Restructuring / Turnaround Strategies Case Study

Yum! Brand's Turnaround Strategy

Abstract:
Yum! Brands, Inc. (Yum!), one of the world’s largest restaurant companies based in Louisville, Kentucky, operated in more than 34,000 restaurants across 100 countries. In 2006, Yum! generated more than $9.5 billion in total revenues which included sales and franchise fees. But in 2007, disappointing performance in its US division, forced Yum! to re-look at its business. Changing consumers’ tastes with increasing awareness towards health and obesity problems affected Yum!’s performance in the US. To turnaround its US business, it decided to follow McDonald’s business model. It decided to introduce new products like beverages and breakfast meals; and expanded value menus to offer healthier products in KFC, Taco Bell and Pizza Hut in the US. But, by following its competitor’s business model would it be able to turnaround its US business division, needs to be seen.

Pedagogical Objectives:

• To understand the dynamics of the US Quick Service Restaurant industry
• Changing consumer tastes and preferences and its impact on the fast food business
• Implications of changing business model for Yum! Brands
• To evaluate the importance of value proposition in fast food industry.

Keywords : Turnaround Strategies Case Study; Fast food industry; US Quick service restaurant industry; Obesity; McDonald’s Changing consumer taste; Value proposition in food industry; Value menus; Healthier products; Full-service restaurants Independent restaurants; Breakfast menus; Premium coffee Healthy foods; Trans-fats