The Fortune 500 and Louisville, Kentucky-based corporation, Yum! Brands, Inc. is the epitome of a modern multinational functioning company. With several different restaurant chains, including Kentucky Fried Chicken (KFC), Pizza Hut, Taco Bell, Long John Silver’s, and more, Yum! Brands Inc. caters to a consumer base by encompassing a wide variety of food genres on a multinational level. The franchise even builds co-branding restaurant sites, which feature two or more chains, increasing the probability of satisfying customers with alternative requests. Now, with several thousand restaurants around the world, Yum! Brands, Inc. mainly targets branding in countries other than the United States, namely China, because of their booming economies and steadfast consumerism.
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According to Bateman-Snell (2009), a multinational company consists of “several subsidiaries operating as stand-alone business units in multiples countries” (p. 223). Yum! Brands Inc. falls under this category because they operate thousands of autonomous units throughout the world. In addition to this characteristic, Yum Brands, Inc. also faces a higher pressure for local responsiveness in the countries it markets its brands, which according to the text, is a key trait of multinational business functioning.
As the As seen in the cases of the company’s China and India expansions, the countries where the largest multinational fast food chain chose to brand presented differences in distribution channels as well as traditional and sales practices. Therefore, the company must overcome high pressure for local responsiveness. For example, “KFC is Yum! Brands’ channel to reach China’s mainstream consumers-offering a combination of foreign flavor with localized tastes, and all at reasonable prices” (Backaler, 2010). Through creating a market in foreign countries, Yum! Brands, Inc. is challenged with branding an American-style fast food trend that the countries have never before been exposed to.
A multinational company must use research and knowledge to investigate the different flavors a country’s citizens will find attractive and worth spending money on. In an article by Ravi Nagarajan (2010) describing Yum! Brands, Inc.’s transition to the Indian market, he declares, “Some of the products, such as the paneer and potato taco in India, have no resemblance to products sold in the United States. In fact, no beef based products are sold in the Indian market at all.” Although a vegetarian menu could be considered “jumping the shark” from Taco Bell’s American menu, which features primarily beef-based entrees, the brand has continued to flourish in India by catering to that demographic. However, it is not just consumer tastes that a multinational company must appeal to, it is also culture. Nagarajan states, “In China, western-style fast food is considered a premium product and customers often consider a night out at KFC to be a special occasion and a place to be seen.” Perceived more glamorously in Eastern countries, Yum! Brands, Inc. relies on consumers in that region to purchase their brand rather than their product. The franchise has benefited from being a well-known brand and cultural bias in the past. In fact, former Yum! Brands, Inc. Executive Warren Liu shared, “China’s first Western fast food restaurant opened to the warmest embrace imaginable by Chinese consumers. For weeks, long queues formed every day outside the restaurant, waiting to gain entry. It was as if decades of hidden curiosity and conflicting emotions toward the West had been unleashed all at once. (Korman Frey, 2009).
Though the restaurants, like KFC, under parent company Yum! Brands, Inc. are household names and business flows simply because of that fact, tireless and costly efforts are still required of the company in order to stay at the top of its marketing game. Presently one of the strongest resources Yum! Brands, Inc., or any multinational company for that matter, is.
Social media is a major way for a company to brand on a multinational scale. In recent years, Yum Brands, Inc. has overseen their restaurant chains’ Facebook and Twitter accounts, in addition to countless written blogs. Furthermore, Yum! Brands, Inc. has even launched promotional campaigns through social networking sites, offering deals to millions of individuals around the world. The use of technology has enabled this multinational company to launch a single advertisement intended to reach consumers everywhere at one time as an alternative to their standard advertising routine: single commercials broadcasted uniquely to each demographic throughout the globe over the course of weeks, months, and even years.
It would suffice to say Yum! Brands, Inc. has catapulted into the digital age and all of its advantages. When asked what resources are recommendable to a business looking to brand globally, Liu explained, “Due to internet and related technologies, resources available today are far more varied, and data can be accessed far quicker, compared to thirty years ago when I was facing this problem myself. For example, various U.S. government agencies offer different background data on countries around the world, from demographics gleamed from country analysis published by the CIA, to country-specific industry reports prepared by The US Department of International Trade” (Korman Frey, 2009). The internet has provided many routes of acquiring knowledge and understanding other cultures, creating easier data queries and alleviating time-consuming research methods of the past.
As previously stated, research and technology are fundamental organizational resources for a company’s function of management, but another extremely important ingredient to an organization’s operations are its people. Yum! Brands, Inc. is structured with executives, officers, franchise owners, managers, development professionals and more, and these individuals
are responsible for quality, marketing, the satisfaction of consumers and stakeholders, and the vital task of staying relevant in today’s economy, to name a few. This may be considered a tall order, but according to a 2007 case study conducted by HR.com, Yum! Brands, Inc. feels the key to meeting such expectations begins with capable human resources, another viable resource in successful management functions. This applies to every subsidy’s human resource department no matter the global location.
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Yum! Brands, Inc. employs an internal feedback surveying process, known as the 360-feedback process, to every one of their 850,000 employees across their multinational operations. They worked with Kenexa, a high-profile company that optimizes human resource operations, to design and interactive survey software program, which integrated both human and technological resources to advance their company. The Vice President of People Development at Yum! Brands, Inc. said in a statement, “Our survey is fairly unique and contains a large narrative component to allow employee to communicate their thoughts, so we needed a 360 feedback engine where we could insert our 360 feedback instrument,” said Galbraith. “We recognized we could not meet the global demands of conducting 360 feedback the way we were managing the process and worked with Kenexa to design an Internet-based survey to use across our employee population” (2007). Statistically, since utilizing the 360-feedback software, the company has reported longer employment terms and improved human resources than in prior to doing so.
The multinational company, Yum! Brands, Inc. is continuing to grow and strategize its global marketing procedures, and the application of these resources helped to enhance the company on a global scale. Today, Yum! Brands, Inc. remains a leading parent company to some of the world’s favorite fast food restaurants. Their stellar organizational model of doing global business should be followed by similar entrepreneurs seeking to become a multinational company as well.
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