Taco Bell
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When John Martin, (CEO) joined Taco Bell 1983, he questioned whether Taco Bell understood the fast food business. In 1982, the company had 40% of the Mexican fast food market and generated about $700 million in revenues, but had negligible market share in the entire fast food market. The company did not understand this concept of their business and needed to re-establish themselves within the industry to gain market share.
Problems:
Some of the main problems that Taco Bell faced which did not allow it to compete effectively with its competitors were:
* Current labor was intensive
* The company used low levels of technology – ex. Orders were placed on manual plastic board
* Lack of drive-through windows
* Required employees to create large amounts of operational paperwork as part of their role.
* The Taco Bell employee turnover rate measured at 220%
All of these problems created significant errors, provided no data for management analysis and forecasting, and forced employees to perform repetitive and paper intensive duties. These errors varied each individual store. In fact, there was a distinct variation in taste and food quality between individual restaurants.
Implemented Changes –
Look and Feel of the Company
John Martin saw many aspects of the company that needed to be changed. He wanted to change the entire layout of the typical store to benefit the companys efficiency and customer base. For instance, he switched from a parallel food line to a double assembly line perpendicular to the customer service area to make it more efficient. Taco Bell created the “Kitchen minus” (K-minus) concept by making the restaurant kitchen a heating and assembly unit. This enabled all food processing to be handled by the corporate level and delivered to individual stores. This process allowed Taco bell to change the configuration of its restaurants to 30% kitchen and 70% customer service area ratio. K-Minus greatly expanded seating capacity within the restaurants and provided space to expand drive-thrus.
Technology Upgrade
He upgraded the technology used in many ways. Originally, plexi-glass boards were used to write orders. They were now replaced by electronic POS systems that allowed the company to track sales, product-mix, and inventory more closely. Taco Bell established the Total Automation of Company Operations system (TACO) that provided management with large amounts of information about store operations. Later, the company updated its system to the TACO II system, which provided more information and measured essential aspects of customer satisfaction in addition to operations.
Customer Focus
Taco Bell focused more on the customer needs and wants. Taco Bell implemented a survey and concluded that the customers looked for “FACT” in fast food restaurants: Fast, Accurate, Clean service and appropriate temperature in there restaurants to be satisfied. In order to meet the customers demand for speed and