% by 2020Nuclear families rose from 59% in 2006 to 72% in 2014They spend more money on eating outGen I will spend more money in fast foods
Finding the prizeDiverse nation: 23 official languages, 100 unofficial languages, 1600 dialects, 8 major religions, 3.2 million square km in sizeConsume segmentation
Capturing the prizeTarget the major cities which house professional affluent, traditional affluent, and Urban aspirersIgnore small towns and villages
Competitive environment
Industry Growth Outlet additions will grow at 16-18 per cent.70% of additions will take place in tier II and tier III cities
Our product mix for KFC
Can you believe that we KFC have 100% veg specials
When in Rome,do as the Romans do
To do Growth plans for all 3 chainsAfrica: How large is the prize
Keeping up with technologyWhere are we in Africa ? Where to invest in Africa ?Criteria :
GDPPopulationInstability, risksHDIMiddle class %
CountryGDP rank (Africa)Population 2015Instability (world)Standard of living (Africa)Middle classTotal1 South Africa2341.216254844000211529292142102 Ghana1335.47512771400011082132495283 Kenya862.72224415300021801811924274 Angola5131.4072253260001431201494274 Nigeria1594.25721850430002170231427166 Tanzania1236.620248829000265226085067 Cameroon1632.1631219180001271221948268 Ethiopia949.8572900760002190380290159 Namibia3011.98202233000010321122081510 Botswana2116.3040217600001212621191511 Zambia1825.61111547400004911521090412 DR Congo1532.6651712460002405104811413 Ivory Coast1433.96312332600011403605152414 Congo2514.114047060000371142510315 Uganda1726.08613576000012203104441316 Mozambique2016.59002572800015014301070217 Lesotho442.458019080000722290590218 Swaziland423.842010970000511191100219 Zimbabwe2613.739013503000011025101Analysis of African market on different parametersTop CountriesSouth AfricaGhana KenyaAngolaNigeriaTanzaniaCameroon CountryTotal1 South Africa102 Ghana83 Kenya74 Angola74 Nigeria66 Tanzania67 Cameroon68 Ethiopia59 Namibia510 Botswana511 Zambia412 DR Congo413 Ivory Coast414 Congo315 Uganda316 Mozambique217 Lesotho218 Swaziland219 Zimbabwe1Nigeria
Assets :
1st GDP rank1st population rankMiddle classEuropean influence on developement
Nigeria
Weaknesses :
Law : No chicken importationFind chicken suppliersCorruptionPolitical instabilityInstability It costs twice as much to open a Nigerian KFC than a South African onelacks a large industrialised farm system and the infrastructure to reliably get meat to restaurants before rotting
Nigeria
Current YUM situation :
25 KFC100% franchise
Objectifs ?Find chicken suppliers
GROWTHDEFICITUNEMPLOYMENTGDP PER CAPITA
GDPSouth Africa
South AfricaGDP PER CAPITAAngolaAssets :
PopulationMiddle class increasingHigher levels of disposable incomeGDP per capita is the second largest in AfricaWith 50% of its population under 18 years of age, the country is expected to double its population in 20 yearsFood consumption has been growing since 2010 (with an average growth of about 14,5% each year) and this value is expected to increase even further with the passing years, achieving a 18,8% growth rate in 2017, reaching a 32,8USD billion marketWith rising consumption levels, FAO has estimated that in 2009 alone, Angola consumed 3.6 million of tonnes of meat from a clearly insufficient production of 20 000 tonnes
AngolaWeaknesses :
Corruption Public-sector mismanagement remainDespite its natural assets, Angola is still lacking many resources, especially food and consumer goods in generalThe depletion of the war devastated most of the countrys agriculture and the present farmers produce only at subsistence levels, leaving a vast market to explore
Market caracteristicsOpportuniesAdoption of western lifestyleMeat shortageBeef prices in Africa are much higher than in other parts of the worldA simple cheeseburger : a luxury item for Africans-> CHICKENSub-Saharan Africa is expected to experience 6% economic growth in the next yearFast-food industry is arguably one of the fastest growing sector in the globe, especially in the emerging markets
ConstraintsInfrastructure costsImportationHigh cost of refrigerators and other appliances
Ghana ExternalPolitical: 7th-best governed country, 5th-most stable country, rated thirteenth-highest HDI on continental AfricaEconomical: 6th-largest on the Africa continent(by purchasing power parity and Nominal GDP), is one of the fastest growing in the world.Purchasing power parity: highest per capita income in the subregion of western Africa, tenth-highest per capita income on continental Africa.Population: 24.2 million inhabitants, Ghana is a largely Christian country Modes of transport: road transport, high-speed rail, civil aviation, ferry Food: Fish is important in the Ghanaian
Source: Five Countries to Watch". individual.troweprice.com. Retrieved 27 April 2013. Oumou Bah (22 October 2011). "Ghanaian cuisine, dokonu, banku, okra and soup". kadirecipes.com. Retrieved 1 August 2013.Ghana Business MarketMaket type: EmergingFranchise store: 100%Company store: 0%Total stores: 4 KFCWhy not choose Cameroon? Large numbers of Cameroonians live in poverty as subsistence farmers. They have very limited physical and financial access to health care and food.Fishingn is a major industry in Cameroon. It's more cheap than others. Cameroon has not yet yum company, it is difficult to enter this market for the first time.Ghana Plan
52External AnalysisCompetitorAfrican Market Overview4 main competitors in South African fast food industry, which are KFC, McDonalds, Nandos and Wimpy24 billion rand. The fast food restaurant sales reached over 24 billion rand (1.81 billion ) in 2012.40%. The fast food industry accounts for just under 40 percent of total consumer foodservice sales in South Africa.
53Chained fast food in south Africa
SOURCE:CNBCAFRICA54Relative market share
SOURCE: CNBCAFRICA55Competitors Mapping56SWOT Analysis 57Outlets in South Africa
Forecast in 5 years
KneyaExternal Analysis South Africa Market OverviewEconomic: economy grow by more than 4% for the last three years; the East Africas largest economyPopulation: approximately 44 million, with a growth rate of 2.11% in 2014, more than one-third of the populace 42.9% is under 14 years of agePurchasing power: growing middle classCompetitors Analysis look at Kenya as the gateway to East Africa62Competitor mappingInternal AnalysisFirst entry
SWOT Analysis Current Position--KFC
66Forecast in 5 years
67Sheet1201520162017201820192020Total stores4710152022Company stores024789Franchise stores45681213
Sheet1
Total storesCompany storesFranchise stores
Chart111.435.051.3
market value/billion rand2012 market value: billion rand
Sheet1market value/billion randchicken11.43burgers5.05pizza1.3
Chart1672495493
outletsOutlets in 2012
Sheet1outlets 2 3KFC6722.42Nando's4954.42Wimpy4931.83 44.52.85
Chart1614656700736
outlets
Sheet1outlets 2 320106142.4220116564.4220127001.8320137362.85
Chart1736773811852895
outlets of KFCOutlets of KFC
Sheet1outlets of KFC 2 320157362.4220167734.4220178111.8320188522.852019895736773811852895
Chart169142130
Outlets of KFC
Sheet1Outlets of KFC 2 3201562.42201694.422017141.832018212.85201930