The overlap between the IT strategy and Frito Lay business strategy
Before the admission of Michael Jordan, Frito Lay followed the traditional way of decision-making. A business strategy for the company defines all areas in an interrelated manner where one area is expected to influence and be influenced by another. A business strategy aims at improving the operation of the company (Harvard Business School, 2001). It aims at defining the corporate vision and ensuring that it is applied at the corporate-wide level over the traditional departmental level. It targets an inter-functional approach. IT strategy is focused on using information and technology systems for automating operations in the company for better results. It aims at the collection of data and analyzing it for better decision-making. It is intended to integrate and leverage micro-management strategies. All systems in the company can be well managed and controlled using systems set for this task. For example, inventory and supply chain management are integrated to ensure that there is the timely ordering of materials when required.
The overlap between the IT strategy and Frito Lay business strategy is on their scope. A business strategy covers the needs of an IT strategy. Thus, IT strategy is a small part of the larger business strategy. Their interrelations occur when the IT strategy is not functioning well, where a business is not likely to meet its targets, and thus it fails in the business strategy. On the other hand, there are chances that a business can have a good IT strategy but fail in business strategy if the strategy is not fully supported. Thus, a business strategy is a totality of all processes, but an IT strategy is one form of business strategy.
Related elements between IT strategy and corporate strategies at Frito Lay
- Both IT and Corporate strategies aim at attaining high efficiency in a business. This is attained by aligning business processes to fit the current and future requirements of a business.
- Both the systems are dynamic and should be developed and reviewed with time. Change in the business environment call for improvement and constant reviews.
- They both need to be supported by top management; they should be at the forefront in implementation and monitoring either of the systems. This does not mean that they should impose employees on them, but it means that they should be actively involved and collaborated with for its fulfillment.
Seven key components of Frito Lay’s plans that must be reviewed
There are a number of systems that need to be reviewed in Frito Lay’s business plan. These are systems that could bring a competitive advantage to the business. They are;
- Information and technology systems
- Vision for change
- The company needs an effective internal control mechanism
- There is a need to develop good supply chain management systems
- Manufacturing strategies
- Sales and corporate marketing, and
- Product development
The selection of each key component of Frito Lay’s plan
Information and technology systems
The company needs to develop systems that could offer information for making decisions. The traditional way of using management insights to make decisions is not acceptable. The internet, which sometimes is used as a tool to get information, gives only general information about something but offers limited intelligence for decision-making. When information and communication strategies are implemented in Frito Lay, the company will get quality and reliable information necessary for strategic decisions.
Vision for change
There are some areas that had previously been recommended to be changed for the good of the organization; however, the changes were not implemented. The reason for this is vested in the organizational culture of the firm, which does not embrace change.
The company needs an effective internal control mechanism
These are systems that could ensure that all processes are looked into and addressed accordingly. Decentralization of decision-making is also crucial. Internal control will facilitate the recognition of areas of inefficiency as well as areas that require improvements. Efficiency and effectiveness can be attained through adequate internal controls.
There is a need to develop good supply chain management systems
These systems can assist the business to have a just-in-time supply, avoiding expenses and loss out of holding stocks and being out of stock. Supply chain management is the control of all the processes involved in the production of goods and services to ensure that the end customer derives the anticipated expectations. It starts from the raw materials to work in progress, storage, and finally, the delivery of the finished products. It is a management tool. The aim is to ensure that quality goods are produced and delivered to the customer when they need them, efficient system, and better the quality and services to the customers. It is not one department’s work, but it involves the entire team to be able to join hands and satisfy the customers. The purchase department, for instance, makes orders according to the demand of goods by the internal customer.
They need to be changed to ensure that they make products that are responsive to the need of the customer. There is no point in having a manufacturing department that produces goods that are either substandard or outdated. This is a strategy to have the business regain its competitiveness.
Sales and Corporate Marketing
When marketing products, the company requires to be strategic and ensure that it reaches its market segment effectively. Customers are the backbone of the company; the main decision that a marketing manager should make is determining his company’s market segment. A market segment is a homogenous subset of the main market, which shares similar characteristics that make it demand similar goods. A segment is also stimulated by similar innovations. After developing a marketing segment, the next step is to develop mechanisms to enable sell in the target market. One of the ways to enter the target market is the marketing mix. An effective marketing mix ensures that goods are available to the target customer at an affordable rate.
The company needs to be creative and innovative to ensure that it is competitive in the changing markets. Increased awareness among customers and the rise of healthy eating habits (among others) call for increased diversification in the firm’s offerings to the different market segments. These segments must be carefully selected. Besides joint marketing and public relations, Frito Lay must draw on its chain operators, allowing them a level of product flexibility to suit the fast-changing demographics and varied local tastes. This should, however, be controlled to see to it that the quality and standards of the organization are met, and this could be accomplished by sending out teams of quality auditors to the company’s departments to review them. Product differentiation is particularly crucial during the economic recovery when inflation rates are low, thus limiting the ability of firms to pass on costs to consumers. This effectively limits price competition and instead increases product competition (Fred, 2008).
Strategies that would be an effective way to communicate plans to executives, senior management, and team members if used at Frito Lay
Business communication is vital for success in all businesses; success in this context means being able to accomplish a particular task or to achieve a specific objective. Good business communications in relationships either with fellow staff or customers is needed in order to prosper. Business success can be measured in terms of the practicability of business relationships, which is directly proportional to the quality of communication. It is the system that ensures that top management and directors get in touch with what is happening on the ground for an informed decision. An IT system can be used by Frito Lay to this effect. This is by use of the intranet to convey information from the people on the ground up to the top management. To have a good intranet, it should be designed in such a way that there are checks and balances to control information. Other than delivering the messages, managers should ensure that they involve junior staff in some decisions. Some of the strategies that can work to facilitate good communication are;
- Having smaller units that are handling certain issues. In the case of Frito Lay, Michael called them area business teams
- Interact with employees and customers not only at the corporate or business level but also at the social and individual level. This would assist in creating good communication networks.
- Developing a freelance organizational culture is a culture that aims at facilitating communication in an organization. Employees are given the freedom to air their views and contribute to the good of the organization.
- Decentralization of decision-making in Frito-lay assisted in ensuring that every employee is involved in making strategic decisions. A bottom-up approach could work for the company.
Strategies that would be an effective way to communicate plans to executives, senior management, and team members if used at Frito Lay
Smaller management units
These units will be able to communicate and recommend changes in their area of operation. When this is done, it will give the information to the team leader who sits in a higher level team, say a team of segment heads. When at the team, he will discuss with others issues raised by their team; two things can happen. At this level, they can look for a solution to problems on the ground from different experiences or recommend the same to a higher level. The process continues until the best person to handle the case is reached. With this, top management will get information on the ground and assist them in decision-making.
Interact with employees and customers
When management and employees interact with each other, they develop interpersonal calls well enough that they can share business information at a more relaxed level. One of the hindrances to effective communication in a company is fear among employees and management. Employees feel belittled by high-flying managers whom they don’t interact with unless they are receiving orders. When an outside interaction is done, the tension existing between management and employees will ease.
Developing a freelance organizational culture
Freelance organizational culture facilitates communication within an organization. It aims at ensuring that a manager can listen to the views of his juniors, and the opposite is true. It’s the opposite of dictatorship management. When such a culture is adopted, an organization will facilitate good communication and flow of information from junior staff facilitated.
Decentralization of decision
When decisions are decentralized, the organization will have a bottom-up approach to decision-making. Issues that are affecting a business will be recognized from the bottom. With such an approach, the management will know what the organization needs for its success. When decentralizing, decisions will flow from the real problems affecting the business to having a problem-based solution (Collis and Rukstad, 2008).
Information about plans presented to information technology staff
Information staffs are the people on the ground who takes raw data from the field. They are the ones who give the first response on how the business is operating. Raw information does not have any order or reference for the managerial decision but needs to be interpolated for decision-making. When the system and data processing staffs analyze the data, they then convey it to top management as refined data. Execute staff in a well-framed organization gets a background of a case and recommendations from their juniors. They may not get the massive data about the happenings in an organization but get refined data about a problem.
A framework that will support an IT strategy to support Frito Lay’s business strategy
For success in IT strategy, the company should use a star topology connection. Star topology adopts a system whereby there is a central server where all the other users are connected. It has a current-like connection whereby when one transmission line fails. It does not affect the other connections. There is a central server that has information for the entire organization but can be accessed through different terminals and controlled using rights of access. There are various advantages that are associated with this topology that make me prefer it over the others. They include better performance; – although the topology is made in such a way that the transmission line is dependent on the central server, with a high capacity server, it can serve a high utilizing device without affecting the others. With this, it separates one system from the other, and non-centralized failure cannot affect a well-functioning connection. Secondly, the topology gives the benefit of centralization; this is because it allows for other devices to be connected to the system without affecting the other networks. On the other hand, it is easy to follow a certain link from the central point and establish the area of weakness, if any. It is a straightforward way to connect and wire. When adding or removing a connection, the other connections are not affected. The topology has some disadvantages though the topology is highly dependent on the hub or the central server. The failure of the hub affects the entire system. It is also dependent on the capacity that the hub can handle at one time. If the devices are highly utilized, the system may be slow in the process. The disadvantages can be mitigated by using a high-tech hub depending on the need of the organization.
Recommendations for how IT could/did assist Frito Lay business units in developing strategy and complementing the requirements of other departments
The organization should have a computerized supply chain management system. This is a system that will ensure that the procurement department is up to date on the material requirement in an organization. It ensures that there is continuous production at all times. Any risk that can make production stopped as a result of lack of material is reduced. A well-planned management system is one that ensures that there is a continuous supply of materials to the factory. By doing this, it ensures that all the machinery has been effectively utilized and they are utilized to their maximum. The labor does not lie idle because, at any one time, there is something to be done. The above advantages bring with their efficiency in the system. This leads to increased customer satisfaction. The stock reorder level is well maintained to ensure that raw materials are ordered and delivered at the right time. Maximizing the assets and human resources is only attained when the company is operating at all times.
Develop knowledge management mechanisms; – these mechanisms will assist the company taps its intellectual asset. When an organization is able to utilize the talents that its employees are blessed with, then it is likely to be successful. Knowledge management also involves the use of market data to make sound decisions in a firm.
Develop a business intelligence mechanism. Business intelligence tools are crucial to a business as they help in collecting data for making various specific decisions. These decisions will be from an informed point of view and will help management in making an informed decision. When developing the tools, information from customers should also be considered as it offers an insightful evaluation of a business and assists in managing it effectively.
As a matter of managing risk and ensuring that the business takes advantage of opportunities brought about by the forces in the market, the company should embrace a rapid response strategy. This is in all departments. For example, there may be an expected increase in the demand for goods and services offered by Frito Lay; this may be as a result of a visiting head of state. This is a chance that the company can cash in a lot of money. But under a just-in-time system, it may fail to meet the demand. A rapid response comes for the rescue of the company in such a case (Camillus, 2008).
Camillus, J.C. (2008). Strategy as a Wicked Problem. Harvard Business Review 86(5), 98-106
Collis, D.J., & Rukstad, M.G. (2008). Can you say what your strategy is?” Harvard Business Review, 86(4), 82-90
Fred, D. (2008). Strategic Management: Concepts and Cases. New Jersey: Pearson Education
Harvard Business School. (2001). Frito-Lay Inc. A Strategic Transition, 1987-1992. New York: McGraw-Hill