Forecasting: Brand expansion strategies
Like two ships passing in the night, Arby’s is introducing a value menu strategy (Taco Bell’s core competency) while Taco Bell is introducing a strategy that will focus on high quality, premium priced menu items (arguably, Arby’s core competency). The successful implementation of these strategies — particularly for one brand — will be extremely challenging. Consumers demand value, and operators require profitability, delicate equilibrium (referred to as menu value) that is often contradictory and elusive. So which one will be a hit?
Let’s look at Arby’s value strategy first, followed by a dive into Taco Bell’s move toward premium tomorrow.
Arby’s Value Menu
Arby’s is currently rolling out a nationwide Value Menu with seven items priced at $1 each. In Southern California, where the Value Menu has not yet been introduced, there is no ‘center of plate’ menu item priced below $2.99. Wow!
Does Arby’s need a Value Menu? Absolutely. Can Arby’s successfully introduce a Value Menu at $1? Maybe … but it won’t be easy.
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