Assignment # 2: IT And Business Models – Case Study Taco Bell Inc.

Given the speed and magnitude of change, why didn't Taco Bell go "out of control?"
Given the speed and magnitude of change, Taco Bell was still thriving considering the highly
competitive nature of fast food market. This is because despite implementing the series of
change, these changes were made after a proper research and well thought out plans as stated in
the case study rather than taking rash decisions. Hence, Taco Bell took calculated steps to
implement these changes that made sure the company does not go out of control. The following
are some of the calculated steps:
1. Taco Bell made significant investments to train its employees to develop more innovative
work behavior and while doing so employees were motivated to display above average work
performance through the introduction of pay for performance compensation structures.
2. Secondly, investments in Training and Development and compensation structures were the
main competitive advantage of Taco Bell when compared with its competitors in the market
which played a significant role in achieving lower turnover rates at Taco Bell that was
previously 220%.
3. Taco Bell also made significant changes to its physical appearance. The introduction of
KMinus which resulted in more seating area for customers to sit and roam about and the
tighter control over quality proved to be a lot more cost efficient and simplified the
operations at restaurants.
4. Apart from this, Taco Bell equipped its managers with tools such as SOS and TACO. These
tools enabled the newly trained managers to proactively monitor and were empowered to
manage and take decisions regarding operations in their own branch.
5. Last but not the least, three safety net introduced by Taco Bell significantly helped to manage
the areas of customer satisfaction and quality control at every branch.
Can Taco Bell's major competitors copy the Taco Bell strategy? (Why or why not)
In my opinion, the major competitors need to consider several factors before they should go on
copying the Taco Bell strategy. To begin with, if the nature of their products is similar to that of
Taco Bell’s products, then it is wise and easier for the competitors to copy the strategy.
However, one should also consider the culture of their organization, i.e. whether they are willing
to push down decision-making powers and empower their managers and employees to take
decisions. Moreover, are the competitors in accordance with the idea of value-pricing and not
just the profit-based pricing and that customer satisfaction should be the topmost priority, then
copying Taco Bell’s strategy would be easier for them. Lastly, learning organization was another
factor that significantly differentiated Taco Bell from its competitors and played a major role in
the success of the changes implemented by Taco Bell.
Hence, Taco Bell’s strategy was not only focused on these individual factors, rather all these
factors combinedly played a significant role in making their strategy a success. Therefore, the
competitors should have the culture as that of Taco Bell or are ready to change their
organizational culture to successfully incorporate the said strategy otherwise, it would be a waste
of financial resources and time when your organization isn’t capable of adopting these changes.
Is Taco Bell positioned to achieve its goals? What advice would you have given John
Martin in 1994?
So far, Taco Bell is doing significantly well in the area of customer satisfaction which has
increased from 8.12 in 1990 to 8.34 in 1993. Moreover, looking at the Exhibit 5 it can also be
gathered that its POAs have greatly increased in number since 1992 which was 4,152 to 9,707 in
1993. Lastly, as per the vision presented by John Martin to achieve $25 billion in food retailer,
exhibit 5 clearly shows the evidence regarding the success in retail food. Apart from this, Taco
Bell’s increasing focus on customer, integrity, teamwork, accountability, and, most important,
commitment to both personal and corporate growth are playing a vital role in achieving the goal
of 2000. All and all, it can be assumed that Taco Bell is well positioned to achieve its goal of
2000.
The advice that I would like to give John Martin in 1994 is that Taco Bell should diversify its
product range, i.e. it should include ready to eat or frozen food products. Adding such products
would enable Taco Bell to achieve its strategic goal of 2000 which is not only limited to fast-
food market but rather diversified to convenience food. It can sign contract with Walmart to
display their ready to eat or frozen products on their shelves. Accordingly, the vast number of
Walmart retail stores can prove to be beneficial for Taco Bell to achieve its goal of $25 billion in
food retailing and 200000 POA’s.