Introduction

• Introduction
• Background
• Internal Assessment
• External Assessment
• Strategy Formulation
• Strategy Implementation
• Conclusion

Background

• Industry Background
• Highest producing market segments
• BLUF: Taco Bell operating segment introduces breakfast menu all day, KFC enters breakfast food market

Vision Statement: Yum! Brands is 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 runway for growth, especially on an international level. (YUM)

Slogan: "Alone we're delicious...together we're Yum!"

Internal Assessment

Ratio Analysis

• Gross profit margin, Net profit margin, and operating profit margin all up 2% in past year
• Earnings per share up $.60 in past year.
• Return on stockholder's equity doubled in the past year.
• Low liquidity- current ratio .55, quick ratio .47 in 2015, much lower than industry average
• Debt to equity ratio has almost doubled in past year- high compared to industry average
• High inventory turnover
• Stock buyback plan
• Yum! China Spinoff

Organizational Chart

IFE

Strategy Formulation

SWOT Bivariate

SPACE Matrix

BCG Matrix

IE Matrix

Business Unit Comparison

• Kentucky Fried Chicken
• Pizza Hut
• Taco Bell
• China division

Strategy Recommendations

• Create YUM app to encompass all three business units and generate corporate brand recognition in restaurants.
• Introduce all day breakfast menu for Taco Bell US operating segment, and introduce breakfast menu to KFC US operating segment.
• Focus on other developing countries that have less saturated markets to expand upon new growth potential.
• Increase advertising in China and use brand recognition to promote better food quality safety measures.

QSPM

Strategy Implementation

Explanation of Strategy

1. Expand Taco Bell breakfast menu to all day with certain items in heavily populated area (Louisville, KY) for three months.
2. Introduce breakfast menu into KFC stores in KY, NY, LA, and MI for three months.
3. If successful, roll out into all stores in US.
4. Employees of KFC will require 4 hours of additional training to learn breakfast handling and safety.
5. Supply chain must include certain new breakfast items.
6. Advertising expenses to promote new breakfast option in stores.
7. KFC must adjust operation hours to account for breakfast

Cost Analysis

All Day Taco Bell

Introduction of KFC Breakfast

Timeline

EPS/EBITDA Analysis

Pro Forma Income Statement

Pro Forma Balance Sheet

Pro Forma Cash Flow

Pro Forma Ratios

Return on Investment

Conclusion

Balanced Scorecard

Ending Recommendations

• BLUF: Expand Taco Bell menu to all day option, Introduce new KFC breakfast menu

References

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