Welcome to the Fall 2013

MB107 Executive PresentationOrientation

Find your team number and sit together with your team.

We’ll get started soon!

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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

You are now junior executives working for this company…

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10 hints…1. It’s a Fortune 250 company.2. It gives out employee awards like a set of chomping dentures with legs

to all those who "walk the talk" of leadership.3. It is the leading retail developer in China with nearly 6,000 shops in

more than 850 cities.4. 2012 brought record international growth (1,976 new store openings -

889 in China, 138 in India, and 83% of this growth in emerging markets).

5. 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.

6. It sold off two key brands in 2011: Long John Silver's and A&W. 7. One of its brands has been ranked the #1 most trusted food-service

brand in India for a sixth year by The Economic Times.8. 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!”

9. They’re expanding aggressively in Russia, Nigeria, Kenya, Zambia, France, Germany, Spain, and (planned for ‘13) Tanzania, Uganda and Zimbabwe.

10.It is the world's largest restaurant company with more than 39,000 restaurants in over 130 countries and territories.

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What will you do to move Yum! Brands

forward over the next five years?

http://www.yumcsr.com/

Your job?You must come up with a

well-supported, well-researched, & implementable

STRATEGY to move Yum! Brandsforward in the next 5 years.

The Bottom Line?YOUR TARGET IS

TO ADD 10% TO THEIR OPERATING PROFIT

BY YEAR-END 2018

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Who’s Who in MB107 ProgramMB107 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

http://www.skidmore.edu/management_business/mb107/index.php

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MB107 Website:Helping you get ready for the EP Day

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What is the Executive Presentation?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)

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Dry Run and EP SpecificsDry 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)

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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?

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Dry Run & EP Specifics: Executives’ Evaluation

You will be evaluated on:1.Your presentation’s substance2.Your professionalism and effectiveness3.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-worldHuman perception is involved

Subjective judgments are being madeImperfection is the rule rather than the exception

You may think you know Pizza Hut, KFC, and Taco Bell, but you’ll be surprised at

what you find out! 13

14Don’t forget about key rivals!

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Analysis and Strategy Development Start with Situational Analysis

This leads to Strategy DevelopmentExternal Analysis• General/Macro-environment• Porter’s 5 forces• Industry life cycle• KSFs• Value chain• Competitor analysis

– Strategic group mapping– Market segmentation– Rivals’ profiles Strategic

OptionsInternal Analysis• Mission/vision• SWOT• Core/distinctive competencies• Competitive advantage• Internal value chain

Select Optimal Strategy

• Arenas• Vehicles• Differentiators• Staging• Economic logic

Insight and Action!It’s all about…

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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)

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

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Analysis and Strategy Development Your strategic recommendation must be comprehensive

• 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?

• Speed of expansion• Sequence of initiatives

• Unique expertise• Customization• Price• Styling• Reliability• Etc., Etc., Etc.

• Internal development• Joint ventures• Partnerships• Licensing & franchising• Mergers & acquisitions

?

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Economic LogicFinancial Target – Yum! Brands

6 monthsended Dec. 29 Dec. 31 Dec. 25

June 15, 2013 CS 2012 CS 2011 CS 2010 CSTotal Revenues $5,439 100.0% $13,633 100.0% $12,626 100.0% $11,343 100.0% Sales $4,573 84.1% $11,833 86.8% $10,893 86.3% $9,783 86.2% Franchise and license fees and income $866 15.9% $1,800 13.2% $1,733 13.7% $1,560 13.8%COGS - Company restaurant expenses $3,930 72.3% $9,852 72.3% $9,140 72.4% $8,120 71.6% Food and paper $1,485 27.3% $3,874 28.4% $3,633 28.8% $3,091 27.3% Payroll and employee benefits $1,080 19.9% $2,620 19.2% $2,418 19.2% $2,172 19.1% Occupancy and other operating expenses $1,365 25.1% $3,358 24.6% $3,089 24.5% $2,857 25.2%Gross Profit $1,509 27.7% $3,781 27.7% $3,486 27.6% $3,223 28.4%Operating expenses $632 11.6% $1,487 10.9% $1,671 13.2% $1,454 12.8% General and administrative expenses $622 11.4% $1,450 10.6% $1,536 12.2% $1,407 12.4% Non-recurring expenses - Closures/impairment $10 0.2% $37 0.3% $135 1.1% $47 0.4%Operating profit $877 16.1% $2,294 16.8% $1,815 14.4% $1,769 15.6%

Fiscal Years Ended

2018

+ 10%

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Financial Target/Economic LogicWhat will account for the returns of your strategy?

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)

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Team Dynamics: Your Junior Executive Team Create SYNERGY & ride MOMENTUMApply individual and team GOAL-SETTINGBe ACCOUNTABLE to your teamCOMMUNICATE early, often, and effectively

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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!

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Team Dynamics:Your Coaches

Coaches work with your team• They won’t do the work for you

They are facilitators, advisors, and leadersThey’re here to help you negotiate team relationshipsThey’ll help you stay on targetThey work with you from today through to December 6th

  

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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   

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Teambuilding & Situation analysis

• Thorough analysis• Identify the key issues…be able to back it up

Alternate strategies

• Come up with 2 alternates• Do they address the issues?

Pick a Strategy & Develop

implementation

• What to do (how, action plan, staging, vehicles)• Why it makes sense?

Dry Runs• Great chance for feedback• Be open to it…use it!

Back to the drawing board

• Major revisions to analysis, diagnosis, recommendation, and implementation plan

Financials • Numbers to support your plan• Revenues, expenses, profits, all the details• How do you reach the target?

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Teambuilding & Situation analysis

• Thorough analysis• Identify the key issues…be able to back it up

Alternate strategies

• Come up with 2 alternates• Do they address the issues?

Pick a Strategy & Develop

implementation

• What to do (how, action plan, staging, vehicles)• Why it makes sense?

Dry Runs• Great chance for feedback• Be open to it…use it!

Back to the drawing board

• Major revisions to analysis, diagnosis, recommendation, and implementation plan

Financials • Numbers to support your plan• Revenues, expenses, profits, all the details• How do you reach the target?

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!

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The Student Perspective Rebecca McCourt ’14 & Christine McEachern ‘14

MB107 Student Coordinatorsrmccourt@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…

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ResourcesMB107 website

Financial Template (excel and word doc)

Your coaches

Student coordinators

Barbara Norelliand Library Resources

MB107 and Coaching Faculty

All MB dept faculty

Tutors and Events: to be announced

SUCCESS

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ResourcesMB107 website

Financial Template (excel and word doc)

Your coaches

Student coordinators

Barbara Norelliand Library Resources

MB107, Coaching, and Leadership Faculty

All MB dept faculty

SUCCESS

Your team is the most critical

resource for success!

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A FEW FINAL NOTESTO BE PROFESSIONAL, YOU MUST BE PREPARED!

– Address technology needs prior 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-mail multiple times each day!

Remember, this is your job…

http://yum.com/annualreport/

David Novak, Chairman and CEO

“Your boss”

You now work for me and Yum! Brands.

Help us position our company for the next five years!