Yum!

BY: Mark Nall – 10/28/08 – ENTP 6826
Abstract: The paper examines Yum! Brands, Incorporated’s strategy to drive profitable international growth for the company’s global portfolio by securing supply chains, increasing franchisees, and leading the world in restaurant multi-branding. Details of the importance of local context and the need to adhere to a global perspective on opportunities are discussed.
Citation: http://www.yum.com/
:Kotler, P. (2008).Marketing Management. Upper Saddle River: Pearson Prentice Hall
:Legace, M (2003).Around the World of Entrepreneurial Ventures. Harvard Working Knowledge
Yum! Brands, Incorporated, based in Louisville, Kentucky, is the world’s largest restaurant company boasting more than 35,000 restaurants in more than 110 countries and territories. This global chain includes Yum! Brands, Inc.’s International Division, as well as China Division, which alone homes more than 3,100 restaurants. Yum! Brand restaurants- KFC, Long John Silvers, Pizza Hut, and Taco Bell are the global leaders of the chicken, quick-service seafood, pizza, and Mexican-style food categories. Along with its acquisition of the longest running quick-service franchise in America, A&W Restaurants, Yum! Brands, Inc.’s restaurants combined for more than $10 billion in total revenue in 2007, including food sales and franchise fees.
With a huge opportunity for growth due to tremendous scale and economics, the China Division has been reported separately since 2005 due to its size, strength, and importance. While the International Division realized 2007 operating profits of more than $480 million, the China Division, alone, enjoyed 2007 operating profits of $375 million, making China Yum! Brands number one market for new company restaurant development worldwide.
Yum! Brands, Inc. is a successful venture which has combined the entrepreneurial efforts of those who created the restaurants Yum! Brands markets. Dating back to 1919 when A&W mixed up its first batch of creamy root beer, through the 1930’s depression when Harland Sanders blended special herbs and seasonings for fried chicken, to the 50’s Taco Bell inception and the 1960’s introduction of Long John Silvers and Pizza Hut, quick-service restaurants have shaped the evolution of the American diet. Now, as the global market is diversifying to meet the needs of a changing world, Yum! Brands is also diversifying to meet the needs of international expansion by incorporating local operating cultures, as well as varying menu items to different markets.
After becoming a public company in 1997, Yum! Brands has built an empire of global franchises. Over the past eight years, the company has opened more than 700 new restaurants outside the U.S., while more than doubling its operating profits. The company’s international business is one of the key factors that make them unique in the restaurant industry.
In an effort to build a vibrant global business, Yum! Brands is focusing on the following key growth strategies: building leading brands across China in every significant category; driving aggressive international expansion and building strong brands everywhere; dramatically improving U.S. brand positions, consistency and returns; and drive industry-leading shareholder and franchisee value.
There are a few central ideas which will continually aid in Yum! Brands enhancement of it global portfolio. By analyzing local context, the frequency and form of where markets and countries are headed will aid the company in developing extended performance trends. As economies are strengthened due to increased globalization, Yum! Brands positioning in the market place will also strengthen. With the introduction of more stable economies, comes more work force and more hungry workers, hence more opportunity for restaurant development.
This leads to another central idea of maintaining a global perspective on opportunities, by management, to enhance the performance of the company’s international expansion. By adhering to a global perspective on access to resources utilized by the 35,000 plus restaurants and enhancing their deal structures, Yum! Brands will decrease its costs in the supply chain, thereby increasing their operating margin. Developing international supply chains will aid in the strengthening of international economies, thus providing for increased opportunities in these areas.
In developing an expansion strategy, Yum! Brands has become the worldwide leader in restaurant multi-branding. The company has increased its presence in the restaurant market by offering consumers more choice, convenience, and value at one location by combining two restaurant brands under one roof. “Yum!’s formula for success is centered on putting people capability first because when we do that, we satisfy our customers and generate more profits”. (http:yum) In implementing this formula, the company has come to offer more than 4,000 company and franchise-owned multi-brand restaurants worldwide. This unique style has become a hit with customers as the increased menu items reveal increased customer satisfaction.
In adhering to its fore mentioned growth strategies, Yum! Brands, Inc. has become one of the fastest growing retailers in the world by opening up about three new restaurant locations outside of the U.S. everyday. Their growth strategies have aided the company in becoming a large, growing, profitable, high-return international business with a market presence which promotes strong growth opportunity. This company has become a model for international expansion by creating international operating cultures which deliver outstanding customer service including cleanliness, hospitality, accuracy, maintenance, product quality, and speed which drives sales growth around the globe. I believe other companies venturing internationally will benefit from studying this model.

New York Eatery Looks for The Sweet Spot Overseas

ABSTRACT:

Chocolate Bar, a New York eatery and candy store, has two locations in the city and one in New Jersey. Although the expectations were to expand inside the U.S., its owner, Ms. Nelson, has just signed a deal in the Middle East. Under this deal, Ms. Ghorbial and her husband founded Gourmet Company, which is structured as a Chocolate Bar licensee.

It all started when Ms. Ghorbial, a Dubai-based investor, called Ms. Nelson because interested in a partnership that would bring high-end chocolate to the region’s increasingly worldly consumer class. In spite of Ms. Nelson’s initial hesitation, Ms. Ghorbial succeeded in closing the deal. She explained how the Arabic consumer is becoming more and more globalized thanks to Internet and satellite TV. Middle-Easterners are also fascinated by the prestige of European and American brands. Besides, while Americans are cutting back on discretionary purchases because of the economic slowdown, the Middle East consumer class is growing and is eager to buy high-end products, such as chocolate. The two parties negotiated for about nine months and reached an agreement in August 2006. Ms. Ghorbial and her husband will open 30 stores across the region in the next 10 years, starting with Dubai.

After closing the deal, Ms. Nelson started to adapt her products to this new and unfamiliar market. She produced more milk and white chocolate, the favorites in the region. She created big platters for gift-giving, since Middle-Easterners use chocolate to celebrate important occasions. Because Muslims don’t eat pork, she also removed prosciutto from her menus. Furthermore, she adapted the stores to the local culture. So each store will have smaller and more distant tables to allow more privacy and will also provide isolated banquettes for women. Adjustments were also necessary in the way Ms. Nelson operates. She learned to do business the Arabic way, which requires long meetings, hours of phone calls and no internet search.

Despite the time-consuming set-up process, Ms. Nelson is sure she has made the right move.

LINK:

http://online.wsj.com/article/SB122047376978596329.html

HTC Corp on Asia's Fab 50 Companies (2008)

HTC Corp on Asia's Fab 50 Companies (2008); Forbes.com; 9/15/08; Joyce Huang


Abstract
HTC, a Taiwan based electronics and mobile device company, has recently become the largest producer of mobile phones that use the Microsoft Windows operating system. Their growth is largely due to their shift in strategy. Nearly two years ago, the company shifted its core focus to branding. Through innovation and key partnerships the company has been experiencing growth and success. While this growth has allowed their strengths to shine through and has created many opportunities, there are still many challenges and potential threats that lie ahead. Chou and his team are on the right path but need to remember that success requires a certain balance. With Chou’s experience and visionary leadership, it appears that the company should be able to overcome the challenges that lie ahead.

Gabbie Romano
International Entrepreneurship / ENTP 6826
October 28, 2008

China’s Alibaba Expands to India, Japan

BusinessWeek.com; China’s Alibaba Expands to India, Japan; 9/5/08; Bruce Einhorn

Abstract
Alibaba, the China based e-commerce company, connects small and medium sized importers and operates certain Chinese web sites including Yahoo! China and Taobao.
The company has been profitable and successful. In November of 2007, they offered an IPO on the Hong Kong Stock Exchange and did very well. However, this trend did not continue. There are several factors contributing to this downturn. Chinese exports are declining since the RMB is currently so strong. In addition, labor costs in China are on the rise. These factors are directly affecting Alibaba’s customers and therefore affecting Alibaba. Under the solid leadership of Jack Ma they are using a strategy of market diversification to ensure that they are still players in the world of e-commerce for years to come. Currently, Alibaba is expanding into India, Japan and Korea.

Gabbie Romano
International Entrepreneurship / ENTP 6826
September 23, 2008

Start-Up Seeksto Link 3 Billion to Net

Start-Up Seeks to Link 3 Billion to Net
By CHRISTOPHER RHOADS
The Wall Street Journal, September 9, 2008

http://online.wsj.com/article/SB122091223182012137.html

Student: Maria Rodriguez

ABSTRACT:

O3b Networks Ltd. is an enterprise founded by the US technology entrepreneur Greg Wyler. He wants to bring high-speed Internet service to poor and remote countries. The plan is to launch as many 16 satellites, which orbit the Earth around the Equator at relatively low altitude, to provide Internet services to Africa, the Middle East and many parts of Latin America by the end of 2010.
The total cost of the project is estimated in $650 millions with an initial disbursement of $60 millions invested by a number of global enterprises like HSBC Holdings PLC, Allen & Company, Liberty Global Inc, or Google.
At this moment there are about 1.5 billion Internet users in the word. The majority of them are concentrated in the developed world. The new perspectives of telecommunication companies are focused in potential markets as Africa and the Middle East. Wyler’s idea is about to open Internet opportunities to other 3 billion people.
The idea to deliver Internet via satellite is not new. Precedent projects did not materialized because an economic barrier. They were too expensive for companies and for users. The major costs of this project to telecom companies will be to connect the entire world with under see and underground fiber links. This will suppose billions of dollars but it will be cheaper than precedent projects.
O3b Networks Ltd. will not provide Internet directly to consumers. The company will sell linkups to local Internet service suppliers that will provide the service over their own networks.

Ericsson to Launch Mobile Innovation in Africa

Ericsson to Launch Mobile Innovation in Africa
ERICSSON PRESS RELEASE
International Business Times, September 25, 2008

http://www.ibtimes.com/prnews/20080925/ericsson-to-launch-mobile-innovation-center-in-africa.htm

http://www.ericsson.com/ericsson/press/releases/20080925-1254235.shtml

Student: Maria Rodriguez



ABSTRACT:

On September 25, 2008, Ericsson[1] has informed in a press release their plans to launch a Mobile Innovation Center in Africa. Ericsson has established an alliance with the United Nations to work together in order to reach the Millennium Development Goals that are part of the Millennium Villages project.[2]
First, Ericsson project will begin to improve the communication in Nigeria, South Africa, and Kenya. The Innovation Center will concentrate in health applications, and later this technical improvement will help in the developing of the education, agriculture, business, finances, government services and the overall improvement of communication capabilities. Especially, this project will help in the development of rural communities and in the stimulation of local entrepreneurship.
Ericsson is planning to bring voice, Internet connectivity, and Telecom infrastructure across of the 10 countries that are part of the Millennium Villages project in order to lift rural African communities out of extreme poverty.
Ericsson has a global experience in this kind of social projects. Precedent experiences were: Gramjyoti Project (which brought a range of services including telemedicine, m-learning and m-governance to rural communities in India) or the Alokito Bangladesh project (which brought high-speed, internet-enabled mobile learning and healthcare to the region of the capital, Dhaka).

-------------------------
[1] Ericsson is the world's leading provider of technology and services to telecom operators. The market leader in 2G and 3G mobile technologies, Ericsson supplies communications services and manages networks that serve more than 195 million subscribers. The company's portfolio comprises mobile and fixed network infrastructure and broadband and multimedia solutions for operators, enterprises and developers. The Sony Ericsson joint venture provides consumers with feature-rich personal mobile devices. Ericsson is advancing its vision of 'communication for all' through innovation, technology, and sustainable business solutions. Working in 175 countries, more than 70,000 employees generated revenue of USD 27.9 billion (SEK 188 billion) in 2007. Founded in 1876 and headquartered in Stockholm, Sweden, Ericsson is listed on OMX Nordic Exchange Stockholm and NASDAQ (“Ericsson to Launch Mobile Innovation in Africa”. Ericsson Press Release. International Business Times, September 25, 2008).

[2] The Millennium Villages project is a partnership between the Earth Institute, Millennium Promise, and the United Nations Development Program that provides an innovative model to help rural African communities lift themselves out of poverty. The project forms part of the initiative for rural Africa to achieve the Millennium Development Goals (MDGs) - global targets for reducing extreme poverty by half and improving education, health, gender equality and environmental sustainability by 2015. (“Ericsson to Launch Mobile Innovation in Africa”. Ericsson Press Release. International Business Times, September 25, 2008).

Jacobus Busono: Marking his mark in business

Student: Fu Kuang Chuang
Title of Article: Jacobus Busono: Marking his mark in business
Author: Suherdjoko, The Jakarta Post, Kudus, Central Java
Complete Citation: http://old.thejakartapost.com/detailfeatures.asp?fileid=20081027.S10&irec=3

Abstract:
Be happy with your work if you want to be successful. This is businessman Jacobus Busono's philosophy. The director of the Pura Group Indonesia, a large company located in the Central Java town of Kudus, some 50 kilometers east of Semarang, was recently chosen as a member of the World Entrepreneurship Forum.
"It is the result of working with a team. So teamwork is key to success. NASA can fly a spacecraft to the moon only because of teamwork," said the father of three. The success story of the man, who works until 3 a.m. every day, can be seen from his company's success. Supported by strong engineering teams and fresh innovations, Pura Group Indonesia has survived, even during the 1998 crisis, when many other companies have collapsed.
The company produces, among other things, hologram applications that are printed directly on to aluminum packaging and blister medicine packs, as well as scratch holograms for covering the numbers on prepaid cell-phone cards. The company has also modified an offset one-color printing machine so it can handle intaglio printing using two or four colors. These innovations are believed to be the first of their kind in the world. The company's others achievements include the production of NCR carbonless paper -- copy paper without carbon -- from what is said to be the first NCR production plant in a tropical country.
Lately, the company's other special products have included the development of an integrated anti-counterfeit security system involving the production of security paper. This material is usually used for printing paper money. The company is currently printing money for an African country. In Indonesia, the Pura Group is also a cell-phone voucher-card producer that uses smart technology for contact and contact-less cards. With some products, which are based on the anti-counterfeit security systems, the results can be seen on paper money. Apart from holograms, there are also watermarks. Jacobus' company also produces paper money using fibers and a three-color hologram; when the money is illuminated under an ultraviolet lamp, the colors can be seen flickering. This technology makes it difficult for forgers to produce counterfeit paper money.

FutureNow Announces That It Is Increasing Its Ownership in Australian Partner Alkemi

Student: Fu Kuang Chuang

Title of Article: FutureNow Announces That It Is Increasing Its Ownership in Australian Partner Alkemi

Author: Jeffrey Eisenberg

Complete Citation: http://money.cnn.com/news/newsfeeds/articles/marketwire/0433701.htm

Abstract:

FutureNow Group, Inc. (OTCBB: FUTR) ("FutureNow"), a recognized authority in online marketing optimization, is pleased to announce that it is increasing its ownership in Alkemi International, Ltd. ("Alkemi"), a joint venture established in early 2007. Alkemi and FutureNow recognized the opportunity to join forces by aggressively marketing services to the Australian and New Zealand markets. FutureNow extended to Alkemi a limited-term exclusive territory licensing agreement. As part of the agreement FutureNow is increasing its equity participation in Alkemi. As originally envisioned FutureNow will convert the licensing fee earned under the agreement up to the maximum 15% and as such no cash outlay will be required. Now that the maximum equity participation has been reached, Alkemi will pay all future licensing fees in cash.

Jeffrey Eisenberg, CEO of FutureNow, said, "Alkemi is a valuable partner and we are very proud of the inroads they made into their market. Australia and New Zealand were perfect testing ground for this type of arrangement and provide us with proof that the licensing concept works as part of our expansion plan. We are confident that we can replicate it in other parts of the world."

Nathan Stewart, CEO of Alkemi, said, "The market for online marketing optimization is exploding here and we are really hitting stride in trying to keep up with demand." He went on to say, "The FutureNow relationship is a real strategic advantage. We have a unique offering and it is often the edge in winning new business."

The Dish on Green Disposables

Michael Dwork, now 29, is an up-and-coming international entrepreneur. Through his studies at Columbia Business School, Michael has brought a passion for green products across borders and started a company named Verterra.

Verterra’s mission is to produce the highest quality products using sustainable production methods and fair trade labor for the environmentally and socially conscious consumer. Their staple products consist of fashionable plates and bowls made out of steamed leaves sourced in India.

This article discusses the success of Mr. Dworks new company and the types of impacts he is making both in the United States and in India. Verterra’s start-up and growth is largely due to Mr. Dworks networking abilities couched at in his MBA program and partner schools. He is an example of someone who has reached across many boundaries to create win-win solutions for many stakeholders.

Citation:
Caplan, J. (2008, October 1). The Dish on Green Disposables. Retrieved October 3, 2008, from Time: http://www.time.com/time/specials/2007/article/0,28804,1706699_1707550_1846340,00.html

-Peter Haid-