Threats of Yum! Brands
Essay by langeyou • November 10, 2013 • Research Paper • 519 Words (3 Pages) • 1,632 Views
Threats of Yum! Brands
1. Highly competitive environment
The fast food restaurant industry is highly competitive. Though Yum! Brands is the world's largest restaurant company, it still has some strong competitors both in domestic US market and global market.
In domestic US market, the biggest competitor for Yum! Brands in fast food market is McDonald's. According to a recent data, though Yum! Brands do get a solid domestic growth platform with Taco Bell, McDonald's is currently eating KFC's lunch in the US market.[1] for reference, there was a notable decline in Yum!'s domestic same-store sales growth during the past quarter in 2013, which was lead by 4% surprise decrease at KFC. [2] Because of KFC's domestic underperformance, now Yum! Brands is less effective than McDonald's in domestic US market.
In global market, although Yum! Brands provides products that is differentiated from local restaurants, the success will be greatly affected by the tastes of consumers. If consumers are not convinced to the unique of Yum!s' food, the company will lose out to other restaurants that have been long established in foreign countries.
2. Unhealthy lifestyle
With regard to all of its divisions, one of the biggest threats that Yum! Brands faces is that public's increasingly health concerns think that fast food stands for unhealthy lifestyle. People may choose to substitute to healthier food options. It is possible that consumers may choose to pay slightly more for better quality food at more expensive restaurants or cook at home.
Particularly, in recent years, Yum!'s industry, fast food, has beset in America with debate over obesity.[3] The public's blame for the steady rise in the proportion of overweight Americans laid mainly at the expand of fast-food chain. In addition, as a result of recent major outbreaks of the avian flu and other diseases, many people regarded fast food that Yum!'s offers as unhealthy food. It is a threat for Yum! Brands to publish nutritional information about their food and change public's thoughts.
3 Missteps in China Division
Yum! Brands has three divisions: the U.S. Division, the International Division, and the China Division. China Division is important to
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