Companies in the highly competitive and fickle fast-food market are always looking for new ways to grow. Sometimes this involves introducing new products to try to take advantage of changing customer tastes. McDonald’s, for instance, has recently started selling premium coffee and healthier foods.

Another way fast-food firms try to grow is through aggressive expansion into overseas markets. This is an area that Yum! Brands (symbol YUM on New York), which we’ve covered for some time in our Wall Street Stock Forecaster newsletter, has a particular talent for.

This large cap stock’s dominance in China gives it an edge

Yum is the world’s largest fast-food operator, with over 36,000 outlets in more than 110 countries. (McDonald’s Corp. has fewer restaurants than Yum, but higher annual sales.) The large cap stock’s major chains include KFC (fried chicken), Pizza Hut, Taco Bell (Mexican food), Long John Silver’s (seafood) and A&W (root beer and hamburgers).

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Yum was the first fast-food company to enter China, in 1987. It is now the largest in the country, with nearly 3,600 restaurants. The company continues to aggressively expand in China, particularly its KFC fried-chicken restaurants. As well, Yum is aiming to build on its dominant position in China by launching a new restaurant chain there. These restaurants, called “East Dawning,” will serve traditional Chinese food. The large cap stock’s China division, which includes Taiwan and Thailand, accounts for 30% of its sales and earnings.

Enter the Colonel

Yum made international headlines last week with a particularly creative promotion to publicize KFC’s new grilled chicken as an alternative to its signature fried chicken.

Yum hired an actor, dressed him up like Colonel Sanders (originator of the KFC recipe) and sent him to United Nations headquarters in New York. The actor talked his way past a security guard and was shown to restricted areas. He got to shake hands with the Dr. Ali A. Treki of Libya, president of the UN General Assembly. He also posed for a photo under the giant UN logo, and asked Ban Ki-moon, UN Secretary General, to register the “Grilled Nation” of grilled chicken eaters as the UN’s 193rd member state.

The stunt probably offended some, but it gave the company free publicity and word of mouth around the world. That should vastly outweigh any loss of business.

We’ll continue to keep an eye on Yum’s overseas expansion and update our buy/sell/hold recommendation as necessary in our Wall Street Stock Forecaster newsletters and hotlines. Click here to learn how you can subscribe for one full year with no risk and no commitment.