Frito-Lay

Table of Contents

Purpose and Overview 3

Analysis of Our Past and Current Situations 3

External Opportunities We Could Exploit 4

External Threats That May Impeded Success 4

Internal Strengths on Which to Capitalize 5

Internal Weaknesses to Overcome 6

Assumptions on Which the Strategies are Based 6

Marketing Strategies That Emerge from the SWOT 7

Summary and Request for Action 7

References 9

Case Analysis of Frito-Lay Company

Purpose and Overview

Frito-Lay’s net sales of over 8 billion dollars in 1985 amounted to a 190% increase in sales growth from 1981 (Kerin, Peterson, pg.131). This success leads the company to a major issue of how the company can be further developed. The company’s options lead to two different viewpoints. The first is the chip dip category or secondly, the newer vegetable dip category.

Analysis of Our Past and Current Situations

Frito-Lay is a nationally recognized leader in the marketing and manufacturing of salty snack foods. The company began introducing dips in the 1950’s as a complement to the chip market. Frito-Lay has introduced many other cheese type dips to add to their product line due to the increase popularity of Mexican food. In 1986, its first sour cream-based, shelf-stable dip was introduced as an accent to the company’s potato chips (Kerin, Peterson, pg. 134).

Currently, 33% of dip sales are linked to vegetables. Only one fourth of the dollar volume is associated with vegetable dipping with relatively no major competitors in this market area (Kerin, Peterson, pg. 141). Furthermore, research has indicated that sour cream-based dips are the most popular dip type (Kerin, Peterson, pg. 132). With an increased trend moving to healthier eating options, an increased preference for vegetable dipping would exist. Promoting this market area would strengthen an already strong market growth of 18% in this segment (Kerin, Peterson, pg. 132).

Following are the internal and external factors affecting the market opportunities for Frito-Lay. Strengths, weaknesses, opportunities, and threats (SWOT) serve as the basis for identifying appropriate marketing strategies for Frito-Lay.

External