Yum! Brands Expansion: Threats, Opportunities, and Innovation

This report analyzes the global expansion strategies of Yum! Brands, focusing on its ventures in emerging markets. The report begins with an introduction to Yum! Brands and its market presence, followed by an examination of the opportunities and threats the company faces in emerging economies, ...Read More

Running head: SHAPING BUSINESS OPPORTUNITIES
SHAPING BUSINESS OPPORTUNITIES
Name of the student
Name of the university
Author note

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Part A
1. Introduction
The growth and expansion of the companies in the different international markets are
reliant on the needs of sustenance and elevatein the sales volume. It has been observed that the
expansion of a venture in the new markets enables the same in improving the sales revenue with
an elevated scope of marketing the propositions. The report will be developing an assessment of
the different opportunities, challenges and innovative practices that are being encountered by
Yum while making an expansion in the emerging markets. The report will also enumerate the
benefits and challenges that the same might face in the emerging economies while making an
expansion on the same.
2. Opportunities and threats that are faced by Yum while expanding in the global emerging
markets
2.1 Opportunities that are being faced by the organization in the emerging economies
 The scope of attracting new customer base: The major opportunity that is being faced by
the concerned organization, Yum, while expanding in the emerging markets are based on
the elevatein the potential customer base. Most of the organizations make a foreign
expansion with the purpose of improving the customer base and attracting new customers
towards the propositions with the purpose of improving the sales volume. In this
connection, Yum’s expansion in the emerging markets might be taken as a step for
improving the sales volume of the venture. It has been observed that already 33% of the
operating profits of the organization was derived from China 1. It has been observed that
1 Foley, S, "The fast-food giant eating up the world.". in The Independent, , 2010,
<https://www.independent.co.uk/news/business/analysis-and-features/the-fast-food-giant-eating-up-the-

2SHAPING BUSINESS OPPORTUNITIES
the elevatein the sales volume of the organization through widened market scope
provides the same with elevating profit which might support the sustenance of the
venture 2. Therefore, the expansion of the organization in the emerging economies would
support the organization in elevating the efficiency of the business operations while
adhering to the common goals of the venture.
 Developing diverse range of propositions: The development of diverse range of
propositions by the organization would support the organization in improving the
customer base while widening their scope of marketing their propositions to the target
market. The introduction of a wider variety of propositions would support the
organization in retaining a competitive edge over the existing market players. The
diversity of propositions allow an organization in elevating its efficiency of the same in
attracting the attention of the target customers3. Therefore, the development of diverse
propositions would support the organization in empowering their sales volume while
maximizing the annual margins and achieving targets towards sustainable growth.
 Continuous improvement in the quality of the propositions: The continuous
improvement in the quality of the propositions would support the organization in
elevating the loyalty and commitment of the customers towards the propositions that are
world-2025955.html> [accessed 12 March 2020].
2 Xu, Q, "Dynamic Interaction Mechanism Model Between Market Competition, Marketing Innovation and
Enterprise Innovation.". in , , 2019.
3 Gong, R, Y Wu, F Chen, & T Yan, "Labor Costs, Market Environment and Green Technological
Innovation: Evidence from High-Pollution Firms.". in , , 2020.

3SHAPING BUSINESS OPPORTUNITIES
made by the same. The continuous improvement of the quality is one of the major
constructs that are being followed by an organization with the purpose of influencing the
buying behaviour of the customers4. It has been observed that most of the customers
desire quality experience for the capital invested by the same towards the propositions5.
Therefore, the continuous improvement in the quality of the propositions play an
important role in improving the experience of the customers while operating as per the
common goals of the venture.
2.2 Threats that might be faced by the organization in the emerging economies
 Intense competition from the existing players: The intensification of competition
between the existing players in the new emerging economy might impose significant
threats to the expansion of the concerned organization. The customers in the economies
are more loyal towards the offerings that are made by the existing organizations which
might create further challenges in maintaining the efficiency of the business operation
while operating as per the common goals of the venture6. Therefore, intense competition
4 Wu, C, F Huang, C Huang, & H Zhang, "Entry Mode, Market Selection, and Innovation Performance.".
in Ideas.repec.org, , 2018, <https://ideas.repec.org/a/gam/jsusta/v10y2018i11p4222-d183161.html>
[accessed 12 March 2020].
5 Ozturk, A, & S Cavusgil, "Global convergence of consumer spending: Conceptualization and
propositions.". in , , 2019.
6 Wang, H, "Divergence, Convergence or Crossvergence of Chinese and US Approaches to Regional
Integration: Evolving Trajectories and Their Implications.". in , , 2018,
<https://www.researchgate.net/publication/326395979_Divergence_Convergence_or_Crossvergence_of_
Chinese_and_US_Approaches_to_Regional_Integration_Evolving_Trajectories_and_Their_Implications>

4SHAPING BUSINESS OPPORTUNITIES
in the markets would affect the competency of the organizations in maintaining a uniform
growth in the emerging economies.
 Lower disposable income among the population: Lower rate of disposable income
among the population in the emerging economies might restrict the scope of the target
market for the organization while making a growth in the markets. The lower disposable
income among the population would result to price sensitivity which might affect the
competency of the business in drawing the attention of significant amount of population
towards their propositions7.
 New entrants: The new entrants in the market would elevatemarket competition. In this
connection, the new entrants, providing better propositions, might affect the competency
of an organization in making a expansion in its market holdings8. The threat of new
entrants are growing in the emerging economies which would significantly affect the
business growth.
3. Innovation that might be made by Yum as per local needs
The theory of Convergence specifically aims at identifying the need of technological
innovations in the business processes. The technological innovations in the business processes in
the operational framework of Yum’s case is based on identifying the shifts in the preferences of
the customers. The organization might make use of Big Data analytics or the CRM with the
[accessed 12 March 2020].
7 Wu, C, F Huang, C Huang, & H Zhang, "Entry Mode, Market Selection, and Innovation Performance.".
in Ideas.repec.org, , 2018, <https://ideas.repec.org/a/gam/jsusta/v10y2018i11p4222-d183161.html>
[accessed 12 March 2020].
8 Ozturk, A, & S Cavusgil, "Global convergence of consumer spending: Conceptualization and
propositions.". in , , 2019.

5SHAPING BUSINESS OPPORTUNITIES
purpose of identifying the specific demand of the local communities. In his connection, the use
of different technologies would support the venture in merging global knowledge with local
needs of the customers9. On the other hand, the exploration of the Divergence theory in the
organizational model would permit the organization in influencing the cultural hold of the
society and thereby develop capabilities for sufficing to the interests of the local community
stakeholders. Crossvergence theory would enable the organization in developing an idea on the
unique value proposition in the different economies. The crossvergence theory would support the
organization in improving the rate of operations as per the common goals of the venture.
4. Benefits and challenges of Yum in the emerging markets
4.1 Benefits that might be encountered by the business
 Better marketing competency: The increased marketing competency of the business
facilitated in encountering increased scope for drawing the attention of the customers.
The organization devised different promotional campaigns with the purpose of improving
the rate of awareness among the customers for increased chances of operational
performance.
 Command over the supply chains: The increased command of the organization over its
supply chain and logistics operations would support the venture in making the
propositions widely available in the different markets. The improved supply chain
9 Wang, H, "Divergence, Convergence or Crossvergence of Chinese and US Approaches to Regional
Integration: Evolving Trajectories and Their Implications.". in , , 2018,
<https://www.researchgate.net/publication/326395979_Divergence_Convergence_or_Crossvergence_of_
Chinese_and_US_Approaches_to_Regional_Integration_Evolving_Trajectories_and_Their_Implications>
[accessed 12 March 2020].

6SHAPING BUSINESS OPPORTUNITIES
operations of the organization would support the business in making dynamic expansions
in the emerging economies.
 Product based innovations: The efficient R&D operations of the business allowed the
same in empowering the innovativeness of the venture while operating in the different
markets. The product based innovations would support the organization in experimenting
with the tastes and preferences of the customers while offering them localized delicacies.
It would optimize the scope of expansion of the business in the emerging economies.
4.2 Challenges that might be encountered by the business
 Legislative controls: The imposition of different legislation and regulations by the
government in the emerging economies might restrict the competency of the organization
in making dynamic expansions without altering the policies and frameworks of the
business model. The different changes in the legislative and regulatory activities are
based on the effective functioning of the different systems in accordance with the
common goals of the venture. Therefore, the legislative changes or stringent regulations
in the emerging economies might affect the competency of the organizations in elevating
the feasibility of the growth in the emerging economies.
 Increased cost of operations: The increased cost of operations in the emerging
economies due to poor infrastructural or technological facilities might curtail out the
annual margins that are earned by the business. The increased cost of operations and
lower levels of sales volume in the emerging economies might adversely affect the
economic sustenance of the business while establishing their venture in the emerging
economies.

7SHAPING BUSINESS OPPORTUNITIES
 Changes in the preferences of the target audience: The change in the taste and
preferences of the customers might restrict the competency of the organization in
improving their sales volume while earning reduced revenue per year. It has been
observed that most of the customers are switching from less healthy fast foods to well-
cooked delicacies. The factor of the switching preferences of the customers and their
changing buying patterns might affect the competency of the organization in retaining the
profitability of the same while operating in the different emerging economies.
5. Conclusion
Therefore, from the above assessment it might be stated that the concerned organization,
Yum, might face significant opportunities and challenges while expanding in the emerging
economies. The report aimed at identifying the theories of convergence, Divergence and
crossvergence for inducing innovation in the organizational processes. The report enumerated the
different possibilities and concerns that the organization might encounter while making
expansion in the markets. Therefore, the enumeration of different possibilities and threats would
enable the organization in strategizing effectively for improving the organizational operations in
the markets.

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Part B: Mind mapping

9SHAPING BUSINESS OPPORTUNITIES
(Source: Author)
The Mind Map critically enumerated the different factors that are influenced by
Globalization or globalization. Globalization influenced the growth of the organizations in the
non- westernized markets through different strategies. It created a scope for the firms, with huge
investments, to elevatetheir market exposure. The growth of the huge international firms in the
emerging markets created an opportunity of flexible trade and commerce along with other
economic developments to the host nations. However, the exploitation of the workforce in the
different emerging economies might be perceived as the evils that globalized posed. Moreover,
globalization turned towards intensifying the market competition as large firms entered the
markets and outsized the SME’s. The sustainable growth practices and the imposition of IFRS
standards brought the situation under control. However, globalization provided the international
businesses with the opportunity of introducing their propositions to the global customers.
The increased exposure of the organizations in the different markets have significantly
enforced changes in the business profile while operating as per the common goals of sustenance.
Moreover, the internationalization of the businesses mandated considerations on different CSR
activities which critically empowered the growth of the organizations while empowering
sustainable consumption and adherence to environmental concerns. Therefore, globalization has
a dual impact on the organizational and market setting of the global economies while
empowering the growth of the large multinationals in the emerging economies and avoid
saturation in the parent nations. On the other hand, the increased market expansion of the
organizations introduced increased competition in the markets.

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Part C
1. Intensification of competition in the markets
The intensification of the competition in the markets, through the study, supported me in
identifying the critical decisions and strategies that are developed by the businesses for
empowering their long term sustenance in the markets. Therefore, I recognized the value of the
strategic impositions in the organizations which is focused towards improving their market
position in intensely competitive markets.
2. Marketing aspects in the globalized scenario
The reading supported me in idealizing the need for extensive marketing activities by the
organizations while assessing their competency of attracting the attention of the global
customers. I recognized that the organizations developed different marketing strategies with the
purpose of elevating their scope of sales in the international economies.
3. Innovation in globalized markets
Innovation plays a major role in developing the competitive edge for the businesses. In
this connection, he reading permitted me in developing cognition on the different innovation
based practices that are considered by the modern organizations for improving their offerings
while adhering to the shifts in the interests and the preferences of the customers.
4. The market expansion opportunities offered by globalization
The globalized markets provide the businesses with a growing opportunity of making
market expansions in the foreign economies. I observed that most of the organizations undertake
expansion in the different international economies with the purpose of experiencing an elevated

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sales volume. Therefore, I realized that globalization provided the organizations with an
increased scope of expansion. However, I also realized that increased market expansions would
create a situation of saturated and elevatein market competition in the economies.
5. Legislations and the CSR
Legislations and the imposition of different CSR activities are crucial for the
development of the organization in the market. I realized that the CSR related activities in
organizations are targeted towards the fulfilment of the expectations of the communities,
stakeholders, environmental concerns and the economic growth of businesses.

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References
Foley, S, "The fast-food giant eating up the world.". in The Independent, , 2010,
<https://www.independent.co.uk/news/business/analysis-and-features/the-fast-food-giant-eating-
up-the-world-2025955.html> [accessed 12 March 2020].
Gong, R, Y Wu, F Chen, & T Yan, "Labor Costs, Market Environment and Green Technological
Innovation: Evidence from High-Pollution Firms.". in , , 2020.
Ozturk, A, & S Cavusgil, "Global convergence of consumer spending: Conceptualization and
propositions.". in , , 2019.
Wang, H, "Divergence, Convergence or Crossvergence of Chinese and US Approaches to
Regional Integration: Evolving Trajectories and Their Implications.". in , , 2018,
<https://www.researchgate.net/publication/326395979_Divergence_Convergence_or_Crossverge
nce_of_Chinese_and_US_Approaches_to_Regional_Integration_Evolving_Trajectories_and_Th
eir_Implications> [accessed 12 March 2020].
Wu, C, F Huang, C Huang, & H Zhang, "Entry Mode, Market Selection, and Innovation
Performance.". in Ideas.repec.org, , 2018,
<https://ideas.repec.org/a/gam/jsusta/v10y2018i11p4222-d183161.html> [accessed 12 March
2020].
Xu, Q, "Dynamic Interaction Mechanism Model Between Market Competition, Marketing
Innovation and Enterprise Innovation.". in , , 2019.

13SHAPING BUSINESS OPPORTUNITIES