Case Write-Up #2: Taco Bell Inc.
To: John Martin
From: Steve Aghas
Date: November 26, 2008
Subject: Ensuring Future Success for Taco Bell Inc.
To maintain future success and achieve its stated vision of growing to $25 billion in sales and 200,000 points of access (“POAs”), Taco Bell should: (i) continue its practice of getting feedbacks through surveys from customers; (ii) alter the compensation and non-monetary reward system for its team-managed units (“TMUs”), in addition to empowerment; (iii) continue to leverage PepsiCo’s experiences, networks, resources, and culture; (iv) continue to develop its technology and information infrastructure, and investing in innovations through its “restaurant of the future” program; and (v) continue to manage its frequent transformational and strategic changes so as to avoid frictions with its managers and TMUs.
The following analysis further explains each of my recommendations above, including how each recommendation will help ensure that Taco Bell continues to evolve and maintains its success in the future:
(i) Commitment to Customer Service: Taco Bell’s transformational changes started in 1987 with a study of what its “best customer wanted from a fast-food restaurant”. That study, followed by another study in 1989, lead the company to radically redefine its business and the introduction of earlier successful programs such as the K-Minus (which helped the company reduce its real estate expense and labor costs) and the Speed of Service (which helped the company increase its peak hour transaction capacity and reduced customer waiting times). Customer studies and feedbacks have also helped the company in creating safety nets, by providing customers a toll-free...