Frito-lay’s
Case Recap
Frito-Lay Inc. leads the world in manufacturing and marketing of snacks. More than eight different kinds of Frito-lay snacks chips brands are found among the top 10 best-selling snacks in the U.S Supermarkets. Frito-lay’s well-known brands are: lay’s Doritos, Tostitos, Ruffles potato chips, Fritos corn chips, Santitas tortilla chips, Sun chips Multigrain snacks and Cheetos cheese-flavored snacks among others. Frito-Lay operates as an independent division of the PepsiCo Inc. Its operations had been very successful and are evident in the 1996 net sales reports. For example, the company recorded “operating profit of 1.63 billion on net sales of 9.68 billion; which represented 31 percent of PepsiCo’s net sales and 60 percent of PepsiCo’s operating profit” (Kerin and Peterson, 2013). Moreover, Frito-lay’s five years period, from 1991 to 1996 sales and operating profit combine were 13 percent. The company has two fronts, the Americas and international. The Americas front consists of Canada and the United States; these two fronts had revealed significant growth in sales and operating profit compare to the international front. Yet, the overall Frito-lay’s business growth has been phenomenal. Frito-lay’s product developing strategies had been its premier source of volume growth. In the 1990s, the company found a new way for developing the chips. These chips were baked Lay’s potato crispy, Rold Gold pretzels, and baked Tostitos tortilla. The introduction of these low fat and no fat snacks increases sales and profit.
Problem Identification In 1996, Frito-Lay created a division called New Ventures Division, with a mission: “To drive significant Frito-Lay growth by seeking and creating new business platforms and products which combine the best of Frito-Lay advantages with high-impact consumer food solutions” (Kerin and Peterson, 2013). Right after its interception, the department executive heard of Borden Foods Corporation selling Cracker Jack
Frito-Lay Inc. leads the world in manufacturing and marketing of snacks. More than eight different kinds of Frito-lay snacks chips brands are found among the top 10 best-selling snacks in the U.S Supermarkets. Frito-lay’s well-known brands are: lay’s Doritos, Tostitos, Ruffles potato chips, Fritos corn chips, Santitas tortilla chips, Sun chips Multigrain snacks and Cheetos cheese-flavored snacks among others. Frito-Lay operates as an independent division of the PepsiCo Inc. Its operations had been very successful and are evident in the 1996 net sales reports. For example, the company recorded “operating profit of 1.63 billion on net sales of 9.68 billion; which represented 31 percent of PepsiCo’s net sales and 60 percent of PepsiCo’s operating profit” (Kerin and Peterson, 2013). Moreover, Frito-lay’s five years period, from 1991 to 1996 sales and operating profit combine were 13 percent. The company has two fronts, the Americas and international. The Americas front consists of Canada and the United States; these two fronts had revealed significant growth in sales and operating profit compare to the international front. Yet, the overall Frito-lay’s business growth has been phenomenal. Frito-lay’s product developing strategies had been its premier source of volume growth. In the 1990s, the company found a new way for developing the chips. These chips were baked Lay’s potato crispy, Rold Gold pretzels, and baked Tostitos tortilla. The introduction of these low fat and no fat snacks increases sales and profit.
Problem Identification In 1996, Frito-Lay created a division called New Ventures Division, with a mission: “To drive significant Frito-Lay growth by seeking and creating new business platforms and products which combine the best of Frito-Lay advantages with high-impact consumer food solutions” (Kerin and Peterson, 2013). Right after its interception, the department executive heard of Borden Foods Corporation selling Cracker Jack
References: Kerin, R. A., Peterson, R. A. (2013). Strategic Marketing Problem Cases and Comments (13Th ed.) New Jersey: Pearson Prentice Hall