You are on page 1of 6

Taco Bell Inc

Question 1: Analyze the evolution of Taco Bells business model from 1983 to 1994. How did various factors contribute to its evolution? Situation when John Martin Took over: Fast food market was growing and was showing signs of maturity and competition was aggressive. The problem with TACO Bell that it considered it self a Mexican food vendor (enjoyed a 40% share of Mexican food market) but negligible share in the fast food market. It had to realize that the growth can only come if they change their market to fast food market. TACO bell was company which was labor intensive and used a low level of technology in its operations. All ingredients were prepared in the restaurant which meant that 70% of the space was taken up as Kitchen space and rest of the space as sitting area. There were delays in customer orders because it was difficult to predict the customer demand there was shortage of prepared raw material. There were inconsistencies in taste and cooking quality as it was in the hand of the kitchen staff at the restaurant. Orders were taken manually by the cashier and written on plastic boards and were erased as fulfillment took place. This was in efficient as it often led to confusion on which orders has been fulfilled etc. Also the managerial staff at the restaurant was involved in routine tasks of the restaurant apart from their managerial duties. This led to significant oversights and lack of analysis data for other senior management. Also the relations between restaurant managers and district managers within the organization was quite strained as district managers acted as policemen and tend to be over aggressive with the restaurant managers Steps taken under the management of John Martin: 1983-1988 1) 2) 3) 4) 5) 6) 7) Modernization of physical assets Adding new menu items Increase in opening of new restaurants Increase in the geographical presence Increase in restaurant space Double assembly line perpendicular to customer service area Plastic boards replaced with Point-of-sales system connected with television monitors 8) Training of Restaurant managerial staff These steps were specifically taken to move into the fast food market. Presence was increased. Also customer issues were taken care of by increasing the efficiency and reducing the errors that were previously being made. Also trainings were provided to enable the staff to address the issues in a more efficient manner.

1988-1991 1) 2) 3) 4) 5) 6) Introduction of new products Business strategy based on customer value Restaurant kitchens converted to heating and assembly units Head quarter taking the responsibility of readying the raw material Introduction of speed of service program More responsibility to restaurant managers now known as restaurant general manager 7) District managers converted to marketing managers with increased responsibility of 12 restaurants 8) Increasing salary for the manger to increase motivation 9) Toll free numbers to get customer feedback 10) Mystery shopping introduced to keep check of quality 11) Marketing surveys to get customer perception 12) Introduction of PC linked to POS, Marketing manager, and Corporate HQ 13) Total Automation of Company Operations (TACO) introduced which provides the infrastructure, Information and Analytical tools needed to support new roles of management The steps were taken to establish into the fast food market. Customer values were recognized and new products were introduced keeping in view the customer requirements. Turnaround time was increased because customers wanted fast food FAST. As the restaurant managers were directly dealing with the customers and day to day issues, more responsibility was provided to them to make decisions. As more responsibility was handed over and managerial lines removed certain steps like Toll free numbers and mystery shoppers were taken to keep a tab on the quality assurance and seeing that the responsibility transferred is being used effectively. Use of technology was introduced to facilitate the decision making process and also to increase the efficiency of the over all operational tasks. Technology made it possible for the management to analyze the data and increase the efficiency of communication. It also helped to increase the accountability. 1991-1994 1) 2) 3) 4) 5) 6) Reformulation of company strategy to suite the role of food retailer Introduction of shared resources concept Changed culture of organization to incorporate the learning. Increased point of access Introduction of team managed units (TMU) Reinvention of IT by introducing TACO II i-e information to be available to the TMUs with information that is understandable to them.

7) A central database of best practices and knowledge base and forums on the company Intranet. After successfully establishing it self as a fast food chain TACO bell moved one step further to become an food retailer. The advantage that TACO bell had was that they had resources available from their parent company Pepsi Co. and they utilized these existing resources with the parent company to establish the new areas in the food retailer business. More emphasis was laid on changing the culture of the organization to one which is constantly evolving to the needs of the market. Also once again keeping in mind that the people at the points of access have most exposure to customers, team managed units were created. The idea was that the employees working on points of access will be responsible for the entire management of the area. Thus all decision will be made by the team. Once again technology was used to support the idea of TMUs and TACO II system was introduced which basically converted the information in such a manner that it becomes understandable to the team members Also to facilitate the learning of the TMU a company intranet was established.

Question # 2 What specific organizational challenges were faced by Taco Bell in utilizing IT as an enabler? How did they address these challenges? Challenges Faced By Teco Bell The traditional Taco bell operation were conducted manually that produces lots of errors and fallows in the progress and the growth of the organization . The challenges that Taco bell were facing before the implementation of management information system (MIS) was 1 Lack of customers satisfaction 2 Improper Infrastructure of data and records These two were the main factors that were providing hurdle in the growth of Taco Bell. Johan Martin the CEO of Taco Bell implemented the information management program that allow interconnect of all the chain of restaurants providing data of sale , record , management of inventory. This system was termed as (Total Automated Company Operation) In order to expand information access over the entire organizational network was necessary. There was the need to redesign the TACO system into more user friendly. Thus the system redesign as TACO II The entire implementation increased the organization grown up to 4.3 billion in 1994 and increased point of access 9707 . The entire Taco revolution was based on the leadership strategy of martin and the implementation of the strategy using IT as an enabler

Question # 3 What general lessons can be derived from the experience of Taco Bell? Lesson Drives form the experience of Taco bell The general lesson derived form the experience of taco Bell as as follows 1- The management should use focus on new technologies. As it not only helps the organization by improving its efficiency, but it also helps the organization to use its scarce resources effectively 2- The strong network should be build b/w the employees in order to make it easy for them to communicate with each other, management, supplies and their customers 3 -The company should take keen interest in developing the skills of the employees through various training programs 4 -The company should provide the employees with good incentives in order to keep them motivated and satisfied 5-Products should be tailored keeping the customers in mind, since customer is always right