Case Analysis for Yum! Brands
1. What are the primary driving forces in the U.S fast food industry in 2004
The primary driving forces in the U.S. fast food industry for 2004 are as follows:
There is a major increase in globalization, no matter where you travel to in this time period you are guaranteed to either see a McDonalds or a Pizza Hut.
The fast food industry has diversified it product line by offering semi healthy choices, such as chicken, salads, fajitas or pizza. To this end, consumers want choices.
Consumers are more likely to be a repeat buyer at a certain fast food chain; if they find something they like, they stick to it. To this end, competition efforts have to more aggressive than ever.
The market is reaching its maturity stage so …show more content…
First, they are owned by the same companies, brand recognition and loyalty, distinct product tastes--- there aren't any pizzas out there that taste remotely close to Pizza Hut and the same is true for KFCit has secret recipes etc. They have both been around for a very long time and they are both international companies.
7. What are the benefits of franchising versus company owned restaurants for companies like Pizza Hut, KFC, McDonald's or Burger King?
There are many benefits to franchising vs. company owned restaurants; they are as follows: International expansion is easier, not to mention national expansion. To this end, if international expansion was to occur local needs would be understood and limited market research would need to be conducted. Also the headquarters does not need to worry about Human resource or any operational aspects of each individual franchise. It only needs to worry about collecting its royalty fees and making sure the franchise is staying within the guideline and regulations.
8. Describe Pizza Hut and KFC's investment strategy in Latin America.
The investment strategy that is being used in Latin America is they consider Mexico to be one of the most attractive investment locations because it has a population of 105 million people. It is one of the largest markets available. The high tariff costs have been decreased