2017

Project Management
TACO BELL: EXPANDING SALES INTO NEW TERRITORIES

EUGEN ZOTA
STANCIU MIHAI

UNICORN COLLAGE
Table of Contents

Introduction................................................................................................................................................. 2
Company Background.............................................................................................................................. 2
Statement of the problem....................................................................................................................... 2
Aim.......................................................................................................................................................... 3
Stakeholder analysis.................................................................................................................................... 4
Employee................................................................................................................................................. 4
Customers................................................................................................................................................ 4
Suppliers.................................................................................................................................................. 4
Trade unions............................................................................................................................................ 5
Communities........................................................................................................................................... 5
The Government...................................................................................................................................... 5
Taco Bell SWOT Analysis.............................................................................................................................. 6
Project Life Cycle Forecast........................................................................................................................... 8
Risk Analysis................................................................................................................................................ 9
Work breakdown structure.......................................................................................................................... 9
Precedence diagram method...................................................................................................................... 9
Logical Framework....................................................................................................................................... 9

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Introduction

Company Background
Taco Bell is an American chain of fast-food restaurants which operates mainly in United States.
The founder of the restaurant was Glen Bell, a World War II veteran. He decided to start his own
business which focused on selling hot dogs. After years of operations in the food industry and
customer preference research, he decided that a Mexican food restaurant is what American
population needed. In 1995 Taco Bell began co-branding with KFC and Pizza Hut. Today all three
restaurants are subsidiaries of YUM! Brands, Inc., and American fast food company.
Currently, the restaurant offers a variety of Mexican cuisine food including tacos, burritos,
quesadillas, nachos and other specialty items. In the year 2004, Taco Bell management decided
to combine company and franchise sales, reaching a total of 5.74 billion dollars. As a result, the
restaurant held the largest share of Mexican-style restaurant market in US. The restaurant
server more than 2 billion customers yearly in 6407 restaurants. Currently more than 80% of the
restaurants are operated and owned by independent franchisees and licensees.

Statement of the problem

Taco Bell restaurants have been in an overly saturated U.S fast-food market and now it is
planning to open restaurants overseas.
Melissa Lora, president of Taco Bell International, stated in an interview Theres a really strong
pull for Taco Bell to come to different countries. Moreover, she mentioned that there is a
growing familiarity outside the United States with Mexican food. Faster Taco Bell expansion
overseas may give Yum the boost it needs in order to increase its profitability and competitive
success in the Horeca business industry. Last year, the company made an official announcement
stating that it plans to open 1,300 Taco Bell locations around the world by the end of year 2023.
Yum spokesman Jonathan Blum said the strategy to grow Taco Bell globally has the potential to
turn it into "our third global iconic brand." Michael Schaefer, head of consumer foodservice at
Euro monitor, said hes optimistic about Taco Bells overseas plans. The company is selling the
idea of "America" rather than Mexican food and one key element is to adapt its menus to local
tastes.
Bob Goldin, the speaker of a research and consulting firm servicing the food and foodservice
industry called Techonomic, stated "When McDonalds went to Europe, hamburgers were
already part of their culture so it was easy to sell," Goldin said. "For Mexican food, there is a

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complete lack of familiarity due to a lack of Mexican heritage in those countries." (Patton en
Boyden)
Taco Bell has ambitious plans to expand internationally starting in countries such as Czech
Republic, however, it will encounter various impediments from well-established competitors
such as McDonalds and Burger king as well as different tastes from the affluence of various
cultures in the local market.

Aim
The objective of this project is to successfully manage Taco Bell corporation with efficient and
effective methods on how to successfully enter the Prague market as a franchisee food chain
restaurant by the end of the year 2018. Moreover, we will forecast the possible future dangers
by planning, organizing and controlling activities so that we are sure the project is completed as
successfully as possible in spite of all the risks which can occur. We will insure we provide
maximum customer satisfaction by providing our clients with affordable product prices,
operational speed and high product quality.
There are multiple benefits of expanding this particular business overseas. Firstly, the
operations expansion increases the exposure of the business, which results in greater brand
recognition through the world. Strong brand names are attractive not only for customers, but
for investors as well. Furthermore, since Taco Bell restaurants mainly operate in US and can be
found in every state of the country, it is clear that the market is saturated and new
opportunities for growth must be developed. Moreover, the company will have the chance to
grow faster overall, total revenue growth will be maximized as customers are being served
internationally.
The areas we will be focusing on in Prague are City Center (New Town and Old Town), ikov and
Vinohrady. According to our research these 4 areas are populated with tourists, students, young
expats and international residents. These social groups represent the target market of our
international food chain restaurant therefore we can conclude that these areas would be most
suitable for placing the food chain restaurants.
The project will reach an end when the objectives have been achieved, in our case the objective
is to open three Taco Bell restaurants in Prague which are well functioning in an ethical, timely
and qualitative manner, managed by well trained staff.
*In the excel file we included a two-year project planning, divided into several project phases by
thins ensuring improvement in our management control and efficiency achievement.

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Stakeholder analysis

In this section of the project we will analyze and identify in more depth the individuals
(stakeholders) who share an interest or concern in the organization. Stakeholders can affect or
be affected by the organization actions, objectives and policies. They play a very important role
in the success of the corporation because their actions are strongly tied to customer
satisfaction, therefore analyzing the insights related to this groups can enlarge our knowledge,
by this helping us minimizing the risk and improving the efficiency and effectiveness of our
business operations.

Employee.
One stakeholder of Taco Bell restaurant would be its employees. They are internal stakeholders
as they work inside the company and have an interest and influence the day to day business
operations. There are different types of employees at Taco Bell, those who work on the
organizational level and decide the main directions of the company and the frontline employees
which interact on a daily basis with the customers.
Building a good relationship with your employee is a crucial point for conducting successfully
operations in the horeca industry. The satisfaction of the companys employees is strongly
correlated to their economic well-being. Employees share a common concern regarding how
much and how often they are paid by the company. Another method of compensating the
employees is by offering special bonuses of compensatory packages. All this factors raise the
motivation and satisfaction of the internal stakeholders, therefore boosting their productivity.

Customers
Customers are one the most immediate external stakeholder that our company must take into
account. It is very crucial to attract, retain and generate high customers service in order to
generate loyalty and customer value. Supplying the customers with all their needs in a timely
and qualitative manner results in long term financial benefits ensuring stability and lowering the
risk of default. In our case, the customers are strongly tied with our front line employees;
therefore a strong and strict selection process is required. Another point that should be taken
into consideration is the customers feedback, since it can serve as a very valuable information
about points of improvement.

Suppliers
Supplier is another example of internal stakeholder since they work in close relation with our
day to day operations. The main suppliers for Taco Bell are specialized in the food industry, and
without them the food restaurant would have nothing to sell. Building strong relationship with
key suppliers is very important since it affects critically the quality and quality of the services we
provide to our customers. Therefore, the supplier selection process should be conducted in a

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very strict and careful manner in order to avoid bottlenecks in the supply chain or any other
quantitative/qualitative issues which may arise during the business operations.

Trade unions
Trade unions are external stakeholders as they work outside the business. Trade unions are
people who look after the rights of the workers on how they work, get paid and the conditions
they work in. They also access the risk of the employee getting hurt at the work place due to
poor conditions. Employees have to pay to be part of the union but it is only a small amount out
of your wage or salaries. They have an interest in Taco Bell as some of their staff from each
franchise may be part of their unions if they arent the union pay advertise and explaining what
they do and why a staff member should become part of their group to help make other peoples
working conditions better.

Communities
Communities are also external stakeholders. Communities are widely involved with the
businesses like Taco Bell as they are interested when stores are planning to build near them
they are also interested in the jobs that the store can offer. Taco Bell rely on the community a lot
as they wouldnt have any business if they didnt keep their customers happy by offering great
services.

The Government
People dont normally expect the government to be involved with Franchises. But the
government is actually external stakeholders as they also hold an interest and influence
restaurant such as Taco Bell. The government is interested in franchise restaurants because Taco
Bell offers lots of opportunities for the unemployed to get a job. The government also passes
new laws that could affect the way Taco Bell is run, an example of this would have been when
everybody got banned from smoking in indoor public places. The government made every
company from a corner shop to a large global business stop people smocking indoors a public
space as it had become a law if anybody was smoking where they werent meant to be the
business could risk enormous consequences. The government also has an interest in Taco Bell
when they want to build a new franchise. They have to get planning permission first before they
can start building it this is another way the government plays a part as they have to decide
whether they are going to allow or deny this. Therefore, it is important to prepare a well written
documentation stating all the advantages we could offer and ensure Taco Bell is an ethical
business.

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Taco Bell SWOT Analysis

1. Taco Bell is a hugely popular brand name with high brand loyalty

2. Taco Bell adopted a healthy trans-fat free formula which is a key competitive
advantage over other competitors who has not yet switched to the healthier
recipes.

Strengths 3. Hygienic food preparation and quick service

4. Good advertising and marketing of the brand

5. Taco Bell has more than 7000+ stores worldwide

6. More than 170,000+ people are employed with the organization

7. More than 30 countries have Taco Bell outlets

1.High fat and high calorie food not good for health conscious people
Weaknesses
2.High competition means limited market share growth for Taco Bell

1.Threat from other eating joints/restaurants

2. New researches and the raised awareness among the public about the harmful
health impacts of fast food consumption is a threat to Taco Bells fast food menus.
Threats
3. Highly labor intensive which increases the subjectivity involved in the delivery
of services

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Project Life Cycle Forecast

In this section we will talk in more depth about the projects life cycle and what events can occur
in each phase. The importance of the project life cycle model lies in the guidance it provides for
the project team. This technique helps to forecast future events and prepare the needed actions
to confront with them. Moreover, using standard lifecycle processes and techniques help to
coordinate the resources to achieve predictable results, by this increasing the odds of
conducting a successful project with satisfactory final outputs.
In our case, we expect to have higher costs in the initiating phase of the life cycle because we
will need to invest in building the restaurants, ensuring our staff is well trained and capable of
providing high quality service for our customers. The risk in the first part of the life cycle is also
going to be higher, because it is the first time Taco Bell is introduced in the Czech market,
therefore a lot of uncertainties will appear, however, after accommodating ourselves with the
local business environment the risk of default will significantly drop as we will have more
acquired knowledge in the local industry. The ability of the stakeholder to influence the final
result of the project is also going to be higher than normal in the beginning phase of the
project, but it is expected to drop progressively lower as the project continues. It is very
important to conduct the project management process in a strategic and careful way because a
failure in one area could drastically affect other areas.

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Risks of entering Czech Market

Risk of underperformance
As Taco Bell has great reputation in US is essential to maintain its image when expanding the
business abroad. If the franchise strategy will be applied there will have to be certain
requirements for the franchisees to take control over the Taco Bell management. There could be
a risk of poor communication between franchiser and franchisee about different aspects of the
business which may lead to incompatibility of goals, inappropriate structure, poor policies
and/or no coordination.

Risk of supply chain disruption

The expansion of Taco Bell will be in Czech Republic therefore it is required to have a stable
supplier that will provide the right quality of inputs at the right time. Of course there will always
be disruption in the supply chain but managements duty is to anticipate it through on-going
communication with the suppliers to predict and react to uncertainties. It will be a new market
for Taco Bell as they have never operated in a country besides U.S and they will have to find new
suppliers which might involve a risk of not picking the right suppliers. Therefore, management
has to invest time in evaluating each supplier to see their advantages and disadvantages.
Another risk involved with the supply chain is the possible excessive reliance on one individual
supplier. This might be a critical point to the business operations of Taco Bell because if there
will some complications with that supplier Taco Bell would lose a lot because they did not think

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of Plan B in that case. Which is why the corporation should always have stable reliance on its
suppliers.

Risk of not adapting to Czech culture

Before entering a foreign market Taco Bell has to take into account the cultural differences
between the countries. If a brand was successful in one country that does not mean that it will
succeed to do that in another. For example Walmart failed to do so. Walmart has made its
entrance into a numerous of foreign markets but has been unable to replicate its original
success in some places, the absence of fine tuning the shopping experience depending on the
local culture in that place by Walmart was the root cause of the problem. For example, in South
Korea, the company did not understand the local preferences for buying small packages at local
stores, and the preferences among shoppers changed. Similar problems resulted in Walmart
shutting down its operations in Germany, where groceries were sold for lower prices at local
stores. (mbaskool)
Walmart being a big retail corporation can also make mistakes of no satisfying the foreign
demand. Taco Bell has to learn from other corporations mistakes before entering a foreign
market. First of all they will need local insights that would do multiple surveys for local potential
consumers to shape the business the way the locals want instead shaping the business how the
corporation usually does in its parent company. Secondly, they will need a local marketing
expert that has the skills to convince the potential local consumers that they would at least try
one of the Taco Bells foods to create a different value from the already established competitors
like McDonalds, Burger King or KFC. Afterwards it would depend on Taco Bell management to
maintain its customers.

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Work breakdown structure

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A work breakdown structure is a key project deliverable that organizes the team's work into
manageable sections. The project is about entering the Czech Market of Taco Bell. In the WBSs
main purpose is entering the Czech Market. The first levels are Search for franchisees,
Decision-making regarding locations for restaurants, The design of the locations itself,
Hiring Personnel and last but not least Marketing. Of course there is a lot of decision to be
taken into account but these are the most important and we focused mainly on these levels.

In order to find franchisees it is first required to create requirements for them as not any
entrepreneur could manage a restaurant with such a big reputation. That is why the candidates
should be filtered based on their experience and knowledge.

Another big decision that needs to be made is picking the locations for restaurants. The
locations are essential because it should be convenient for potential customers to make them
visit and try the Mexican fast-food. For instance, if Taco Bell wants to enter the Czech Market
they should focus first of all on Prague as the population is dense and it has a big flow of tourists
every time. If they enter in an unpopular city they would not be able to stay long in the market
and they will lose their investments as not many people would visit.

The third major step is designing the location. It should be the same design as it has in USA and
it should be adapted to the building itself. This way it would be recognized and would be able to
maintain its global image.

The next step would be hiring the personnel. The potential franchisee would have this
responsibility and he/she should invest enough money and time to find the right person for the
right job.

Last but not least is the marketing aspect. Marketing is essential because it always brings new people to
try Taco Bells Menu and they should always know how to approach them using various Marketing Tools.
The company should always communicate with the marketing department to make sure they are on the
same page.

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Precedence diagram method

A Precedence Diagramming Method is a graphical representation technique, which shows

the inter-dependencies among various project activities. It is a as guide for keeping track of the
literally hundreds of activities that needed to happen in precise sequence to stay on schedule.

The table above shows the precedence diagram of Taco Bell in our opinion. The first step is market
research where the experts would gather as much relevant information as possible about the fast-food
market in Czech Republic. In dependence of the result or outcome of the research the management
would decide on how to proceed with marketing and locations where the restaurants would be placed.
The next step is finding franchisees that would be responsible for the restaurants who will deal with the
search of personnel.

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Logical Framework

PROJECT SUMMARY INDICATORS MEANS OF RISKS /

VERIFICATION ASSUMPTIONS

Goal Get 10% of the Percentage of the Balance sheet and

market share of fast market share after Income statement
food in Czech one year
Republic in the first
year

Outcomes On-going expansion Global Market Balance sheet and Effective

throughout Europe share and number Income statement positioning in
of visits by customers mind in
customers Europe

Outputs A more recognisable Percentage of Balance sheet and Differentiated

brand. market share in Income statement marketing
Europe strategies
Penetrate the market
share of fast food in
Europe.

Activities On-going marketing Revenue and Balance sheet and Hired local
and differentiated number of visits in Income statement Marketing experts
from its competitors. each restaurant. who has great
knowledge about
the local market

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Conclusion

Making this project it could be concluded that Taco Bell has the ability to enter the European
market of fast-food successfully. Starting its expansion with Czech Republic would be a
potential success as the population is relatively high; moreover it has a large and consistent flow
of tourists. Taco Bell could be a good completion to McDonalds, Burger King and KFC if the
management would adapt to countrys culture.

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