Yum! Brands Food

Yum Brands FoodYum Brandsthe States is non what it once was. Gone are the measure of spending hours sitting on the front porch plot grandma snapped a pound of green beans for dinner. Instead, those times have been replaced with speeding through a drive-thru window to grab a quick bite to eat. Foods that were once referred to as slow-cooked, wholesome, and hearty, are now being described by words such(prenominal) as, fast, convenient, and fatty. We now live in an evolving world, where a single moment of salvage time is branded as wasted time for progress. The fast-food indus demonstrate has emerged some immediately.Yum Brands, Inc., was reported as the largest fast-food company in 2004 (Krug (2004) pg. 627). This company is made up of many household brands such as KFC, Pizza Hut, Taco Bell, tenacious John Silvers, and AW restaurants. In the fast-food industry, they are the market leader in the chicken, pizza, mexi cease, and seafood segments (Krug, 2004). Yum Brands destination is to be the market leader in the unify States, and also adjoin market share in juicy growth areas around the world. whizz strategy that Yum Brands implemented to increase market share in the unify States was to combine two of the companys franchises into one location to attract a giganticer node base. This has brought tremendous success to the company. Yum Brands has since shifted its focus to an transnational strategy to expand on their current market share.The rise of the fast-food industry is not confined to the unite States alone. The world as we experience it has evolved into a fast-paced no look zone. Although establish on a plains culture, the dining practices of the worlds countries are quite different. both(prenominal) countries remain steadfast to their culture and have been reluctant to pressure the fast-food concept. This presents the strategic issue. How mess Yum Brands continue to expand on their international strategy while sustaining their leadership and competitive advantage in the United States and other countries? We in allow for now address this issue by applying an analysis that result help oneself Yum Brands decide which countries need to be assessd and when to expand their company into naked markets.In establish for Yum Brands to venture outside of the United States, they must start-off evaluate the markets in which they are planning to enter. This type of analysis requires a standard that evaluates the economic conditions, political stability, heathenish differences, resources, society conditions, and supporting industries associated within a given market. Michael Porter of Harvard University leave offd that there are four broad attributes of nations that individually, and as a system, constitute what is termed the diamond of national advantage (Dess, Lumpkin, Eisner 2007 pg. 240). We bequeath find this analysis to be the almost beneficial to Yum Brands. In this analysis, we go forth be analyzing what iss ues Yum Brands should address before entering a market. These issues are compute conditions, get hold of conditions, related and supporting industries, and buckram strategy, structure, and competitor.We begin the analysis with component part conditions. These conditions reflect individually nations factors of production and should be industry and firm specific. Yum Brands should be looking at what each country possesses, as far as firm-specific acquaintance and skills created within the country that are rare, valuable, difficult to imitate, and rapidly and expeditiously deployed. If these factors do not survive in a country, then Yum Brands bequeath need to consider whether the firm can create these factors using their accept intellectual assets. One factor advantage for expanding into the Latin American markets, for instance, is that the be associated with labor and salaries result be significantly less than in the United States. This is collectable to inflation rate, economies of scale, and unemployment rates. Yum Brands has been successful in other markets because almost all of their franchises outside of the United States are locally owned and operated. This reduces the language barriers and allows a heathen perspective that might otherwise be a major concern. By allowing local business people to own the franchise, Yum Brands gains intellectual knowledge on the countrys culture and consumer demands in a given market.Analyzing demand conditions is definitive because without knowing what the customers wants and needs are, we cannot efficiently serve the market. In the United States, we know that the demand for fast-food is high, based on our life expression and growing macrocosm trends. Although in Latin America, this whitethorn not be the case, due to consumer consciousness and cultural differences. Yum Brands will need to rely on economic and trend analysts to telephone the cultural and societal trends of that market. Among the things an alyzed should be the ethnic and immigration trends of that country. In the United States, we have seen a growth in ethnic food, due to the recent growth in immigration. Another thing to consider when analyzing demand conditions is the level of income individuals are receiving. A rise in income stimulates growth in the dine-in restaurant segment as consumers receive higher disposable incomes (Krug, 2004). Yum Brands may need to expand and improve on existing products in order to sustain competitive advantage.Related and Supporting Industries deal with countries managing inputs more efficiently. pen up working relationships with providers is a key factor in gaining competitive advantage. In the United States, we have seen that distribution of products is highly correlated with production. Distribution among states within the country is non problematic, based on the free trade barriers that exist between them. This is also true of distribution to Canada and Mexico, due to the northw esterly American Free Trade Agreement that enabled free trade and tariffs between North American countries. Also, the geographic proximity of Latin America to the United States gives the firm an advantage towards supplier power. Yum Brands will need to assess the supplier power, as sanitary as other related relationships relevant to success, in each market before entering. Also, it is important for Yum Brands to research trade laws and regulations between their rest home market and potential foreign markets.Firm strategy, structure, and rivalry is perhaps the most important segment in analyzing a foreign market. Rivalry is in particular intense in nations with conditions of strong consumer demand, strong supplier bases, and high new entrant potential from related industries (Dess, Lumpkin, Eisner 2007 pg. 243). In the fast-food segment, we have seen that home(prenominal) rivalry is very high within the United States. Although, based on cultural differences in Latin America, the demand is low, because most Latin Americans have not yet acquired a taste for American food. Instead, Latin Americans continue to embrace dining at home. Economics are another factor reflecting domestic rivalry. As we have already discussed, the pay rate in Latin American countries is significantly humble than in the United States. This results in lower consumer demand which reduces the competitive environment in Latin America. How a country is run can also influence domestic rivalry and strategy. With populations on the rise around the world, as well as in Latin America, a trend may soon be emerging that will shift all dining practices to a more American style of eating.As long as Yum Brands continues to innovate and make transports in its internecine framework, they should be able to achieve their international strategic goals. It is imperative that Yum Brands does not venture into foreign markets without first analyzing the market in which they are entering. Also, if they try to expand too rapidly, they may experience limited resources and cash flow. Yum Brands will want to expand into areas with high economic growth potential, as well as, regions with rising population and political stability. Firms that succeed in global markets had first succeeded in intense competition in their home markets. We can conclude that competitive advantage for global firms typically grows out of relentless, continuing improvement, innovation, and change (Dess, Lumpkin, Eisner 2007 pg. 243). Based on the history of Yum Brands success in the United States, we can assume that the company is a prime candidate to venture into international markets.Works CitedKrug, Jeffrey A. (2004). Yum Brands, Pizza Hut, and KFC. Appalachian StateUniversity, 627-638.Dess, G. Gregory, Lumpkin, G.T, Eisner, B. Eisner (2007). Strategic Management 3e.Mcgraw-Hill. diamond of National AdvantageDomestic Rivalryhigh in the U.S.based on cultural trendseconomicslow in Latin Americafast-food versus di ning at homeFactor Conditions Demand Conditionsrequires high population low in Latin Americamodern technology high in U.S.communication systems dining practiceslanguage barriers immigration trendstariffs and trade regulations consumer awarenesslegal system growth in suburban areasbanking system unemployment rateslabor costsRelated and Supporting Industriesclose proximity to the suppliersupplier bases must be prevalent in an industrycan a supplier base be createdtrade barrierscan alike(p) suppliers be substituted