Yum!Brands' reputation management

Topics: KFC, Fast food, Pizza Hut Pages: 5 (1063 words) Published: October 13, 2014
Jiang Zhenghui
Past Development of Yum!Bands
In 1997, with KFC, Pizza Hut, Taco Bell three famous brands of food systems (This system is a business unit of PepsiCo, PepsiCo's three main business is soft drinks, snack foods, fast food.), Yum!Bands separated from PepsiCo and listed on the New York Stock Exchange. From then, the world's largest restaurant group - Yum global food Group has been formally established. All shareholders and members of the company may not have thought of that just used two years, Yum! Bands operation achieved a great success in market especially in Chinese market. Today, Yum! has more than 30,000 chain stores worldwide and 500,000 employees, a turnover of $ 20 billion, ranks among the world's top 500 listed companies. Since separating from PesiCo, Yum! had to compensate for the loss caused by the past, while also facing a serious challenge: how to create corporate culture? How to create three well-known food brands to collaborate with each other, rather than competitive relationship? How to build for the future development of the enterprise staff confidence. At that time, CEO Mr. Andrakk Pearson and David Novak took a series of bold and new measures. For example, KFC, Pizza Hut, Taco Bell still continued their existing operational management, but to play a coordinating role with each other; Through packages form, did a joint promotion of the three brands. The raw materials were unified procured, distributed by the company, It helped to controlling the balance of expenditure of funds; It is also the first time that the company transferred some chain restaurant franchises to affiliation. The part of the return funds was used to focusing on the development of new restaurant. The measures also include senior management personally went to the restaurant and motivated staff . So far, the Group's operating margin increased from 11% three years ago to 16%, and in 1998 and the first half of 1999, the turnover of all three chains have emerged great growth. In 2006 the company employed 280,000 people and reported revenues of $9.56 billion. As a result of doing a lot business in developing countries, Yum! Bands faced many challenges. The biggest challenges for Yum! Bands is food safety problem. In 2005, Yum! In China issued a public statement, announced that its KFC restaurants’ New Orleans hamburg and New Orleans roast chicken wings spices contained "Sudan I", all domestic KFC restaurants had stopped the sale of these two products, while destructed all remaining spices(Laurie, &Julie, 2013). After Sudan incident, KFC had been revealed several quality events: frying oil contains carcinogenic acrylamide, employees admit fries oil changed every seven days, and according to the report of food Safety and , KFC hamburger’ coliforms exceeded seven times. In 2012, a supplier who provided KFC chicken raw chicken said the chicken eat a feed which helped the chicken to grow rapidly. Employees broke the news that feed is "harmful." for body. Yum! was lacking transparency with regard to GMOs in its food and address the environment damages (Green America.org). Yum! Bands also has been involved in disputes over workers’ right. In 2001 to 2006, issues such as farm workers were underpaid, failing to produce overtime pay, and unfair employment practices(Business-Human Rights.org). The famous event is “ During the late 1990's members of the coalition learned that Taco Bell (belong to Yum! Bands) was a major purchaser of tomatoes grown in Immokalee, where the wages of migrants (adjusted for inflation) had fallen by as much as 60 percent during the previous two decades. However, Taco Bell tried to ignore the protests and to deny responsibility for the behavior of its suppliers.”(Eric, 2005) Present development of Yum! Bands

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