http://es.slideshare.

net/KitKatePuzzle/taco-bell-mis-case
https://prezi.com/6gf_locpg1en/taco-bell-case-study/
https://es.scribd.com/document/6702170/Taco-Bell

Case Presentation: Taco Bell

and Jesse Paprocki
BUS 754: Information Systems
Mgmt

Pat Lauscher

Spring 2003

HISTORY (EVENTS)
Company Focus:
John Martin joined Taco Bell in 1983 as president and CEO, having previous
executive level experience with other fast food chains. He discovered that the
company didnt know what business it was in, so he quickly focused Taco Bell
on the fast food industry.
Process Improvements:
1983-1988: Strong growth in the 60s and 70s came to a halt in the early
1980s as the fast food industry began showing signs of maturity. To deal with
the potential threat of a maturing business, Taco Bell began a series of process
improvement initiatives that really changed the way it did business. These
improvements included increased restaurant capacity by modernizing its
restaurants to include drive through windows, increased seating capacity,
electronic point of sales systems (to replace plastic order boards), and
reconfigured food production areas. Taco Bell also added some new menu
items during this time.
1988-1991: Continuing to feel the effects of an industry margin squeeze,
Martin commissioned two studies that tuned the company in to what the
customers really valued, FACT (Fast, Accurate, Clean, and Temperature). In
response, the organization stopped viewing quality and price as incompatible
tradeoffs.

The K-minus program transformed the kitchen into a heating and assembly unit
and centralized cooking and chopping, to make more room available for drive
through and dine-in customers.

The Speed of Service (SOS) initiative further increased restaurant capacity by

allowing for the advanced preparation of Taco Bells most popular menu items.

The Role of Management:

Role changes: Martin changed the role of the restaurant manager to that of a
general manager, giving them more decision-making authority and more

accountability for restaurant performance. Additionally, the role of the district

manager was changed to that of a marketing manager. The increased span of
control for this position, virtually forced marketing managers to manage by
exception and change their approach from policeman to that of a coach.
Compensation: Both types of managers received changes in their
compensation that provided for greater earnings potential through
performance incentives. Many restaurant managers and district managers did
not succeed in their new roles. Fortunately the new compensation plans were
designed to attract and retain highly skilled individuals.
Safety nets: As layers of management were removed, three primary safety nets
were installed to ensure control and adherence to company policies and
values:

The installation of a toll free customer comment line that was answered by an
independent vendor

Mystery shoppers visited restaurants and provided feedback that was factored
into managers bonus calculations.

Random marketing surveys were taken to provide customer feedback that was
also used in calculating manager bonuses.

Information systems:
TACO: An information and communication system was needed to support
Taco Bell managers in their new roles. As a result, Taco Bell implemented the
TACO system that linked each POS system with the marketing managers and
corporate headquarters. TACO provided all levels of management with better
information and improved communications within the company. This system
reduced paperwork, provided reports on costs, provided sales estimates, and
gave them email.
TACO II: In the early 90s, a more user-friendly computer system was
introduced to support local crew members by allowing them to share
information with each other to improve job performance.
Learning Organization:
Shared resources: In the early 1990s Martin again reformulated the companys
strategy, setting out to create and dominate the convenience food business. In
support of the new strategy, Taco Bell developed a concept called shared
resources, adding new lines of business that could leverage many of the
resources that were already in place within Taco Bell and PepsiCo.
Team Managed Units: As competition increased in a maturing market, Martin
pushed for Taco Bell to become a learning organization. Success depended
upon capturing information and taking action faster than the
competition. General managers focused on training and coaching team
managed units (TMUs) to become more self-sufficient, thus allowing

managers to increase their span of responsibility. The success of this structure

was heavily dependent on the information provided by the TACO II system.
ISSUES

1. How should Taco Bell position itself to achieve its vision of growing to
$25 billion in sales and 200,000 Points of Access (POAs) by the year
2000?
2. Taco Bell must protect the market share of its core business, fast
food. How can information technology be used to help Taco Bell stay
ahead of the competition in this increasingly competitive industry?
3. What is the best way for Taco Bell to capture a greater share of the one
billion eating opportunities that exist in the United States everyday?
RECOMMENDATIONS

1. a) As we move towards 2000, Taco Bell needs to think bigger than the fast
food business, and start thinking about Taco Bell the brand. Taco Bell
needs to think about capturing more than the consumers fast food
dollar. While Chevys restaurant is providing Taco Bell with a piece of the
consumers full service restaurant dollar, and Taco Bell brands are showing
up in supermarkets, much more can be done. Partnerships with other
successful brands can increase the visibility of the Taco Bell
name. Sponsorships of sporting events and other public contests can also
give Taco Bell needed exposure to grow the brand.
b) Over the past 10 years, Taco Bell has continued to innovate the products
it offers to its customers. In order to reach its sales targets, it is necessary
for the company to continue to deliver new and interesting products that
the consumers will enjoy. This is necessary in both Taco Bells restaurants
and supermarket retail sector. In addition to test marketing new products
in specific areas, it is recommended that Taco Bell creates and markets
regionally and culturally specific products.
c) Finally, Taco Bell must continue to strive to be a truly global
company. One hundred POAs in 21 countries is not enough to drive $25
billion in sales. By expanding the restaurant base, this will also open the
door to expand the supermarket retail sector in these countries. The goal
should not be defined as being an American company, but a global
company.
2. a) To protect its market share in the fast food industry, Taco Bell must
continue to focus on providing the customer with the best value. Utilizing
modern information technology to capture customer feedback is one way
to do this. Taco Bell could dramatically increase its connection to
customer attitudes about new products, prices, service, and quality by

installing an in-store quality feedback terminal in each restaurant. The

information lines connecting each store to the central system are already in
place. This would give customers the chance to complete a short survey
while the dining experience is still fresh in their mind. Customer surveys
can also be made easily accessible via the Internet to provide drive through
and carryout customers with an easy way to share comments about their
dining experience. After taking the time to complete either type of survey,
the customer should receive a coupon for use in a future visit to Taco
Bell.
b) Taco Bell can also use information technology to make additional
improvements in operating efficiency and expenses. Because of the
consistency in production methods from store to store, improvements made
in one location are likely to benefit other Taco Bell locations. For this
reason, efficiency improvement efforts that produce positive results should
be logged into the TACO II system and stored in a central database. The
system should be designed to scan actual results, identify opportunities for
improvement, and automatically forward potential solutions to the
appropriate stores. This would provide stores with a much more
comprehensive and timely list of ideas than the current system of
communication.
3. a) The supermarket retail sector of the business provides Taco Bell with
the greatest opportunity for growth in the near future. To achieve this goal,
it will be necessary to set up a distribution network ensuring that all
supermarkets carrying the Taco Bell brand can have the latest product, and
that their shelves remain stocked.
b) Receiving and interpreting relevant information will be critical to the
success of Taco Bells new strategy of moving beyond convenience
food. Since the company is relatively new to the retail industry, they
should consider partnering with a well-established retailer. Partnering with
a large national supermarket chain that is currently using a sophisticated
data collection system, will allow Taco Bell to quickly achieve economies
of scope. With a system in place to receive timely feedback about the
pricing and movement of retail products, Taco Bell would be positioned
(now and in the future) to run regional trials and quickly learn which
products are likely to succeed in a national rollout.