Sunday, August 5, 2012

Frito-Lay Tostistos In 1932

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Frito-Lay Tostistos In 1, Elmer Doolin, who was in the ice-cream business, bought a recipe for corn chips from a Mexican man who was eager to leave the states and return home.

From him Doolin acquired 1 accounts and old manufacturing equipment in hopes to start an entirely new industry in America. The first manufacturing plant for

Fritos Corn Chips started out in Doolin’s mother’s kitchen. With a lot of hard work, Elmer’s sales increased and new equipment and packaging were soon needed. After WW II he would grant H.W. Lay and Company, a source of potato chips and snack foods, an exclusive franchise to manufacture and distribute

Fritos Corn Chips. The two companies would work close together and in 161 they would merge. Four years later, Pepsi-Cola Company would also combine with

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Frito-Lay, but with separate operating divisions, to form a new company called

PepsiCo. Consumers in 15 spent an estimated $1. billion on Frito-Lay snacks, up $1.8 billion in 14. (PepsiCo. 15 Annual Report). Currently, Frito-Lay is still expanding its sales and serves all of the US markets. In 18 they reconstructed their business into 4 regional divisions to strengthen its channel distribution. Their growth has continued and as of 11 they had Sales and

Marketing areas in order to bring the decision process closer together.

Currently they are continuing to grow nationally and globally with distribution reaching nearly 400,000 in retail, vending, and food service accounts around the country (PepsiCo. 15 Annual Report) They offer more than 100 product lines and several brand names such as Lay’s, Ruffles, Doritos, Rold Gold, and Tostitos.

The overall market share for tortilla and corn chips in 1 accounted for 5.8% of retail sales and 7.8% of pound volume of the salted snacks market.

Frito-Lay’s market coverage involves intensive distribution by placing its products in convenience stores, mass merchandisers, supermarkets, grocery stores, and vending machines. Todays average for the companys distribution amongst grocery and supermarkets has risen to about 56% (PepsiCo.16 Facts).

Frito-Lay’s closest competition in size for snack foods is Nabisco, who doesnt have a snack chip to compete with Tostitos corn chip. Golden Flake Enterprises is Frito’s biggest competitor in size and markets served that has a tortilla chip, but they compete in an indirect way through limited product lines. Some companies that compete serving smaller markets are Philadelphia’s Utz, Herrs, and Bravo. They try to compete with Frito-Lay, but most of them have to add a degree of differentiation to gain a slight competitive advantage in a market that is to easy to copy. Companies selling in small local markets try to compete and differentiate through targeting their audiences more directly which is hard for Frito Lay to do. However smaller companies resources are limited, so it is hard to compete directly with the big distributor in markets served. Frito has also used the strategy of forward integration, which means they have used their earnings to gain ownership or control over distributors and retailers which makes it hard for small companies to gain distribution channels. Frito’s snack products are available in 40 countries and believes that the majority of its growth will come from establishing new markets. Frito-Lay owns most of their operations but some operations are joint ventures. The company works hard at keeping its market share and has brought in outside firms to look at their supply chain from manufacturing to distribution, to logistics and transportation planning. This past year the company won an award for its seasoning and packaging program. It works to get full truckloads by utilizing unique carrier management technology systems which are projected to save 0% in transportation costs, reduce inventory carrying costs, and enable deliveries twice a week to production facilities which is expected to decrease transportation time. They are also using what is called a back-haul program to fill empty miles in

Frito-Lays private fleet, generating over $50,000 in incremental revenue for its traffic centers. They have also spent big money on an integrated system which provides visibility and productivity tools to optimize Frito-Lays distribution network ( Tostitos success is due to Frito Lay’s capabilities to capture opportunities to enhance a competitive advantage. Through decades of hard work and expansion, the company is moving forward expanding its markets. Their profits are high and theyve worked hard over the years to create and maintain relationships with its channel members which has led to their success.

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