Student Anaylsis on FritoLay's Dips - Essay Example

Frito-Lay's capacity to realize this strategic objective is predicated on the company's ability to accurately identify the relevant strategic issues, understand the challenges to the realization of this goal, and analyze and evaluate its position. This report shall do just that, concluding with a set of recommendations. Frito Dips has been a major player in the salty snacks market with 33% market share. It is North America's largest and most popular snack food manufacturer, and controls a good third of the salty-snack market.

Its position in the dips market, however, is unstable. This is largely because of the reputation of its competitors, which include Borden and Kraft, not to mention several local companies who are also determinedly trying to capitalize on the popularity of cheese dips' market. The fact is that the reputation of both Borden and Kraft in the cheese dip market function as an immediate obstacle to Frito-Lay's capacity to realize its strategic objective vis--vis the cheese dips' market. Considering Frito-Lay's supremacy in the salty snacks market and its status as an untested brand in the cheese dips market, several questions impose themselves upon us.

As the company has enjoyed a solid profitability base, the question that now arises is how to sustain profit levels in the dips category The major problem lies in how to develop Frito Lays dips and capitalize on the new shelf stable sour cream based dip to maintain the high growth rates the company has achieved in recent years. Would the best future strategy be to pursue an aggressive promotion in the market for the chip-dip category which appears to be reaching saturation levels or develop the vegetable-dip category, which requires the development of new modes of marketing and entry into a hitherto unfamiliar market Indeed, the question is whether or not entry into segments of the snack food market where Frito-Lay does not have the consumer-base its competitors do and which already appear to be highly saturated is wise.

If there are profits to be accrued and a market segment to be capitalized upon, should Frito-Lay, Inc. seek entry into the cheese or the vegetable dips' markets Answers shall be provided in the form of recommendations, following a critical evaluative analysis of the market and Frito-Lay's position therein.Analysis and evaluation:The popularity of dips in general, as accompaniments to snacks and vegetables has grown in recent years. The vast majority of sales, however, estimated at 80%, occur through supermarket outlets, in addition to which, 45% of available dips are of the shelf stable variety.

Out of the total $650 million in annual sales for all types and kinds of dips, the latter accounts for $185 million. Two-thirds of the available dips are the prepared, ready-to-serve, variety while the remainder is comprised of different kinds of dip mixes to be prepared at home. Sour cream based dips are most popular, accounting for 50% of total sales. The popularity of Mexican foods