"One day China will be bigger than the U.S.," saysYum! Brands chairman & CEO David Novak. "Yum! China isdefinitely a huge opportunity."
In fact, Yum! Brands has experienced a year of recordunit openings and profits. In 2004, the company opened350 new units and will post profits of more than $200million, Novak says.
Currently, there are nearly 1,700 KFCs in China andmore than 220 Pizza Huts. KFC is the number onequick-serve restaurant in China, while Pizza Hut isthe number one casual dining restaurant. According toNovak, the KFC and Pizza Hut brands have more brandrecognition with the Chinese people than Coca-Cola orNike. "We have built the number-one brands in China,"Novak crows.
According to Novak, Yum! Brands has spent more than $61million setting up the Chinese infrastructure. The company employs more than 13,000 Chinese andhas the largest retail development capabilities, with200 experts. Moreover, Yum! Brands owns and operatesits own distribution network in China. It has 21warehouses and more than 450 employees dedicated tothe supply chain.
"When you look at China, we have the chance to be on thefrontier of really providing quick service to theChinese customer," Novak says. "We want to own everysignificant category in China as we go forward."
To that end, Yum! Brands is testing new concepts likePizza Hut home delivery. Also, the company has openedits first Taco Bell concept in China called Taco BellGrande, and it has also debuted a fast casual Chinesefood brand, East Dawning. "We have an undeniable competitive advantage and a head start and huge growth opportunities," Novak says.
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