Globalization: Opportunities and Challenges in Developing Countries

Topics: Africa, Yum! Brands, Pizza Hut Pages: 2 (743 words) Published: December 14, 2011
Globalization: Opportunities and Challenges In Developing Countries Globalization is defined as the trend of the world economy toward becoming a more independent system. There are numerous factors that US financial institutions find lucrative about globalization, and foreign investments now contribute to a staggering 15% of our GDP. Within the past decade, the economic outlook in Africa has taken a major turn for the better. A result of the increased economic momentum has been the interest of foreign investors and the subsequent arrival of popular US chains in African countries. In December of 2010, an article entitled ‘KFC Savors Potential in Africa’ was written by Julie Jargon and published in The Wall Street Journal. This piece delves into the massive undertaking KFC has recently decided upon. KFC is a popular US restaurant chain owned by Yum Brands Inc., whose other chains also include Taco Bell and Pizza Hut. The first KFC to be introduced to Africa was in 1971, and since, about 600 have opened. Late last year, KFC announced a four-year plan to double their number of outlets to 1,200, and its revenue to $2 billion. The two paramount factors leading Yum Inc. to expand KFC’s presence in Africa are initially noted to be an improved stability within African governments and a growing middle class. Furthermore, Africa has become an attractive brand expansion site because its resourcerich countries are adding infrastructure and at the same time increasing urbanized areas, subsequently creating opportunities for restaurant and retail development. Another interesting figure is the fact that the number of African households with discretionary income is projected to increase by 50% over the next decade. An overwhelming amount of positive indicators does not mean that KFC will not also face challenges with African growth. Chicken importation has seen to be a sticky subject for

parts of the country. In certain African countries, imports of chicken are banned. To...
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