Tacobell first ventured into the British market in the late 1980s and in a decade the company was forced to close shop as the British market was not a response as American, Spanish and European markets. In the last couple of decades, Tacobell has gradually invested in the British market as part of its expansion strategy in Europe. Currently, Tacobell has opened four new store locations in London and hopes to open an average of 30 stores by 2022 enabling the company to grow its number of stores from 7000 to 9000 globally. Chipotle’s arrival and penetration in the United Kingdom have played a significant role in popularizing Mexican fast-food stores thus providing them with an opportunity to compete with multiple multinational fast-food companies including KFC, McDonalds and Pizza Hut among others. As Tacobell moves forward with its ambitious expansion strategy for the European region, some factors need to be considered.

Strengths

Tacobell is a well-established fast-food franchise company that has built a strong brand over the decades. Therefore, the brand name “Tacobell” is recognizable in various parts of the world where the company has outlets. Since the brand name is not new to the market, it has a greater competitive advantage as compared to a startup company. The company can rely on the strong and reliable image they have created over the decades. Secondly, Tacobell is not venturing into the British market for the first time, in the 1980s the company operated stores in the region. Therefore, they have documented evidence on how the challenges posed by the British market. Thirdly, the development of the European Union provided the company with the opportunity to venture into various European markets which influence the British market both directly and indirectly. Tacobell, been an established company has a team of professional employees, and over the decades they have established various business strategies that are effective in the hospitality sector. As a result, Tacobell is well positioned to offer quality products and services to its market base. As a result of extensive market research Tacobell has identified that the British market is more likely to sit down and enjoy a meal as opposed to their American counterparts. Hence, the company has invested in newly designed and setting arrangements for London Outlets which allow customers comfort and ambiance to eat in their meals. Also, Tacobell has integrated beer into their menu at their London stores with the aim of attracting millennial customers who are more likely to enjoy beer as they eat Churros and Burritos. The new designs provide a new and authentic image of “fast-food” outlets hence creating a competitive advantage for Tacobell.

Weaknesses

Despite the Tacobell brand being active in the American and European markets, the company is still gambling on the British Market. It is critical to note that the company has invested in London for close to two decades and in which the company has enjoyed business because Britain is part of the European Union. The expansion strategy developed by the organization strongly relies on Britain remaining as a member of the European Union, hence making the approach weak. Secondly, Tacobell is a franchise company, whereby entrepreneurs purchase rights to the brand name and offer a universal menu. Despite the efforts put by the organization to maintain high standards, come Franchisees may not meet the criteria, thus creating a negative image on the brand. The firm reliance on the brand may affect the business much as they may lose the focal point of their marketing strategy and competitive advantage.

Core competencies

Experience in the hospitality sector since the 1980s and Strong, recognizable brand name are the core competencies of Tacobell.

Opportunities

The growing diversity of the British market is apparent, thus providing Tacobell to expand into various parts of the United Kingdom. The British population is more receptive to Mexican cuisine thus providing Tacobell with an opportunity to be the face of Mexican Cuisine in the region. Secondly, market research has revealed that the British Market is not in a hurry as the American market. Thus they can sit down to enjoy a meal. Tacobell can use this to their advantage by developing additional meals on the menu which the customers can enjoy indoors. Also, the company can invest in open kitchens at their outlets where customers can view as their food is being prepared. Tacobell has an opportunity to provide lasting experiences for their customers and build on their competitive advantage. Also, to beer Tacobell may also offer a variety of Cocktails in the there menu which the customers can enjoy at the outlet as they share a meal.

Threats

Tacobell failed on their initial attempt into the British Market, and the decision of the company to reinvest into the British Market was a result of the success and exposure of Mexican cuisine and culture by Chipotle. Therefore, Tacobell cannot be considered as the face of Mexican food in the United Kingdom thus customers would compare them to Chipotle. Secondly, Chipotle has been able to penetrate the British market and as a result, has developed a strong foundation in the region. The competitive advantage of Chipotle is a significant threat to the company as they have a strong and stable market share which they too intend on expanding. As previously discussed, Tacobell benefits from the United Kingdom being part of the European Union for some reasons; Firstly, Tacobell is more established in Europe than in the United Kingdom hence its European market is positioned to influence the British market. Secondly, Tacobell acquires products from various European countries at competitive rates. A Brexit vote would increase the cost of production, affecting the prices and profit margins of the company. Currently, Tacobell has applied a pricing strategy to ensure they offer the most competitive rates in the region. A shift would eliminate Tacobell’s competitive pricing strategy.

Problem statement: It is critical that Tacobell establishes a substantial market share in the United Kingdom to assert its position and ensure its sustainability over the decades. Tacobell must ensure that they succeed and not repeat their past failures that lead to their closure in the 1990s.

Alternative solution: One strategy that Tacobell can apply in addressing the above issue is by conducting extensive and continuous research on markets in the United Kingdom with the aim of ensuring that they discuss and anticipate consumer needs and trends.

Target segment: The Company should evaluate various aspects of the business including food, service, marketing, pricing and packaging among others.

Recommendation

Since the beer culture is influential in the United Kingdom and customers are not in a rush. Tacobell should explore various alternatives and provide a variety of beers and cocktails to be consumed by the millennial customers. The design and indeed sitting arrangement should be suitable for consumption of alcohol. Creating a unique and inviting ambiance that caters for customer needs will create a competitive advantage over competitors such as Chipotle.

Tracking metrics

Market research is the most effective tracking method as it provides insight on consumer wants, needs and responses to strategies applied by the company. The feedback is critical as it allows for the company with an opportunity to create change.

Take Away

I learned that for a business to remain a going concern they must be willing to depart from the conventional and invest in new ideas.

 
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