YUM Brand

Topics: KFC, Pizza Hut, Yum! Brands Pages: 19 (4307 words) Published: April 13, 2015


YUM Brands

SWOT, PESTEL and Porter’s 5 Forces Analyses

Antonio Annicchiarico

INDEX

pag.

Index1

Introduction2

1. Company Overview3

2. PESTEL Analysis4

3. SWOT Analysis7

4. Porter's 5 Forces Analysis9

5. Value Chain Analysis12

6. Conclusions13

7. References14

INTRODUCTION
PESTEL, SWOT and Porter’s 5 Forces analyses of Yum Brands (15 October 2013, 2957 words)

This work analyse Yum Brands, one of the major and leading companies in the global quick service restaurant (QSR) industry. Through some tools the author has examined deeply this fast food firm regarding the internal situation (SWOT), the external environment (PESTEL) and the stakeholders involved in the industry (Porter’s 5 Forces)

key words: Yum Brands, PESTLE, SWOT, Porter’s 5 Forces, QSR, fast food, China

1. COMPANY OVERVIEW
Yum Brands, Inc. is a U.S. company headquartered in Louisville (Kentucky), and is a world leader in the quick service restaurant (QSR) industry with more than 39.000 stores in over 130 countries (YUM, 2013a). Yum was created on 7 October 1997 , under the name Tricon Global Restaurants after the split from PepsiCo. In March 2002, they acquired the Yorkshire Global Restaurants, based in Lexington (Kentucky), bringing into the family also Long John Silver's and A&W Restaurants. The acquisition of Yorkshire is effective on 7 May 2002 and next 16 May, the group formally changed its name in Yum Brands, Inc. In 2004 the company founded the chain East Dawning selling products of Chinese cuisine with the business model of fast food. The group owns the following restaurant chains: Pizza Hut, Kentucky Fried Chicken, Taco Bell, East Dawning and Wing Street (Reuters, 2013a).

2. PESTLE ANALYSIS
A PESTLE analysis is a tool to review the macro environment or external forces, outside the company’s control, that can affect the business plans and future projects. PESTLE stands for Political, Economic, Sociological, Technological, Legal, and Environmental. The PESTLE analysis can help a company to change direction, identify new potential opportunities and it is considered one of the most useful tools in the strategic decision making (Strategic Planet, 2013).

Political
The big firms of the QSR market have to adhere to the requirements imposed by the local government, such as the minimum wage, which can affect the costs and corporate profits. For instance, Yum’s operations are highly affected by the countries policies enforced by local governments, like in the Chinese Market (PwC, 2013). Also, the national governments may drive the companies to promote healthier products and requires companies to publish the ingredients and caloric composition of the food served in their stores (BBC, 2011). Due to many local Governments are highly concentrated on health implication on eating fast food (Inthenews, 2007 ; BBC, 2007), Yum has been constrained to respond to this health concerns by introducing dishes like salads and lighter dishes (The Economist, 2005).

Economic
Although consumer confidence had been badly influenced by the recession of 2008, the number of the customers and their average expenditure in the Yum and its competitors are increased due to low prices (The Economist, 2010). Also, Yum, with all its brands, beat the post-recession effects by adding to its very low and competitive prices, many offers and promotions and focusing on marketing and advertising (Romeo, 2010). The firm, due to the continuous fluctuation of the raw materials rate, with a consequent raise of the costs, decided to increase the recycling to be less reliant on virgin raw materials (SEC, 2013). Social

The increasingly growing awareness by customers regarding healthier lifestyle due to the great deal of emphasis focused on healthy eating in many countries, such as U.K.,...

References: PESTEL, SWOT and Porter’s 5 Forces analyses of Yum Brands
(15 October 2013, 2957 words)
Economic
Although consumer confidence had been badly influenced by the recession of 2008, the number of the customers and their average expenditure in the Yum and its competitors are increased due to low prices (The Economist, 2010)
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