NORTH SOUTH UNIVERSITY

FINAL GROUP PROJECT ON YUM CHINA

Course Instructor: Mohammad Hannan Miah

Senior Lecturer
Department of Management
Course name : Organizational Management
Course code : 212
Section : 12
Prepared by:

SL Student name Id number Phone number Work divided

NO
01 Antor Das 2012921630 01703917276 (5.1 – 5.8)
02 Asif Ahmed 2012698630 01782404039 (04),(11)
03 Amir Hossain (08),(09)
04 Asikur Rahman 2012091630 01705617415 (01),(02),(03)
05 Samia Rahman 2021906630 01721073937 (06),(07-7.1)
06 Lutfar Rahman 1521800630 01623258761 (10)

TABLE OF CONTENTS
SL CONTENT PAGE
01 Introduction of Yum China 01
02 History of Yum China 02,03
03 Name and Characteristics of the founder 03
04 Existing Shareholders of the Yum China 04,05

5.1 Mission 05
5.2 Vision 05
5.3 Key values 06
 5.4 Strategies and Objectives 06,07
5.5 Business Level Strategy 07
5.6 Functional Level Strategy 07
5.7 Corporate Level Strategy 08
5.8 Current Strategies of Yum China 08,09
06 Organization Structure of Yum China
7.1 Your company’s Major Functional and Business
Description
7.2 Major Functional Divisions and Departments
08 Products and Services of Yum China
09 Key Success Factors of Yum China
10.1 Strengths
10.2 Weaknesses
10.3 Opportunities
10.4 Threats
11 Recommendations for Yum China
12 Conclusions

……………………………………………………………………………………….page-01
(0.1) Introduction:
Yum china Holding, Inc. is one of the largest restaurant companies in china. It is a restaurant

company that started in 1987 with a restaurant in Shanghai, China. Yum included KFC, Pizza

Hut, and Taco Bell. Yum! Brand in the china division was Sam Su's leadership. He had built

the largest restaurant company by far in mainland China. In the past five years, they have

launched this restaurant in more than one place every day. In 2010, Yam ran more than 3,600

restaurants in 650 cities and employed more than 250,000 people, including college students,

in their first jobs. But now the company has more than 10000 restaurants in a total of 1500

cities in China. Their company currently employs more than 450,000 workers. Basically,

after beginning, it was spun of Yum Brands. It became an independent publicly traded
company on November 1, 2016. In the third quarter of 2010, Yam China's revenue surpassed

that of the United States. Revenues for the first time and many analysts expected that Yum

China business driven by a rapidly growing middle class would be twice as large as its United

States business within five years. But before rushing to open thousands of more stores, Su

Wondered what the company should do to address some of the problems plaguing the

western fast food industry. At first, people didn't like their food. The main reason was their

food didn't match Chinese culture. Before understood this problem, Su also understood their

team management was not strong. Then Yum concerned about the food and their team

management. Yum later developed a better-quality management process and incorporated the

best products into their supply chain according to human needs. That is why Yum China is

booming today.

.……………………………………………………………………………………….page-02

(0.2) History of Yum China

1. History of Yum china

 Yum! Brands (Yum)—which was the parent company of several restaurant chains,

including KFC, Pizza Hut, and Taco Bell operated 14 eateries spread across the

grounds.

 Yum brands were established on May 30, 1997, as Tricon Global Restaurants,

PepsiCo collaborated with Yorkshire Global Restaurants after a few months.

 Yum opened the first KFC in Shanghai in 1989. Yum was under Su’s leadership, he

had built the largest restaurant company by far in mainland China.

  Yum opened their first Pizza Hut outlet in Beijing in 1990, becoming the first foreign

company to serve pizza to Chinese customers.

 Yum china established its own distribution company in 1997, because of to meet the

demands of its rapidly spreading network of restaurants.

 In 1997, Yum china established Supplier Tracking Assessment and Recognition

(STAR) for improve quality, ensure food safety, and increase capacity.

 Yum China established their 300th number of outlets in 1999. In the same year, Yum

 China estimated that over 2 million Chinese ate in its stores every day and, in an A.C.

 In 2002, some KFCs began opening for breakfast.

 The number of restaurant openings more than 400 in 2008.

 In 2008, Yum reorganized its logistics operations into a separate company

 KFC stores were almost evenly split between larger and smaller cities in 2009.

.......................................................……………………………………………………………………………………….. page-03

 On October 4, 2010, Yam reported more than $1.1 billion in third-quarter revenue in

China surpassing America revenue for the first time.

 In 2010, yum china distribution network consisted of 11 full-service logistics centres

and six satellite centres.

 In October 2010, Yam had more than 3,600 restaurants spread across China. In the

third quarter of the same year, sales at Locations in China opened a year or more at

6%, compared to 1% in the US position.

 In 2010, they had grown to over 260,000 participants in 438 cities.

(0.3) Name and Characteristics of the Founder 

Sam Su graduate from National Taiwan University with a chemical engineering degree taken

an MS in chemical engineering from Pennsylvania State University and an MBA from the

Wharton School of Business at the University of Pennsylvania. Sam Su joined KFC in 1989

as a Director of Marketing for North Pacific and doubled up as General Manager for China in

December 1989. But before joining KFC, Sam Su worked for Procter and Gamble in

Germany and Taiwan. Su always wants Yum will go to significantly faster, but the

government held their back. Sam Su's Strategy was to build a nationwide restaurant in china

that would be rooted in China, be part of China.'' Su always wanted one day their restaurant

would-be all-over China, extending even the smallest cities. He has managed the company

accordingly. He has continuously operated the company according to the needs of the

consumer. Sam Sur is a crucial contributor to the success of Yam China.

.………………………………………………………………………………………...page-04

(0.4) Existing Shareholders of the yum China:

The top 10 owners of yum china who have quantity shares are,

1. Invesco Advisers, Inc. owns 41,207,683 company shares

2. Black Rock Fund Advisors owns 19,681,997 of company shares

3. Massachusetts Financial Services owns 11,122,889 of company shares

4. SSgA Funds Management, Inc. owns 10,969,541 of company shares

5. Loomis, Sayles & Co. L.P. owns 10,177,205 of company shares

6. JPMorgan Investment Management owns 7,676,598 company shares

7. Goldman Sachs & Co. LLC (Private ltd.) owns 7,503,039 of company shares
8. Vontobel Asset Management, Inc. owns 7,373,017 company shares

 9. Templeton Global Advisors Ltd. Owns 6,728,315 company shares

10. RBC Global Asset Management (U.K.) owns 6,443,375 company shares

Top 10 Mutual Funds Holding Yum China who has quantity shares are,

1. Invesco Developing Markets Fund owns 27,413,432 company shares

2. Government Pension Fund – Global owns 5,059,455 company shares

3. Virtues Vontobel Emerging Markets owns 4,672,689 company shares

4. iShares Core MSCI Emerging Market owns 3,471,193 company shares

5. Wells Fargo Special Mid Cap Value owns 3,143,600 company shares

6. JPMorgan Emerging Markets Equity owns 2,690,568 company shares

7. Mutual fund Shares owned JPMorgan Funds owns 2,615,101 of company shares

8. MFS Emerging Markets Equity Fund owns 2,609,467 company shares

9. Templeton Growth Fund Inc. owns 2,469,604 company shares

10. RBC Emerging Markets Equity Fund owns 234710 of company shares

As per 2021 business report from CNN (Reference taken from: https://cnn.it/3w9zyr6) 

.………………………………………………………………………………………...page-05

(5.1) Mission: 

The mission statement of Yum! China is 'To become the best restaurant company not only in

China but the world.'

(5.2) Vision

The vision of Yum! China was to expand on multiple fronts and have its restaurants all over

the country, reaching even the smallest towns. They have worked hard to achieve this goal.
Yum! China's continued vision and efforts to expand in China resulted in over 3,000 KFC's in

650 cities and about 600 Pizza Huts in 120 cities, making them one of the largest food

companies in China in 2010.

(Sources: https://studylib.net/ )

(5.3) Key values:

1. Yum! China Built a nationwide restaurant chain across the country and expanded its

businesses to other regions.

2. They assembled a team that is local to the region.

3. Yum China Build partnership with local businesses.

4. They invest in a supply chain for gaining supplier loyalty.

5. They progress their brand to express local culture and integrate western culture as well.

6. Yum! China Constant new product development and modify menus to appeal to Chinese

Tastes.

.………………………………………………………………………………………...page-06

(5.4) Strategies and Objectives: 

We know that the company Yum! China's goal is to expand on multiple fronts and have its

restaurants all over the country, reaching even the smallest towns. They have worked very

hard to achieve their goal. To achieve this goal, they have adopted some particular strategies.

To fulfill their purpose and objective, they follow some steps: developing the product, place,

and adding several services. Like in America, the total amount of items is 29 on the other

hand, in China; the total number of items is 50. We know the area of KFC outlets in America

is 180 to 280 square meters, but the site is 300 to 450 square meters in China. The main
reason behind this is to serve more people as compared to other countries. KFC signature

dishes are trendy all over the world, but in China, people like spicy chicken dishes and local

dishes. Based on buyer's tastes, they developed their products. They built a robust supply

chain for raw materials. Pizza Hut in China is positioned as a full-service restaurant.

Yum China offers customers a five-star dining experience at a meager price. They get bored

with only pizza. So they provide appetizers included chicken wings, the most popular items

in China, fried squid, and onion rings. Pizza Hut was more expensive than KFC basically; the

targeted customers in Pizza Hut were older people. To attract younger customers, Yum!

China added some budget-friendly dishes to its menu. They are developing new offerings,

such as a business lunch with guaranteed service in 15 minutes on a limited number of items

and afternoon tea (coffee and a dessert) to compete with Starbucks. To accomplish their

company goal, they added some exciting features on their outlets like kid zone. The main

reason for this is that couples with babies can enjoy their food without the hassle.

.………………………………………………………………………………………...page-07

(5.5)Business-Level Strategy:

Product/Service Differentiation of Yum China: Yum! China has a massive number of stores,

product differentiation in their menus; they have their own distribution company, staff

members who know the region well, and their continual effort in making new products to

appeal to more customers. It is a tremendous comparative advantage included in Yum China's

management approach. These advantages put Yum! China is ahead of its competitors and has

helped them establish a significant market share in the country.

(5.6) Functional level strategy:

 As we know, that functional level strategy applies at the department level. It ensures that the

corporate-level system and business-level method are implemented in the regular activities of

the company. Yum China Company was focused on their vision and put their effort to make

some differences between theirs and others. At first, yum's quality assurance team developed

a comprehensive quality management process and supplier rating system named supplier

tracking assessment and recognition (star) in 1997. It allows yum to identify and concentrate

purchasing with the best quality supplies, ultimately leading to improved quality and lower

price of goods.

(5.7) Corporate Level Strategy:

We know that the vision of Yum China is one day their restaurants would be all over China,

reaching even the smallest towns. To accomplish their vision, they use some corporate-level

strategies. Those are; Building a team to implement their growth plans. Yum! China recruits

people who could write and speak Chinese and understand the Chinese consumer. Yum!

China makes partnerships with local partners. At the time when Yum! Started business in

China, the government didn't allow any foreign company to operate without any local partner.

In the starting days, the local joint venture partners and franchisees helped Yum navigate

.………………………………………………………………………………………...page-08

China's complexity. Another most essential strategy that Yum! China is investing in the

supply chain. To meet the demands of it is a rapidly increasing network of restaurants, yum!

Established it is own distribution company. Yum! China's goal was to spread its outlets all

over China. To maintain their company reputation, they create their supply chain systems.

That helps them to ensure high standardization.

(5.8)Current Strategies of YUM Chain:

 Confirms Long-Term Revenue And Profit Growth Targets.

Yum! China drew its strategic significance and growth initiatives to capitalize on market

opportunities and cement its position as China's largest restaurant company. Following this

strategy creates a significant opportunity to improve their operations and build stronger

connections with their customers.

 Long-Term Financial Targets.

The company Yum! China draws long-term financial targets. Their goal was to become the

best restaurant company. To accomplish their financial targets, Yum! China follows ongoing

high single-digit percentage system sales growth. They blended their restaurant margin of

approximately 17% and double-digit operating profit growth.

 KFC, Strong Foundation for Growth.

The Company Yum! China drew KFC to capitalize on the long runway for growth in China.

KFC has a presence in 1,200 cities. And Yam China is currently tracking 1,000 more cities

that have the potential to expand. KFC will build a strong foundation for menu development,

digital and resource innovation to enhance their leadership. This way will be a tremendous

cooperative advantage for growing their business and accomplishing their goal.

.………………………………………………………………………………………...page-09

 Pizza Hut, try to always Something New.

The Company Yum! China gave an impression of Pizza Huts' plans to capitalize on the

promising progress made with the revitalization program. They improved their brand

positioning and continue to roll out these transformative initiatives at scale in 2019.

 Digital and Delivery Transformation

The Company Yum! China also announced its Delivery 3.0 initiative and plans to evolve to a

trade zone-focused, the multi-brand platform that will optimize delivery services and improve
efficiency. In today's world, this strategic element will improve Yum! China's brand image

and that also a comparative advantage as compared with others.

(Sources: https://ir.yumchina.com/ )

.………………………………………………………………………………………...page-10

(06)Organization Structure of YUM China:

 Chairman and CEO of Yum Brands China
Division
(Sam Su)

1.Chief Operating
Officer 2.Chief Marketing Officer 3.Chief Supporting Officer
Public Affairs KFC Pizza Hut Tac Bell

Primary Product
Chief Marketing
CFO Marketing Marketing profit margin
manager
manager manager

Restaurent Restaurent Producer customer

Senior Manager Juniour Manager Employe
General Manager Manager Manager retention

Coustomer
service
Producer
Employe
service
technology

operating profit
revenue

Yum China is China’s largest restaurant company. Each organization has its own management and

organizational structure. This company is no exception.Yum China company Chairman and CEO is

the highest-ranking official in a company, whose essential obligations incorporate making major

corporate choices, managing the general operations and assets of a company, acting as the most point

of communication between the board of chiefs and corporate.So, CEO directly control Chief operating

officer (COO), Chief Marketing Officer (CMO), Chief Supporting Officer, and other brand CEO

(KFC, Pizza Hut & Tac Bell). Chief Operating Officer also controls CFO, restaurant general manager,

restaurant manager, senior & junior manager, and producer manager. This company Chief market

officer also control Chief Marketing manager, primary marketing manager, product marketing

manager and product marketing manager also control product market related employee. Chief

Supporting Officer (CSO) is also control profit margin, customer service, service technology. This is

how YUM China Company is run.