David C. Novak
Novak’s biggest challenge when he took over Yum! (then operating under the name Tricon Global Restaurants) was to unite three global fast-food brands—KFC, Pizza Hut, and Taco Bell. All were floundering and suspicious of each other’s management styles.
In the past decade, Novak has not only created a partnership among the three brands, he’s also rescued them financially. In 2007, Yum!’s total revenues topped $10.4 billion, an 8.9 percent increase from the previous year.
One of Novak’s long-term focuses—international expansion—seems to be paying off. Yum! reported a 15 percent earnings per share growth for 2007, which it attributes to its success in China. Right now there are more KFC restaurants in mainland China than McDonald’s. The long-term plan? Open 20,000 units in the world’s most populated country.
Howard Schultz’s nose is officially back to the grindstone. After Starbucks’s stock dropped 42.8 percent in 2007, Schultz reclaimed the CEO job that he relinquished eight years ago.
Can he rescue the sinking ship? Many say yes. The day after Wall Street learned Schultz was back, Starbucks stock rose 8 percent.
The CEO’s grand plans include introducing a new energy drink, protein and fruit smoothies, and a “breakfast alternative” menu. He will also continue to slow new store openings in the U.S. and grow overseas investments. Still some critics say it might not be enough. And even Schultz admits that in this downturned economy, Starbucks could continue to suffer financially for another year or longer. The answer, he says, isn’t making the brand’s coffee drinks more affordable. Rather it’s reconnecting with customers, convincing them once again that Starbucks is an affordable luxury.
Jon Luther is brewing a coffee war. Last year, he told Fast Company magazine, “Five years from now, if you’re looking for coffee, there will be only two places you’ll be thinking about: Starbucks and Dunkin’.”
Luther is convinced there’s a market to be tapped—a younger demographic that foams at the mouth for Starbucks’ lattés, but just can’t afford them.
The chain’s first offensive in the war was outfitting select locations with new speedy espresso machines able to make drinks in less than one minute. Its second move was unveiling a new and enticing breakfast menu that includes bagels and egg sandwiches.
Today, 63 percent of Dunkin’ Donuts sales are coffee-related.
As CEO of Dunkin’ Brands, Luther also heads Baskin-Robbins, and he’s reviving the ice cream chain through various media and entertainment partnerships.
J. Clifford Hudson
When Cliff Hudson took over as CEO of Sonic, menus differed from store to store, different vendors were used even in the same city, and the company’s accounting was still done manually.
He first focused on consistency and now has his eyes set on growth. His plan is to quickly boost the chain’s presence by requiring new franchisees to operate at least two restaurants. The company currently has agreements to open more than 900 stores over the next seven years.
Sonic is also focusing on advertising. It spent $30 million more on ads last year than ever before.
Customers are buying it. In 2007, the company’s revenues increased 11.1 percent from the year before to $770.5 million. And investors are feasting on 16 percent five-year compound growth earnings.
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