Running head: SUPPLY MANAGEMENT IN THE FAST FOOD INDUSTRY 1
Supply Management in the Fast Food Industry:
Taco Bell versus Del Taco
With the advent of restaurants that offer its consumers quality food at a value price, it seems that quick service restaurants (QSR) are taking America by storm. Fast food chains that encourage their customers to “Have it your way” or “Eat Mor Chikin” continuously push competing chains to become more efficient, faster and cheaper all while maintaining the quality of the product. Del Taco and Taco Bell are members of the fast food industry and competing chains that have set out to provide mainstream American with Mexican-style food. Taco Bell, ...view middle of the document...
Bell’s first entrepreneurial venture, Bell’s Burgers, was a small burger stand funded by the profit made from selling a refrigerator (Baldwin, 1999). Later, Bell took his innovative spirit and applied it to his next big idea-tacos. No one would have guess that this young man who dropped out of high school would go on to become one of the wealthiest men in the US.
Today, Taco Bell, a subsidiary of Yum! Brands International boasts a total of 5,670 restaurants in the United States alone. The company also maintains 275 locations in Canada, Puerto Rico, Hawaii, the Philippines, Spain, Cyprus, Iceland, Greece, Chile, South Korea, Saudi Arabia, Britain, the Dominican Republic, Guam, Aruba, Costa Rica, Colombia, Ecuador, Panama, India and on Army and Air Force Exchange Service (AAES) bases in Japan, Germany, Guatemala and El Salvador. As a parent company of KFC, Pizza Hut and Taco Bell, Yum! Brands employs 466,000 workers on an international scale; 150,000 of those employees work for the Taco Bell corporation. In 2011, Yum! Brands and its stockholders benefited from over $7 billion in U.S. company and franchise sales combined, making Taco Bell a national leader in the Mexican-style food category (Yum! Brands Annual Customer Mania Report, 2011).
“Go Bold or Go Home,” Del Taco’s message to its consumers, speaks of fervor for flavor. Similar to the Taco Bell franchise, Del Taco comes from humble beginnings. Ed Hackbarth and David Jameson opened the first Del Taco in Yermo, CA in 1964. Back then, the menu consisted of tacos, tostadas, fries and cheeseburgers (A Bold New Venture, 2012). Del Taco is a subsidiary of Sagittarius Brands, newly named Del Taco Holdings Incorporated, which has experienced its share of commercial successes.
Today, Del Taco lays claim to 525 restaurants across the nation, with locations in California, Texas, Nevada, Washington, Idaho, Oregon, Montana, Michigan, Ohio, Illinois, South Carolina, Georgia, New Mexico, Utah, Arizona and Colorado. As an essential contributor to the US economy, Del Taco supplies over 5,600 jobs. In 2011, Del Taco Holdings and its stockholders benefited from over $4.4 billion in company and franchisee sales combined (United States Securities and Exchange Commission, 2011). Investigating this company’s supply management practices will give insight into the ways in which it became second to Taco Bell in the Mexican-style quick service restaurant category.
David Burt, Sheila Petcavage and Richard Pinkerton (2010) argue that supply management’s role in the business sector equates to six key functions: creation, finance, personnel, supply, conversion and distribution. Those six functions hinge on the ways in which a company utilizes the five M’s of business: machines, manpower, material, money and management.
Del Taco and Taco Bell share a fundamental idea; their design function is to bring Mexican-style food to American consumers in the quick service restaurant (QSR) market. As far as finance, the goal...