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

by | Case Studies | 0 comments

We have previously written an article on the SWOT analysis of Chipotle; this time we are back with another blog named SWOT analysis of Taco Bell.

Taco Bell is the 4th best fast-food restaurant. Taco Bell has been functioning since 1962, which indicates that they are winning the hearts of their customers for the last 6 decades. Does the question strike your mind? It’s because they have invented and delivered food that people relish and will continue with this performance in the future as well.

Another vital feature that makes Taco Bell so successful is its amazing marketing practices. The world is evolving with everything moving online, it has become important to market your business online using the latest tools and technology. If you feel the urge to grasp more knowledge about digital marketing. Give a shot to our Free Masterclass on Digital Marketing especially prepared and brought to the table for beginners by our CEO Karan Shah.

Excited to learn about how Taco Bell became so successful in the fast-food industry? Stay tuned in with us as we will take you through a complete SWOT analysis of Taco Bell and will help you decode the answer. Before commencement, let us learn more about Taco Bell.

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About Taco Bell

SWOT Analysis of Taco Bell - The Founder of Taco Bell - Glen Bell
(The Founder of Taco Bell – Glen Bell, Source: Taco Bell)

Taco Bell was founded by Glen Bell in Irvine, California 1962. It is an American-based fast-food restaurant that delivers a variety of lip-smacking dishes that are Mexican-inspired foods, such as tacos, burritos, quesadillas, nachos, novelty, and speciality items. 

Taco Bell which was previously a subsidiary of PepsiCo is now a subsidiary of Yum! Brands and serves about 2 million customers every year. It has 7072 restaurants out of which more than 93 per cent are owned and operated by independent franchisees and licensees. 

It all started in 1948 with a small hot dog stand when the founder Glen used to sell hot dogs on the street, later he saw that a Mexican restaurant named Mitla Cafe is getting immense traffic of customers for hard-shelled tacos. Glen started learning the recipe for Tacos and eventually he attempted to reverse-engineer the recipe in his style with the idea of selling crispy-shell tacos from the window of his hamburger stand which got successful among Mexican eaters and became the foundation of Taco Bell in 1962. 

Before settling on Taco Bell in 1962 it went through several name changes from 1951 to 1961 from Taco-Tia through El Taco, finally, in 1962 the popular taco selling shop got the name Taco Bell.

 

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)

 

SWOT Analysis of Taco Bell - Cheese Double Decker Taco Meal


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:

SWOT Analysis of Taco Bell - SWOT Infographics of Taco Bell

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.

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To Conclude

Taco Bell is a well-known fast-food restaurant with an impressive global presence. In this SWOT analysis of Taco Bell, we identified that Taco Bell possesses strong brand recognition and has gained loyal customers. Taco Bell has 7072 restaurants to serve its customers but suffers from inventory management, cash cycles, and the same leverage of low cost of reaching customers through social media as its competitors.

As the fast-food industry is escorted by a surge in competition, companies only have the option to fight for their place in this competitive market by providing the best products & services and exclusively by using the best marketing practices. As the world is evolving with increasing significance for digital marketing, it becomes essential to get conservant in this field as a marketing enthusiast. If you have the curiosity to learn digital marketing, you may check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

We hope this blog on the SWOT analysis of Taco Bell has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

If you enjoy in-depth company research just like the SWOT analysis of Taco Bell, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of Taco Bell in the comments section below.

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Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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