Yum! Brands Inc. in china

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Case Details:

Case Code : BSTR266
Case Length : 23 Pages
Period : 1987-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Yum! Brands Inc.
Industry : Fast Food
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

KFC
In 1930, Harland Sanders (Sanders) started a small restaurant in a gas station in Corbin, Kentucky and called the dining area 'Sanders' Court & Café.' In 1936, the Governor of Kentucky presented Sanders with an honorary "Kentucky Colonel" in recognition of his contribution to the cuisine of the state. By 1937, Sanders' Court & Café expanded and had capacity to seat 142 people...

Pizza Hut
Pizza Hut was founded by two brothers Dan and Frank Carney in 1958 in Wichita, Kansas. They borrowed US$ 600 from their mother to start a small business, and soon John Bender joined them as a partner...

Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

Yum's Foray into China

Before entering China, Pizza Hut and KFC had met with success in Thailand, which became one of the company's top ten markets. Pizza Hut was launched in Thailand in 1980, when neither pizza nor cheese was popular; but by the end of the decade, it had made its mark in the Thai fast food market. The company was also successful in Japan. In the early 1980s, Ta Tung Wang (Wang) was appointed as the Vice-president of the South-east Asian region of KFC. In 1986, RJR asked Wang to explore the opportunities for American-style fast food in the country...

Yum's Strategies in China

Yum focused broadly on four key growth strategies. These were: building strong brands, growing the international business, focus on running good restaurants, and multi-branding, where two or more brands were operated in a single unit (Refer Exhibit IV for more about Yum Brand's growth strategies).

For Yum, Chinese operations played a crucial role in expanding its international business. In China, Yum differentiated itself from the local players in terms of its service and clean ambiance and also, food...

The People

Introducing and developing a western concept in an oriental country was a challenging task. Su was of the view that it required people who had an understanding of the eastern culture as well as complete knowledge about the business practices of the west. This led him to recruit personnel from Taiwan, as they had exposure to Chinese culture as well as the Western world. They were aware of the intricacies of the market and were very cost conscious...

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