Strategy Memo for Case 2-2, James S. O'rourke

Date: August 24, 2014
To: Ms. Laurie Gannon, Public Relations Director
Copy: Confidential to the file
From: Esmira Gheisary, Consultant

Backround: • Taco Bell is a quick-service restaurant concept and operates in a very competitive climate. Was founded in 1962 by Glen Bell. • Kraft Foods Inc., is the largest food and beverage company in North America and the second largest in the world. Was founded in 1903 by James L. Kraft. • On August 1, 1996, Taco Bell and Kraft announced the formation of a license agreement for Kraft to manufacture and distribute Taco Bell-branded taco shells in grocery stores. • Taco Bell branding may be damaged in public perception because their Taco Bell-labeled taco shells sold by Kraft Foods Inc. might contain a corn ingredient unapproved for human consumption. • StarLink, developed by Aventis (a world leader in life science), is a genetically modified strain of corn engineered to produce a toxin to ward off crop-harming pests. This toxin is actually called «Cry9c» which is made only for commercial use as animal feed. • Nongovernmental organizations (widely known as NGO's) publicly rallied against those who support the use of genetically modified ingredients. They conducted a series of tests on 23 of the leading corn-based foods, including the Taco Bell Home Originals taco shells, which contained the «Cry9c» protein. • Kraft announced a voluntary recall of its entire line of Taco Bell Home Originals taco shell and taco kits. • Although Kraft has pledged to discontinue production of taco shell products, the recall does not include any products sold in Taco Bell restaurants. • A group known as «Friends of the Earth» would run an article in the Washington Post about the taco shells and hold a press conference which can lead to negative media