Identifying Threats, Opportunities, and Strategies for Yum!'s Expansion in Emerging Markets

Threats and Opportunities in Expanding to Emerging Markets

Using Appropriate Concepts And Theories From Block 2, Session 2, Identify And Discuss Three Main Threats And Three Main Opportunities That Should Be Considered By Yum! In Expanding Its Global Reach Within Emerging Markets Such As China.

Using The Concepts Of Convergence, Divergence And Crossvergence, Explore How Yum! Can Innovate Through Combining ‘Global Knowledge’ With ‘Local Needs’

From a Marketing Perspective, What Are The Benefits And Challenges For Yum As It Expands In China Or Other Emerging Markets?

The threats that are present in the operational process of Yum!’s can be well diversified in 3 main categories. Competition among the business organization is considered as one of the major threat that is present in the system. As there is a continuous competition with the brand of McDonalds, high competition is present in the business processing.

Another threat that is present in the operational process is namely taxation. It can be stated that there is a difference in between the taxation process of different countries. This might be affecting the cost that is incurred in the operational process. This is one of the main reason that quality of the product might be getting affected in a negative manner in order to maintain the profit margin of the operational process.

Another major threat that is present in the operational process of Yum! is that the accounting system have been prone to high changes. This section includes the fact that there have been constant change in the accounting laws of the country and the legislation is to be bought. Yum! might fail in the operational process. This might lead to legal issues that are present in the system.

Usage of Porter Five forces model can be implemented in the process. With the help of Porter Five forces model, proper understanding of the marketing competitiveness and understanding the market attractiveness (Porter, 1980). This model analyzes the direct industry competitors, Suppliers, buyers, potential entrants and the substitute goods and services.

Usage of contingent model of accounting change can be used for elimination of the issues that are created due to accounting changes that are brought in. the entire model is diversified in 6 stages. The stages are namely State of equilibrium, Financial scandal/significant economic change (financial reporting that is proven to be faulty). After this stage, search of consensus as to how to resolve the issue. After this stage, new regulation is patched and put into rules (Haller and Walton, 2003). After this again stage of equilibrium arises and unintended consequences takes place. However, it can be stated that regulations often fails to see the side effects.

Strategies for Innovation and Combining Global Knowledge with Local Needs

The 3 main opportunities that are to be considered in the process includes that there is a huge market in China to explore and the potential of the market is estimated to be high. One aspect that is to be considered is that Yum! have been gaining positives form the market form the very beginning with US based products and brands, namely KFC and Pizza Hut. Now they have been focusing on developing Chinese food brand. They have been working on the same with the name of east Dawning. High acceptance of this trial is expected to be high.

In today’s society, staying healthy have been one of the major concern. Demand of healthy food over tasty food have been increasing at a very fast rate. This section ensures that organizations who have been providing fast food needs to undergo an alteration. Yum! have been properly adapted to the aspect and have been providing healthy fast food. In case of KFC, chicken is fried less and grilled more. On the other hand it has been seen that Taco bell have been pushing for salad. These are the initiatives that are being taken to order to sustain the market.

Their supply chain have been at par with the required system. This section ensures that the supply section have been highly efficient and this have been one of the major reason that proper operational process can be performed. This section also ensures better results are achieved.

Usage of diamond model can be used in the process of analyzing the benefits that are present in the operational process. This section includes the fact that proper assessment of the business can be performed in a manner that structure of the firms and rivalry is noted (Porter, 1990). This helps in understanding the capabilities of the competitive organization. This helps in increasing the efficiency of the process. Demand condition is well analyzed in the process as well. A proper communication in between the related and supporting industries are considered. Factor conditions are also considered by Yum! for better understanding of the demands of the clients.

It can be stated that convergence will be acting appropriate in the operational process for gaining a short term goal. This section includes the fact that better assessment of the goals that are to be achieved in a while is discussed. It have been seen that adaption method for several countries are different. Hence Yum! needs to create a separate ideology for proper assessing of the business process. It can be stated that there is a requirement of proper compliance of financial statements with IFRS along with the IASB. The prime way of adapting convergence is that there has to be a proper assessment of the voluntary jurisdiction and creation of regulatory authority will be considered. Developing of IFRS standard are also developed. This section ensures that performing a proper and developed standard setting board that will be independent in nature. These board will be accountable to monitoring board of capital market authorities (Tarca, 2012). Proper engaging of the investors, regulators, global accountancy professionals and business leaders will be playing an important role in processing of the public observation. Board deliberation have also been one of the major aspect that is to be considered. These are the main factors that will be considered to be important in the implementation of the convergence in the operating process of Yum!.

Marketing Benefits and Challenges of Expanding in China or Other Emerging Markets

The convergence-divergence duality have to be raised and hence policy concern will be raising processing of globalization (Regmi et al., 2004). This will be creating a proper development of uneven and new dietary habits in between rich and poor people. It can be considered that the high income groups will be providing a better analysis of the countries with accure benefits. This technique will be helping Yum! in long term. This is one of the major reason that divergence is needed to be implemented. For proper development of the process, the main aspect that is to be claimed in the process is that there will be a high influence of globalization policies. This process will be including dietary. Globalization is considered as one of the major aspect that is to be considered in case of divergence. The major aspect that is to be considered is that there needs to be data analysis being performed. This is one of the major reason that proper processing of the degree of acceptability will be managed.

Crossvergence is considered to be one of the defined incorporates that will be made. National culture have been seeing the economic culture and hence this is one of the major aspect that is to be considered in order to proper development of the business process. Developing economic ideology have been one of the major aspect that is to be considered.

There are several benefits that are to be considered. The major benefits that are to be considered in the process are namely having a high population of China. It can be considered that population of the China have been very high. This high population have been the major reason that sales and marketing process of the organization have been high. This is one of the major reason that functional process have been providing higher exposure. It can be said that the exposure of products and the brands that are present are high. Hence the sales of product have been high as well. This section includes the fact that revenue that is earned after performing marketing have been high. This high value that is retrieved after the implementation of marketing is primarily due to the high populace.

Another benefits that is present in the marketing process of Yum! is that they have been trying to adapt with the system of healthier food. It have been seen that Yum! have been focusing on manufacturing healthier food. This is one of the major reason that marketing process have been getting easier. This ease in marketing process is due to the fact that the products that are being manufactured in the process have been well accepted by the audience. This is one of the major reason that the functional process have been getting more positive results.

The foods that are manufactured are treated as a staple food in China. This section includes the fact that the marketing process need not be very much costly as this will be affecting the entire process. This have been one of the major aspect that can be considered. This section also includes a fact that reaching out the audience gets easier. It is seen that Pizza Hut have been reaching out to millions every day for serving their dinner. This regular usage of the brands itself acts as a marketing strategy. This strategy have been benefitting the entire process.

Another major advantage that is present in the process is that there will be seen in the process is that the revenue that have been allocated for performing marketing process is high. This ensures that the popularity of the brand will be high. This high popularity in the brand will ensure that reaching out to the mass will be getting easier.

Autonomy and transformation have been another aspect that is to be considered in the process. With higher autonomy being implemented the major benefit that is received is that the effort that is to be provided in the marketing process decreases. With less effort being given, higher efficiency is received.

Globalization implication in China have been another aspect that is to be considered in the process. This can be considered as one of the major advantage that is received in the marketing process.

The major challenge that is present in the marketing process is that the competition from McDonalds have been high. This is one of the major reason that the effectiveness of marketing process will be lower than it should have been without the competition.

Another challenge that is faced in the process is that there Yum! have been focusing more on digital platform and hence wise the target audience is set form the very beginning. This might have been affecting the entire process.  

Figure 1: Mind map

The 5 key learning points that have can be considered in the process that have been affecting the entire process of business making are Porters Five Forces. With the help of this model, the main aspect that can be considered is proper competitive analysis can be made. This analysis have been focusing on performing better understanding of the bargain power of the suppliers and the customers are properly analyzed. Threats to entrants are also analyzed.

Diamond model have also been helping in proper management of the competitive analysis. This competitive analysis ensures that better management of the business processing can be ensured.

Convergence should not be adapted at a whole as the entire strategy is needed to be applied only in terms of short term goal achievement. This section ensures that there is a need of data management and IFRS management. This will be helping in proper development of the strategy development.

Globalization is another aspect that is considered. This is one of the major aspect that have been affecting the marketing process. Globalization have been increasing efficiency of the organizational structure. This organizational structure have been bettering the operational process as well and have been helping in increasing the revenue of the organization.

Contingent model have been bettering the process of the accounting changes that are performed in the course of business operational process. This ensures that proper engagement of the rules have been performed in a manner that issues that might occur due to the change in the accounting system will be eliminated.

References

Haller, A. and Walton, P. (2003) ‘Country differences and harmonization’, in Walton, P., Haller, A. and Raffournier, B. (eds) International Accounting, 2nd edn, London, Thomson.

Porter, M.E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York, Free Press.

Porter, M.E. (1990) ‘The competitive advantage of nations’, Harvard Business Review, vol. 68, no. 2, pp. 73–93.

Regmi, A., N. Ballenger, and J. Putnam. 2004. Globalisation and income growth promote the Mediterranean diet. Public Health Nutrition 7 (7): 977–983.

Tarca, A. (2012) ‘The Case for Global Accounting Standards: Argument and Evidence’ [Online]. Available at www.ifrs.org/Use-around-the-world/Globalconvergence/Convergence-with-US-GAAP/Documents/Analysis-of-SEC-FinalStaff-Report.pdf (Accessed 13 August 2016).