Frito Lay, Inc. Sun Chips

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1. Using the “DECIDE” procedure/formula, analyze the above case. (50 points) Company Background Frito-Lay Company is the world leader in the salty snack category, controlling more than 35 percent of the world market in snack chips and 60 percent in the United States. Among the company's well-known brands are five that generate annual sales of $1 billion each: Lay's, Ruffles, Doritos, Tostitos, and Chee-tos. In addition to its dominance of the potato chip, tortilla chip, and corn chip sectors (the last of these led by the Fritos brand), Frito-Lay has major brands in other categories, such as Rold Gold pretzels, Cracker Jack candy-coated popcorn, and Grandma's cookies. About $4 billion of the company's overall net sales are generated outside the United States, with sales in 42 countries. Lay's, Ruffles, and Chee-tos are among Frito-Lay's major international brands, along with such local favorites as Walker's in the United Kingdom and Sabritas in Mexico. Frito-Lay Company is the snack food division of PepsiCo, Inc., generating about half of the parent company's revenues and two-thirds of its profits. Step 1: Define the Problem 1. Dilemma to come out with the formal recommendation whether kill the project, continue the test market ,expand the test, market to other cities and introduce the project nationally. Here, timing and competitive reaction were important issues. Riskey believed that national regional competitors were monitoring Frito-Lay’s test market. There was also a high probability that these competitors were examining the chip with the intention of developing their own version. 2. Sales volume gained from consumers’ that switch from Ruffles and Lays Potato Chips. Step 2: Enumerate Decision Factors * Alternatives cost of actions by the company define as follows: Timing – if an expended test market or a national introduction was considered,

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