Yum's big plan in India, success? Or failure?

Foreign direct investment inflow is significant to the economic growth of developing countries. There are several advantages of invested abroad:

• econimies of scale and scope arising from enterprises' size 
• managerial and marketing expertise
• superior technology owing to company's heavy emphasis on research
• financial strength
• differentiated products
• ompetitiveness of company's home market

Multinational enterprise direct oversea market in order to get more profit also increase market share. Not only the company need to prepare a large sum of money but also strategies for open new market. The first and most important issue is decided where to invest. In my opinion, companies might need to do background search like market imperfections, ownership advantages, internalization advantages and location advanatages.

Yum Brand Inc (Yum), an America based fortune 500 coroperation, which operates or licenses of worldwide restuarant Taco Bell, KFC, Pizza Hut and WingStreet. WSJ has reported the big plan of KFC. It reported that Yum will increase to $1 billion in sales for more retail stores in India. Their target of this FDI in India is to make india be "the largest consuming class in the world, ahead of U.S and China, by 2030."

The main reson that Yum decision making is the potential maket of India. This due to conclusion of reasearch illustrate " nearly two-thirds of Indians now ear out at least once a week." Besides that, as 70% of the market is consist by "small mom-and-pop stores rather than restaurant chains". The second reason is the 25% decreasing revenue of China between January and February. Yum tends to relocated their main market which is long-term strategy.

Similarity of Chinese market, Yum realized that more earlier in opening Inidan market would be considered as competitive advantages. In order to achieved the plan, not only need large sum of money but also specific strategies.
Firstly,  this "big plan" is based on the chain include Pizza Hut and Taco Bell, not only KFC. Meanwhile, Yum has changed and create new products for occupy local market. For instance, the vegetarian chickpea patty sandwich and hot wings with chili lemon sprinkles. And changes some of the ingredients to Indian counterparts.

Although there are large potential market of fast food in India, more consideration should be put on the political risk and cultural risk. Cultural and Institutional risk is more about religious heritage and human resources norms. Considering the strategy like changed the ingredians and looks somewhat more Indian food need to trying many times. However, FDI in new market or relocated the main market is a long-term strategy associated with influence of Group. Despite of that, for managers, more risk, more gain.