Introduction
The large food corporation Yum! Brands owns KFC, Pizza Hut, and Taco Bell. It competes with other restaurants for a global market share and has established itself as a dominant force in the restaurant sector. To determine Yum! Brands’ competitive advantage: This external and internal analysis examines the business climate, firm industry analysis, industry change agents, attractiveness, internal analysis tools, recent performance, comparisons, business strategy, and corporate strategy.
External Analysis
Yum! Brands’ overall business environment is highly competitive, with numerous restaurants vying for a global market share. Yum! Brands, the world’s largest restaurant company, operates over 50,000 restaurants in over 150 countries and territories under brands such as KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill (Khanduja, 2022). Yum! Brands have taken an innovative approach to their business to stay ahead of the competition, including introducing new products and services (Dube et al., 2023).
The company has maintained its market position by remaining competitive and establishing a solid market presence (Ternova, 2022). Yum! Brands have also focused on providing high-quality food and service to create a positive customer experience (Wang & Cong, 2022). As a result, the company has gained a loyal customer base and cemented its position as a leader in the restaurant industry.
Yum! Brands is a market leader in the quick service restaurant (QSR) segment, competing with McDonald’s, Burger King, and Wendy’s. (Sung et al., 2022). It also has a presence in the FSR segment through its Habit Burger Grill brand, with its main competitors being Applebee’s, Chili’s Grill & Bar, and Olive Garden. (Lee et al., 2023). Yum! Provide quality and value, a unique experience, and keep up with technology, trends, and customer preferences to gain a competitive advantage. (Comiran et al., 2022; Brooks et al., 2022). Furthermore, the company must keep up with technological advances such as mobile ordering, online ordering, and delivery services. (Brooks et al., 2022). To remain competitive, Yum! Brands must also keep up with trends and customer preferences.
The primary drivers of change in the restaurant industry are technological advancements, consumer preferences, and industry consolidation. Customers can now order food from home or on the go thanks to online ordering and mobile apps (Raimondo, 2022; Jones, 2022), which has increased demand for these services. (Smu.edu.sg, 2023). Furthermore, industry consolidation has allowed for the emergence of more giant corporations, such as Yum! Brands acquire smaller competitors to broaden their reach. (Xu, 2022). These change agents have had a significant impact on the restaurant industry today.
The restaurant industry is appealing to investors due to its potential for growth and profitability. In recent years, spending on food and technological advancements has increased, offering customers more convenience (Langgat, 2022; Smu.edu.sg, 2023b). Yum! Brands are well-positioned to benefit from the expanding demand for comfort, with a diverse portfolio of brands (Lee et al., 2023; Loutskina et al., 2022). Additionally, the industry is relatively resilient during economic downturns and is subject to government regulations (Yates, 2022; Adedeji & Sowunmi, 2022; AC Investment Research, n.d). All of these factors make the restaurant industry an appealing option for investors.
Internal Analysis
Yum! Brands has a strong portfolio of restaurants, a powerful global brand, and an efficient supply chain that consistently supplies quality food. It has demonstrated its ability to expand in new markets rapidly (Smu.edu.sg, 2023c; Asmussen et al., 2022). It has also leveraged digital marketing, customer loyalty programs, and customer-centric initiatives (Yuan et al., 2023; Asmussen et al., 2022). Yum! Brands have used customer data to improve customer satisfaction, loyalty, and target marketing campaigns (Woetzel et al., 2023; Wold, 2022). Through competitive analysis tools, Yum! Brands have identified capabilities and resources to maintain their competitive edge.
Yum! Over the past four to five years, Brands has outperformed its rivals in terms of financial and marketing performance. Significant growth in sales and profits has improved return on equity and return on assets. (Fan and Hou, 2022; Yum et al., 2022). Moreover, the stock price has increased, demonstrating investor confidence (Du and Tran, 2022). Customer loyalty, churn rate, return on advertising spend, customer acquisition costs, and customer lifetime value have all been above the industry average, indicating strong marketing performance (Hou et al., 2023; Hajar et al., 2022). Yum! Brands profited from their success in establishing a successful company.
Yum! Brands has established itself as a fast-food company that puts the consumer’s needs ahead of the competition’s. They have gained an advantage as first movers thanks to innovations like their mobile ordering platform (Ghosh, 2022; Zhang & Bi, 2022; Du, 2022). Additionally, because of their strategic group position, they have been able to capitalize on the advantages of their competitors and produce a complete offering (Guinto & Alcantara, 2022; Ilmandani & Kusmayadi, 2022). Yum! Brands are competitively different from their rivals thanks to their value proposition, cutting-edge offerings, and strategic positioning within their strategic group.
Yum! Brands has adopted a business-level strategy of differentiation, with a focus on innovation and customer engagement, to set itself apart from its competitors. The firm has invested heavily in product innovation and digital marketing to support this strategy and create new offerings that appeal to customers (Smith, 2022). Additionally, the firm has invested in technology and customer engagement initiatives to build strong relationships with customers and remain competitive (Ochodo, 2022). Moreover, Yum! Brands have leveraged their global scale to reduce costs while still providing superior products and services to their customers (Staniškienė et al., 2022; Lu et al., 2022). This strategy has enabled the firm to create a distinctive brand and differentiate itself from its competitors.
Yum! To broaden its clientele and boost sales, Brands has adopted strategies for diversification and internationalization. It has expanded organically by introducing new goods and services and making acquisitions to access new technologies and markets (Chen et al., 2023; Rhee, 2022). The cooperative strategy encourages collaboration with other businesses so that they can pool resources and take advantage of economies of scale. (Suveiu, 2022; Prasad et al., 2021; Moshood et al., 2022 ). These tactics have improved the company’s competitive advantage and enabled it to start a catering and food delivery service.
Strategic Fit Evaluation of the Company
Yum! Brands’ strategic fit is based on its ability to align its corporate and business strategies and capitalize on opportunities. Yum! Brands have focused on brand management, global operations, and innovation in their business strategies (Gathingu, Susan Wasike, and Mote, 2022). Cost-effectiveness helps the company stay competitive and profitable. Yum! Brands have grown by adding products, entering emerging markets, and using digital and mobile technology (Daft & Marcic, 2022; Nabilah & Anggrainie, 2022). To expand, the company has partnered with Grubhub and DoorDash (www.proquest.com, n.d.). Yum! Brands’ sustainability strategy includes carbon reduction, renewable energy, and sustainable agriculture.
Conclusion
In conclusion, strategic investments, diversification, and collaboration have allowed Yum! Brands must maintain their market position and stay competitive in the restaurant business. The business has distinguished itself from rivals and held an edge in the market by utilizing its potent brand and effective supply chain. Yum! Brands have also benefited from the expansion of the restaurant sector and its recent success in boosting sales and clientele. Yum! Brands are in a solid position to maintain their position as a leader in the restaurant business thanks to their cutting-edge products, customer-focused initiatives, and strategic alliances.
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