In 1983, Taco Bell Inc. was suffering from a problem of identity. In order to be a successful company, Taco Bell needed to clearly identify what type of business it wanted to be in: Mexican food business or fast-food business.
In this case study we will review the company and industry background, where the fast-food market was an upcoming industry in the 1960s and 1970s.
In addition we will review how in the early to mid 1980s, Taco Bell attempted to establish a clear path to where it wanted to be in the industry and how it went about implementing the change process. We will then discuss how the transformation process was progressing between the late 1980s and early 1990s. In addition, we will see how the company's sales increased as a result of the changes implemented through the company.
In order for any company to be successful, it needs to have the right product.
However, more importantly, the company needs to understand the nature of industry and market it is operating in, as well as the potential customers it is targeting.
The fast-food market as a whole experienced a substantial growth during the 1960s and 1970s. However, this industry was reaching a level of maturity bye the early 1980s. As a result, competition was getting fierce amongst the major players who were vying to the biggest market share.
One of those players was Taco Bell. The company had a sizeable market share of 40% in the fast-food market. In contrast, Taco Bell did not really enjoy a recognizable market share in the fast-food market. The company had to change how it conducted its business in order to be able to compete successfully.
Taco Bell did not implement any innovative technologies in running its restaurants.