Executive Summary:

We would highly recommend that Yum! Brands consider introducing NEXTEP Systems touchscreen drive thru's to 4,500 of their strategic business units. NEXTEP Systems allow customers to buy more, order and pay faster, and get back to their day in no time. The benefits of installing this advancement of technology into Yum! Brands would decrease operational expenses, improve quick service efficiency, along with providing a unique experience for the consumer that is in a hurry, but still craving a menu item from either KFC, Taco Bell, or Pizza Hut.

Overview:

1. Mission and Vision
2. Internal Assessment
3. External Assessment
4. Strategy Formulation
5. Strategy Implementation
6. Strategy Evaluation
7. Conclusion

Mission/Vision Statement:

Yum! Brands are committed to continuing the success realized during our first ten years. Our success has only just begun as we look forward to the future, one, which promises a long runaway for growth, especially on an international level.

Strategies:

Yum! is building a vibrant global business by focusing on three key growth strategies:

• KFC: Build powerful brands through superior marketing, breakthrough innovation and compelling value with a foundation on winning food and world class operations.
• Taco Bell: Drive aggressive unit expansion everywhere, especially in emerging markets. Build leading brands in every significant category in China and India.
• Pizza Hut: Create industry-leading returns through franchising and disciplined use of capital. Maximize long-term shareholder value.

Biggest Competitor:

McDonalds Mission and Vision

Our purpose goes beyond what we sell. We're using our reach to be a positive force. For our customers. Our people. Our communities. Our world.

GOOD FOOD

We promote choices. Real ingredients. Great taste. Transparency.

GOOD PEOPLE

We create great opportunity. Encourage diversity. Offer training. Facilitate teamwork. Reward achievement.

GOOD NEIGHBOR

We champion happy, healthy kids. Keep families together through Ronald McDonald House Charities. Commit to reducing our footprint. Using less energy. And recycling more.

New Mission Statement:

Through the advancement of technology and the fastest drive through system of its kind, Yum! plans to keep up with and a generation of millennials that demand fast, accurate, and quality service. Through the philosophy of continuing success, Yum! plans to implement cross training to all of their employees to maximize customer service as well as employee satisfaction. Yum! Is on a mission to supply better food and faster than anyone else.

New Vision Statement:

Yum! Brands vision is to become the international leader in quality, quick served Mexican style food, fried chicken, and pizza while providing excellent service, the fastest service, and the most accurate service all while partnering with our brand's charities to finally end world hunger.

Internal Assessment:

Internal Factor Evaluation (IFE):

Total Weighted Score: 2.49

This score reveals Yum! Brands is neither weak internally nor significantly internally strong. If they continue to overlook their strengths and weaknesses, then Yum! will become internally weak.

Yum! is doing well in the following to affect there overall Internal Factor Evaluation:

Strength

1. "Diversified business operations" (Business Insights: Global, 2015) Score of .36

Weakness

1. "Decline Operational Performance" (Business Insights: Global, 2015) Score of .16
2. "Lack of Healthy Food Options" (Business Source Complete, 2015) Score of .16

Internal Factors:

Top Strengths

1. Diversified Business Operations (Business Insights: Global, 2015)
2. Focus on Franchise Business Model (Business Insights: Global, 2015)
3. Focus on R&D Activities (Business Insights: Global, 2015)
4. Strong Supply and Distribution Network (Business Source Complete, 2015)

Top Weaknesses

1. High Degree of Debt (Business Insights: Global, 2015)
2. Decline Operational Performance (Business Insights: Global, 2015)
3. Lack of Healthy Food Options (Business Source Complete, 2015)

External Assessment:

External Factors:

Top Opportunities

1. Increasing Demand for Breakfast (NRN, 2016)
2. Increasing Trend of Eating Out (Business Insights: Global, 2015)

Top Threats

1. Intense Competition (Business Insights: Global, 2015)
2. Changing Consumer Preferences (Business Insights: Global, 2015)
3. Increased Awareness for Healthy Food Options (Business Insights: Global, 2015)

External Factor Evaluation (EFE):

Total Weighted Score: 2.20

This score reveals that Yum! Brands is below the average midpoint of 2.5. Yum! is struggling to recognize their opportunities and avoiding the threats that face them.

Yum! should capitalize on the following in order to improve their external operations:

Opportunities

1. Exploring Healthy Food Options (Business Insights: Global, 2015) Rating of 1
2. Fully Automated Restaurant (NACS Online, 2016) Rating of 1

Threats

1. Protest for Higher Wages (S & P Net Advantage, 2015) Rating of 1

Strategy Formulation:

Strategy Implementation:

Why is this cost efficient?

• Drive thru kiosks cost per unit of $15,000
• Installation costs of $5,000
• Total cost of $20,000
• Adding these units to 4,500 locations creating an initial investment of $90,000,000.

How will we pay for this strategy?

• Cash and cash equivalents of $737,000,000
• Why are we using cash?

Potential Growth

• Revenues projected to grow on a 2% growth rate.
• Decrease in operational expenses, which will increase in efficiency.
• By 2018, operating profit will reach $2,106,000,000.

Cost Revenue Analysis

• Cash inflows based off of operating profit.
• Inflows of $219, $221, and $232 (millions)
• Due to low cost, NPV is $355 million with an IRR of 238% based off of three years of cash flows.

Recommendations:

The Problem

The Weakness

Low operational performance due to inefficient cost management.

The Solution

• NEXTEP Drive Thru Systems to increase DT efficiency
• Implementing 4,500 automated in KFC, Taco Bell, and Pizza Hut's across the United States.
• Increase sales by 30%
• Historical growth of 12% annually

Why

• High efficient drive thrus will attract customers
• Millenials historically prefer less human interaction
• Technology always improves sales by 15%
• More customization
• Technological advancement potential

Potential

• High expansion potential
• Electronic Loyalty Card showing past purchases and much more
• Acquiring data to showcase the right products to the correct loyal customers
• Text Reminders for deals and reminders
• Acquiring an App to pay for purchases instead of physical cash

Conclusion:

Any Questions?