Taco Bell products are new products that do not exist in the fast food industry in Germany. In this section we are going to analyze the company, focus on the core competencies and capabilities, list key success factors and weaknesses and area of advantage in the home market in order to introduce the German market.
Core competencies
Taco Bell seeks to use its core competencies to achieve a sustainable competitive advantage in Germany. German competitors do not provide the same value to consumers that Taco Bell does.
- Offering a tasty food, which is the most popular in the United States
- Creating a sense of community among consumers who purchase the Taco Bell food
- Healthy food development reputation among customers
- Develop numerous menus (potential for new menu in Germany)
- Strong relationships with its consumers and suppliers that provide a competitive advantage for Taco Bell.
Resources
- Tangible assets such as stores and equipment in Europe (UK and Spain). But Taco bell is also physically present in Germany in the military bases. So they have their own supply chain and raw materials. The group Yum! has important tangible assets in Germany that can be helpful when introducing the market by Taco Bell.
- Intangible assets: Strong brand name reputation. Consumers know at least, that Taco Bell is offering fresh and healthy Mexican food.
Capabilities
- Strong operational capability. For example: Smart Forecasting & Labor Scheduling to reduce cost of labor at the stores by automating work and scheduling the best schedules to store managers.
- Standardized food making and operating processes: It permits to ensure that their food tastes exactly the same at each restaurant. Regarding operating process, every restaurant follows standardized rules for HR, inventory and promotion, so new restaurant are easy to manage.
- Independent supply chain and unique integrated model: Ensure system efficiency, quality and safety and rapid innovation (menu…) – Centralized procurement to improve gross margin, strict raw materials purchase system in order to reduce food safety and risks.
- Strong site selection capability: Complete city based database ensure successful site selection
- Experience in the Fast food industry with Yum!, with important market share in the European Market (KFC and Pizza Hut).
- Innovation in social marketing strategy: For example: Taco Bell is promoting its Doritos Tacos through different mobile mediums including a new iAd campaign that mixes social media and location-based technology to drive consumer engagement. “We used iAd because of their advanced targeting capabilities and creative flexibility.”
- Strong management team: « Just to be CFO at Taco Bell requires excellence in finance leadership, but when the same CFO takes a pivotal leadership role in strategic planning, franchise performance management, and brand growth, you have someone uniquely qualified to run a complex and successful global business. » Melissa Lora, Chief Financial and Development Officer of Taco Bell
Key success factors
- Taco Bell switched to zero trans-fat frying oil in all of its outlets which is a key
success in providing healthy food to consumers.
- Good service and healthy/ fresh food.
Taco Bell is differentiating itself from fast food competitors by offering healthy and fresh products. Taco Bell gives a much bigger variety in products compared to other competitors
- New products innovation
Category innovation is a priority in taco Bell to increase sales and adapt to the market.
For example Taco Bell had extend a breakfast platform to more states in the western United States, to expect a gradual rollout of breakfast and a gradual impact on sales. It can be introduced also in Germany.
- The attractive pricing give Taco bell will make sure that a large number of
consumers try out Taco Bell in Germany and will permit Taco Bell to compete against other fast food brand and Mexican restaurant.
- Strong partnership related to the local market
E.g.: ESPN for United States
- Subsidiary of Yum! Restaurants
Yum! also owns Pizza Hut and KFC. These two have 158 outlets in Germany (91 for KFC and 67 to Pizza Hut). The experience of KFC and Pizza Hut will definitely hold Taco Bell in good stead. The success of any fast food chain depends on how it manages its supply chain and from where it sources it raw materials. Due to the experience Worldwide and in European market with its other two brands, YUM! definitely has an edge in this regard. Taco Bell contributes around 66% of Yum Brands’ profits globally and surely will get all the support from the parent company.
- Unique and innovative social media campaign
The ways in which Taco Bell utilizes social media to engage with its consumers in unexpected ways can be considered revolutionary.
I really recommend this article to understand Taco Bell marketing effort and real time marketing strategy: http://www.pointburst.com/taco-bell-living-mas-via-social-media/
Moreover there is plenty of examples in their Youtube page. It is really interesting and funny to have a look at those videos. (http://www.youtube.com/user/tacobell/videos?view=0)
For example: http://www.youtube.com/watch?v=BbAJYHJAue8
FREE SWOT ANALYSIS
Key weaknesses
- Awareness of German consumers to Mexican food
There is not much awareness about Mexican food in Germany. But Döner kebab have the same « format » so consumers are used to it.
- Horse meat Found At Taco Bell In UK during the European's horsemeat scandal
Recommendations on complying with the traditional approach VS adapting for local market:
- Keep the strong operational capability and the standardized food making and operating processes/
- Keep an independent supply chain and unique integrated model/
- Keep franchise as a mode of entry in the German market
- Pay attention to site selection when introducing the German market
- Use the fact that Taco Bell is a subsidiary of Yum! Restaurants to increase its bargaining powers regarding suppliers. Use Yum! network and maybe raw materials
- Create strong partnership with local brand in the German market
- Develop New products according to German tastes and expectations
- Develop Taco Bell’s breakfast in Germany
- Develop appropriate social marketing strategy according to German consumers and keep this unique and innovative social media campaign
- Improve German consumers awareness to Mexican food
- Improve German consumers awareness to Taco Bell offers via marketing strategy
- Be transparent and provide information to consumers regarding the Horse meat scandal
- Communicate on Taco Bell’s good service and healthy/ fresh food
- Communicate on Taco Bell’s attractive pricing
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