World Market
YUM Brands1General InformationHeadquartered in Louisville,
KentuckyCreated in 1997Worlds largest restaurant operator in terms
of system unitsKFC, Pizza Hut and Taco Bell are primary brands4
reporting segments: Yum ChinaYum Restaurants International (YRI)Yum
IndiaYum United States
2
3
4
KFC
Pizza HutFounded in 1958Ready-to-eat pizza product restaurant
chainSells ten pizza productsToppings are suited to local
preferences But menu items rarely differ
muchInternationalpresenceThe leading pizzamaker in the QSR
segment.Current Presence
The World is for the taking!8Taco BellStarted in 1962 in Downey,
CaliforniaOffers a variety of Mexican-style foods such as tacos,
burritos, chalupas, salads, and nachosTextTextTextTextTACO
BELLCorporate StrategiesKey strategies Building Leading Brands in
China in Every Significant categoryDrive Aggressive International
Expansion and Build Strong Brands EverywhereFor the past 13 years
Yum opened over 700 restaurants/ yrStrong growth in both existing
markets and new markets Negative sales growth in EuropeProviding
good returns to stock holdersWorld Market
The QSR segment and the restaurants industry ingeneral,
recovered quickly from the economic crisis in2008 in terms of sales
and profitability. Continuedinternational expansion allows
companies such asYum, McDonalds and Starbucks to shift their risks.
Weexpect these companies to continue with its expansionagenda, and
will break into new geographic segments.Economic stability in BRIC
(Brazil, Russia, India andChina) and other emerging markets
provides apotential platform for a sustained global expansion
forQSR companies.11YUM financial performance vs Peers
In 2012, the Restaurants industry had a global
marketcapitalization of $349.10 billion with $251.52 billion
inrevenues.vii Leading the industry in capitalization andrevenue
were Yum, Starbucks and McDonalds.Despite having lower margins than
MCD, Yum hadmore than 80% Return on equity in 2012. Yums ROEis much
higher compared to MCD and SBUX, reflectingthe firms strong
profitability. Yum is on the higher endof the spectrum for return
on assets, indicating thecompany has been using their assets
efficiently togenerate profits, which is shown by a ROA of
17.90%.By financing a third of their assets with debt, Yumindicates
prosperous profitability for future projects.With operating margins
consistent with the restaurantindustry, at 11.51%, Yum also shines
is in their ROE,due to returning a significant portion of their net
incometo the investor.12India Understanding the market:
HistoryEntry of McDonald's in 1996 marked the beginning of the QSR
concept in India
How large is the prize?Consumer spending to increase from $1
trillion in 2010 to $3.6 trillion 2020 Gapminder
Understanding the prize: House Hold Income
Urbanization, Nuclear families, Gen IUrbanization to increase
from 30% in 2010 to 40% by 2020Nuclear families rose from 59% in
2006 to 72% in 2014They spend more money on eating outGen I will
spend more money in fast foods
Finding the prizeDiverse nation: 23 official languages, 100
unofficial languages, 1600 dialects, 8 major religions, 3.2 million
square km in sizeConsume segmentation
Capturing the prizeTarget the major cities which house
professional affluent, traditional affluent, and Urban
aspirersIgnore small towns and villages
Competitive environment
Industry Growth Outlet additions will grow at 16-18 per cent.70%
of additions will take place in tier II and tier III cities
Our product mix for KFC
Can you believe that we KFC have 100% veg specials
When in Rome,do as the Romans do
To do Growth plans for all 3 chainsAfrica: How large is the
prize
Keeping up with technologyWhere are we in Africa ? Where to
invest in Africa ?Criteria :
GDPPopulationInstability, risksHDIMiddle class %
CountryGDP rank (Africa)Population 2015Instability
(world)Standard of living (Africa)Middle classTotal1 South
Africa2341.216254844000211529292142102
Ghana1335.47512771400011082132495283
Kenya862.72224415300021801811924274
Angola5131.4072253260001431201494274
Nigeria1594.25721850430002170231427166
Tanzania1236.620248829000265226085067
Cameroon1632.1631219180001271221948268
Ethiopia949.8572900760002190380290159
Namibia3011.98202233000010321122081510
Botswana2116.3040217600001212621191511
Zambia1825.61111547400004911521090412 DR
Congo1532.6651712460002405104811413 Ivory
Coast1433.96312332600011403605152414
Congo2514.114047060000371142510315
Uganda1726.08613576000012203104441316
Mozambique2016.59002572800015014301070217
Lesotho442.458019080000722290590218
Swaziland423.842010970000511191100219
Zimbabwe2613.739013503000011025101Analysis of African market on
different parametersTop CountriesSouth AfricaGhana
KenyaAngolaNigeriaTanzaniaCameroon CountryTotal1 South Africa102
Ghana83 Kenya74 Angola74 Nigeria66 Tanzania67 Cameroon68 Ethiopia59
Namibia510 Botswana511 Zambia412 DR Congo413 Ivory Coast414
Congo315 Uganda316 Mozambique217 Lesotho218 Swaziland219
Zimbabwe1Nigeria
Assets :
1st GDP rank1st population rankMiddle classEuropean influence on
developement
Nigeria
Weaknesses :
Law : No chicken importationFind chicken
suppliersCorruptionPolitical instabilityInstability It costs twice
as much to open a Nigerian KFC than a South African onelacks a
large industrialised farm system and the infrastructure to reliably
get meat to restaurants before rotting
Nigeria
Current YUM situation :
25 KFC100% franchise
Objectifs ?Find chicken suppliers
GROWTHDEFICITUNEMPLOYMENTGDP PER CAPITA
GDPSouth Africa
South AfricaGDP PER CAPITAAngolaAssets :
PopulationMiddle class increasingHigher levels of disposable
incomeGDP per capita is the second largest in AfricaWith 50% of its
population under 18 years of age, the country is expected to double
its population in 20 yearsFood consumption has been growing since
2010 (with an average growth of about 14,5% each year) and this
value is expected to increase even further with the passing years,
achieving a 18,8% growth rate in 2017, reaching a 32,8USD billion
marketWith rising consumption levels, FAO has estimated that in
2009 alone, Angola consumed 3.6 million of tonnes of meat from a
clearly insufficient production of 20 000 tonnes
AngolaWeaknesses :
Corruption Public-sector mismanagement remainDespite its natural
assets, Angola is still lacking many resources, especially food and
consumer goods in generalThe depletion of the war devastated most
of the countrys agriculture and the present farmers produce only at
subsistence levels, leaving a vast market to explore
Market caracteristicsOpportuniesAdoption of western
lifestyleMeat shortageBeef prices in Africa are much higher than in
other parts of the worldA simple cheeseburger : a luxury item for
Africans-> CHICKENSub-Saharan Africa is expected to experience
6% economic growth in the next yearFast-food industry is arguably
one of the fastest growing sector in the globe, especially in the
emerging markets
ConstraintsInfrastructure costsImportationHigh cost of
refrigerators and other appliances
Ghana ExternalPolitical: 7th-best governed country, 5th-most
stable country, rated thirteenth-highest HDI on continental
AfricaEconomical: 6th-largest on the Africa continent(by purchasing
power parity and Nominal GDP), is one of the fastest growing in the
world.Purchasing power parity: highest per capita income in the
subregion of western Africa, tenth-highest per capita income on
continental Africa.Population: 24.2 million inhabitants, Ghana is a
largely Christian country Modes of transport: road transport,
high-speed rail, civil aviation, ferry Food: Fish is important in
the Ghanaian
Source: Five Countries to Watch". individual.troweprice.com.
Retrieved 27 April 2013. Oumou Bah (22 October 2011). "Ghanaian
cuisine, dokonu, banku, okra and soup". kadirecipes.com. Retrieved
1 August 2013.Ghana Business MarketMaket type: EmergingFranchise
store: 100%Company store: 0%Total stores: 4 KFCWhy not choose
Cameroon? Large numbers of Cameroonians live in poverty as
subsistence farmers. They have very limited physical and financial
access to health care and food.Fishingn is a major industry in
Cameroon. It's more cheap than others. Cameroon has not yet yum
company, it is difficult to enter this market for the first
time.Ghana Plan
52External AnalysisCompetitorAfrican Market Overview4 main
competitors in South African fast food industry, which are KFC,
McDonalds, Nandos and Wimpy24 billion rand. The fast food
restaurant sales reached over 24 billion rand (1.81 billion ) in
2012.40%. The fast food industry accounts for just under 40 percent
of total consumer foodservice sales in South Africa.
53Chained fast food in south Africa
SOURCE:CNBCAFRICA54Relative market share
SOURCE: CNBCAFRICA55Competitors Mapping56SWOT Analysis 57Outlets
in South Africa
Forecast in 5 years
KneyaExternal Analysis South Africa Market OverviewEconomic:
economy grow by more than 4% for the last three years; the East
Africas largest economyPopulation: approximately 44 million, with a
growth rate of 2.11% in 2014, more than one-third of the populace
42.9% is under 14 years of agePurchasing power: growing middle
classCompetitors Analysis look at Kenya as the gateway to East
Africa62Competitor mappingInternal AnalysisFirst entry
SWOT Analysis Current Position--KFC
66Forecast in 5 years
67Sheet1201520162017201820192020Total stores4710152022Company
stores024789Franchise stores45681213
Sheet1
Total storesCompany storesFranchise stores
Chart111.435.051.3
market value/billion rand2012 market value: billion rand
Sheet1market value/billion
randchicken11.43burgers5.05pizza1.3
Chart1672495493
outletsOutlets in 2012
Sheet1outlets 2 3KFC6722.42Nando's4954.42Wimpy4931.83
44.52.85
Chart1614656700736
outlets
Sheet1outlets 2
320106142.4220116564.4220127001.8320137362.85
Chart1736773811852895
outlets of KFCOutlets of KFC
Sheet1outlets of KFC 2
320157362.4220167734.4220178111.8320188522.852019895736773811852895
Chart169142130
Outlets of KFC
Sheet1Outlets of KFC 2
3201562.42201694.422017141.832018212.85201930
