Business Analysis Yum Industries

Business Analysis Part II: Yum! Brands

University of Phoenix
MGT 521

Bob d’Alessio

Quick Service Restaurant
The quick service restaurant industry is highly competitive and saturated.   Yum! Brands   has .8% of the market share.   The quick-service segment faces strong competition from other segments, such as convenience and food stores, as well as the impact of higher energy costs and the economic slowdown on consumers’ discretionary dollars. According to the Restaurant, Food & Beverage market Research handbook there is more than 960,000 restaurant and foodservice locations in the United States. The restaurant share of the food dollar is approximately 48%. The industry employs over 12.9 million people.   According to the National Restaurant Association (, total restaurant industry sales are projected to reach $631.8 billion in 2012, an increase of 3.5%, or 0.8% on an inflation-adjusted basis. Sales reached $610.4 billion in 2011. The global restaurants sector is fragmented with the four largest competitors McDonalds, Sodexo, Compass and Yum! Brands contributing to competition levels.
Yum! Overview
Yum Brands is a multinational company that conducts business in over 120 countries.   Founded in 1977, headquarter in Louisville, Kentucky it operates franchisees and licensees KFC, Taco Bell and Pizza Hut. Yum is the world’s largest quick service restaurant with over 37,000 units worldwide.   Each restaurant is operated by a franchisee or licensee ranging in size from sole-proprietor to large publically traded company. Yum! Brands own non-controlling interest Chinese entities similar to KFC franchises and Little Sheep Limited in Mongolia, China.   The China division is based in Shanghai, China and is made up of 4,500 restaurants; Pizza Hut and KFC.   Revenues for 2011 for the China Division were $5.6 Billion and operating profit of $908 million. Revenues for the International division based in Dallas, Texas were $3.3 Billion with operating...