SBU for Fritolays

8 August 2016

As a leader in food industry, Frito-Lay developed many strategic business units (SBUs) for its succeed. Each SBU has its own individual managers, resources, mission statement, target market and competitors. A good SBU should respond customers’ demand quickly and effectively, while big organization has the lag of decision making. The following factors which I believe that make Frito-Lay as a successful snacks provider.

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First, Frito-Lay has lots of brands, however, none of them produce similar products. For example, Lay’s provides classic potato chips and Dorito’s has unique flavor tortilla chips which Frito-Lay has various product differentiation for customers to select. In addition, large product differentiation creates large competitive edges. It gives a clear advantage over the competition in terms of one or more elements of the marketing mix that is valued by potential customers(Pearson).

Second, Frito-Lay continues to innovate new flavor chips for its whole brands. For example, Lay’s developed some special flavors for Chinese market. Also during the summer time, Lay’s has lime, tomato, cucumber flavors. Innovating new flavors and tastes are the key factor for outstanding in this industry.

Third, Frito-Lay keeps and develops a global market. From North America to East Asia, we can find Lay’s chips in everywhere, Walmart, 7-11 or Family-Mart in Shanghai. Frito-Lay has the chance to sell its products for large revenues in this global market.

Fourth, advertising strategy is one of the successful factors Frito-Lay using for the last decades. We can easily find a Lay’s commercial during Super Bowl, and most of them are very impressive and funny which reminds people Lay’s is the number one chips maker for customers and potential customers.

SBUs help company to adjust and correct the existing marketing strategies by SBUs’ feedbacks from customers, marketing operations and reactions of competitors, for resulting to keep whole company grows in a high rate.

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