TACO BELL & CRISIS MANAGEMENTBy: Courtney, Jaime, Stephanie, Kaitlyn, Lauryn and Dave

Discussion

Dave- Brief history and timeline

Kaitlyn- E. Coli outbreak

Stephanie-Crisis Management & E. Coli

Lauryn-Rats in Greenwich Village

Jaime- How TB/YUM Brands dealt with the rat crisis

Taco Tia to Taco Bell:An empire in the making

1954-55: Built three Taco Tia 1956: Sold to partner and started El Tacos 1962: First Taco Bell 1964: First franchise sold 1969: Publicly traded 1975: Bell resigned as CEO 1977: First Taco Bell overseas 1978: Bell sold to PepsiCo 1997:Ownership transfer (Tricon Global)

Taco Bell 2009 Serves two billion annually

5800 restaurants

Employs 178,000

1.8 billion in revenue in 2005.

Current president/CEO

The Outbreak

What is E. Coli

Effects of E. Coli

Affects 73,000 Americans annually, kills 61

Taco Bell -largest outbreak in the North East in years

The Outbreak

Taco Bells are closed in NJ, NY, PA, DE

December 2006: McClane Food Services

Illness from outbreak varied

(hemolytic uremic syndrome)

December 2006- Centers for Disease Control

New “re-sanitized” Taco Bell

E.Coli PR Disaster

Delayed response to crisis. YUM! Brands CEO cancelled appearance on

MSNBC December 5th to address issue. Press release dated 5 days after crisis occurred

Responded when crisis was “over” Message from Greg Creed

www.tacobell.com Our company > latest news > 12/14/2006

Analyzing Greg Creed

Lack of facial expression Looks rehearsed, but not genuine

Foreigner, makes him unreliable to audience Distance between audience and company Does he eat Taco Bell products?

Strengths

Changed produce suppliers

Shut down all infected locations for 24 hours. Stores were sanitized and inspected by local

health departments.

Customer support line: 1-800-TACO BELL

The Take Over

Rats invade Greenwich Village

February 2007- citizen journalism

Employees confirm rat infestation

http://www.youtube.com/watch?v=su0U37w2tws

The Takeover Contd.

Health Department – closes Taco Bell indefinitely

QRS magazine reports on the “truth”

After sanitizing the store owner makes statement.

“We want to assure our customers that nothing is more important to us than food safety and their health” (Minnick)

How To Make a Comeback

The importance of Health Codes in Food Co.

Social Media spreads news quickly ( blogs/google articles)

1000 blogs/ 600 posted stories

YUM! Brands did not respond quickly enough

Time to Act!

Food Franchises must respond better to crisis’

Press Release statement – “There is no immediate threat”

Consumers reactions – “actions speak louder then words”

Taco Bell’s Reputation- saved or still hurt?

Quotes

There’s nothing more viral on the negative side than rate”, said Pete Blackshaw, chief marketing officer.

Nielsen Buzzmetrics. “In the world of fast food, hygiene is the number 1 driver, and rats take it to the food hygiene on steroids level. Rats are Defcon 5.”

Conclusion

Taco Bell – Crisis management grade

Fast Food Franchises- Must Attend to Crisis’ Immediately!

Bad Reputations die hard

Class Discussion and Questions