powerpoint presentationtitle: powerpoint presentation author: stephens, james created date: 4/3/2012...
TRANSCRIPT
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Brands in China
Presented By: Charisse S. Bruin
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The Issue
• To establish a nationwide
chain seamlessly in
Chinese culture.
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The Issues
• Localization
• Creating a workforce
• Cuisine
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Localization
• Important to begin in
mainland China
• Chinese curiosity
• KFC interiors modernized
• Upscale atmosphere
• Native entrees
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Establishing a Workforce
• Requirements:
▫ Speak and understand
Chinese
▫ Teachable
▫ Innovative
▫ Fast Food background
• Chinese employees
• Younger workforce
• Training programs
• Competent managers
• Cohesive mindset
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What’s for Lunch?
• Generalized menu would
not suffice
• Offered variety
• More localized foods
• Health conscientious
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Yum! History
• Started with three of five company from
PepsiCo. (Taco Bell, Kentucky Fried
Chicken and Pizza Hut)
• Based in Louisville, Kentucky
• The Yum! system includes three operating
segments: U.S., International (Yum!
Restaurants International) and China
Division.
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Four key business strategies: • Build leading brands across China in every
significant category
• Drive aggressive international expansion
and build strong brands everywhere
• Dramatically improve U.S. brand positions,
consistency and returns
• Drive industry-leading, long-term
shareholder and franchisee value
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• Sam Su- chairman of Yum! Brands China
• Based in Shanghai
• Mainland China : Yum! Brands' leading market for new
company restaurant development worldwide
• In 2010, the Company opened more than 500 new
restaurants in mainland China.
• KFC was the first quick service restaurant chain to
enter China in 1987
Yum in China
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The Facts: Perspectives
• Experts: See Yum Brands China accounting for 50% of profits by 2015
• Chairman & CEO Yum! China, Sam Su: Aiming for 500+ store opening per year (already succeeded), 20,000 restaurants ultimately
• Consumers: Adapted to Yum primarily because of menu differentiation devoted to Chinese consumers; view restaurants as “restaurants”
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Personal Source:
• “Very popular… localized taste for
menus…I know it has more than 500 stores
in China and it grows very fast…Chinese
people will feel
very disappointed if it withdraw from
China.”
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Ansoff Model
Present
New
Present Market Penetration: HEAVY, 3,600 restaurants;
Goal 20,000 restaurants
Product Development: Adapt to local taste;
East Dawning
New Market Development: 1 new restaurant opening
EVERYDAY throughout
China;
East Dawning
Diversification: Menus very different than
America Yum menus
Market
Product
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Marketing Mix
Product:
KFC, Pizza Hut, East Dawning
Place:
China (all provinces/territories
minus Tibet
Price:
KFC- $3-$5 US
Pizza Hut- $4.25- $7
Promotion:
Ad’s, commercials, LOCATION
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SWOT Analysis
Strengths
• Strong reputation
• Diverse
• Has largest chicken
restaurant
Weaknesses
•Overexposure
•Weak R&D
Opportunities
• Expansion
• Innovation
Threats
•Changes in food prices
•Competition
•Changing consumer tastes
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Actions
• Buy out competition
• Create new recipes
• Create plan to attract new staff members
• Continue to expand
• More focus on R&D
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Consequences
• Oversaturated market
• Unhealthy lifestyle
• Too much preparation
• Can be costly
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2011 Update
• Yum's biggest profit driver and accounts for just over 40 percent of overall profits.
• Yum's second-quarter net income rose to $316 million, or 65 cents per share, from $286 million, or 59 cents per share, a year earlier.
• Revenue rose to $2.8 billion from $2.6 billion a year earlier
• Yum overseas strength offset a 4 percent decline in U.S. same-store sales.
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Future Growth
• Profit will continue to
increase in China
• Continue to expand
• And more variety on
menus
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Take-Away’s A Successful China-fied Operation
Adaption
Taste
Price point
Vast Distribution Network (heavy early investments– location to other cities competition isn’t located
Long- Term Commitment
Right ambience and experience
Operating growth more than 30% each year in the past decade