Detailed SWOT Analysis of Taco Bell – An American-Based Chain Of Fast Food Restaurants

Quick Stats on Taco Bell

Founder	Glen Bell
Year Founded	1962
Origin	Downey, California
No. of Employees	42,700+
Company Type	Public
Market Cap	$34.25 Billion (2022)
Annual Revenue	$11.745 Billion (2020)
Net Income/ Profit	$1.575 Billion (2021)

 

Products by Taco Bell

It has been in the fast-food restaurant industry for six decades and produces majorly:

• Tacos 
• Burritos 
• Quesadillas
• Nachos

Competitors of Taco Bell

The top 5 competitors of Taco Bell are:

• Chipotle
• Graze
• Wendy’s
• Freshly
• Del Taco.

Now that we understand the company’s key business, let’s look at the SWOT Analysis of Taco Bell.

SWOT Analysis of Taco Bell

SWOT Analysis of Taco Bell can show how a well-established company uses its opportunities to ensure its growth. It can show how the company takes advantage of its strengths to use the opportunities while working on its weaknesses. SWOT Analysis of Taco Bell will also reveal its expansion plans.

To better understand the SWOT analysis of Taco Bell, refer to the infographic below:

Now first let’s begin with the strengths of the company from the SWOT analysis of Taco Bell.

Strengths of Taco Bell

Strengths represent Taco Bell’s unique capabilities which give it a competitive advantage in the marketplace.

• Established Brand: Taco Bell in the US is an established brand with more than 5500 outlets in the US only. More than the United States the brand has a strong foothold in the international market including Asian, European, Middle East and North American markets.
• Subsidiary of Strong Company: Taco Bell is the subsidiary of a very popular fast-food corporation worldwide named Yum! Brands that own strong brands like Pizza Hut and KFC. Taco Bell gets both financial and operational support from its parent company.
• Eventually Evolved: Original Taco Bells only featured walk-up windows without indoor seating or drive-thru service. But with its food getting popular it eventually introduced indoor seating with an open kitchen design and that got a favourite place for customers to find a mix of seating areas, music and lighting to make them feel at home.
• High-Quality Food: Taco Bell presents a craveable Mexican-Inspired menu following food safety and product quality standards. Taco Bell is known for using fresh ingredients in its food preparation and maintaining its taste.
• Reasonable Prices: To ensure customer satisfaction, Taco Bell provides high-quality food while ensuring that the prices charged are reasonable for their customers. In India, the starting price of Taco ranges from Rs18 to 79 to make sure a large number of customers try out Tacos.
• Higher Margins: Taco Bell charges a premium that its competitors don’t. This provided Taco Bell with resources that it used not only to thwart the competitive pressure but also used it to invest in research and development.
• Strong Advertising: In 2009, Taco Bell replaced the 20-year sponsorship between McDonald’s and the NBA with McDonald’s being the fast-food partner of the NBA. Taco Bell and the NBA agreed on a 4-year deal allowing Taco Bell to advertise on ABC, TNT and ESPN, and NBA-themed promotions.
• Increasing Global Profit: Taco Bell’s net profit contributed around 66% from international franchises and that could be the biggest strength of any brand bringing other currencies into its nation. 

Weaknesses of Taco Bell

Weaknesses are the areas and capabilities where Taco Bell falls short. It hinders the ability of the firm to have a competitive advantage over global players.

• Reliance on a Small Number of Suppliers: Taco Bell relies on a small number of suppliers for its main ingredients, which include chicken, pork, and beef.
• False Advertising: In 2011, a lawsuit was filed against Taco Bell for falsely advertising the ratio of ingredients in its beef filling for its tacos. The spots featured employees and franchisees stating that the filling has always been a mixture of 88% beef and various spices and binders and nothing else.
• Lack of Variety: Taco Bell’s menu is limited to primarily burritos and tacos, resulting in a lack of variety. As a result, their customers spend relatively large amounts of money at their competitors’ locations, such as Panera Bread.
• Not Much Aware In India: In India, Taco Bell and its products are hardly recognizable due to Indian people not having that much interest in eating tacos and burritos. The company has to do more if they want to create interest in their products in the Indian market.  
• Poor Franchise Relations: Although the company is known for its excellent supply chain model and processes management, it is lacking in developing franchise relations, a concern that should be resolved to expand faster than the competition.

Opportunities for Taco Bell

Opportunities are the external environment factors that Taco Bell can make maximum use of either to consolidate its existing market position or use them for further expansion.

• Training & Retaining Top-Performing Employees: Taco Bell can gain a competitive advantage over its competitors by retaining its employees. It can be ensured by investing in new employee training, offering a competitive salary, and so on.
• Introduce Healthier Alternatives: The number of health-conscious consumers is rapidly increasing. Taco Bell has the opportunity to attract more customers by offering health and wellness-focused options.
• Disposable Income: With the boom in IT and other industries, the disposable income of people has exponentially increased. After Covid, there is a surge in people eating outside giving Taco Bell a huge and growing opportunity for a perfect entry.
• New Products in Menu: Desserts and sweet markets are some of the potential markets in the food segment. Adding new and yummy snacks to its menu will increase customer feet in stores. Further expansion and something unique are always desired by the customers.
• Research & Development: Taco Bell can invest more in research and development and know more about its target customers and competitors.

Threats to Taco Bell

Threats are the external environmental factors that can hinder Taco Bell’s growth

• The issue in Franchising: Recently, Taco Bell is facing some issues on the franchising and distribution side, especially in India. As compared to other fast-food chains in India, the growth of the Taco Bell franchise is relatively slow which is causing trouble for Taco Bell in present and future.
• Competitors: Wendy’s, Del Taco, and Chipotle are the main competitors which are growing rapidly. Thus it should also increase its pace.
• Shift Toward Healthy lifestyle: With rapid changes in lifestyle people or customers have adopted healthier lifestyles.
• Supply Chain Issues: As a result of the implementation of strict policies governing animal feeding and raising, hundreds of Taco Bell locations experienced difficulties obtaining pork and beef.
• Indirect Competitors: Indirect Competitors of Taco Bell like Mcdonald’s, KFC, and Domino’s franchisees are very well established in international markets as compared to Taco Bell. Also, these indirect competitors are slowly entering into selling tacos and burritos which is becoming threatening for Taco Bell due to these competitors having a good share of the market.

This ends our complete SWOT analysis of Taco Bell. Let us conclude our learning below.