Key Internationalization Decision Criteria Marketing Essay

Taco Bell is a subordinate of Yum. Brands Incorporation, which is one of the largest eating house companies. It is one of the first fast nutrient eating houses who introduced people who live in the United States to the Mexican nutrient by offering the fast nutrient service, and added more coloring materials to be someplace outside the fast-food line, establishing several new points that it designed to vie with higher-end eating houses.

Taco Bell offers a broad scope of Tex-Mex fast nutrient to its clients, following the bill of fare to local gustatory sensations. Although in foreign states the merchandise of Taco Bell is considered as traditional Mexican nutrient. We introduce besides new merchandise – desert.

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For come ining a new market we consider of import to take a state whose market is big plenty and concentrated figure of people who knows and are familiar with fast nutrient and Tex-Mex nutrient, have stable or increasing GDP, and the state is portion of a larger part where Taco Bell is non present yet.

Based on the cardinal success factors talked above, and the comparative analysis made, the mark state is Latvia. The KFC and Pizza Hut tried to travel into Latvian market in 1993 and failed. Many things have changed since that clip. Now Latvian people are more familiar with fast nutrient and Tex-Mex nutrient.

In the research of World Bank “ Doing Business 2013 ” is told that Latvia is in 25th topographic point of relaxation of making concern from 185 states and in 8th topographic point in Europe. Since twelvemonth 2004 Latvia is a member of European Union ( EU ) . Economic freedom mark is 65.2, doing Latvia ‘s economic system the 56th freest in the 2012. It is above the universe ‘s norm.

To come in Latvian market the most suited entry manner would be non franchising, but a entirely owned subordinate.

The organisation

Taco Bell is a subordinate of Yum! Brands Incorporation, one of the most of import fast nutrient eating house companies. The history of the trade name begun in 1962, when the American man of affairs, Glen Bell founded Taco Bell Corp. in California. Previously he gained experience in this industry, functioning the demands of auto drivers, as rival for McDonalds. In merely two old ages, opened 8 more Taco Bells, and in 1965 the first franchise was launched in Torrance ( California ) .

After an astonishing period of strong enlargement, in 1978 he sold the concatenation of 868 eating houses to Pepsi. In 1997 as a consequence of a by-product, the 3 celebrated trade names ( Taco Bell, KFC and Pizza Hut ) founded Tricon Global Restaurants, Inc. In 2002 Tricon acquired 2 other trade names, Long John Silver ‘s and A & A ; W All American Food, and the same twelvemonth changed its name to Yum! .[ 1 ]As we can see on Figure 1, the portfolio was dominated by Pizza Hut, KFC and Taco Bell, so in order to be able to concentrate on the 3 good executing trade names, as portion of its new scheme, YUM! decided to sell Long John Silver and A & A ; W.

Figure 1: YUM! Restaurants by Brands ( 2011 )[ 2 ]:

The current scheme of YUM is based in the undermentioned points[ 3 ]:

Build taking trade names across China in every important class.

Drive aggressive international enlargement and construct strong trade names everyplace.

Dramatically better U.S. trade name places, consistence, and returns.

Drive industry-leading, long-run stockholder and franchise value.

As we can detect in the undermentioned chart ( Figure 2 ) , Pizza Hut and KFC are brands well-introduced internationally, but the per centum of Taco Bell eating houses runing abroad are far below it.

Figure 2: Number of shops each trade name has in the US and internationally ( 2011 )[ 4 ]:

So one of the most of import actions to be taken in order to accomplish the company ‘s international enlargement scheme, is to concentrate on Taco Bell debut in a foreign market. Our study is aimed to take the first measure towards it.

Merchandise Description

Taco Bell offers a broad scope of unconventional fast nutrient in Mexican manner, following the bill of fare to local gustatory sensations. The most basic merchandise Taco Bell is offering are nachos, beef and poulet or baked murphy wrapped in a tortilla. The long listed bill of fare includes greaser, burritos, nacho, salads, side dishes, and pintos. Just late, on June 2012, Taco Bell has introduced their new “ Cantina Menu ” by up scaling points in their Kentucky and California eating houses and it was created by famous person chef Lorena Garcia. The bill of fare featured black beans, coriander rice, citrous fruit, and herb marinated poulet and coriander dressing. Apart from the new Cantina Bell Menu, Taco Bell has service on Drive-Thru Diet, Why Pay More Menu, Frutista Freeze, Limeade Sparklers, and Kid ‘s Meals. Taco Bell besides offer meatless options, but are n’t certified as vegetarian.

Cardinal rivals

Who is Taco Bell rivals, and how they are viing! At first, Taco Bell is one of the first fast nutrient eating houses who introduced most people who live in the United States, and added more coloring materials to the fast-food line, lunching several new points that it designed to vie with higher-end eating houses.

There are some rivals who came after Taco Bell eating house who tried to function Mexican nutrient with wider Varity to vie since Taco Bell was the first and lone Mexican fast nutrient line in the United States at the clip. One of the first rivals now is Chipotle Mexican Grill, after they decide to come in the market with the same sort of nutrient of Taco Bell by they recognizing some of the menaces in the SWOT analysis for Taco Bell, which is most new researches that raised consciousness among the populace, and educated consumers about the harmful wellness impacts of the fast nutrient ingestion ; such as trans-fats, sugars, oil, and salts. In add-on, Taco Bell ingredients are centrally sourced geting via what Vickers characterizes as corporate nutrient truck. Therefore, Chipotle as a rival tried to take an advantage of that and come up to the same assembly line with Taco Bell with more quality fresh. They besides, locally sourced and prepared by in- house ‘chefs ‘ as opposed to Taco Bell workers. However, they do n’t hold the large trade name behind them where ‘s Taco Bell does.

Another rival to Taco Bell is Moe ‘s South West Grill, as a Mexican fast nutrient. Choice of meat, beans, and topping is good with broad assortment ; they were smart to come up with a new thought where you can do your ain pick of home base by adding the ingredient with your personal gustatory sensation. However, they have low trade name consciousness and limited locations in the market topographic point.

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For illustration, in a new study[ 5 ]of nutrient penchants, despite the introduction of its Cantina bill of fare, Taco Bell placed dead last in every class except “ value, ” harmonizing to Market Force. As a planetary fast nutrient eating house, Taco Bell knows who are there rivals are in the United States, and how many of them serve greaser. Even though, those Mexican eating houses are similar. But have serious differences such as ; Chipotle ‘s music is funkier on the other manus ; Moe ‘s is more welcoming by the waiters as you walk in the door. Most of all low Numberss of loyal clients to each of those fast eating houses particularly that our economic system traveling through fiscal crisis that effected consumers passing and how much money they welling to pass on nutrient, etc.

Chipotle, Moe ‘s Mexican fast nutrient eating houses rivals has striven hard plenty to seek consumer satisfactions and freshness themselves to the populace to achieve to the length where the Taco Bell reach out on the fast nutrient industry.

International development

Although Taco Bell expanded in an impressive graduated table since its foundation, during the first period of its history started concern merely in the USA and Canada. In the 2nd stage appeared in Puerto Rico ( 1985 ) and Hawaii ( in both states Taco Bell is present besides now ) and besides tried to set up itself in Europe ( 1983-UK, and 1993-Poland ) but in both states Taco Bell closed the eating houses in a short period of clip.

The 3rd phase of internationalisation became in the last decennary, and it was really of import because the trade name appeared non merely in Asia ( 2003-China, 2004-Philippines, 2010-India and South Korea ) but besides returned, this clip successfully – to Europe ( 2006-Iceland, 2008 – Spain, 2009 – Cyprus, 2010 – new entry in UK, Greece ) . The trade name is besides present in the Middle East ( Saudi Arabia and United Arab Emirates ) and in South America ( Chile, Columbia, Ecuador and Panama ) . Although in foreign states the merchandise of Taco Bell is considered as traditional Mexican nutrient, in Mexico the company is non present. Taco Bell had 2 efforts to set up itself in the state, but without success.

Key internationalisation determination standards

Based on the above explained we have identified the following cardinal internationalisation determination standards:

80 ‘ and 90 ‘ : Taco Bell entered nearby states and in Europe, in old ages 2000 targeted states were in Asia, Europe, Middle East and South America.

to be present in states with the more dwellers in every continent,

besides targets little states where GDP/capita is higher than part norm

easier market because of similar linguistic communication ( e.g. UK ) or civilization ( Spain and South-America )

It is of import to see that as the 80 % of Yum! eating houses operate as franchise[ 6 ]in most instances the cardinal determination standards is if there is a possible franchise operators in a specific state. Harmonizing to Yum! franchise web page, there are several standards about optimum site for its eating houses but they define the location ( constructing country, parking, seating, batch size, traffic ) or state of affairs ( traffic, preferred sites/site qualities ) and there are merely one standards harmonizing to the metropolis where the eating house is to be ( population: 20.000 Immediate TA ) .[ 7 ]

Based on the company presentation and rival analysis above detailed, we summarize in Table 1 the strengths and failings of Taco Bell, and the chances to research, threatens to avoid.


innovator in presenting people who live in the United States to the Mexican nutrient

strong US background

good worldwide presence

co-brand names ( KFC and Pizza Hut ) are celebrated and well-known in most states

competitory monetary values

broad scope of merchandises offered

adopts menus to local gustatory sensations


trade name Taco Bell is non well-known internationally

does n’t offer a broad assortment of comeuppances

does n’t concentrates on stressing healthy ingredients


as a consequence of globalisation and cultural standardisation clients accept and are more likely to seek alien gustatory sensations

Because of deficiency of clip people tends to eat something fast but quality.


Economic downswing can consequence on the dropping of buying power. The low criterion of populating brand people ca n’t afford eating out

healthy culinary art is progressively of import for clients, and fast nutrients are considered unhealthy

New rivals as the new entry in the market can go a menace as people likes to happen something similar but in different monetary value.

Table 1: Swot analysis

Market Opportunity Analysis

Cardinal market success factors for Taco Bell to win in a new market:

no limitations for franchising or foreign direct investings

market size:

big and concentrated figure of people who knows and are familiar with Tex-Mex nutrient or if non, they like and accept new gustatory sensations and other civilizations nutrients

big and concentrated figure of people who accepts and are familiar with fast nutrient eating houses

buying capacity, stable or increasing GDP

presence of other fast nutrient eating houses, but non high figure of rivals that offer the same line of merchandise ( Tex-Mex or Mexican nutrient )

state that is portion of a larger part where Taco Bell is non present yet

equal mark client and market cognition.

As most of fast nutrient eating houses are operated by franchisees, one of the most of import factors while taking a new market is if there are any limitations about franchising. Although the first eating house in a new state of course could be operated by the company YUM! but if there are several limitations for franchising, the enlargement chances in that state are rather limited.

Second of import factor is cultural openness, e.g. possible consumers must be familiar and like the nutrient offered by Taco Bell ( or other civilization ‘s nutrient ) because if they do n’t accept different gustatory sensations, incomes will be earnestly lower as expected. Besides of import if people in the mark state like fast nutrient eating houses, or have a slower life manner, and prefer eating at place or in classical eating houses.

Third of import factor is if people can or non afford eating out. In states where a big figure of people became unemployed because of the crisis, or GDP growing is negative, one of the first things that people consider as money cachexia is eating out.

Although it is non a success cardinal factor, but we consider besides of import while taking the mark state, to analyze geographical presence of Taco Bell in the universe and take a state which could be a base for a farther enlargement via states where Taco Bell is non present yet.

Last but non least, it is really of import while taking the mark state is holding deep cognition about the hereafter client and market, as unsuccessful international enlargement determinations are by and large based on schemes without cognizing what mark consumers will believe about our company, merchandise, monetary value and publicity.

Potential mark states

Based on the antecedently identified cardinal success factors, we have chosen as possible mark states Latvia, Malaysia and Hungary. The research of easiness of making concern says that Latvia is in 25th topographic point, Malaysia in 12th and Hungary in 54th topographic point of 185 states in entire.

As can be seen in the comparing tabular array ( Table 2 in appendices ) , in none of these states exist limitations for franchising or nutrient industry. In Malaysia there is an extra factor to see, as eating houses have to guarantee that the nutrient and the supply are certificated Halal to accommodate the bulk of Malayan penchant. So if the determination would be Malaysia, the merchandise should be somewhat amended and the providers should besides be Halal which is traveling to be hard because the ingredients of the merchandise are fundamentally Mexican-style. If we choose to be non Halal, the market is still there and we can still do a new entry, but we are traveling to lose the clients because of the Muslim ‘s bulk value.

In all states people like fast nutrient eating houses and accepts other civilization ‘s nutrients ( but as indicated, in Malaysia it is necessary certify Halal ingredients and supply ) .

In all of the three states we can happen people who can afford eating out in big metropoliss, concentrating people with higher degree of income, and a big figure of tourers, who can afford fast nutrient eating houses, and they ( particularly tourists from the USA ) are familiar with the trade name and Tex-Mex nutrient.

Sing competition, in all states exist fast nutrient eating houses, but the figure of those that offers nutrient similar to Taco Bell merchandises, is comparatively low. In Malaysia there are no locals offering Tex-Mex or Mexican nutrients, but there are other fast nutrient eating houses that may be rivals for illustration KFC and McDonalds. In Hungary fast nutrient eating houses are popular, and there are some presence of Tex-Mex and Mexican nutrients, and other states ( Chinese, Turkish, Indian, etc. ) fast nutrient culinary art. In Latvia, similar to Hungary, there are different fast nutrient ironss, and eating houses offering Tex-Mex.

As we can see in Taco Bell Worldwide Presence Map ( Figure 3 in appendices ) , Taco Bell is represented in North and South America, in South Asia, in the Middle East, and in West and South Europe. Regions what are non covered are Africa, Central, East and North Europe, Russia and ex-soviet states, Australia and Oceania. Our three selected possible mark states should be going points for a farther international enlargement: from Hungary all east and cardinal European states can be reached easy, from Malaysia we could make Australia and Oceania, and Latvia would be an first-class pick because it is an ex-soviet state, but culturally and logistically good connected to North European states.

The last point to see while taking a state is to hold deeps knowledge and understanding of local civilization, gustatory sensations, and client penchants. Although this point is critical for foreign enlargement, sometimes go on that the internationalisation scheme focuses on difficult ( e.g. GDP growing, market size, figure of rivals ) factors and does n’t concentrate on soft ( e.g cultural ) factors.

Based on Hofstede ‘s comparing between states writers made a comparing between United States and other 3 targeted states. Unfortunately they do non hold informations about Latvia, that is why writers took Estonia and Sweden.

PDI – Power Distance

IDV – Individuality versus Bolshevism

MAS – Masculinity versus Femininity

UAI – Uncertainty Avoidance

LTO – Long Term Orientation

Figure 4: Geert Hofstede states cultural comparing

Power distance – this is evidenced by the focal point on equal rights in all facets of American society and authorities. Magyar and Latvian manner: Being independent, hierarchy for convenience merely, equal rights, higher-ups accessible, training leader, direction facilitates and empowers, people do non readily obey and respect people in autocratic places based simply on their rank and position as power-holders. Malayan people accept a hierarchal order in which everybody has a topographic point and which needs no farther justification.

Individualism versus Collectivism – The United States, Hungary, Latvia is an individualistic civilization, people look after themselves and their immediate households, there is a solid strong belief about the personal duty and everybody ‘s ain accomplishment and part in order to be self-fulfilled. Malaysia is a collectivized society, this is manifest in a close long-run committedness to the group.

Masculinity versus Femininity – the United States, Hungary and Malaysia is considered a “ masculine ” society – extremely success oriented. Latvia is a feminine state, it means that society is driven by a certain sum of modestness and equity.

Uncertainty Avoidance – American society is “ uncertainness accepting ” , there is a larger grade of credence for new thoughts, advanced merchandises and a willingness to seek something new or different. Hungary and Malaysia has a penchant for avoiding uncertainness. Estonia has a high penchant for avoiding uncertainness, Latvians are more prone to trust on regulations, elaborate and clear guidelines and work descriptions.

Long Term Orientation – the United States is a short-run orientated civilization, it is a civilization focused on traditions and carry throughing societal duties. HungaryA is a long term orientation civilization. Latvia is a short term orientation civilization. No mark available for Malaysia.

United States civilization is closer to Europeans civilization than Malayan.

Basic features of mark state

Based on the cardinal success factors talked above, and the comparative analysis made, the mark state will be Latvia.

Latvia is located in Northern Europe, on the Baltic Sea. Latvia ‘s country is 64.589 km2 from which 1.57 % ( 1.014 km2 ) consists of H2O. Latvia ‘s boundary line is 1836 kilometer long ( 1382 kilometer land and 454 kilometer is H2O ) . Land boundary lines are with Estonia, Russia, Belarusia and Lithuania, H2O boundary lines with Sweden, Lithuania and Estonia. The official linguistic communication is Latvian, and currency is Lats ( $ 1.85 USD ) . In twelvemonth 2014 Latvia wants to set up Euro.

In the beginning of 2012, Latvia has 2A 041A 763 dwellers and denseness is 32/km2, capital metropolis is Riga with 650A 478 dwellers, and denseness is 2A 140/km2.[ 8 ]Density in Latvia is one of the smallest in Europe In the beginning of 2012 in metropoliss lived 68 % of dwellers and in countryside merely 32 % .

In Latvia is 76 towns, and in 2 the dwellers is more than 100A 000, and in 19 town lives at least 10A 000 dwellers.

Climate in Latvia is temperate, it is influenced of the Baltic Sea and Atlantic Ocean. There is expressed alteration of 4 seasons ( -35oC – +30oC ) . Sky frequently is nebulose.

Natural resources – 29A 660 km2 ( 45 % ) of all Latvia ‘s land is forest, and 1.014 km2 ( 1.57 % ) is H2O. In Latvia are 12 00 rivers and 2256 lakes.[ 9 ]

Latvia has one of the fastest cyberspace upload and download velocity in the universe.

World Economic Forum in their study on The Global Competitiveness Latvia is ranked in 55th topographic point.

Economic Environment

Latvia has market – orientated economic system. In the research of World Bank “ Doing Business 2013 ” is told that Latvia is in 25th topographic point of relaxation of making concern from 185 states and in 8th topographic point in Europe.

Since twelvemonth 2004 Latvia is a member of European Union ( EU ) . That made an impact on Latvia ‘s economic state of affairs. GDP since 2004 grew enormously. In 2008 Latvia ‘s economic system collapsed due excessively planetary economic crisis ( -18 % ) . Now it has one of the fastest turning economic system in EU. Since economic crisis lowest point in twelvemonth 2009 in 3rd quartile GDP growing is 12.4 % .

In 2011 mean wage was similar, about $ 828 USD in public sector and in private sector. The biggest mean wages in Latvia in general was in finance and insurance industry, and from all Latvia the highest mean wages are in be aftering part of Riga.

Economic active people are 1006.7. In general 166.2 1000 people are looking for occupation, and 375.4 thousand people are non active. In study twelvemonth 2011/12 in colleges and universities were 97041 pupils in entire.

Average labour cost in twelvemonth 2011, including rewards and benefits, was 852876 1000 USD. In twelvemonth 2007, twelvemonth before economic crisis, mean wage was lower, but in twelvemonth 2008 it increased and so decreased in 2009 and 2010. In twelvemonth 2011 it increased. Unemployment every twelvemonth since 2008 is increasing, in 2010 it reached the lowest point of 20.5 % . In terminal of May unemployed was 121A 994 ( 12.3 % ) people it decreased in last 12 month.

70 % of entire Latvian GDP is structured by service industries. Trade is doing 16.69 % of entire GDP and fabrication industry 14.1 % . The chief sectors in GDP are besides transit and edifice industries.

Import in Latvia is bigger than export. Exports of goods and services ( % of GDP ) are turning every twelvemonth from 42 in 2007 to 59 in 2011, and import in 2007 was 62 % of GDP than it decreased to 45 % in 2009 and increased once more to 63 % in 2011. Latvia ‘s chief trading spouses are Europe Union states. Main exportation merchandises are wood and wooden goods, besides nutrient and agribusiness.

As Latvia is a member of EU, the imposts government is maintained of EU Customs Code. Importing goods in theA RepublicA ofA LatviaA from other EU Member States, enterprisers do non hold to declare and pay VAT on the province boundary line. Supply of EU goods from oneA MemberA StateA to another is non regarded as an import or export, but it is defined as free circulation of goods. Importing goods to Latvia one needs to pay transportation cost, insurance and VAT, which for Latvia is 21 % . Duty rates applied normally from 0 % – 17 % ( responsibility and revenue enhancements are calculated on the value of imported goods ) .

Before the planetary economic crisis the rising prices was 10.1 % , than it increased till 15.4 % . In twelvemonth 2009 it decreased and in twelvemonth 2010 reached deflation -1.1 % . And now rising prices is 1.6 % . Latvian Lats is one of the strongest currencies of the universe – 1 LVL: 1.45 EUR ; 1.86 USD ; 1.18 GBP ; 59.74 RUB. Latvia will present European national currency Euro in 2014.

From this day of the month we can see that Latvian market is genuinely turning. There is a position of company ‘s growing. World Bank in its research rank Latvia as 25th state among 185 of easiness of making concern. Latvia has increasing GDP, so from this point of position Latvia is a good state to set up Taco Bell. With increasing GDP, increases besides purchasing capacity. So people can afford to eat outside the house in eating houses.

Political and Legal Environment, Government

Latvia is a parliamentary democracy democracy. Latvian parliament is Saeima that consist of 100 members which are elected from Latvian state for 4 old ages. The president is elected from Saeima besides for 4 old ages, he is representative 1 with limited power. President appoints the premier curate who chooses people 13 other people ( Cabinet of Ministers ) , they govern the state. Curates can accept one or other jurisprudence, but so they need to direct it to Saeima for blessing.

Latvia ‘s most of import papers for jurisprudence is Constitution of the Republic of Latvia and Constitutional Court is answerable for it. Latvia have three – degree tribunal ( regional tribunals, territory tribunals and Supreme tribunal ) . The most of import jurisprudence for making concern is Commercial Law, it tells what is little and average endeavor big company, explains different understandings and liabilities. A foreign company, who wants to make concern in Latvia under its ain name, and non set uping affiliated company, may register a subdivision. Branch is an independent portion of a parent company.

Competition jurisprudence – Labour jurisprudence – it discusses understandings with employees, minimal wages and other payments, working clip and careers. There are Torahs, what can do troubles for eating houses work, such as it is difficult to carry through all the demands for excised goods and Food Veterinary Service.

Harmonizing to Aon ( Insurance agents ) Risk Countries of World 2011, Latvia is a medium hazard state. Research writers draw attending to currency hazard and payment default. The chief hazard in Latvia is political relations, parties and persons, their inability to come to an understanding and their willingness to borrow money for work outing any job, may get economic hazards.

Latvia is a member of EU trade organisation. The trade policy of EU refers besides to Latvia. EU is the biggest trade leader in the universe with 20 % of universes import and export. Foreign direct investings are turning every twelvemonth. Main states that invested in Latvia are Sweden, Netherlands and Estonia. More investings are in Fieldss of existent estate and finance.

Latvia has a council which is responsible for belongings rights and one for rational belongings right protection. Not merely these councils is responsible, but all authorities. Property rights index is 50, the index measures the grade to which a state Torahs protect belongings rights. Intellectual belongings rights are protected with “ Copyright Law ” ( 2000 ) and “ Patent Law ” ( 2007 ) .

Latvia is a member of the United Nations, European Union, Council of Europe, NATO, Organization for Security and Co-operation in Europe, International Monetary Fund and World Trade Organization, and is portion of the Schengen Area. Latvia is besides a member of the Council of the Baltic Sea States and Nordic Investment Bank, and is together with Estonia and Lithuania involved in trilateral Baltic States cooperation and Nordic-Baltic cooperation.[ 10 ]

Corruptness is in high degree in Latvia. A batch of people involved in corruptness are convicted. The clip period for investigate the instance is comparatively long, it is due to measure of information demands to be collected, and sometimes besides of measure of informants. Economic freedom mark is 65.2, doing Latvia ‘s economic system the 56th freest in the 2012. It is above the universe ‘s norm.

There are no limitations from authorities side to open new companies by franchising or foreign direct investings, although there are some specific Torahs and services that are doing jobs. Freedom in Latvia is above the universe ‘s norm. There are no particular Torahs or regulations what is curtailing action of public catering service.

Cultural Environment

In old old ages count of peoples who are go forthing Latvia is increasing, twelvemonth 2011 it established more than 30A 000. Along with that Latvia ‘s civilization is increasing. Latvian civilization is influenced from German, Sweden and Russian civilizations due to businesss. Latvian is official linguistic communication. 58 % of Latvians speak Latvian linguistic communication and 37 % in Russian. English linguistic communication can talk 20 % of Latvia ‘s dwellers. In Latvia are three faiths in dominant place – Lutheran, Roman Catholic and Russian Orthodox. Lutheran parishes count lessenings every twelvemonth, Russian. Orthodox stayed at the same degree, in last twelvemonth it increased for 3 parishes. Datas about Roman Catholic in first old ages is non available, in last 2 old ages it was 250 parishes.

In Latvia is expressed comfortable and hapless inhabitant category. Few dwellers is in in-between category, normally they are go forthing Latvia. The anterior Fieldss for Latvia ‘s dwellers are monetary values and rising prices, employment, economic state of affairs and wellness.

In Hofstede site is possible to see the states cultural lineation. Power is decentralized and director counts on the experience of their squad. Employees expect to be consulted, control is dislike, and communicating is direct and participative. Latvia is individualistic society. Persons are expected to take attention of themselves. Employer/employee relationship is a contract based on common advantage. Hiring and publicity are supposed to be based on virtue merely. It is of import to maintain work/life balance. An effectual director is supportive. Decision devising is achieved through engagement. Conflicts are resolved by via media and dialogue. Latvians are more prone to relay on regulations, detailed and clean guidelines and work description. Do non wish to be rushed into doing determinations. Short term oriented society, restlessness for accomplishing speedy consequences.

Yum! was in Latvia from 1993 to 1996 with “ Kentucky Fried Chicken ” and “ Pizza Hut ” . Those old ages were non superb for fast nutrient industries in Latvia, as people did non cognize what it is and the buying power was quit low, now the state of affairs is far manner better. Now people love more and more fast nutrient, and the buying power is bigger.

Peoples in Latvia are familiar with fast nutrient and Mexican nutrient. McDonalds in Latvia is already 12 old ages and have 11 eating houses, Hesburger -working 8 old ages with more than 20 eating houses. There are besides a batch of Turkish kabob topographic points and their figure is still increasing. As for Mexican manner nutrient can be mentioned restaurant Tequila Boom ( 2003 ) and eating house concatenation Tex-Mex. It is working from twelvemonth 2001 with 2 eating houses in Riga and 4 in other metropoliss. Their bill of fare is similar to Taco Bell ‘s bill of fare.

General instruction in Latvia is 12 old ages ( 9 old ages mandatory primary instruction, 3 old ages high school instruction ) . 2 – 6 old ages higher instruction, 1 -2 maestro surveies and 3 – 4 old ages chief surveies. Last 5 old ages figure of pupils who got the professional instruction is about 9000 per twelvemonth.

There will non be a job of Taco Bell to fall in Latvian market. Peoples are familiar with fast nutrient and Mexican manner nutrient, where they do n’t necessitate to pass all twenty-four hours long for waiting the nutrient. But for success Taco Bell should take the topographic point closer to metropolis Centre and, where all twenty-four hours and dark life is taking topographic point.


Taco Bell specializes in functioning Mexican nutrient such as burritos, greaser, nachos, chalupas, gordita, salads and some other fortes that distinguish Taco Bell ( Taco Bell, 2012 ) . These already bing points will be present in greaser Bell ‘s bill of fare that will be introduced in the Latvian market. New points will besides be added to the bill of fare. The dining desert tendency in the fast-food market has made the debut of a sweet repast to the bill of fare really appealing. Since comeuppances have high demand in the market, ice pick and apple pie will be added to the bill of fare. Ice pick and apple pie were chosen specifically, because these sweets are already present in Taco Bell ‘s rivals ‘ bill of fare, and people enjoy them. Therefore, by following these new merchandises that already exist in the fast nutrient market and are good liked, we are taking advantage of this chance.

Many of the rivals in the market offer desert on their bill of fare. The chief rival of Taco Bell is Chipotle Mexican grill ( Hoovers, 2012 ) . Chipotle does n’t hold dessert on their bill of fare. Therefore, by adding sweet to the bill of fare it will help us on deriving competitory advantage over them. However, chipotle is non the lone rival, Taco Bell besides have other rivals in the fast nutrient industry such as McDonald and Burger King. Both McDonald ‘s and Burger male monarch carry sweets on their bill of fare. McDonalds Apple Dippers and Baked Apple Pie are ranked 6th amongst the 10 most popular McDonalds bill of fare points ( William Harris, 2012 ) . McDonald ‘s sweets are listed as the first and Burger King as tierce of the best fast nutrient sweets amongst other fast nutrient eating houses that serve sweets ( Dana Barnett, 2012 ) . Because the sweets have shown a immense demand, McDonald decided to extinguish some of their existing merchandises from the bill of fare such as the little Gallic french friess and little drinks, and add more sweets like fresh cookies and more ice-cream to hold a “ dollar value bill of fare ” ( Lisa Baertlein, 2012 ) .

Peoples besides tend to hunger sweets after repasts and that is normally due to the encephalon chemical science, diet make up or even wont ( Andrea Crespede, 2011 ) . So by presenting sweet on the bill of fare we would pull more people to the eating house because of the fluctuation in the bill of fare.

In add-on to what ‘s mentioned above ; harmonizing to a survey made in 2006 by the Swedish trade council about the Latvian nutrient market, 40 % of the family ‘s outgo is normally to nutrient and eating out. Furthermore, the survey states that there are some factors that influence the consumer purchases. Harmonizing to the graph below the state of beginning does n’t hold a dramatic influence on the buying determination, merely 12 % . Monetary value on the other manus is the chief factor that influences the consumer determination ( Swedish trade council, 2007 )[ 11 ]. Therefore, since monetary values of Taco Bell are close to the monetary values of its rivals. They are low-cost and cheap. So the debut of Mexican fast nutrient eating house is non an issue every bit long as the monetary values are within range. Furthermore, The Mexican culinary art is widely liked worldwide and it ‘s like a basic in every state along with Indian culinary art and the Italian culinary art etc. And since Taco Bell will be opened in Riga the capital of Latvia, many tourers will be attracted to Taco Bell.

Figure 5: Most of import factors which influence Latvian consumers buying ( 2006 )

In some states particular merchandises of involvement may be offered. Because they are non needfully in demand in other states, they are non mentioned on the chief merchandise lists. Of class, these merchandises could besides be supplied to other states if required. We are adding the sweet into Latvian market and there is no particular adding on bill of fare harmonizing to Latvian penchants and civilization. So, the merchandise is non state specified, the determination on making Taco Bell in Latvia is because of there ‘s no limitation and so it works in the construct of multiple markets. So the merchandises remained the same without holding to modificate it to accommodate the community penchants. Taco Bell used monetary value sensitiveness when it introduced “ value pricing ” to the speedy service industry in 1988. ( Services Marketing New York: McGraw Hill, 1996 ) . They have succeeded with it because it is based on its scheme on client perceptual experiences of value. ( Leonard A. Schlesinger, 1991 ) . Latvia is still in the monetary value sensitiveness province, nevertheless they do n’t truly mind about the gustatory sensation or the state beginning, in which can be an chance for us. Puting Taco Bell in Latvia is non bother by any enfranchisement and ordinance and fundamentally merely travel with the original Taco Bell operation.

Entry manner

There are six basic manners of entry into a foreign market, which are exporting, licensing, franchising, turnkey undertakings, entirely owned subordinates, and joint venture. Each has their ain advantages and disadvantages, but the manner that works best for presenting Taco Bell in Latvia could be franchising or entirely owned subordinate.

The 3rd manner of entry is franchising. Franchising is a method of making concern wherein a franchisor licenses hallmarks and methods of making concern to a franchisee in exchange for a repeating royalty fee. Franchising is besides a signifier of licensing. The franchisor can exert more control over the franchise compared to that in licensing. Under franchising, an independent organisation called the franchise operates the concern under the name of another company called franchisor. The franchisor provides the undermentioned services to the franchisee: hallmarks, runing system and merchandise reputes.

Wholly Owned Subsidiary is defined as “ a corporation that is entirely owned by one or more parent Crown corporations straight or indirectly through any figure of subordinates each of which is entirely owned straight or indirectly by one or more parent Crown corporations ( Wholly owned subordinate ) . ”

Although – as we can see in the undermentioned chart ( Figure 6 ) – rather big per centum of YUM! eating houses are operated by franchisees, and merely the 17 % of the are owned by the company. To come in Latvian market the most suited entry manner would be non franchising, but a entirely owned subordinate.

Figure 6: Percentage of YUM! Restaurants by how they are operated

To understand the entry manner suggestion, it is of import to see that set uping a eating house in Latvia would be the first measure for a high-scale international enlargement, and the state could be a going via North-Europe ( Norway, Finland, Sweden ) , neighboring and culturally strongly connected ex-soviet states and Russia, and via Poland, so it would be a strategically of import, possibly regional Centre for the company.

In instance of a franchise, YUM ca n’t command quality and oversee expeditiously if the debut of the trade name in a new part goes swimmingly, and a failure during the debut could impact negatively the trade name image and repute in other states as good, which can besides do a negative impact on YUM! stock monetary values.

Besides of import that presenting a wholly new trade name in a part requires more attempt and fiscal investing and franchisees possibly wo n’t take such a hazard in this initial period. Following eating houses in the state and subsequently in the part could be operated by franchisees, under the bing YUM Restaurants International Franchise system.

Establishing a entirely owned subordinate abroad will necessitate a set of stairss from the company portion. Taco Bell will necessitate to seek a legal spouse and fiscal advisers in the state in order to happen the most appropriate company signifier, and larning about fiscal and legal demands.

Besides extremely recommended to reach commercial and trade development offices in Latvia in order to acquire professional advice on market entry activities, taking the location, and take determinations about selling issues, although for franchisee spouses Taco Bell ( and all YUM! ) has a elaborate set of demands about these issues, so non much amendments will be possible, but it is of import to aline them to local penchants client demands.

For staffing the company will necessitate to place the figure of employees needed, and their duties, deicide if they should be local or expat co-workers ( talked profoundly in following chapter ) . Taco Bell besides will hold to take the location for its subordinate office.


First of all we have to do a manpower stock list planning to place what undertakings to be covered and what places to open in the wholly owned subordinate in the Latvian market. ( In this study we fundamentally use the place names that can be found in the callings subdivision of Taco Bell web page ( hypertext transfer protocol: // ) for better apprehension. )

At the same clip, we have to analyze if the places require local, expat, or 3rd state subjects, current employees, or engage new 1s.

Those, who prepare and present Taco Bell nutrient to clients

Team members are responsible for fixing nutrient and helping clients. They should be local individuals, as they have direct contact with clients, so common linguistic communication and civilization, and a good apprehension of client wonts and penchants, communicating manner is one of the cardinal factors in these place.

Those, who make certain that squad members are decently trained, positioned and ready to supply a client experience, organizing occupation of squad members and have a personal accomplishments to make such sort of work.

Shift Leaderships: Depending on gap hours, but fundamentally 2 displacement leads are needed, they will work on bends and will be responsible for pull offing the squad who serves the clients. They should be local employees, as they will pull off the squad of local individuals.

Those, who are responsible for concern and overall eating houses operations.

Restaurant General Manager ( RGM ) – A eating house director is besides needed ( 1 individual for each Latvian eating house ) , would be responsible for procurance, logistics, eating house fundss, so the smoothly running of the eating house, but besides physiques and inspires their squad, making an environment where Customers love to see. As for this place is truly of import the deep apprehension of Latvian Torahs and legal ordinances ( e.g. about nutrient industry ) , experience in Latvian fast nutrient industry ( e.g. good contact with providers, cognition of natural stuff monetary value degree and quality ) , the eating house director should be a Latvian individual.

Those who are responsible for the execution of Taco Bell Brand in the part an in the hereafter, in all the part.

Adjunct Director: At the same clip it is necessary to engage a local helper director, who in the initial period could back up state director ‘s work with his/her local cognition, and by shadowing, could larn information about the parent company and the trade name. After the initial period could replace the state director or take part as state director in farther enlargement in neighboring states.

At overall, it is necessary to happen a state or general director, whose duty will be the nidation of Taco Bell trade name in Latvian market. This individual must be person who knows the trade name rather good, sooner has worked for YUM/Taco Bell for several old ages, is cognizant of the company ‘s scheme and has a deep cognition of fast nutrient industry. The best option for that should be to take an bing employee in Taco Bell and direct him as an exile to Latvia for the period of the execution ( approx. 2-3 old ages ) and so return the parent company.

Resuming the above explained, in instance of the state director we suggest using a current Taco Bell employee/expat, who could take the nidation with his/her experience in the parent company ‘s issues, conveying Taco Bell corporate civilization. This besides would hold the benefit that Taco Bell could hold higher control about the nidation procedure, and this could bring forth a better relationship between parent company and its Latvian subordinate.

In instance of other places, we suggest engage new employees from Latvia, as local market and client cognition, good apprehension of ordinances, earlier professional web will ease good corporate public presentation. In instance of employees that have direct contact with clients, is even more of import. And last, salary degree in Latvian market is lower that US wages, so engaging local employees besides will maintain budget in tighter graduated tables.

In instance of local employees it is of import to supply an initial preparation in order to reassign non merely the parent company ‘s corporate values, but experience and procedure cognition.


Taco Bell I non offering wholly new merchandise for Latvian market, as there are already companies who provide fast nutrient and Tex-Mex nutrient. First of all, Taco Bell should present local market, public and other companies, with them, their products/services. They have to supply the information to possible costumier, present them to their services utilizing advertizement in Television, wireless and cyberspace.

As there are differences in civilization, linguistic communication and I Torahs, Taco Bell will hold to take some challenges, but fundamentally Latvia is a state where people accept and like American merchandises and life style.

Market size – people are familiar with fast nutrient and Tex Mex. McDonalds in Latvia is already 12 old ages and have 11 eating houses, Hesburger -working 8 old ages with more than 20 eating houses. There are besides about 5 Turkish kabob topographic points and their figure is still increasing. As for Mexican manner nutrient can be mentioned restaurant Tequila Boom ( 2003 ) and eating house concatenation Tex-Mex, working from twelvemonth 2001 with 2 eating houses in Riga and 4 in other metropoliss. Their bill of fare is similar to Taco Bell ‘s bill of fare.

Due to such a assortment of merchandises offered to consumers, companies representing Yum trade name represent a serious power in the fast nutrient market busying the taking places in different sections of the market.

The Yum trade name implemented the selling mix ; after identifies the different growing chances so they decided what to make, how to make it in the 4th stairss of the selling mix- merchandises, monetary value, publicities, and topographic point.

Marketing mix



Consumers will comprehend the products/services as valuable to purchase. The Yum trade name has created different, new merchandises in in the fast nutrient eating houses to consumers who would wish to eat fast nutrient other than beefburgers. As mentioned before, people in Latvia are familiar with fast nutrient and Tex-Mex, their figure is increasing.

Monetary value

Value- based selling requires houses to bear down a sensible monetary value for the quality of merchandises. The Yum trade name have used market planing which is a bit high priced to aim the center and upper category people which entreaties to the many categories of the society. Monetary values in Taco Bell and other similar eating houses in Latvia are non so different.


The Yum trade name brought all nutrient lover attending toward its delightful one-of-a-kind merchandises together. Taco Bell should set their publicities in cyberspace, Television and wireless to reach with wider group of people.

Topographic point

After making the value through good merchandises or services houses should be able to do it try accessible where consumers can happen it at any clip they wanted it. So Taco Bell eating houses should be in metropolis centre, where are more people daily and all dark life traveling on.


Taco Bell should believe of all stakeholders – workers, clients and others. Workers to be satisfied with work environment, payments, working hours. Clients/costumers should acquire the quality they want, speedy service and delightful nutrient. Other people should experience that they are welcomed in eating house. Here Taco Bell will hold to take challenges, because people in Latvia speak fundamentally 2 linguistic communications, they like speedy service and quality.

Physical grounds

Taco Bell should do the ambiance, the inside and environ that people could experience welcomed in eating house and willing to come back. That the passers would willing to travel in.


Taco Bell should develop workers to function the costumiers fast and with quality, Latvian people like fast and qualitative service.

Table 2: Service marketing 7P ‘s

Appendixs, mentions

Table 3: Market chance analysis comparing tabular array


Market Success









Peoples aged between 20-40 likes and accepts other civilizations nutrient.

GDP addition slows down, during the crisis a big figure of people became unemployed.

Customers are non monetary value sensitive in fast nutrient sector. Budapest is full of tourers.

2 Restaurant that offers Mexican ( Tex-Mex ) . Other state ‘s fast nutrient in Budapest.

No limitations to franchising nutrient industry.

Particular revenue enhancement on fast and debris nutrients ( introduced in 2011 )


Peoples do n’t really eats other civilization nutrients in day-to-day footing.

Fast nutrient eating houses are ever full of people.

The buying capacity is big but merely at certain location. The monetary value rate is rather high for the community at big.

Not certain if people wants to eat something out of ordinary ( Mexican nutrient ) .

They are all right with the monetary values but wo n’t see on a regular basis.

Other fast nutrient eating house. There is non yet any Mexican Style eating house.

No limitation to franchising, but have to guarantee that the nutrient and the supply are certificated Halal to accommodate the bulk of Malayan penchant.


Peoples like and accepts other civilizations nutrient.

Fast foodA eating houses are ever full of people.

Latvia has the fastest turning economic in Europe. Peoples have buying capacity.

Local people love to seek something new and non ordinary. Riga is new mark for tourers. Students are the biggest fast nutrient buyers.

Different fast nutrient eating houses. Mexican nutrient eating houses ( Tex-Mex ( 2 in Riga, 4 in other metropoliss ) , Tequila Boom ) .

No limitations to franchising nutrient industry.

Figure 3: Taco Bell Worldwide Presence Map


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