This essay sample essay on Taco Bell Swot Analysis 2019 offers an extensive list of facts and arguments related to it. The essay’s introduction, body paragraphs and the conclusion are provided below.
Many factors, both within the organization and in the market, have the potential to influence the success or failure of a company’s internationalization. In order to put itself in the best position to succeed (or to prevent failure), a company must conduct an in-depth analysis of these factors and use that analysis to make an educated decision as to whether or not they should expand their business abroad.
Strengths and weaknesses of the organization must be evaluated. Also, there are opportunities and threats that exist outside the control of the organization in the market that must be assessed. By determining the strengths, weaknesses, opportunities, and threats through analyzing the company and market research, it will be possible to determine if internationalizing Taco Bell to Great Britain is a financially lucrative and promising decision.
Based on the marketing research, Taco Bell has many strengths that would help it succeed in an internationalization effort in Great Britain. Its primary strength is its corporate ownership. Taco Bell is owned by YUM! Brands, an international organization consisting of six subsidiaries*. Those subsidiaries include Taco Bell, Pizza Hut, KFC, A&W All American Food Restaurants, and Long John Silvers. YUM! has successfully franchised on an international level, and has done particularly well with Pizza Hut and KFC, featuring 4,348 and 7,088 international units respectively*.
Taco Bell itself has internationalized as well, with 209 international units. Another positive aspect in terms of these YUM! Brands figures, is that there are 578 KFC’s and 522 Pizza Huts in the UK already, but there are currently no Taco Bells*. These figures imply YUM! Brands would be able to successfully internationalize another of their leading subsidiaries in a market in which they have already been successful.
In terms of their franchising strength, YUM! Brands provides the resources Taco Bell would need to establish a lucrative franchise in Great Britain. There are ten Franchise Restaurant Support Centers throughout the world to aid in YUM! Brands franchising. The center for Europe and Great Britain is actually located in England, providing an accessible support center for a newly established Taco Bell franchise*.
Within the company there is the personnel support to aid in Taco Bell’s internationalization to Great Britain. While Taco Bell is under the control of its president and chief operating officer, it also has the extended support of the YUM! Brands executive officers. Furthermore there is actually a separate division called YUM! Restaurants International that would provide additional support to Taco Bell*. As an added support resource within the context of the organization, YUM! has their own board of directors. The board consists of twelve members, each possessing their own valuable experience with other large and often international corporations, which is able to provide valuable advice and support regarding Taco Bell’s new project.
Despite the numerous strengths of the Taco Bell organization and YUM! Brands, there are some important potential weaknesses within the organization to consider before internationalizing. YUM! Brands’ reliance on franchising, Taco Bell’s reliance on beef as a cheap, staple product, and the image of Taco Bell as an American restaurant are all possible weaknesses that stem from the organization.
Over 80% of YUM! Brands’ restaurants are franchised. YUM! Brands has had great success with this internationalization mode with existing KFC’s and Pizza Huts, however, their reliance on franchising may hurt when trying to introduce a new restaurant, such as Taco Bell in Great Britain*. The culture and expectations of Taco Bell are not yet known in the UK, so the new franchise may not coordinate itself with the company image as well as it should.
Another serious detriment for Taco Bell’s expansion into the UK is their reliance on cheap available beef. Due to regulations in the market (covered later), beef is not a cheap and readily available product in the UK. Many Taco Bell products contain beef and their products are known for being very inexpensive. With beef being more expensive, this creates a problem for Taco Bell’s core menu and prices*.
An interesting weakness for Taco Bell may be its overall image. KFC and Pizza Hut serve American food in an American atmosphere both domestically and abroad. Taco Bell is distinct in that it is supposed to be a Mexican restaurant*. Domestically, the atmosphere of Taco Bell is the same as any other American fast food restaurant, but abroad, consumers may prefer a more Mexican, rather than American approach. Taco Bell’s American image may create difficulties when attempting to persuade customers that it is a Mexican restaurant.
Many opportunities exist for the internationalization of Taco Bell in the United Kingdom. Aspects of the British culture, economy, and general food market support the introduction of a Mexican fast food chain.
British consumers enjoy spicy food, Indian food being one of the most popular foods. They also enjoy variety and novelty in food choices. Mexican food is generally spicy and Taco Bell’s line of spicy sauces give consumers a choice in how spicy the food tastes as well as providing an alternative to everyday British food*. Also, living in the UK is quite expensive, especially in London, and Taco Bell appeals to the price sensitive nature of most British consumers*.
The ethnic food market in the UK is growing rapidly with Mexican food as one of the fastest growing sectors. Consumer food preferences are evolving to fit the increasingly fast paced lifestyles of the British*. Taco Bell has the opportunity to take advantage of consumers’ needs for rapidly prepared food. Many consumers have expressed an interest in Mexican food, yet there are few Mexican restaurants. Taco Bell can fill the niche and gain a share of the large ethnic and fast food markets. Taco Bell can gain the first mover advantage in internationalizing to the UK, as there are currently no direct competitors*.
The UK has favorable psychological distance from the US. Trade, customs, and governmental policies are well understood by the US and it will not be difficult for Taco Bell to market itself effectively in the UK. Many US citizens also travel to the UK and know little about or do not enjoy British food thus creating a demand for American chains*. McDonald’s, for example, has done very well in the UK.
Potential threats of Taco Bell’s entrance involve mainly the legal and economic environment of the UK and its fast food industry. The strict food safety regulations which require beef imported from the US to be tested and prohibit the import of hormone treated meat in the UK complicate the procedures for Taco Bell to acquire and sell their food. This increases their cost, as they have to find suitable meat suppliers and ensure their meats are hormone free.
As the UK government is open to foreign investments and free trade, the few regulations and stable economy makes the UK market attractive to many foreign firms. One threat Taco Bell should note is the continuously growing fast food industry and the fact that Mexican food is one of the three most popular foods in the ethic food industry*. As there is currently no established Mexican fast food chain in the UK, Taco Bell could take up great risks including the significant pioneering costs of being the first mover in this market*. Taco Bell’s main competition includes McDonald’s, traditional Mexican restaurants, Indian, Asian, as well as local cuisine*. However, their competition does not fall directly into the Mexican fast food category.
The S.W.O.T analysis taken from the marketing research indicates that Taco Bell should internationalize and the United Kingdom will provide a lucrative market. YUM! Brands has proved successful in internationalizing its other leading subsidiaries in the UK market. It has a well-defined franchising plan including a support center located in the UK, which can ameliorate the possible weakness involved with introducing a new restaurant through franchising. Taco Bell has the opportunity to fill a niche within the UK fast food market and appeal to British consumer preferences for spicy, rapidly prepared food. Entering the niche market as a first mover may include high pioneering costs, but allows Taco Bell to take advantage of the rapidly growing ethnic food market. As a result of weighing the organizational strengths against the weakness and market opportunities against the possible threats*, the analysis proves that with careful planning, internationalizing Taco Bell to the UK should be a success.