Frito-Lay It Strategy

2584 WordsNov 20, 201111 Pages
Frito-Lay in the mid to late 1980’s was looking to change its way of doing business. As with many large companies, decisions were made on a corporate level, with field operations carrying out the business plan. This model, though efficient in terms of use of resources on the corporate level, did not allow for the kind of flexibility that the snack foods market demanded. The outgoing CEO, Willard Korn, had set forward a micromarketing strategy where each field office would be responsible for identifying demand, conducting promotions and other marketing activities and ordering replenishment. The problem with this approach was that Frito-Lay lacked the technological framework to make it happen in an efficient manner. (Frito-Lay, 1992)…show more content…
What is the critical path? Justification of Key Components 1) Will the sales force be able to use the information quickly? – A central goal of the business strategy is to allow decentralized, micromarketing to be done in each of the 32 regions. Since the gathering of data is done in each vendor store, the lead time will be dependent upon operations. For example, if a given region has several large stores and dozens of smaller ones, is the replenishment done on a regular basis in all of them? If the larger stores order new inventory less often, it may result in a delay in pertinent sales data. 2) Will replenishment be more efficient than under the current model? – Obviously gathering restocking information “at the store shelf” is very efficient, but can that be translated into just-in-time inventory? Can the information be used to accurately forecast demand in the future? On a smaller, regional scale, activities by the consumer can affect demand. A good example of this may be a parade in a given town. If more people have taken to the streets to celebrate, they may purchase more snack food? How will this scenario affect stock and sales? 3) How will marketing decisions be made and what influence will the corporate strategy have on them? – Armed with more timely information about regional sales, the micromarketing strategy will allow regional managers to decide the best marketing mix to use in order to meet goals. What portion of the decision

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