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Taco Bell in Switzerland Shkëlqim Gërxhaliu 2/15/2013
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Table of Contents
Executive Summary ...................................................................................................................................... 2
Company Description ................................................................................................................................... 2
Cultural Analysis Of Switzerland ................................................................................................................. 3
Brief History Of Switzerland .................................................................................................................... 3
Geographical Settings ............................................................................................................................... 3
Social Institutions...................................................................................................................................... 4
Religion And Aesthetics ........................................................................................................................... 6
Living Conditions ..................................................................................................................................... 7
Language ................................................................................................................................................. 10
Economic Analysis ..................................................................................................................................... 10
Population ............................................................................................................................................... 10
Economic Statistics And Activity ........................................................................................................... 11
Developments In Science And Technology ............................................................................................ 17
Channels Of Distribution ........................................................................................................................ 18
Media ...................................................................................................................................................... 19
Market Audit And Competitive Market Analysis ....................................................................................... 20
The Product ............................................................................................................................................. 20
The Market .............................................................................................................................................. 20
Preliminary Marketing Plan ........................................................................................................................ 21
Marketing Plan ........................................................................................................................................ 21
Pro Forma Financial Statements And Budgets ....................................................................................... 28
Resource Requirements .......................................................................................................................... 29
Conclusion .................................................................................................................................................. 30
References ................................................................................................................................................... 31
2
Executive Summary
This five-year project has been created with the aim to make an investment in Switzerland by
bringing a Taco Bell franchise to that country. This franchisee will operate as a single-brand, a traditional
Taco Bell Unit offering inexpensively priced, which offers a high quality Mexican-style food for take-out
and on-premises eating. Although this kind of food is a traditional Mexican food, it is very popular and
preferred by Americans. This kind of food with its delicious taste can also be liked by Europeans, in
particular by Swiss people who are going to have the opportunity to have this fast food restaurant in their
own country. However, there are some challenges that should be considered for brining Taco Bell in
Switzerland. The legal requirements from Switzerland, the standards of the quality of food, the skilled
staff, and some other requirements must be met for having a Taco Bell open in this country.
Company Description
Taco Bell Corporation is a California-based fast service restaurant chain that specializes in
Mexican-style fast food. Taco Bell, with 2004 combined company and franchisee sales reaching $5.7
billion dollars, holds the largest share of the Mexican-style restaurant market in the United States. More
than 35 million consumers visit a Taco Bell each week and over 80 percent of its 6,500 locations are
franchised. The company, with restaurants in Canada, Guam, Aruba, Dominican Republic, Chile, Costa
Rica, Guatemala, Puerto Rico, Ecuador, Hawaii, Asia, and Europe, operates as a subsidiary of YUM!
Brands Inc., the largest restaurant company in the world.1
1 Tacobell.com.ph (2008) Taco Bell Philippines. [online] Available at: http://www.tacobell.com.ph/company.htm
[Accessed: 8 Feb 2013].
3
Cultural Analysis Of Switzerland
Brief History Of Switzerland
Switzerland industrialized rapidly during the 19th century, becoming the second most industrialized
country in Europe after Great Britain in 1850. During World War I, tensions developed between French,
German, and Italian speaking groups in Switzerland. During World War II, there was a high pressure
from the fascist powers, which after the fall of France, surrounded the whole country.
The Cold War improved the neutral position of Switzerland. It integrated itself into the American-led
Western postwar order. Switzerland did not join the European Union and it still remains out of the
European Union.
Geographical Settings
Switzerland is a small country which is located in the heart of western Europe. It is the land of the Alps
with some of the highest mountains in Europe and it has a plateau and many lakes. 60% of Switzerland
are in the alpine region. 30% are hills and relatively flat valleys. 10% form a chain of old mountains
called Jura. Switzerland does not have access to the sea, but it has many water resources. It is rich of
large lakes such as Lake Geneva, Lake Constance, Lake Lucerne, Lake Zurich, Lake Lugano, etc. Some
of the largest rivers of Switzerland are Rhone, Rhine, Limmat and Aar. Switzerland enjoys an almost
Mediterian climate.2
2 History of Switzerland
Jud. (2000) History of Switzerland. [online] Available at: http://history-switzerland.geschichte-schweiz.ch/swiss-history-summary.html [Accessed: 2 Feb 2013].
4
Social Institutions
Family
People in Switzerland marry relatively late. They focus more on training and their careers. A Swiss family
usually consists of 3-4 family members. Most of the couples have 1 to 2 children.
Education
Switzerland has a decentralized education system. Decisions about running primary and secondary
schools are taken at the cantonal level. Cantons also provide the bulk of financing. A head of education is
elected for each canton. The heads of cantons make up the Swiss Conference of Cantonal Ministers of
Education. About 25% of Swiss adult population hold a diploma of higher learning. According to the CIA
World Factbook data for 2003, 99% of the Swiss population aged 15 and over could read and write, with
the rate being identical for both sexes.3
Political System
The governance system of Switzerland is stable. It is consensus-based and it is designed to direct
democracy. Switzerland is a Federal State with 26 cantons. As a decentralized confederation of states,
political and administrative responsibilities are divided among the federal, cantonal and municipal levels
of Swiss government. . Each canton has its own constitution, code of civil procedure and parliament
chamber. The Constitution provides for the separation of the three branches of government: the Federal
Assembly, the Federal Council and the Federal Tribunal. Being located at the heart of the European
3 Aecsworld.com (2000) AECS WORLD | Abroad Education Consultancy Services World Study Abroad Services Study
Abroad Consultants For Germany, USA, Finland, Norway, Denmark, Sweden, Netherlands, France, Australia, New Zealand, Canada, Singapore, Switzerland, UK, Ireland, Cyprus etc. [online] Available at: http://www.aecsworld.com/view.php?id=49 [Accessed: 7 Jan 2013].
5
Economic Area (EEA) there is a well-established Swiss-EU relationship mostly focused on trade, labor
and transport issues.4
Legal System
As a brief overview, legislation in Switzerland is approved by Parliament and adjudicated by the Swiss
Federal Supreme Court or, in insurance-related cases only, the Federal Insurance Court. The Federal
Supreme Court has a comparable role to the U.S. Supreme Court, however the court in Lucerne is the
only federal court. In adjudicating cases, the Federal Supreme Court cannot normally overrule federal
statutes unless these are deemed to be in direct violation of human rights, but can call legislation set by
cantons into question. However, there are periodic reviews of legislation, with many new laws having
come into force on 1 January 2011 concerning a variety of issues ranging from privacy to war crimes, and
from minimum wages for cleaners to the prevention of marriages of illegal immigrants in Switzerland.5
Social Organization
Switzerland is a place of tradition and respect for values of family, religion and homeland. This is more
evident in rural areas. Social rules govern behavior of people, promoting a society that is respectful for
others. However, there is low tolerance for behavior that is contrary to the good of the community.
Switzerland is known as an efficient and well-ordered society. Glacial lakes and snowy landscapes help to
promote the image of a clean and proud country which ensures high standards. Switzerland has high life
expectancy . Zurich and Geneva are ranked respectively numbers 2 and 3 in the top cities worldwide for
quality of living.6
4 Fleiner, T. (2012) Swiss Confederation. [report] IACFS, p.1.
5 Focus, E. (2010) Switzerland - Legal System | ExpatFocus.com. [online] Available at:
http://www.expatfocus.com/expatriate-switzerland-legal-system [Accessed: 3 Feb 2013]. 6 Focus, E. (2010) Switzerland - Culture, Society and Religion | ExpatFocus.com. [online] Available at:
http://www.expatfocus.com/expatriate-switzerland-culture-society-religion [Accessed: 15 Jan 2013].
6
Business Customs And Practices
Appointments in Switzerland should be arranged in advance, and the arrival should be prepared with
detailed information relating the meeting. It is very important to build positive business relationships.
Arriving at appointment five or ten minutes late is considered disrespectful to Swiss people. When you
cannot avoid lateness, contact the meeting coordinator as early as possible. Efficiency is highly valued
among Swiss. Swiss businesses operate with a clear leadership structure. The leaders tend to be modest
and discreet in their exercise of authority. Most of the Swiss are generally courteous but reserved.
Loudness, excessive enthusiasm, and over familiarity are all considered improper at the start of a business
relationship. Giving gifts is not a part of the Swiss business culture, however, if invited to diner in a
colleague’s home, it is appropriate to bring flowers or high quality Swiss chocolate. When entering or
leaving a meeting, it is traditional to shake hands and make eye contact with each person in attendance,
beginning with the most senior in age or rank. It is also appropriate to distribute business cards during
introductions. Professional relationships are quite formal, even amongst colleagues who have worked
closely together for many years. Refer to Swiss colleagues using their formal title if appropriate, or Mr.,
Mrs., etc. and surname. Nonverbal communication and proper posture is important in professional
situations. It is appropriate to cross legs knee-over-knee, however, crossing legs ankle-over-knee or
extending legs out while seated is considered rude.7
Religion And Aesthetics
Religion
The major religions in Switzerland are Catholicism and Protestantism. 46% of the Swiss people are
Roman Catholic, while Protestant followers are a close second at 40%. Muslims, Jews and Christians
constitute 6%, while people with no professed religious following figure at 10%. There is total freedom of
7 Communicaid (2009) Doing Business in Switzerland. [report] p.1.
7
worship in this small country. The proportion of people belonging to other churches has risen since 1980.
The Muslim community, representing over 2 percent of the population in 1990, is the largest religious
minority in this country. The Jewish community has always been very small and often discriminated; in
1866, Swiss Jews received the constitutional rights held by their Christian fellow citizens. Even though
the Swiss Constitution calls for separation of church from the state, churches are still dependent on the
state. In many cantons, pastors and priests receive salaries as civil servants, and the state collects
ecclesiastical church taxes. 8
Aesthetics
Switzerland has a very intense and diverse cultural life. The art and the esthetics in Switzerland also are
part of the Swiss. Modernity and rationalization inspire the Swiss artists to create art. People are open to
different cultures, arts, and fashion. However, they are mostly focused on the European culture, including
arts and aesthetics.
Living Conditions
Diet And Nutrition
Switzerland does not have a great tradition of foods. They adopt the best recipes from German and
French cuisine. Also similar to Germany, the Swiss tend to have a diet that is spicier and even sweeter
than the diet of the British. They eat a lot of breads, cakes and other sweets, potatoes, and meats. Sausage
is also popular in Switzerland. The people of Switzerland are known for being especially fond of cheese
and chocolate. Fermented foods, such as sauerkraut and sour cream may help the body handle this higher-
8 UNHCR.org (2011) UNHCR | Refworld | World Directory of Minorities and Indigenous Peoples - Switzerland :
Overview. [online] Available at: http://www.unhcr.org/refworld/country,,MRGI,,CHE,4562d8b62,4954ce045,0.html [Accessed: 23 Jan 2013].
8
fat, low-fiber diet. Fresh fruits are less available and the colder-climate vegetables, such as cabbage,
cauliflower, and potatoes are used the most. Beer consumption is also high in Switzerland.9
Housing
Since Switzerland is rich of different cultures and has a variety of geographic settlement patterns, there
are different types of traditional housing in different regions of this country. There are smooth stone
houses in Engadin, small stone buildings in Ticino, combinations of houses and barns in Mittleland,
shingled facades in Appenzen, and the wooden villages of the valleys of Valais canton.
There is a relatively modern housing stock in Switzerland, two-thirds of which have been built since
1947.Since there is a high population density, about one-fourth of homes have more than five rooms.10
Clothing
All the various cultures have an influence on Swiss fashion, as does the nation's climate. Switzerland's
climate is temperate, although temperatures vary according to the altitude. Temperatures in lower
elevations range from cool to warm, with humid summers having occasional showers.
Sports And Recreation
Sports are an important part of Swiss life. The Swiss Olympic Association, the national clearinghouse for
sports activities. There are 3.5 million members and more than 25,000 organizations that have been part
of it since the beginning of the 21st century. Swiss people like Alpine skiing, Nordic Skiing, touring
museums, drinking, fine dining, hiking, cycling, and fishing.11
9 Ianr.unl.edu (2011) People and Their Diet. [online] Available at: http://www.ianr.unl.edu/kendrick/411/people-
s00.html [Accessed: 4 Feb 2013]. 10
All-history.org (2009) History of the World. [online] Available at: http://all-history.org/01un166.html [Accessed: 9 Jan 2013]. 11
Olympic.org (2012) Switzerland | Swiss Olympic Association | National Olympic Committee. [online] Available at: http://www.olympic.org/switzerland [Accessed: 3 Jan 2013].
9
Social Security
The social security system in Switzerland is based on state and occupational benefits. Contributions are
made by both employer and employee. However, the contributions to the occupational pension fund only
start when the employees turn 25 and they earn more that SFR 20,880 in wages per year from one
employer. If the employer is changed, then the employee must arrange for his/her accumulated capital to
be transferred to the new employer’s pension fund.
Residents of USA also benefit from social security agreements with Switzerland. They are entitled to a
Swiss pension based on contribution they made when working in Switzerland, even if they are no longer
in Switzerland when they retire.
Contribution reimbursements to the state social security system, are only possible for people from
countries with no social security agreement. Expats may choose to keep or transfer their funds or request
a pay-out, so called cash termination benefit. 12
Healthcare
There are high standards of the general healthcare in Switzerland. This is reflected in an above average
life expectancy of Swiss population. Private and public hospitals meet and even exceed international
healthcare standards. But, it is very expensive as well. It is on the second place in terms of cost (after
U.S.) Private hospitals usually tend to specialize in certain treatments.
Everyone living in Switzerland is entitled to healthcare. All Swiss residents are required to register for
basic health insurance. A large portion of health insurance cost is covered by the population and the
insurance companies, rather than the state itself.
12
Internations.org (2002) Social Security in Geneva | InterNations.org. [online] Available at: http://www.internations.org/geneva-expats/guide/working-in-geneva-15511/social-security-in-geneva-2 [Accessed: 2 Feb 2013].
10
Language
Every country that surrounds Switzerland has a cultural influence on the areas of Switzerland that are
close to them. This influence is mostly visible in language of Switzerland. There are four main languages
spoken in this country: German, French, Italian, and Romanish. 60% of the Swiss population speak
German. 20% of them speak French, 6% speak Italian and around 1% of them speak Romanish.13
In
Switzerland, each region, town or village speaks their own dialect and nobody is willing to give it up and
find a common written Swiss Language. People often identify themselves and their regions with their
dialect. In the early 15th century the need for a uniformly written German came into reformation. Most
Germans accepted the written form as their spoken language, but the others did not. So different dialects
are used in private and business conversations, even in schools and universities.
Economic Analysis
Switzerland has the most stable economy in the world. As a country where monetary security and
political stability, it has been a heaven for investors, by creating an economy that is highly dependent on
foreign investment. Since Switzerland is a small country and has high labor specialization, then the keys
of this country to economic life hood are trade and industry. There are low unemployment rates, and a
high per capita income. One of the significant roles is played by the service sector.
Population
Population in Switzerland was recorded at 7.9 million in 2011. It was a 48% increase of population from
5.4 million. The population of Switzerland represents 0.11 percent of the world’s total population.
Population growth was steepest in its growth in the period after World War II and it slowed down during
the 1970s to 1980s and has since again picked up to 1% during the 2000’s. The population density
13
Eda.admin.ch (2008) Population. [online] Available at: http://www.eda.admin.ch/eda/en/home/doc/infoch/chpopu.html [Accessed: 6 Jan 2013].
11
(people per sq. km) as of 2010 was 195.65. More than 75% of the Swiss population live in the central
plain between the Alps and the Jura Mountains and from Geneva to the Rhine River and Lake Constance
in the north-east. About 20% of the Swiss population is made up from residents foreigners.
15.2% of the population is made up of people aged under 15. 67.8% of them is made up of people aged 15
to 64, and 17% of it is made up of people aged 65 years and over. 14
Economic Statistics And Activity
Switzerland had a Gross Domestic Product (GDP) of $635.65 Billion US dollars in 2011. The population
of Switzerland enjoys a comfortable financial life. The capita income in this country is $59,880. It ranks
sixth in the World Bank’s rankings. Its capitalist economy has many giant banks and multinational
corporations.
The average Swiss family income is 22,387 USD a year. 15
Distribution of Income or Consumption by Percentage Share: Switzerland
Survey year: 1992
Lowest 10% 2.6, lowest 20% 6.9, second 20% 12.7, third 20% 17.3, fourth 20% 22.9, highest 20%
40.3, highest 10% 25.2
Note: This information refers to income shares by percentiles of the population and is ranked by per
capita income.
Resources
14
Tradingeconomics.com (2011) Switzerland Population. [online] Available at: http://www.tradingeconomics.com/switzerland/population [Accessed: 13 Jan 2013]. 15
ymcamun.org (2013) Legal Country Reference Information. [online] Available at: http://ymcamun.org/wp-content/uploads/2013/01/Legal-Country-Reference-Information.pdf [Accessed: 6 Jan 2013].
12
With an area of almost 16.000 sq miles, Switzerland is one of poor countries of natural resources. There
is no oil and there are not many gas reserves. There are a few ,omera; resources including salt and marble.
Due to the absent of natural resources, Switzerland focuses on the deposits it has. Swiss exploit gravel,
sand and clay together with the minerals they have. They produce ammonia, raw steel, gypsum,
aluminum, etc.16
Transportation
The Swiss transport system is known to be one of the finest in the world. The dense network of
railroads, bus and tramway lines together with systematic timetables allow one to reach any point in the
country in no time. Annually many funds are invested into transportation infrastructure and road building.
Highways and motorways across the country connect France, Germany, Italy, Liechtenstein and Austria.
The International airports of Zurich, Geneva, Basel and Lugano receive flights from all over the world
and have their own railway and bus stations directly connected to all major cities in Switzerland and
neighboring countries.
Communication Systems In Switzerland
Communication in Switzerland is mainly made possible through telephone lines, cellular, radio broadcast
stations, Television stations, and Internet. There are around 5 million users of telephone lines, 6 million
users of mobile cellular. There are also around 115 TV stations and around 3 million internet users.17
Working Conditions
Switzerland is known for good working conditions and pays great attention to its monitoring and
16
Muse.jhu.edu (2004) Project MUSE - Whiteout. [online] Available at: http://muse.jhu.edu/journals/sais_review/summary/v024/24.1baron.html [Accessed: 3 Feb 2013]. 17
Pressreference.com (2010) Switzerland Press, Media, TV, Radio, Newspapers - television, circulation, stations, number, print, freedom, online, broadcasting. [online] Available at: http://www.pressreference.com/Sw-Ur/Switzerland.html [Accessed: 12 Feb 2013].
13
improvement. The employment contract is generally regulated by the Swiss Code of Obligations and can
be concluded for a definite or an indefinite period, on a full or part-time basis. The salary may be
calculated by periods of time or according to the work carried out From the legal aspect, there is no
minimum wage unless stipulated in a collective employment contract. The regular termination terms can
vary between one and three months. It depends on the duration of the employment period. In case of
termination of employment both contractual parties are protected by law from abusive employment
termination. Maximum working hours vary between 45 and 50 hours per week and depend on the
industry. For example, a 45 hour limit is applied to industrial workers and office staff. The legal standard
for employment holidays is 4 weeks. However, holidays depend on the employer, the employment
contract and age of the employee.18
Major Industries
The major industries of Switzerland include tourism, the provision of banking, insurance and financial
services, watch-making, precision instrument manufacturing and chemical manufacturing.
Foreign Investments
Switzerland offers a good economy, stable politics, open trade policies, etc. In 2009, Switzerland got the
first place on the list of the World Economic Forum’s Global Competitive Index. This has led to a higher
interest of foreign companies to set up their global or regional headquarters in this country. According to
a study conducted by the Swiss-American Chamber of Commerce, over the past decade. about 200
companies have set up their corporate headquarters in Switzerland. The Swiss government is constantly
promoting the benefits companies can have for investing in Switzerland.
18
Invest in Switzerland (2012) Labor market and labor laws.. [report] p.73.
14
Switzerland is highly dependent on export markets to maintain its large export sector and supply materials
for the domestic manufacturers. Switzerland has very liberal trade and investment policies and it protects
foreign investments in it by its domestic policies.
The main exports of Switzerland are machinery, metals, watches, agricultural products, chemicals,
vehicles, etc. In 1998, 80% of the main partners of Switzerland were from the EU (Germany, France,
Italy, Nederlands, and Britain), 6% from the US, and 3% from Japan. By 2000, exports to the U.S.
increased by 15.9%. Exports also increased in Turkey, South Korea and China.19
Trade (expressed in billions of US$): Switzerland
Year
Exports Imports
1975 12.958 13.305
1980 29.632 36.341
1985 27.433 30.696
1990 63.784 69.681
1995 78.040 76.985
1998 75.431 73.877
SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.
General Import Restrictions
19
Global Competitiveness | World Economic Forum (2012) Global Competitiveness. [online] Available at: http://www.weforum.org/issues/global-competitiveness [Accessed: 1 Feb 2013].
15
The following items are not acceptable for carriage to any international destinations unless they are
indicated in some other way.
1. Perishable foodstuffs and foods and beverages requiring refrigeration or other environmental
control.
2. Plants and plant material, including cut flowers (cut flowers are acceptable from the U.S. to
selected points in Canada and from Colombia, Ecuador and the Netherlands to the U.S.).
3. Money (coins, cash, currency, paper money and negotiable instruments equivalent to cash
such as endorsed stocks, bonds and cash letters).
4. Shipments being processed under: A. Duty drawbacks claims unless advance arrangements
are made. B. Temporary Import Bonds – acceptable under the FedEx International Broker
Select option, for initial import only. C. U.S. State Department licenses. D. Carnets. E. U.S.
Drug Enforcement Administration export permit. F. Letters of Credit. Shipments subject to
Letters of Credit are generally prohibited, with the exception of shipments subject to Letters
of Credit calling for a “courier receipt”, as defined by Article 25 of UCP 600, shipped using
the FedEx Expanded Service International Air Waybill. G. Certificate of Registration
shipments (CF4455).
5. Shipments that may cause damage to, or delay of, equipment, personnel or other shipments.
6. Shipments that require us to obtain any special licenses or permit for transportation,
importation or exportation.
7. Shipments or commodities whose carriage, importation or exportation is prohibited by any
law, statute or regulation.
8. Shipments with a declared value for customs in excess of that permitted for a specific
destination.
16
9. Processed or unprocessed dead animals, including insects and pets. Taxidermy-finished
hunting trophies or completely processed (dried) specimens of whole animals or parts of
animals are acceptable for shipment into the U.S.
10. Packages that are wet, leaking or emit an odor of any kind.
Goods Subject To Import Controls
The following goods are restricted by law and subject to import approval and must meet other regulatory
requirements but are acceptable for importation on FedEx Express International Priority Service:
Milk and dairy products including cheese
Cereals and forage products
Meat, game, seafood
Foodstuffs
Drugs and other chemicals
Alcoholic beverages
Precious metals, watches, jewelry
Considering this, we must buy the products inside Switzerland and not consider to import them
from the United States. 20
Labor Force
There are about 4.5 million workers in Switzerland. The employment rate in this country is 65.6 percent.
71 percent of workers are employed in the service sector, 25 percent of them in industry and trade and 4
20
Fedex.com (n.d.) Switzerland Country Profile. [online] Available at: http://www.fedex.com/us/international/irc/profiles/irc_ch_profile.html [Accessed: 1 Feb 2013].
17
percent in agriculture. 45 percent of workers are women. About a fifth of the workers in Switzerland are
foreign nationals. Over 65 percent of them come from the EU countries .21
Inflation Rates
The inflation rate in Switzerland was recorded at -0.40 percent in November of 2012. Inflation From 1956
until 2012, Switzerland Inflation Rate averaged 2.7 % reaching an all-time high of 11.9 % in December
of 1973 and a record low of -1.4 % in June of 1959. The inflation rate in this country measures a broad
rise or fall in prices that consumers pay for a standard basket of goods.22
Developments In Science And Technology
Leading role is given to the development and implementation of the forward-looking, innovative and
sustainable ICT (Information and Communication Technology) solutions. The Swiss government and
the private sector are important in developing and defusing ICT (Information and Communication
Technology) for infrastructure, content and applications. According to the Economist Intelligence Unit,
spending per capita on information and communications technology in Switzerland is one of the highest
in the world and well above the Western European average. The IT intensive industries such as financial
services occupy a large share of the economy.
Research And Development
Switzerland is one of ten top countries for expenditures in Research and Development. In year 2006,
Research and Development contributed in Switzerland’s GDP with 2.9%. Most of it comes from
chemical, pharmaceutical, and engineering industries, and the remaining comes from the public sector.
Universities are those who conduct the most basic research.
21
Expatica.com (2013) The Swiss labour market. [online] Available at: http://www.expatica.com/ch/employment/employment_information/The-Swiss-labour-market_16133.html [Accessed: 15 Feb 2013]. 22
Tradingeconomics.com (2013) Switzerland Inflation Rate. [online] Available at: http://www.tradingeconomics.com/switzerland/inflation-cpi [Accessed: 5 Feb 2013].
18
Technological Skills Of The Labor Force
Within the professionals group in Europe Switzerland is the second country (43 %) for having the highest
shares of scientists and engineers. Switzerland's advanced economy and highly skilled labor force make it
a good location for licensing sophisticated products and processes. The country itself depends on exports
of product and process licenses. It is one of the few nations with a positive balance in licensing
transactions. Sectors that are particularly important include pharmaceuticals, watch-making and precision
machining, food and drink.23
Channels Of Distribution
There are many food suppliers available in Switzerland and many of them are specialized in supplying
certain food products. Agro Sierre company is well known for supplying fruits and vegetables. Bell Ag is
specialized in meat and meat products. Taco Bell in Switzerland will be supplied by Aligro, a big food
service dealer in Switzerland which offers different kinds of food ingredients, sauces, spices, flavorings,
etc. These ingredients then will be transported to Taco Bell. Beverages will be supplied by Migros
company. The warehousing will be done by Taco Bell itself where food will be kept cold. The inventory
turnover will be less than 10 days since we have to do with perishable goods. The customers will be able
to buy Taco Bell products in two ways: Drive-in method in which the customers will have the opportunity
to order food while staying in car, and get the food within two minutes. The other method in getting food
in Taco Bell will be by going in Taco Bell premises and order food.
23
Eurostat.ec (2013) Human resources in science and technology. [online] Available at: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Human_resources_in_science_and_technology [Accessed: 2 Jan 2013].
19
Media
There are different media types available in Switzerland such as TV, radio, newspapers, magazines, and
internet. The daily coverage of these media in Switzerland is as follows: TV 72% , radio 91% which is the
highest coverage of radio in all European countries, newspapers 78%, magazines 96% , and internet with
68%. When the price development of various media types and countries is considered, Switzerland
generally shows a moderate increase, though at a high price level compared to other European countries.
The most massive markdown in price is shown in Great Britain and Italy. In an international comparison
of advertising expense per capita, Switzerland is in front, and in an EU comparison, Switzerland is ahead
of Germany, France and Italy. Below we have the price development of advertising costs in Switzerland,
comparing to some other European countries.24
One of the most well-known advertising agencies in Switzerland is Charles Cannon which offers different
advertising services of a high quality such as website design development, photography and video, and
many other great services.
24
Publicitas. (2009) Media Scene - Switzerland. [e-book] p.8-9. Available through: Publicitas.com http://www.publicitas.com/fileadmin/uploads/swisspress/Medienland_ENGLISCH_Verlinkt.pdf.
20
Market Audit And Competitive Market Analysis
The Product
Taco Bell products are new products which currently do not exist in the fast food industry in Switzerland
and in region. As Taco Bell is a well-known fast food restaurant chain with delicious foods, and it is
based in United States, it gives people the feeling that this fast food restaurant will have a good place in a
modern and well developed country such as Switzerland which is the home of diversity in terms of
population, but also in terms of foods that come from different regions.
Major Problems And Resistance To Product Acceptance Based On The Preceding
Evaluation
One major problem that would cause resistance to product acceptance is that fast food has created
an opinion worldwide that contains different fats and are a cause of overweight. As a result of failures of
many other fast foods in maintaining cleanliness and the healthiness of their food, has created the opinion
that fast food is not clean and healthy at all.
The Market
The first Taco Bell restaurant will be based in Zurich, as the capital of Switzerland. Although German is
spoken in that city, Zurich is the most diverse city, where populations from different cultures live in
harmony. Taco Bell targets people of different ages and both genders. Since Taco Bell will be based in
Zurich, it means that people from this city who travel by Taco Bell or live in this city, will have the
opportunity to have Taco Bell more often, since location plays an important role on making the food of
this restaurant available to Swiss citizens.
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Compare Products With Competitors
The Fast Food sector lacks variety and is dominated by McDonald’s who have very little competition
from international brands. Pizza Hut, Domino’s, Subway and KFC are either not present in the market or
have very little significance All of these restaurant offer fast food similar to the United States. However,
what makes Taco Bell distinct from them are the final products as the main important part of this
restaurant which are distinct in ingredients, taste and preparation from other fast food restaurants in
Switzerland. There are also a few Mexican food restaurants such as L’Hacienda and Juanitos which serve
Mexican food, but still, the great ingredients and preparation of Taco Bell food, as well as the availability
of this food to consumers, make Taco Bell distinct from these small Mexican food restaurants in
Switzerland.
Market Size
The food market in Switzerland is 32.29 billion euros, dominated by Migros with a total sales of food of
9,847 million euros. Switzerland ranks Number 7 in the Top 10 Western European Markets and Number
21 in the Global Market list (IGD, 2008). There are 207 companies involved in the food industry of
Switzerland. While in fast food, the leader is McDonalds with 152 outlets and 45% value share. As a sole
proprietorship of business, Taco Bell as a sole proprietorship business will not be regarded as a Tax
Entity. However, it will have to pay a tax of 9% as a personal income for the owner.
Preliminary Marketing Plan
Marketing Plan
22
Taco Bell’s Mission and Goals
Taco Bell’s mission is to be the leading producer and marketer of fast food in Switzerland. Taco Bell
wants to give people an opportunity to have a tasty fast food that people on the other side of the world
have been enjoying for a long time. Taco Bell strives to offer Swiss people food with natural ingredients
that keeps people healthy while enjoying it. The Taco Bell’s mission statement is: “We take pride in
making the best Mexican style fast food providing fast, friendly, & accurate service. We are the
employer of choice offering team members opportunities for growth, advancement, & rewarding
careers in a fun, safe working environment. We are accountable for profitability in everything we do,
providing our shareholders with value growth.”
During the next five years, Taco Bell seeks to achieve the following financial and nonfinancial goals:
Financial Goals
Obtain financing to expand manufacturing capabilities and make a broader product line.
Increase revenues by at least 20 percent each year.
Donate at least 20,000 eur a year for health campaigns.
Nonfinancial goals
Introduce new products with new spices.
Create loyalty among customers.
Develop a successful Internet site, while maintaining strong relationships with suppliers.
Organize and sponsor programs about offering the community healthy food.
Core Competencies
Taco Bell seeks to use its core competencies to achieve a sustainable competitive advantage, in which
competitors cannot provide the same value to consumers that Taco Bell does. Taco Bell has developed
core competencies in (1) offering a tasty food, which is the most popular in the United States; (2) creating
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a sense of community among consumers who purchase the Taco Bell food; and (3) developing a
reputation among customers that Taco Bell’s food is healthy for them. Taco Bell intends to build on these
competencies through marketing efforts that increase the number of menu items offered.
By forming strong relationships with its consumers and suppliers , Taco Bell believes it can create a
sustainable competitive advantage over its rivals.
Situation Analysis
The marketing environment for Taco Bell represents overwhelming opportunities. It also contains some
challenges that the firm believes it can go through them successfully. A SWOT analysis of the company
conducted to highlight Taco Bell’s strengths, weaknesses, opportunities, and threats is shown below:
SWOT ANALYSIS
Strengths
1.Huge popular brand name and support from Yum!
2. Adopted a healthy trans-fat free formula which is a key competitive advantage over other competitors
who has not yet switched to the healthier recipes.
3.Hygenic food and quick service
4.Good advertising and marketing
Weaknesses
1.High fat and high calorie food not good for health conscious people
2. There is not much awareness about Mexican food in India.
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3. Lost goodwill when some of customers were hospitalized due to traces of E.coli bacteria on November,
2006.
Opportunities
1. Few competitors
2.Introduce home delivery
3.Venture into newer markets
4. New flavors and new recipes specially focused on health friendly ingredients can be introduced.
Threats
1.Threat from other eating joints/restaurants
2. New researches and the raised awareness among the public about the harmful health impacts of fast
food consumption is a threat to Taco Bell’s fast food menus.
3. Highly labor intensive which increases the subjectivity involved in the delivery of services
Collaborators of Taco Bell
Taco Bell will get supplier by Aligro company for the food ingredients. Aligro will supply Taco Bell once
a week and Taco Bell will keep the supplies in its own warehouse.
Another collaborator of Taco Bell will be Zidan Printing company which will supply Taco Bell with food
packaging materials, such as paper boxes and paper bags.
Competitors Of Taco Bell In Fast Food Market In Switzerland
Until 2011, McDonald’s remained the clear fast food leader. With 152 outlets by the end of 2011, the fast
food chain operator held a 45% value share. The multinational has managed to create a strong network of
25
both company-owned and franchised outlets over the Swiss territory. Second ranked player, Burger King
held a value share of 2% and operated 26 outlets in Switzerland in 2011.
While all of the companies listed earlier can be considered competitors, none offers the kind of food that
Taco Bell does, the well-known Mexican food prepared by a well-known chain restaurant established in
the United States. In addition, most of these competitors sell pretty much the same products (hamburgers,
fries, etc).
The Target Market
The target market for Taco Bell’s products is active consumers between the ages of 16 and 50—people
who like to eat tasty food, who do not have issues with over-weight, and who want to try new tasty foods.
These consumers represent a demographic group of individuals; they are single or married. Household
incomes generally range between 100,000 and 150,000 CHF. Despite their comfortable incomes, these
consumers are price conscious and consistently seek value in their purchases. They like to be associated
with high-quality products but are not willing to pay a premium price for a certain brand. Taco Bell
targeted customers mostly live in Zurich. However, one future goal is to target consumers in the other
parts of Switzerland.
The Marketing Mix
The following discussion outlines some of the details of the proposed marketing mix for Taco Bell
products.
PRODUCT. Food products of Taco Bell are a popular Mexican food rich of spices and sauces which
give it a great taste. Taco Bell in Zurich in the beginning will offer food products such as Tacos, Burritos,
Gorditas, Salads, and Nachos. Taco Bell products will offer the customers a unique taste that they cannot
get in other fast food restaurants in Switzerland. After Taco Bell is introduced to Swiss people, then it
26
will introduce new specialties of Taco Bell restaurants. The great taste of other food products, will be an
incentive for people to try what Taco Bell is bringing in.
PLACE. Taco Bell will be located in a convenient place, in the outskirts of Zurich, Switzerland. The
franchise will be located near the main road, which is very frequent in traffic and people walking. This
location would be convenient for both, customers, but also it would be convenient for the company, since
it is easier and costs less to buy land in the outskirts of Zurich than in its center.
Location in which Taco Bell will be built (Zurich, Switzerland)[Google Maps]
PRICE. As discussed earlier in this plan, Taco Bell products are priced with the competition in mind.
Since its products will be new to Swiss customers, Taco Bell will use the penetration pricing strategy for
setting its prices. Penetration pricing is the act of setting the initial sales price far lower than what the
normal selling price would be in order to infiltrate the market. The goal behind penetration pricing is to
appeal to a broader audience and increase market share.
PROMOTION. Taco Bell will communicate with consumers and suppliers about its products in a
variety of ways. Information about Taco Bell—the company as well as its products—will be available
via the Internet, and direct mailings. The firms’ promotional efforts also seek to differentiate its products
from those of its competitors. The promotions aspect of the marketing mix covers all types of marketing
communications. Taco Bell will use Yum!’s support on promotion and advertising as well as will strive to
27
meet its requirements. Advertising of Taco Bell is conducted on TV, radio, cinema, online, poster sites
and in the press (newspapers, magazines). There will be also sales promotions, games, loyalty schemes,
etc. The purpose of the promotional campaign will be to increase awareness to people that a new popular
fast food restaurant franchise is coming in their country which offers a tasty food that can barely be found
in Europe.
Promotional Mix
1. Advertising - Advertising of Taco Bell in Switzerland will be done through television, radio,
billboards, catalogues, in store displays, and web pages. Advertising will also be done by sponsoring
campaigns for healthcare, which can give Taco Bell a positive image about their commitment for healthy
food.
2. Personal Selling - When customers stop by in Taco Bell to eat food, as workers serve the food in
their tables, they can ask the customers if they want anything else and show other food items in the menu
that they can order.
4. Sales promotion – Taco Bell will organize different contests where its product will be exhibited. For
example, it will organize a music contest, and the winning team will win a prize. The audience, as well as
the competing teams will get to buy and taste Taco Bell food items. Taco Bell will also give premiums to
particular groups of people, for example to students.
6 Exhibitions: Taco Bell will organize exhibitions or tours where a Taco Bell truck will travel through
Zurich and give samples of tacos or other food items for free for people to try.
Methods Of Payment
Payment in Taco Bell can be done in two ways:
1. Cash method of payment
2. Credit/debit cards method of payment
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Pro Forma Financial Statements And Budgets
Taco Bell
Income Statement
Proforma statement (000)
As of December 31, 2013 & December 31, 2018
Revenue 2013 2018
Sales
1,455,000
2,030,008
Cost of goods sold
465,600
595,600
Gross Profit 989,400 1,434,408
Operating Expenses
Advertising Expense
24,000
15,000
Recuritment and Wages Expenses
21,246
21,930
Rent Expense
78,000
80,000
Electricity Expense
7,200
7,600
Water Expense
9,200
9,900
Insurance Expense
12,000
12,000
Office Supplies Expense
2,300
1,000
Salary Expense - Administrative
5,300
5,600
Depreciation Expense - Office Furniture
1,875
2,000
Depreciation Expense - Office Equipment
3,650
3,900
Total Operating Expenses 164,771 158,246
Other expenses
Taxes (9%)
14,829
14,242
Interest Expense
5,280
5,400
Total other expenses
20,109
19,642
Net income before taxes
804,520
1,001,512
Net income after taxes
732,112.85
1,108,375.79
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60%
30%
10% Bank loan (4%interest)
Owner
Friends &Family
€ 350,000
€ 520,000
Franchise fee
Liquid cashavailable
As Taco Bell makes new customers and its sales increase, in five years, its net income after taxes will
increase for at least 48%. The high revenue on the first year of operating, will come as a result of
people’s interest to enjoy Taco Bell foods.
Resource Requirements
The franchise fee for Taco Bell is 350,000. Yum!
requires the franchiser to have 520,000€ of liquid cash
available in order to launch and operate the business.
So the total cash needed is 870,000€. 60% of this cash
will be taken as a bank loan with an interest rate of 4%.
30% will be provided by the owner. 10% will be
provided by friends and family.
0.00 €
500,000.00 €
1,000,000.00 €
1,500,000.00 €
2,000,000.00 €
2,500,000.00 €
2013 2018
Net income
Sales/Revenue
30
Human Resources Plan
Enter cost of benefits as a percent of salary 5.00% Monthly
Title Position Salary
Number of People
Manager 1,200 € 1
Administrative assistant 900 € 1
Hosts 600 € 12
Servers 500 € 5
Dishwashers 500 € 3
Bussers 500 € 3
25
As required by Yum!, Taco Bell will have 25 employees in total and the average salary will be 740 euros
per month, plus 5 percent benefits. With this personnel, Taco Bell will have the capacity to make food
very quick for its customers. Production capacity of Taco Bell will be 2.70 products per minute, which
would be 1,400,000 units produced annually.
Conclusion
Taco Bell in Switzerland has the potential to become a the top fast food restaurant in the local and
national fast food market. Due to the company's aggressive marketing strategy, establishment of the
company as a "unique" type of restaurant in this country, Taco Bell has the potential to provide lucrative
returns to the potential investor.
For Taco Bell to achieve status as a fast food leader, it must secure initial capital. This capital will be
used for start-up costs, and to further develop the business, business infrastructure, internal systems,
product development, and extensive marketing and geographic positioning. Providing that the company
is able to acquire its funding requirements, Taco Bell should be able to achieve its operational success for
many years to come.
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