Welcome to the Fall 2013 MB107 Executive Presentation Orientation Find your team number and sit together with your tea

1. Welcome to the Fall 2013MB107 Executive PresentationOrientationFind your team number and sit together with your team. We’ll get started soon!

2. Orientation Meeting Agenda • What is Company X? • Who’s who in the MB107 Program • What is the Executive Presentation? • Dry Run and EP Specifics • Analysis and Strategy Development • Financial Target: Economic Logic and Financial Estimates • Team Dynamics & Project Timeline • Student Perspective • The EP day

3. You are now junior executives working for this company…

4. 10 hints… • It’s a Fortune 250 company. • It gives out employee awards like a set of chomping dentures with legs to all those who "walk the talk" of leadership. • It is the leading retail developer in China with nearly 6,000 shops in more than 850 cities. • 2012 brought record international growth (1,976 new store openings - 889 in China, 138 in India, and 83% of this growth in emerging markets). • It invested over $1.1 billion in 2012 in the future growth of its business and is investing at least that same amount in 2013. • It sold off two key brands in 2011: Long John Silver's and A&W. • One of its brands has been ranked the #1 most trusted food-service brand in India for a sixth year by The Economic Times. • It hasn’t escaped scandal or public scrutiny with its poultry supply debacle in China and fast food workers’ strikes in the US…“Hey hey, ho ho, poverty wages gotta go!” • They’re expanding aggressively in Russia, Nigeria, Kenya, Zambia, France, Germany, Spain, and (planned for ‘13) Tanzania, Uganda and Zimbabwe. • It is the world's largest restaurant company with more than 39,000 restaurants in over 130 countries and territories.

5. http://www.yumcsr.com/ What will you do to move Yum! Brands forward over the next five years?

6. Your job? You must come up with a well-supported, well-researched, & implementable STRATEGY to move Yum! Brands forward in the next 5 years. The Bottom Line? YOUR TARGET IS TO ADD 10% TO THEIR OPERATING PROFIT BY YEAR-END 2018

7. MB107 Faculty Coordinator – Professor Caroline D’Abate MB107 Faculty – Professors Mark Youndt and Colleen Burke MB240/316 Coaching Faculty – Professor Tancredi-Penman MB107 Staff – Terri Kindl, Rebecca McCourt ’14, Christine McEachern ‘14 MB107 Coaches – Enrolled in MB240/316 and Volunteer coaches Management and Business Faculty – Experts are available Seek them out for specialized questions (marketing, financials, presentations,…) Reference Librarian – Barbara Norelli, Social Science Librarian Who’s Who in MB107 Program

8. MB107 Website: Helping you get ready for the EP Day http://www.skidmore.edu/management_business/mb107/index.php

9. Outcome: Strategic Plan for Yum! Brands • Strategic recommendation • Financial analysis & projections • Detailed plan for marketing, operations, and implementation • Briefly describe what other options you considered • Why is your chosen strategic path the right course of action? • Formal and Professional Presentation • Your Role: Junior Executives of Yum! Brands • Your Audience: Senior Executives from Yum (actually executives from across the country and various industries) • Presentation Format: • -Formal Presentation 20-25 minutes – visual aids/hand-outs encouraged • -Question and Answer 10-15 minutes • -Senior Exec Evaluation/Consensus 10 minutes (students leave room) • -Feedback Session 5-7 minutes (you will receive a team grade) What is the Executive Presentation?

10. Dry Runs are Tues/Wed/Thurs nights (Oct 22, 23, 24) • Each team has been assigned a one-hour time slot on one of these evenings • Presentation in front of 3-4 student execs and MBD faculty • This is to help YOU! • At the very least, you must have: • A solid situation analysis • A clear strategic recommendation • A good plan for implementation • Basic financials • Basic PowerPoint • Solid preparation will yield quality feedback • Use feedback to refine and enhance presentation for the EP day (Dec 6th) • Bring your iPhone, Flip, DVD recorder, or other device to film the dry run for your own review (if needed, contact Media Services to borrow a recording device) • Presentation Day – Friday, December 6th at the Courtyard Marriott • Assignment sheet outlines main tasks (Do not ignore it!) • You must update the case to Dec. 6th (Look for Q3 earnings report in October) Dry Run and EP Specifics

11. Dry Run & EP Specifics: Executives’ Evaluation • Some key concerns • Do you have a good understanding of Yum’s situation? • David Novak says they should “stay the course”, but look at what they’re doing…they’re not sitting still! • Have you identified the key challenges? Will your strategy address those challenges? • Is your plan implementable? Have you convinced the executives that it can work? Have you convinced them that it is the right course of action?

12. Dry Run & EP Specifics: Executives’ Evaluation You will be evaluated on: • Your presentation’s substance • Your professionalism and effectiveness • Your teamwork Ultimate goal is reliable, consistent, valid, accurate assessments of your strategic plan and presentation. We give them clear evaluation criteria. You’ll see the evaluation form beforehand. But remember… This is real-world Human perception is involved Subjective judgments are being made Imperfection is the rule rather than the exception

13. You may think you know Pizza Hut, KFC, and Taco Bell, but you’ll be surprised at what you find out!

14. Don’t forget about key rivals!

15. Analysis and Strategy Development • Start with Situational Analysis • This leads to Strategy Development External Analysis • General/Macro-environment • Porter’s 5 forces • Industry life cycle • KSFs • Value chain • Competitor analysis • Strategic group mapping • Market segmentation • Rivals’ profiles Select Optimal Strategy • Arenas • Vehicles • Differentiators • Staging • Economic logic Strategic Options Internal Analysis • Mission/vision • SWOT • Core/distinctive competencies • Competitive advantage • Internal value chain InsightandAction! It’s all about…

16. Analysis and Strategy Development Q: Where should we start? A: Read the case, the annual report, any/all reports and articles linked on the MB107 website, and stay current on any “new” news or reports on Yum! Brands Analyze Yum! Brands’s current situation to identify the major issues. Two “Key Slides” to include in your presentation: 1. The key challenges/opportunities/issues facing Yum! Brands are… 2. Our strategy addresses these by… (explain how)

17. Lowest costs via scale advantages • Lowest costs via scope and • replication advantages • Premium prices due to • unmatchable services • Premium prices due to proprietary • product features • Which product categories? • Which market segments? • Which geographical regions? • Which core technologies? • Which value-creation stages? Analysis and Strategy DevelopmentYour strategic recommendation must becomprehensive • Internal development • Joint ventures • Partnerships • Licensing & franchising • Mergers & acquisitions • Speed of expansion • Sequence of initiatives ? • Unique expertise • Customization • Price • Styling • Reliability • Etc., Etc., Etc.

18. Economic LogicFinancial Target – Yum! Brands 2018 + 10%

19. Some Key Executive Concerns: • Capital • - What is your funding source? How will you pay for your proposed plan? - Operations? Investments? Financing? Cash? • Can you explain your quantitative analysis? • - Offer a coherent explanation of your finances • - Realism – Is it realistic? Feasible? You need to provide a good story • - Back it up – Use external sources to provide evidence • Explain and justify the assumptions that underlie your numbers • - Assumptions about costs (cost of goods sold, inventory, supplier relations, • distribution, facility costs, employee-related costs) • - Assumptions about growth (revenue projections, units sold, sales in • different product categories, in different regions, market share, revenue • projections) Financial Target/Economic LogicWhat will account for the returns of your strategy?

20. Create SYNERGY & ride MOMENTUM • Apply individual and team GOAL-SETTING • Be ACCOUNTABLE to your team • COMMUNICATE early, often, and effectively Team Dynamics: Your Junior Executive Team

21. Team Dynamics • MB107 Teams Fail When Team Members or Individuals: • Don’t develop competencies from the course • Use the analytical tools you’re learning in MB107 • Engage in social loafing • Instead, hold each other accountable • Share the workload • Fail to take the advice of others • Instead, recognize escalation of commitment is occurring • Realize when it’s time to move on • Seek intervention when you need to • Emphasize relationships, rather than the task • Instead, look for symptoms of groupthink • Mare sure you’re not putting “getting along” ahead of • making good decisions • Don’t forget the 360-degree evaluations!

22. Team Dynamics: Your Coaches • Coaches work with your team • They won’t do the work for you • They are facilitators, advisors, and leaders • They’re here to help you negotiate team relationships • They’ll help you stay on target • They work with you from today through to December 6th

23. Team Dynamics: Meetings Keep a schedule that works for everyone If your team needs a place to meet for one or two nights during the semester, you must reserve a room. You cannot assume that campus spaces are available. Room reservations should be made only when you absolutely need them and through Skidmore’s Scheduling Office: http://cmsauthor.skidmore.edu/odsp/scheduling-office.cfm

25. Back it up • Substantiate your assertions • Be able to explain: • how you know what you know • why you’re suggesting what you’re suggesting • EVIDENCE!

26. Rebecca McCourt ’14 & Christine McEachern ‘14 MB107 Student Coordinators rmccourt@skidmore.edu cmceache@skidmore.edu We’re here for you! Come to us with team problems, for team support, for help with preparing for the dry runs or the EP, etc… The Student Perspective

27. Resources SUCCESS

28. Your team is the most critical resource for success! Resources SUCCESS

29. TO BE PROFESSIONAL, YOU MUST BE PREPARED! • Address technology needsprior to December 6th (multi-media, connection/laptop issues, multiple flash drives, etc.) • Prepare for no Internet access at hotel – This means no email, no datastor, no Dropbox/Cloud/Box • Use USB/flash drives • Equipment /power failures – The show must go on…can you present without PowerPoint? • Travel arrangements – getting to/from the Courtyard Marriott • Know the time of your presentation (it’s a tight schedule) • Perform Library Research Assignment • Check your Skidmore e-mailmultiple times each day! A FEW FINAL NOTES

30. Remember, this is your job… http://yum.com/annualreport/

31. You now work for me and Yum! Brands. Help us position our company for the next five years! David Novak, Chairman and CEO “Your boss”