IntroductionProbably considered the most innovative brands of 21st century Taco Bell has gone through a long journey to establish itself as the one global leaders for serving tex mex food. The company is known for its inventive Mexican food. Taco bell is owned by the famous American Yum Brands Yum Brands is mainly know for its big 3 of KFC, Pizza Hut and Taco Bell has has customer base of 42 million weekly customers and massive 7000 restaurants around the globe. The brand Taco Bell has always been know for its strategic planning since its birth in 1962 in California. The company made sure to have its constant presence in the American market with its famous strategy known as the bell system and its famous ad campaign’s like – Hungry Chihuahua and Good to Go.
Taco Bells use of Labour Management System to its advantageTaco Bells key strategy has always been to constantly innovate and reduce costs and become as effiecient as possible. In 1988 the management of the company decided to take the company to a a new horizon in terms of their market share and their profits. This led the company to aggressively develop new strategies to conquer the market.
One such strategy that was relatively visible was their value meals. Subsequently they came up with new menu items, design, layout, customer service etc. The impact this new changes would have upon their labour cost and customer service was a key issue they had to figure out before they start to implement them. It was at that time that America learnt its lesson about increasing demand without anticipating the effect is going to have on operations. The planning phase of the new startaegy namely value strategy made managers of the company ask questions that have never been asked before. One of the key question was the impact of operations decisions on the brands speed of service and labour costs. The labour system of Taco Bell at that time FAST was not designed to ask such questions. It was not adaptable to yield information to support the decisions that were to be taken in the new setting.
The idea was to introduce a new strategy namely “total automation of company operation” namely TACO in short. The main purpose of TACO was to link all its to restaurants to corporate mainframe for the control of financial as well as aspects of its store operations. This gave Taco Bell freedom to manage its labour in a consistant manner. The results turned out to be very good for the brand as it increased the consistency of service. This led to great customer satisfaction in turn. This also made it more attractive for franchise’s to invest in the brand. The Labour Management Model (LMS) was developed and implemented between 1990 and 1992.
It was implemented across all of its store by 1993. Before the implementing the new system the LMS was tested across 5 different restaurants in USA, after its satisfactory performances the company finally decide to implement the new strategy. Simultaneously a measurement system was put in hand to measure the benefits of the new strategy. Initially in order to test the effectiveness of the new LMS system was compared with the company’s old labour management system FAST.
During this period at the end of each week the company’s operations team along with its IT team use to monitor and retrieve the information of previus week’s saes data, and aplied the nu LMS process to those dat jut as a restaurant manager wold. Then compred the labor ue obtaind by that proces to that rported as actualy used in the resturants. They aggeragated results and reported the difference as actual labour saving.
This process was used durin the five-stor and the 10-store operations test. After company wide implementatin, The process ws reversd. We reportd the labor actualy used under the nu LMS system. Then applied th old FAST systm to actual dat.
then recordd the differenc in labour used by the simulatd aplication of te old FAST syste and the nuw LMS syste. Since 1993, te LMS system has shown a consstent Differenc of one les hour per day of labor than the FAST system.The LMS started implementing and functioning from From January 1991 Bell budgeted 87,500 to suppor the labor consultat, the job shoppe, the industril engineering consultan, and th programmes working on the proect. Approximatey $90,000 as budgeted to suppot the simulatioModeling effor, $80,000 for th data collectio and develpment effort, and 117,500 fo the combine task of developig the forecastin mode and developin the integer-programing model. In adition, the industrial-engineerin function grew ino th restaurant-systems engineering departmet. Today, tis department has fur individuals with trainin in operation research or indusrial engineering who dvote approximatel half of their tie to using the LMS to impove the efficienc and effectivenes of the Taco Bel system.The effect of the new LMS was instant and effective. It improved the quality as well as the consistency of the brand.
During the period of 1991 to 1993 the no of food joints using the new LMS system skyrocketed from 1298 to 3954 in America. T. The saving he saving on labour cost was another benefit of this new system as went from 3.5 million US dollars to 1993 to 16 million US dollars in 1996. The savings between the period 1993 to 1996 was 40 million and the cost on savings continued to increase over the coming years. The LMS system not only cut the labour cost but also developed a strategy for the company to determine the labour requirements and deploy them in easy and flexible ways. Beore labour was allocated to a store certain no of hours and it was the manager’s decision to effectively deploy the labour deployed to him/her.
Since FAST system was not integrated different stores across America varied their service, cleanliness, quality etc. What LMS did best was it eliminated this variability across all of its store which led to more sales and visits customers increasing the revenue of the company. The Brand additionally cut free of expenses by utilizing the LMS to assess the impact on work of a ceaseless stream of thoughts for enhancing key procedures. Before the LMS, stakeholders discussed the benefits of suggestions for development in view of subjective components. As a rule, the suggestions embraced were those upheld by the most noteworthy positioning or most persuasive stakeholder. With the LMS, they could quantitatively assess the money saving advantages of new thoughts and settle on choices on a discerning reason out of the blue. By utilizing the LMS to direct their endeavors to reengineer work stream in the kitchen to dispense with non-esteem included work, expel bottlenecks, and adjust workloads, existing stores enhanced efficiency by archiving reserve funds of $13 million every year in labor costs.
Besides, the organization has utilized the LMS to decide ideal drive through window and line outlines, to quantify the advantages of elective plans for purpose of-offers specialized gadgets, and to create manual strategies for enhancing the man-machine execution of new innovation ventures. The LMS framework was basic in supporting Taco Bell’s choice to embrace the “Kminus” idea. Taco Bell expelled the substantial customary kitchens from its eateries and changed them into mechanical production system territories for amassing items utilizing arranged fixings. The old kitchens had involved 70 percent of the customary Taco Bell eatery, leaving just 30 percent for client seating.
Today, these extents are switched. From that point forward, the LMS has been a fundamental plan instrument in Taco Bell’s development to inline areas in shopping centers and different areas that offer constrained space and guarantee high volume deals. The organization chose to give free drink refills, which later prompted self-benefit savor islands eateries, simply in the wake of utilizing the LMS widely to decide the design, area, and staffing techniques that would limit work costs while keeping up client benefit gauges. Before thinking about any new hardware, administration utilizes the LMS to measure its impact on work and speed of administration. In its esteem methodology, Taco Bell presented six center menu things at the lessened cost of 59 pennies, and later extended to a three-level esteem menu of 59, 79, and 99 pennies. This gave the driving force to the organization’s advancement of the LMS. Thusly, the LMS was a vital device that permitted Taco Bell to accomplish the operational efficiencies and cost investment funds that helped it to expand deals and income at a normal of 20 percent or all the more every year in the vicinity of 1993 and 1996.The Strategies Taco Bell uses to stay relevant in the marketTaco Bells strategic plan to stay relevant in the market with its unique selling point of Mexican food in America has worked out well for them so far.
This comes down to their excellent expertise in menu innovation and digital innovations and efforts to diversify their investment portfolios. Digitalization can be considered one of the key factors for success of the company coming in to 21st century. From its clever tweets on social media platforms like twitter and Instagram to attract young millennials to targeting social media influencers to promote its brands.
Taco bell has done well so far to stay relevant. This also gave them international presence which was much needed to after its failed expansion in Mexico. Taco bell also started using Youtube as medium attract customer it came up with its own channel namely Taco tales which hosts an array of vloggers and comedians.
Taco bell also stays loyal to its consumer base by inviting the super fans to its headquarters to try the new upcoming products and give their review on the product. Customer delightment in a food restaurant is not that simple as it appears as it can haunt restaurant managers easily. Taco bell came up with with this strategy of assessing a social situation before the response known as “The Bell System”. Well it did work as it prevented its customers from south of the border. Taco Bell takes up two ends of the spectrum when it comes to the value: an entry point that has always been $1, and abundance through $5 boxes.
When new items are introduced, they can be purchased either à la carte or mix-and-matched in the box, effectively allowing the same product to serve as an entry point or be upsold on abundance. This is particularly important as a very high 70% of Taco Bell customers take the menu and customize it. The company has done cage free eggs, no human crossover antibiotics, lowered sodium, eliminated preservatives, and even offers vegan and vegetarian options; all to remain current. The pipeline is strong, with nacho fries (french fries with queso) in test and doing “very well”, fried chicken products, and a breakfast business launched only four years ago that is currently ~6% of daypart sales and has seen 13% transaction growth in two years.
In the past five years, $600m has been spent on over 2,700 reimages with only 5% of the system at F16 end not on a current image compared to 14% at F13 end and 52% at F11 end. Digital menu boards are being rolled out to the system now, and payment options & kiosks are only in a few restaurants at the moment with the plan continuing to evolve from there. A quick glimpse of the “future” was offered, including facial recognition enabled kiosks and drive-throughs, location based spatial technology, Amazon’s Alexa voice ordering + delivery, or even, yes, virtual reality ordering……Culture can be considered as one of the key factors for a brands success and the no of time the word culture has been stressed as an important strategy for a brand cant be countable. According the Ceo of Taco Bell Brian Niccol a brand moves forward in a right direction if its constantly innovating, attracting the millennial and coming up with new ideas. The Brand is trying to put up a youthful display of eagerness and passion to serve to make a statement that Taco Bell is still in its early days and has eagerness to reach even greater heights.Taco Bell in IndiaFor a company or a brand to be successful in today’s society. Strategy holds a key role in it.
This is true especially when a company plans to enter a new market which is relatively new and foreign.Population and globalization are two key main factors that make India a strong destination for setting up or expanding an international business. This can be shown through the likes of McDonald, Pizza hut, KFC etc as they came and conquered the Indian market.
In order for a business to survive in any country the brand must adapt to the culture of the country. As India consists of highest no of vegetarians in the world brands like McDonald, Pizza Hut even KFC started introducing more vegetarian dishes in their menu. Another reasons for thier success is thier strategy to attract Millennials. The world is constantly changing and millennials occupy the major share of a fast foods bossiness in India.
Altough Taco Bell has doing good in ts native USA but it struggled to come up in countries like China and Mexico. In fact it failed extremely bad in establishing itself in Mexico. So bad that there is no single store of Taco Bell in Mexico. Taco bells idea of introducing Tex Mex food to Mexico went down very bad that infact most of the locals over there considered Taco Bell as a cheap rip off their food culture. Some of the names of the dishes in their menu had to be changed as the locals felt it was disrespecting their culture and they failed to understand the food they were placing their order for. One such food critic namely Carlos Monsivias at that time considered bringing Taco Bell from USA to Mexico was bring ice to Antarctica Another name that stuck with the brand was a wannabe Mexican brand which serves dishes which aren’t relevant to the name that it suggests. To sum up Taco Bell has been branded as “Everything but Mexican Food” in Mexico. In order for Taco Bell to succeed in India it must have a glance at McDonald’s strategy to penetrate Indian market as it came and conquered the Indian Market.
Taco Bell did makeup its amends my revising its entry strategy to international market but Mexico remains as the only black stain in the company’s if not well planned strategy.ConclusionLeaders at Taco Bell knew they had to drive change and innovation and change to bring the company out the rut and to establish itself as a world class brand. From devising key strategical planning, implementing the LMS and constantly innovating. The brand sought out to redefine itself in the global market and grow consistently.Taco Bell played out its strategical cards in right places to keep going strong in the 21st century and attract the millennials. Taco Bell’s strategy may profit by their group’s innovative virtuoso, however there’s still long way to go.