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Presentation Overview
Ricardo:
Company Profile Mission Statement Ownership & Organization

Vania:
Alliances Products & Technology Market Trends & Growth Key Players

Presentation Overview
Andrew:
SWOT Analysis

Talib:
Financial Overview
Past and Present

Financial Ratio Analysis Probable Outcomes and Predictable Crises Critical Success Factors

200 restaurants globally .Background & Overview Company Profile Founded in 1952 Operates in more than 108 countries globally Parent company YUM Brands Serves approximately 12 million customers in more than 5.

brand position Drive long term Shareholder and franchisee value .S.Background & Overview Mission Statement YUM BRANDS: Build their brands in China Aggressive international expansion Improve U.

Background & Overview Ownership & Organization David Novak. CEO of YUM Brands Roger Eaton CEO of KFC KFC Franchise breakdown: Restaurant General Manager Assistant Managers Average of 20-35 employees per store .

225 83 956 Franchisee 4.Background & Overview Ownership and Organization Company Beginning of Year New Builds Acquisitions Refranchises Closures Other End of Year Total % of Total 60 47 None 855 17 60 107 (12) 4.210 Total 5.166 6 74 None 80 None 154 (12) 5.080 100 .

Background & Overview Alliances Pizza Hut & Taco Bell Yum Brands: World’s largest proprietor of multi-branded fast-food locations KFC holds 69% of Yum Brands market share .

Background & Overview Charitable Alliances Animal Welfare World Hunger .

Background & Overview Products & Technology KFC’S Point of Difference: Secret Recipe for Fried Chicken Fast-Food Competitive Technology: Automation Heating Food Production Shelf-Life Ingredients .

Market Overview Market Trends & Growth Global Recession = Increase in consumption of cheaper foods 73% of Americans eat fast food out of convenience 33% of Americans and 30% of the Asia Pacific Market eat fast-food at least once a week .

Emerging Markets: Prefer international brands .S.Market Overview Market Trends & Growth KFC’s usually clustered in urban centres Soaring food prices notably wheat. health and diet concerns have slowed growth of fast food chains since 2006 in U.

Market Overview Key Players International: McDonald's Domestic: Wendy’s Burger King Sonic Jack in the Box .

S. Market growth . 16% increase in market share Aided KFC in declining U.Strategic Analysis Strengths: Market Share KFC has roughly 42% of the global chicken on the bone market share Nearly 3 times as much as their nearest competitor China 2009.

e. China) .Strategic Analysis Strengths Differentiation: Trademarked items and Recipes International Presence: Global Diversification and ability to expand rapidly (i.

166 Mainland China 2.497 Japan 1.150 Great Britain 689 Canada 780 Australia 572 Indonesia 336 Malaysia 431 .Strategic Analysis Strengths USA 5.

Strategic Analysis Weaknesses Systemic: Integrity of Supplier & Distributors Decentralization of OwnershipFranchisee model (i.e.service. quality.) Branding: Mom and Family values: Health and weight issues . etc.cleaniness.

Strategic Analysis Opportunities Stability In Commodity Pricing: Analysts indicate that chicken prices should stay stable in short term Beneficial in further maintaining costs to provide better margins .

88 82.00 .38 86.S Chicken Price per lbs.56 86.96 88.77 84. (cents) Month Feb 2009 Mar 2009 Value 86.70 85.73 Apr 2009 May 2009 Jun 2009 Jul 2009 Aug 2009 Sep 2009 Oct 2009 Nov 2009 85.13 Dec 2009 Jan 2010 82.17 88.15 83.85 82.Strategic Analysis U.

Strategic Analysis Opportunities Emerging Markets: Estimated 5% growth rate in emerging economies Perceive brands as superior to local Asia Pacific region rates high globally in fast food frequency visits Low Labour Costs .

etc.) Expansion of Multibranding: Single store location pairings with Pizza Hut and Taco Bell . expanded protein options.e. new beverages.Strategic Analysis Opportunities Diversification in Mature Markets: Develop Incremental sales layers (i. Breakfast.

e.e. Chicken Fil A) Avian Flue .Strategic Analysis Threats Mature Market Diet and Health concerns (75% of Americans eat less fried chicken due to health concerns) Foreign Currency Fluctuations Animal Welfare Activists (i. PETA) Emerging Competition in Mature Markets (i.

Sales per unit have grown by 2% over last 4 years Present: Yum Brands achieved 6.Financial Overview Past/Present Past: Steady share price increase over past ten years KFC U.9% growth in 2009 compared to 2008 Annual Sales per restaurant in U.S. on par with industry . are around 1.3 million.S.

S.Financial Overview Past/Present KFC U. Sales per Unit: Year End thousands 2008 2007 2006 2005 2004 % growth KFC US $967 $994 $977 $954 $896 2% .

7 9% 13% KFC China $1.0 $4.1 $5.4 Franchisee Sales: $7.1 $5.7 $1. 2008 Company Sales: $1.2 $1.0 Company Sales: $1.3 $0.9 $0.7 $1.4 $3.6 Company Sales: $2.7 $1.Financial Overview Past/Present KFC Division Sales Growth: In Billions KFC U.0 $0.S.6 5-year growth (4%) 2% KFC International $1.6 28% 18% .1 2007 $1.4 $3.0 2006 $1.9 2005 $1.8 $1.4 $3.7 $0.3 $6.1 $1.2 Franchisee Sales: $4.5 Franchisee Sales: $1.8 2004 $1.2 $4.

75 Industry: 2.1% Industry: 12.6% McDonalds: 44.2% Return on Assets: Yum Brands: 15% McDonalds: 15.0% Industry: 35.28 McDonalds: 0.5% .00 Gross Profit Margin: Yum Brands: 20.Financial Overview Financial Ratio Analysis Debt/Equity: Yum Brands: 3.

7 McDonalds: 1.22 McDonalds: 4.11 Current Ratio: Yum Brands: 0.Financial Overview Financial Ratio Analysis Earnings Per Share: Yum Brands: 2.0 Inventory Turnover: Yum Brands: 56.8 .1 Industry: 1.4 McDonalds: 117 Industry: 97.

Financial Overview Financial Ratio Analysis Quick Ratio: Yum Brands: 0.14 McDonalds: 0.0 Asset Turnover: Yum Brands: 1.8 Industry: 1.4 McDonalds: 1.0 Industry: 1.1 .

Probable Outcomes & Predictable Crises 1. Improve operational and supply chain efficiency . Diversification of Menus in North America 3. Improve control processes on ethical operations 4. Continue rapid expansion in emerging markets 2.

Critical Success Factors 1) Develop brand equity in new markets and sustain a differentiated brand in existing markets 2) Develop and sustain healthy relationships with franchisees and other stake holders .

Critical Success Factors 3) Provide an infrastructure that is flexible enough to adapt to local markets under the umbrella brand 4) Ensure the integrity of supply and distribution networks in the face of international variances. environmental crises and intensifying ethical concerns. .