Yum Brands Essay

696 Words3 Pages
International Business Strategy
1. Describe Pizza Hut and KFC's investment strategy in Latin America.

Latin America was appealing to Yum brands because of its close proximity to the United States, language and cultural similarities, and the North America free Trade Agreement eliminated tariffs on goods traded between the United States. Performing a country analysis was an important part of the strategic decision making process. Yum Brands had to accurately assesses the risks of doing business in other countries and regions in order to make good choices about where to invest. Expanding to a foreign market was attractive because of their large customer bases and comparatively little competition. Having a separate subsidiary in Dallas,
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By 2004 85 percent of Mexico’s exports were purchased by US consumers, and 68 percent of on Mexico’s imports were purchased from the United States. 70 percent of Mexicans lived in the urban areas with a population of 18 million people. Many U.S firms had operations in or around Mexico City, which the fast food industry is well developed in the city. Chicken is a staple product in Mexico and helps explain KFC’s popularity. The fast food chains in Mexico was KFC (274 restaurants), McDonalds (261), Pizza Hut (174), Burger King (154), and Subway (71). Being a variety of restaurants brings intense competition.

Brazil has a population of 182 and is the largest country in Latin America. Brazil is the world’s largest coffee producer and largest exporter of sugar and tobacco. Brazil has a strong industrial power it exports airplanes, automobiles, and chemicals. Brazil is one of the most important emerging markets, along with China and India. The fast food industry is less developed than Mexico. Many restaurant chains such as Burger King, Pizza Hut, and KFC built restaurants in the mid 1990’s but later closed because of poor sales. Eating customs play a huge role in Brazil, because consumers eat their big meal in the early afternoon, in the evening they have a light meal such as a soup or small plate of pasta. Brazilians rarely eat with their hands, preferring to eat with a knife and a fork. United
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