Case Study Description of Taco Bell Corp. (Abridged Update)
Taco Bell's management has developed plans to establish 100,000 points of service for its fast food business. Clearly, this will require significantly different approaches to management and organization.
Swot Analysis of "Taco Bell Corp. (Abridged Update)" written by James L. Heskett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Taco Bell's facing as an external strategic factors. Some of the topics covered in Taco Bell Corp. (Abridged Update) case study are - Strategic Management Strategies, Change management, Growth strategy, Strategic planning, Strategy execution, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Taco Bell Corp. (Abridged Update) casestudy better are - – there is increasing trade war between United States & China, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic ,
wage bills are increasing, there is backlash against globalization, etc
Introduction to SWOT Analysis of Taco Bell Corp. (Abridged Update)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Taco Bell Corp. (Abridged Update) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Taco Bell's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Taco Bell's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Taco Bell Corp. (Abridged Update) can be done for the following purposes –
1. Strategic planning using facts provided in Taco Bell Corp. (Abridged Update) case study
2. Improving business portfolio management of Taco Bell's
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Taco Bell's
Strengths Taco Bell Corp. (Abridged Update) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Taco Bell's in Taco Bell Corp. (Abridged Update) Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– Taco Bell Corp. (Abridged Update) firm has clearly differentiated products in the market place. This has enabled Taco Bell's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Taco Bell's to invest into research and development (R&D) and innovation.
Organizational Resilience of Taco Bell's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Taco Bell's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Taco Bell's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Taco Bell's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Taco Bell Corp. (Abridged Update) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Taco Bell's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Taco Bell's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Taco Bell's is one of the most innovative firm in sector. Manager in Taco Bell Corp. (Abridged Update) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Taco Bell's is one of the leading recruiters in the industry. Managers in the Taco Bell Corp. (Abridged Update) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Taco Bell's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Taco Bell Corp. (Abridged Update) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Technology & Operations field
– Taco Bell's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Taco Bell's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Taco Bell's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by James L. Heskett can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Taco Bell's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Taco Bell's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Taco Bell Corp. (Abridged Update) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Taco Bell's is present in almost all the verticals within the industry. This has provided firm in Taco Bell Corp. (Abridged Update) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Taco Bell Corp. (Abridged Update) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Taco Bell Corp. (Abridged Update) are -
No frontier risks strategy
– After analyzing the HBR case study Taco Bell Corp. (Abridged Update), it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Interest costs
– Compare to the competition, Taco Bell's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Taco Bell Corp. (Abridged Update), it seems that the employees of Taco Bell's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Taco Bell's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Taco Bell's is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Taco Bell's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Taco Bell's to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Taco Bell's products
– To increase the profitability and margins on the products, Taco Bell's needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Taco Bell Corp. (Abridged Update) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Taco Bell Corp. (Abridged Update) can leverage the sales team experience to cultivate customer relationships as Taco Bell's is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Taco Bell Corp. (Abridged Update) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Taco Bell's 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Taco Bell's supply chain. Even after few cautionary changes mentioned in the HBR case study - Taco Bell Corp. (Abridged Update), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Taco Bell's vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Taco Bell's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Taco Bell's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Taco Bell Corp. (Abridged Update) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Taco Bell's has relatively successful track record of launching new products.
Opportunities Taco Bell Corp. (Abridged Update) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Taco Bell Corp. (Abridged Update) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Taco Bell's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Taco Bell Corp. (Abridged Update), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Taco Bell's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Taco Bell Corp. (Abridged Update) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Learning at scale
– Online learning technologies has now opened space for Taco Bell's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Taco Bell's has opened avenues for new revenue streams for the organization in the industry. This can help Taco Bell's to build a more holistic ecosystem as suggested in the Taco Bell Corp. (Abridged Update) case study. Taco Bell's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Taco Bell's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Taco Bell's to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Taco Bell's in the consumer business. Now Taco Bell's can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Taco Bell's to increase its market reach. Taco Bell's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Taco Bell's is facing challenges because of the dominance of functional experts in the organization. Taco Bell Corp. (Abridged Update) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Taco Bell's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Taco Bell's can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Taco Bell's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Taco Bell's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Taco Bell's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Taco Bell Corp. (Abridged Update) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Taco Bell Corp. (Abridged Update) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Taco Bell's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Taco Bell Corp. (Abridged Update) .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Taco Bell's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Taco Bell's can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Stagnating economy with rate increase
– Taco Bell's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Taco Bell's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Taco Bell's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Taco Bell's in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Taco Bell's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Taco Bell's.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Taco Bell Corp. (Abridged Update), Taco Bell's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Taco Bell's in the Technology & Operations sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Taco Bell's business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Taco Bell's.
Weighted SWOT Analysis of Taco Bell Corp. (Abridged Update) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Taco Bell Corp. (Abridged Update) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Taco Bell Corp. (Abridged Update) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Taco Bell Corp. (Abridged Update) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Taco Bell Corp. (Abridged Update) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Taco Bell's needs to make to build a sustainable competitive advantage.