2. Yum! Brands, Pizza Hut, and KFC Jeffrey A. Krug
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Strategic Management, 3/e
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3. Yum! Brands Industry Analysis
What are the primary driving forces in the U.S. fast-food industry in 2004?
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Strategic Management, 3/e
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4. Yum! Brands
Using Porter’s Five-Forces Model, assess the strength of each competitive force in the fast-food industry.
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Strategic Management, 3/e
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5. 3. Is the U.S. fast-food industry attractive?
Yum! Brands
3. Is the U.S. fast-food industry attractive?
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Strategic Management, 3/e
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6. 4. What are the fast-food industry’s key success factors?
Yum! Brands
4. What are the fast-food industry’s key success factors?
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Strategic Management, 3/e
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7. Yum! Brands Business Strategy Analysis
Complete a SWOT analysis for Pizza Hut and KFC.
McGraw-Hill/Irwin
Strategic Management, 3/e
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8. Yum! Brands
In what ways are Pizza Hut and KFC positioned to take advantage of the industry’s key success factors?
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Strategic Management, 3/e
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9. What are Pizza Hut and KFC’s competitive advantages?
Yum! Brands
What are Pizza Hut and KFC’s competitive advantages?
McGraw-Hill/Irwin
Strategic Management, 3/e
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10. Yum! Brands Franchising Strategy Analysis
What are the benefits of franchising versus company-owned restaurants for companies like Pizza Hut, KFC, McDonald’s, or Burger King?
McGraw-Hill/Irwin
Strategic Management, 3/e
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11. Yum! Brands International Business Strategy
Describe Pizza Hut and KFC’s investment strategy in Latin America.
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Strategic Management, 3/e
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12. Yum! Brands
Using the country and industry risk categories discussed in the case, compare and contrast Mexico and Brazil as alternative investment locations.
What risks are associated with investment in Mexico? In Brazil?
What strategies can be used to minimize these risks?
McGraw-Hill/Irwin
Strategic Management, 3/e
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13. Q1. Industry Analysis Industry sales are flat
The industry is consolidating
The industry is becoming more global
Diversification has become an important growth strategy
Many customers are health conscious
Many customers are experienced, repeat buyers
Greater consumer demand for convenience
Rising labor costs and a shortage of labor aged years
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Strategic Management, 3/e
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14. Q1. Industry Environment
Weak
Strong brand loyalty; difficult for new brands to develop awareness; high fixed costs, economies of scale, retaliation
Paper/plastic standardized commodities; low switching costs, threat of backward integration; volume purchases
POTENTIAL ENTRANTS
Strong
Weak
INDUSTRY COMPETITORS
Strong
SUPPLIERS
BUYERS
Knowledgeable, repeat buyers; price and quality sensitive, want great convenience and are location sensitive, low switching costs
Flat sales, intense competition for market share, high first mover advantage, low customer switching costs
Strong
SUBSTITUTES
Low customer switching costs; variety of alternatives
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15. Q4. Key Success Factors Product quality and consistency Q Service S
Cleanliness C
Perceived Value V
Location
Global brand awareness
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Strategic Management, 3/e
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16. Framework for Country Analysis
Environmental Risks
Political Risk
War, revolution
Change in government
Price controls
Tariffs, trade restrictions
Appropriation of assets
Government regulations
Restrictions on repatriation of profits
Industry Risks
Supplier Risk
Quality
Shifts in supply
Changes in supplier power
Competitive Risk
Rivalry among competitors
New market entrants
New product innovations
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Strategic Management, 3/e
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17. Framework for Country Analysis (cont.)
Economic Risk
Inflation, interest rates
Foreign exchange movements
Balance of trade
Social unrest, riots, terrorism
Social concerns
Natural Risk
Rainfall, hurricanes
Earthquakes, volcanic activity
Product Market Risk
Consumer tastes
Availability of substitute products
Scarcity of complementary goods
McGraw-Hill/Irwin
Strategic Management, 3/e
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