Taco Bell was once operating in the United Kingdom in the 1980s. However, due to the social elements, the business closed all of its outlets in the United Kingdom to operate in North America specifically the United States. As seen in its evolutions and activities, the company has been involved in both political and social intrigues. Nonetheless, the soaring popularity of Mexican food has witnessed the emergence of restaurants and eateries like Chipotle, Tortilla, and Wahaca selling the same food as Taco Bell (Burke, 2018). This situation attracted the urge by the management who considered going back to the United Kingdom to establish their business as before even though there existed competition from other firms with the same line of products.
Problem Statement
Taco Bell is planning a comeback to London in the United Kingdom. The growing popularity of Mexican foods in Europe has enabled this due to an available market. Due to this scenario, the company is planning to expand its operations and reach as many customers as possible in their activities. However, the macro environment setbacks leave this ambition in jeopardy (Burke, 2018).
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SWOT Analysis of the Competition Environment
Even though there are noted opportunities and strengths in the UK market for Taco Bell, there are weaknesses and threats too. The SWOT analysis framework is one of the most proposed analytical tools used in designing business strategies. Through the use of a SWOT analysis, an organization can effectively devise and formulate plans in regard to the pertinent issues affecting the organization generally (Phadermrod, Crowder, & Wills, 2019). The company is likely to face obstacles like competition which comes from establishments such as Tortilla and Wahaca restaurants that already have a presence in the market. External threats are seen through the political instability brought about by Brexit as the company depends much on importation from the European countries. As noted by Burke (2018), this is likely to create fluctuations in the value of the key ingredients and also create a bottleneck in the supply of the ingredients that they are frequently using. The company is however optimistic with the advance in social media which has enabled gauging of the company step. Additionally, the soaring popularity of Mexican food in Europe is an added advantage.
Development of Strategies to Ensure Excellence
Despite the noted challenges, the company is in the urge of developing strategies and plans geared towards having a successful re-entry into the UK market. As explained, Taco Bell is a multi-business organization which is likely to present complexities and challenges to the management. These business settings are prone to difficulties because strategies are formulated at the cooperate level (Reynolds & Yetton, 2015). The company is looking up to cheap pricing as one of its strategy for competing favorably with their opponents. The plan is marked by given unique aspects such as “Cravers’ value menu” as well as “Taco Tuesdays”. This is meant to see into it that the prices of the products are lower as compared to other chains (Burke, 2018). Another strategy is to expand their base into occupying more stores. Already the company is taking advantage of the Yum! Brands umbrella which brings together many chains of the same sort such as KFC and Pizza Hut. The alternative here is to ensure that the reputation and profile of their chains are maintained at the most popular levels to outplay other potential competitors who are in the same business. This idea is not only geared at the new companies which might have the potential of starting the business but to the already established entities. Looking at these two alternatives, it is possible to tell the best out of them. Looking at the advantages and shortcomings of each, it is probable that one is better. According to analysis, the strategy based on the development of the profile is better than selling products at inexpensive prices. This is due to its long term benefits. Once the business has established a brand, there is a likelihood that customers will crave to be identified with the brand’s products. In return, there will be more sales of the products. As it stands from the records, Taco Bell is the least earning concerning revenue among the Yum! outlets. According to consensus metrics, there was variation in the system earnings with KFC gaining 2%, Pizza hut 1.8% and Taco Bell 0.5% these are revenue contributions from the total earnings of $1.37 billion (Larkin, 2018). These variations in sales and revenue generation can be linked to the popularity of KFC as compared to other outlets. Thus, as stated earlier it is necessary that the product name is popularized and profile’s reputation developed to attract more sales and profits. Again the management can take advantage of the parent company which houses the three and link it with. With this, customers who are interested in KFC products are likely to fall in the cycle of the more significant market cooperation which Taco Bell is a member.
Recommendations for Alternatives
It becomes clear that there are benefits and costs related to these alternatives as pointed out in the previous paragraphs. Starting with cheaper products, there is a likelihood that there must be tradeoffs. These tradeoffs will lead to an increase in the running costs or reduction of the profit margins. When practiced for more extended periods, customers will likely get used to and there will be no point of return. Besides, there is a possibility for the creation of conflicts between the products of the same parent company. Also, the strategy is short-term and is likely to fade with the advent of other approaches by the competitors. Nevertheless, there will be a benefit in that it is expected to increase sales. On a different façade, the development of the company profile to enhance the customers’ attachment and trust is the best alternative. Similar to the inexpensive products alternative, it has costs such as the need for a lot of resources in marketing and the need for the provision of many outlets to increase accessibility. All these micro strategies are likely to require an immense capital injection. Since the cost might be huge regarding finances. The benefit is that it is long term and is expected to go over for generations. Further, the company is likely to increase its revenue with steady sales and purchases.
Description of Tracking Metrics for the Recommended Strategies
There are some tracking metrics in the strategy recommended. One of the most significant is the sales revenue. It should be remembered that the system output is essential in evaluation and improvement of the business metrics of a given organization. The overall production of the entire organization or subsidiary may be used in the recommendation for a better strategy of the organization ( Gudla, Bhosle, & Chandrasekaran, 2014). With the tracking metrics, there are both the short and long term. For profile development strategy, it is clear that the tracking metrics such as sales revenue, profit margin and gross revenue are likely to be lower within the initial stages of implementation. In the implementation, there is a need for the increase in advertising budget which will erode the net profit margin.
Thus in the implementation decision, there is a recommendation that there is increased revenue for marketing. Even though this should be conducted with much caution as it should be up to a defined period. The primary target is to see into it that the company builds its reputation and profile. Once this has been achieved, there will be a reduction in the revenue allocated for marketing. Eventually, the profit margin will be widening despite the possibility for steady sales.
References
Burke, S. (2018, November 26). Taco Bell Luring Londoners with Beer. CNN journal. Retrieved from https://edition.cnn.com/2018/11/23/business/taco-bell-uk/index.html
Gudla, R., Bhosle, A. M., & Chandrasekaran, V. (2014). U.S. Patent No. 8,731,983 . Washington, DC: U.S. Patent and Trademark Office.
Larkin, M. (2018, February 5).Taco Bell Parent Yum Brands Dives Below Key Levels On Weak Same-Store Sales. Investor’s Business Daily. Retrieved from https://www.investors.com/news/taco-bell-parent-yum-brands-q1-earnings-fast-food-sector/
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management , 44 , 194-203.
Reynolds, P., & Yetton, P. (2015). Aligning business and IT strategies in multi-business organizations. Journal of Information Technology , 30 (2), 101-118.
