Industry Analysis
Rivalry among Competing Sellers Now in the industry of western fast food restaurants, there are several strong competitors against Yum! Brands such as The McDonald 's Corporation, Papa John 's International, Inc., Domino’s Pizza Inc., Subway Inc, Wendy’s Company, Burger King Inc, and so on. These companies are competing with Yum! Brands both in the U.S. and internationally. As a result of the high level of competition within the industry, profit margins are low for most companies, forcing them to lower cost and to take quality controls to maintain efficiency and minimize wastage to attract customers. Companies also face strong competition based on quality. Good quality ingredients and well-presented meals are highly
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Yum! Brands’ biggest competitor, McDonald’s Corporation, is specific in the hamburger restaurant segment, with 90% of the market share within the industry. McDonald’s two largest competitors, Burger King Corporation and Wendy’s International, Inc., each only hold a mere 4% of the market share. As more and more fast food restaurants establishing in the U.S., Yum! Brands Corporation faces its highest competition domestically. The largest seven fast food restaurants possess 45% of the total market share. So developing internationally is a vital and wise decision that Yum! Brands has made.
In comparison to the U.S. division, the situation is totally different in the international market. KFC is the first fast food restaurants to enter the China market, and continues to be the most popular brand. Pizza Hut is the first chain pizza restaurant to bring pizza, Western casual dining, and pizza delivery to China. According to these facts, the competition is less severe in the China market. However, Yum! Brands need to deal with a new wave of competitors in foreign countries. Although it provides products that are differentiated from local restaurants, the tastes of consumers and the quality of service will greatly affect the success of the corporation. If consumers are not willing to purchase the food type that Yum! Brands offers, the company will lose to other restaurants that have been long established in foreign countries.
Potential New Entrants The
The saturation of the US QSR industry has caused firms to look outside of US borders for growth opportunities. Europe has been a very attractive market for global expansion due to its large affluent population and that menu options do not have to be completely customized to the region. China and India are also attractive environments but require more modified product offerings to meet local demands. KFC has had to offer options such as burgers, ribs, or fish to meet local cultural demands in their overseas expansion.
In the beginning of Chapter 2 of Fast Food Nation,Eric Schlosser recounts a visit to the McDonald’s headquarters in Oak Brook,Il where he is engulfed in the enormous amount of Mcdonald’s merchandise.The McStore is described as a store similar to Disney, Schlosser uses the word “Disneyesque”. From that point on the author begins to compare the establishment of the McDonald’s company with that of the Walt Disney company. Ray Kroc,predominant establisher of the McDonald’s corporation, is depicted as a great salesmen who targeted predominantly children;And portrayed working at his establishment as something greater than it possibly was-much like Walt Disney did. Later on in the Chapter Eric Schlosser goes on to explain that Ray reached out to
The future of any firm company lies in its strategies and alignment to the environmental situation for sustainable profitability. In the restaurant industry, MacDonald’s corporation has developed specific strategies that have made it become the pacesetter for other companies. As the industry becomes more competitive, Macdonald’s corporation needs to balance its business-level strategies and corporate-level strategies. This paper analyses the business-level and corporate strategies adopted by MacDonald’s corporations. An analysis for Macdonald’s Competitive Environment will feature the Yum Brands in a bid to compare the performance on Slow-cycle and Fast-cycle Markets.
More than an exposé of the fast-food industry, Chew on This is explicit about why kids need to be informed. The authors profile real teens whose lives have been affected by fast food. They talk to an eighteen-year-old boy who decides to have gastric bypass surgery; a twelve-year-old girl in Alaska who launched a "Stop the Pop" campaign to remove soda machines from her school; a teenage boy who helped unionize the McDonald's franchise where he worked — the first to do so — only to see the restaurant close shortly after; and two sisters living on a traditional ranch.
Schlosser wants to emphasize the consequences of fast food restaurants and how it is changing the culture of the people in America, developing into a more unhealthy lifestyle. The author’s appeals to ethos shows the readers that he shares a lot of common beliefs that other Americans have, this gets the reader's attention due to their similar ideals such as the complex interplay of social, economic, and technological forces that determine what people eat transforming not only the culture of food but also their lifestyle and environment in a negative way.
operates several fast food brands in Australia. KFC is the major brand that Yum runs. The main product of KFC is made by chicken meat. Therefore, the strength and the weakness of KFC are obviously. People who like chicken meat will highly be attracted by KFC. However, it gives customer who like fast food a limited choice. Just use the one kind of meat will make the brand to be more professional. But it also will narrow its potential markets.
Wake up look at what the fast food industry is causing and how it is affecting many people and especially teens and kids. The fast food industry has become very clever throughout the years, making us eat more with their special deals and bigger serving sizes. These companies are getting worse and worse and it will keep happening if nothing against this process is done. Various factors have changed since the 70s to the present day such as changes in serving size and proportions causing excessive consumptions of these foods. Thanks to the so ever convenient and cheap prices of these foods compared to the prices of healthy foods like fresh produce used to make homemade food that are healthier than fast food junk. Ever since
The majority of Americans enjoy fast food like bees enjoy their honey. Fast food is hard not to love due to families experiencing fast paced days, parents who work more than 20 hours a week, and having children with picky appetites can be rough. For most American families, it can be a challenge to not consider eating fast food more than once a week. The fast food industry has grown tremendously through the years. The one restaurant that is known all over the world for their golden arches and their big macs is McDonalds. With knowledge and personal experiences, I can say that McDonalds is by far the worst fast food restaurant in America. I believe this due to how unhealthy the food is for our bodies, the disturbing facts about the happy meals, the poor service, and the non-cleanliness of the restaurant.
Thusly, because of such a mixture of items offered to the clients in Chinese market, and also in some other nation of the world, organizations constituting Yum! Brands speak to a genuine force in fast food business possessing the main positions in different segments of the market.
This case study determines the critical success factors used by Subway Restaurants Corporation to expand nationally, which the corporation wants to use also to expand internationally. In addition, this paper describes the competition and the prospect success in Asia-Pacific and Latin America. In general, the fast food industry is discovered with respect to the history and future plans of fast food chain Subway international for expanding and accretion in Asia-Pacific and Latin America, containing the four factors that Subway should use to compete and success in those markets. Each proposed country market has unique cultural and religious requirements should be realized by Subway, as well as the consumption patterns, market trends, and the franchise values which determine from the local traditional fast food compared to the viewpoint of Subway’s healthy alternatives and low expansion costs.
Lack in identifying the trend of customers .The healthy eating trends are on the rise, so it will be difficult for Yum brand to win more customers in fast food category. Many companies started to include in their menu by offering low-fat and low-calorie burgers ham. Chipotle, McDonald's as such but Yum Brand have not done it yet. It Yum Brands Inc's reputation, which are responsible for pain and other causes customers to flee to
Since McDonald’s is the most well know fast food chain in the world with a market cap of 69.35 billion, brand recognition is their biggest strength. The secret of McDonald’s success is its willingness to innovate and maintain consistency in the operation of its many outlets. In recent years McDonald’s has introduced Premium Salads, Snack Wraps, fresh Apple Dippers in the United States, and Corn Cups in China. Also, McDonald 's products are priced so low that economic conditions are almost insignificant.
So, Yum! Brands must know the competitors of the Taco Bell in Malaysia market that offer the similar product that satisfy the same needs and wants of the customer. The Yum! Brands should produce more valuable product for the Taco Bell to winning the customer over the competitor in Malaysia market. The competitor in Malaysia that satisfy the same needs and wants of customer such as KFC, McDonald, Pizza Hut, Burger King and many more. Yum! Brands must to identify all the weakness of their competitors in Malaysia market such as the weakness in their foods, services, packaging and many more. So, Yum! Brands must develop the strategies that is everything in the competitors goods and services in Malaysia can’t to provide to the customer, Taco Bell can provide it. What they can’t and haven’t prepare, Taco Bell can and will have prepared. Taco Bell must know all the marketing strategy that have been use by the competitors, especially the promotional method that they use to market their product. Taco Bell must follow up all the marketing strategy and make some differences
Providing customers with the best of both worlds: west meets east. In addition to its radical strategic approach of localization with regard to its food, they extended that viewpoint when selecting their management team. By hiring Chinese executives, Yum! Brands is able to build relationships with the local suppliers more easily and quickly. It definitely helps with their competitive advantage that chicken is a staple meat in China. Given these factors, it is clear that KFC has a competitive advantage in this market. However, taking a closer look at the industry and thinking longer-term, the competitiveness is undesirable but there is still potential to improve profitability. See the analysis
The first KFC was opened in Tiananmen Square, China 1987; it struggled as western food was unknown to the east. This was still a very conservative nation, not prepared for the “Fast Food” takeover. The restaurant did pretty well, but grew slowly. The Harvard business review, stated that “in 1992 the Chinese government granted foreign companies greater access to markets, KFC China’s managers gradually developed the blueprint that would transform the chain.” (Yums' China, 2017) Although they have done well for themselves they struggled, as growth was steady but slow and their customer base was shrinking. “In November 2016 Yum China Holdings, Inc. became a licensee of Yum brands in Mainland China; they have exclusive rights to KFC.” (Yums' China, 2017) Yum controls approximately 7,300 restaurants and more than 400,000 employees in more than 1, 100 cities. YUMS generated over $8bln in sales in 2015.