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US
$20 million per year on R&D at facilities
Significant expenditures on product and process
development were required to expand into new dayparts
Outside U.S.
comparatively limited
Tap into franchisees ideas about product innovations
Centralized in Asia
US SALE
U.S. Sales by Daypart (% of Sales)
350%
300%
160%
250%
140%
120%
200%
100%
150%
80%
60%
100%
40%
50%
0%
20%
0%
Pizza Hut
Dinner
KFC
Lunch
Snacks/Breakfast
Taco Bell
Pizza Hut
KFC
Dine Out
Dine In
Taco Bells
CHINA
Operating Profit growth of 15% per year
In China, KFC's growth is outpacing rival McDonalds at
a rate of 3 to 1
Unlike its competitors, Tricon owns its own distribution
centres.
Issues
Residual effects of adverse publicity of sale of spoiled
meat by one of its suppliers
Avian Flu
Operational and marketing changes in expanding to fuller
dining experience
Investment in building up local product development
capabilities
INTEGRATING SUPPLIERS
Tricon Global Restaurants does all purchasing domestically.
Foreign sources are tried when domestic sources prove inadequate.
Global sourcing networks are developed. Worldwide purchasing is coordinated
across divisions and is represented at the highest organizational levels.
Manufacturing materials and process technologies are coordinated across
markers and suppliers
Internet-integrated supplier - manufacturer relations. Tricon Global Restaurants
centralised worldwide buying to allow 30,000 units to order supplies through one
clearinghouse to reduce procurement costs