Requirements: 2Paragraphs , No citation (Using your own words)

Discussion #4 – Yum Brands – SWOT in Reverse

Please read the attached investor’s announcement from Yum Brands published back in October 2016. For this discussion, it may be helpful if you work to reverse engineer a SWOT analysis from the investor announcement itself. See if you can discern the factors that led to the strategies you are reading.

• What key external and internal forces do you think are driving the strategies listed?
• What strengths and weaknesses can you discern?
• What opportunities does Yum Brands highlight?
• What threats do you assume have influenced the strategy?
• What do you think Yum Brands is trying to accomplish?

Yum! Brands Details Transformation Plans to Drive Growth of KFC, Pizza Hut and Taco BellAfter China Separation at Annual Investor Conference Today

Louisville, KY, October 11, 2016 – Yum! Brands, Inc. (NYSE: YUM) will announce today at its annualinvestor conference in New York City the Company’s strategic transformation plans to drive growth of itsKFC, Pizza Hut and Taco Bell brands following the separation of its China business, currently expectedto be completed after the close of business on October 31, 2016. Yum! Brands will outline how theCompany is sharpening its focus on the development of its three iconic global brands, increasing itsfranchise ownership and creating a leaner, more efficient cost structure. The Company will also providean update for returning capital to shareholders.

“Our mission is to build the world’s most loved, trusted and fastest-growing restaurant brands,” said GregCreed, Chief Executive Officer of Yum! Brands. “The transformation we are announcing today is asignificant investment in our future designed to build and strengthen KFC, Pizza Hut and Taco Bellaround the world and to create even more long-term value for our shareholders. As a ‘pure play’franchisor, the transformed Yum! Brands will become more efficient and capital light with an optimizedcapital structure, improved cash flow and laser-like focus on our key strategies to drive same-store salesand new unit growth worldwide.”

Major features of the Company’s transformation and growth strategy involve being more focused,franchised and efficient.

• More Focused. Four growth drivers will form the basis of Yum! Brands’ strategic plans andrepeatable business model to accelerate same-store sales growth and net-new restaurant developmentat KFC, Pizza Hut and Taco Bell around the world over the long term. The Company will focus onbecoming best-in-class in:

• Building Distinctive, Relevant Brands, by increasing investment in consumer insights, coreproduct innovation, digital excellence and initiatives that strengthen the quality, convenience andappeal of the customer experience;
• Developing Unmatched Franchise Operating Capability, by strengthening how we equip andrecruit the best restaurant operators to deliver great customer experiences, and build and protectour brands;
• Driving Bold Restaurant Development through partnerships with growth-minded franchiseeswho can expand and penetrate markets with modern restaurants, strong economics and value; and
• Growing Unrivaled Culture and Talent to strengthen the customer experience and franchisesuccess with best-in-class people capability and culture.

• More Franchised. Partnering with growth-minded franchisees, Yum! Brands will increase franchiserestaurant ownership from 77% currently to 93% at the time of the separation of the China business toat least 98% by fiscal year ending 2018, with a focus on equipping and recruiting the best restaurantoperators in the world to deliver great customer experiences and drive brand growth.
• More Efficient. The Company will revamp its financial profile, improving the efficiency of itsorganization and cost structure globally, by:
  • Reducing annual capital expenditures from ~$500 million (2015 Pro Forma post-separation) to~$100 million (FYE 2019);
  • Reducing G&A by a cumulative ~$300 million by FYE 2019; and
  • Maintaining optimized capital structure of ~5.0x EBITDA leverage.

Mr. Creed continued, “The separation of our China business provided a once-in-a-lifetime opportunity toreview our operating model and consider all possibilities available under our new structure. Thetransformed Yum! Brands will maintain its geographic diversity with continued, meaningful exposure tothe growth potential of the world’s largest consumer market, China, but with greater revenue stability byleveraging our four growth drivers. We will reinforce the distinctiveness of our brands and their relevanceto customers, select the highest potential franchisees and help drive their success, expand more profitablyin key markets across the globe and bolster training and talent initiatives to foster the culture that will beespecially critical as we evolve into a highly franchised growth company.”

Capital Return Program Update

Following through on its previously announced plan to return $6.2 billion of capital to shareholders(excluding dividends) in connection with the separation of its China business, Yum! Brands hasrepurchased approximately $5.5 billion in shares at an average price of approximately $81, reducing itsshare count by approximately 16% as of October 10, 2016. The Company is also expanding its plan toreturn capital to shareholders and now expects to return a total of $13.5 billion (including dividends)between Q4 2015 and 2019.

Separation of the China Business

After the separation of the China business, Yum China Holdings, Inc. will become a licensee of Yum!Brands in Mainland China. Yum China will have exclusive rights to KFC, China’s leading quick-servicerestaurant concept, Pizza Hut, the leading casual dining brand, and Taco Bell, which is expandingglobally but is not yet in China. It will also own the Little Sheep and East Dawning concepts. Yum Chinahas more than 7,300 restaurants and more than 400,000 employees in over 1,100 cities, and generatedover $8 billion in system sales in 2015. The standalone company, Yum China, is expected to begintrading “regular way” on the New York Stock Exchange under the symbol “YUMC” on November 1,2016.

In addition to Mr. Creed and other senior Yum! Brands leaders, the Yum China leadership team will alsospeak at the investor conference about their growth plans, as described in a release issued separatelytoday.

Today’s presentations can be followed live via webcast beginning at 8:00 a.m. EDT at:http://edge.media-server.com/m/p/8vmtxvkm.

About Yum! Brands

Yum! Brands, Inc., based in Louisville, Kentucky, has more than 43,000 restaurants in almost 140countries and territories. Yum! Brands is ranked #218 on the Fortune 500 List with revenues of over $13billion in 2015 and is one of the Aon Hewitt Top Companies for Leaders in North America. TheCompany’s restaurant brands – KFC, Pizza Hut and Taco Bell – are the global leaders of the chicken,pizza and Mexican-style food categories. Worldwide, the Yum! Brands system opens over six newrestaurants per day on average, making it a leader in global retail development.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this communication contain “forward-looking statements.” Forward-lookingstatements can be identified by the fact that they do not relate strictly to historical or current facts. Thesestatements often include words such as “may,” “will,” “estimate,” “intend,” “seek,” “expect,” “project,”“anticipate,” “believe,” “plan,” “could,” “target,” “predict,” “likely,” “should,” “forecast,” “outlook,”“model,” “ongoing” or other similar terminology. Forward-looking statements are based on our currentexpectations, estimates, assumptions or projections concerning future results or events, including, withoutlimitation, the planned separation of the Yum! Brands and Yum China businesses, the timing of such

separation, the future earnings and performance as well as capital structure of Yum! Brands or any of itsbusinesses, including the Yum! Brands and Yum China businesses on a stand-alone basis if the separationis completed and the intended future plans and expectations for Yum! Brands following the separation ofthe China businesses as described in this news release. Forward-looking statements are neither predictionsnor guarantees of future events, circumstances or performance and are inherently subject to known andunknown risks, uncertainties and assumptions that could cause our actual results to differ materially fromthose indicated by those statements. We cannot assure you that any of our expectations, estimates orprojections will be achieved. Factors that could cause actual results and events to differ materially fromour expectations and forward-looking statements are, in addition to those noted above, included in reportsfiled with the SEC by Yum! Brands from time to time, including those discussed under the heading “RiskFactors” in our most recently filed reports on Form 10-K and 10-Q, as well as in the Form 10 filed withthe SEC by Yum China. You should not place undue reliance on forward-looking statements, whichspeak only as of the date hereof. We are not undertaking to update any of these statements.

Analysts are invited to contact:
Keith Siegner, Vice President, Investor Relations and Corporate Strategy, at 888-298-6986Elizabeth Grenfell, Director Investor Relations, at 888-298-6986

Members of the media are invited to contact:
Virginia Ferguson, Director Public Relations, at 502-874-8200

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