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Part 1 of Final - Brief Historical Overview of the Industry...

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Brief Historical Overview of the Industry PepsiCo’s restaurants consisted of Pizza Hut, Taco Bell, and KFC and operated within the foodservice/quick-service restaurant industry. At the time of the case, the economy was experiencing a recession caused by an increase in industrial production and manufacturing sales. Fortunately, industry analysts were predicting a favorable growth in operating profits for Taco Bell, Pizza Hut and KFC. The National Restaurant Association (NRA) estimated that the industry would experience two percent growth and there would be an industry first of quick- service restaurants surpassing full-service restaurants. In 1991, the foodservice industry had sales of $250 billion dollars and expected sales to double within the next ten years. In 1989, PepsiCo’s competition, Coca-Cola, created an advertisement campaign which ultimately resulted in the loss of two PepsiCo buyers, Burger King and Wendy’s. Coca-Cola’s campaign identified PepsiCo as their toughest competitor and asked their customers “why would you want to help of our toughest competitors?” ( citation
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Part 1 of Final - Brief Historical Overview of the Industry...

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