Pollo Campero's Best Management Practices. Introduction to Management in Latin America


Seminar Paper, 2015
18 Pages, Grade: 1,0

Excerpt

TABLE OF CONTENTS

1. Introduction

2. Institutional, cultural and organizational context
2.1 Institutional context
2.2 Cultural context
2.3 Organizational context

3. Practices in Guatemala, the U.S.A. and Latin America
3.1 Practices of Pollo Campero in Guatemala
3.2 Practices of Pollo Campero in the U.S.A
3.3 Practices of Pollo Campero in Latin America

4. Impacts of the best practices on the stakeholders
4.1 Impacts of the BMP’s on the Gutierrez Family
4.2 Impacts of the BMP’s on the franchise owners
4.3 Impacts of the BMP’s on the employees
4.4 Impacts of the BMP’s on the clientele

4. Conclusions
4.1 From a German perspective
4.2 From a Mexican perspective

5. Appendix

6. Bibliography

1. Introduction

“To provide the best chicken-eating experience to our customers, delivering profitability for our partners (shareholders, franchisees, suppliers), and continued development for our collaborators, while maintaining social responsibility in our community.”

- Pollo Campero mission statement, 2007.

This research project discusses the best management practices of the Guatemalan restaurant chain Campero International, S.A., operating as Pollo Campero (PC). The firm does not consider itself as a typical Latin restaurant chain; the menus are mainly prepared with spicy ingredients.1 The entity acts in different places of the world, 50 of its 300 restaurants are located in the United States. Referring to the Hispanic Business Magazine, the overall average sales of the U.S. restaurants achieve a $1.9 million per average. PC avoids the terminology “fast food” and describes itself instead as a family dining restaurant chain.2

Best Management Practices (BMP) are the most effective methods or techniques regarding achieving an objective, while making the optimum use of a firm’s resources. The information for this paper has been obtained from the company’s web page, the case we got in class, different sources from electronic libraries and several web pages. The institutional, cultural and organizational context in which the best practice is implemented will be described as well as the company’s best practices. This paper will focus on Pollo Campero’s best practices in Guatemala, the U.S.A. and Latin America. The impact of the best practices on the stakeholders will be analyzed. The research paper will end with our own conclusions in terms of our cultural backgrounds: Germany and Mexico.

2. Institutional, cultural and organizational context

2.1 Institutional context

While a lot of multinational companies still struggle to enter into the Latin American market and withdraw from the region due to unstable political and economic conditions, many Latin American companies have proved that they have less problems operating in their own countries.3 Unpredictable markets and corrupt political environments are equated with knowledge of local customers and their familiarity with institutional realities. At PC the company is led in third generation currently and this is a sign that the firm adapted to this environment as well.

According to the World Bank, Guatemala was able to strengthen its demographic institutions in recent years. Crimes as drug trafficking, corruption and grossly inequitable distributed resources and a homicide rate of 34 per 100,000 people make Guatemala one of the most dangerous places in the world today.4 The dangerous environment on its home-turf might also be an advantage for PC regarding competition with international companies because it is highly unlikely that well-educated managers from the U.S.A. are interested in working in this kind of environment.

2.2 Cultural context

Guatemala is a country of mixed ethnicities with indigenous inhabitants, former Europeans, who arrived in the second half of the nineteenth century, and an increased immigration from China, Japan, Korea and the Middle East. It covers an area of 42,042 square miles and has a population of approximately 10 million inhabitants. It is located in Central America and has a border in the north and west with Mexico; on the east with

Belize, the Carribean Sea, Honduras and El Salvador; and on the south with the Pacific Ocean.5

People in Guatemala consume corn made into tortillas or tamales, black beans, rice, and wheat in the form of bread or pasta on a daily basis. People who are considered as wealthy added fast-food in the recent decades to their eating habits.6 PC is profiting from this development, because the more people eat quick-made food on a daily basis, the higher is the amount of potential customers for them. The change of the eating habits is also a likely reason for their growth. In Guatemala there are six universities, none of them is considered as comprehensive.7 This is a disadvantage for PC, because it makes the hiring of new managers more complicated.

2.3 Organizational context

Guatemala has as every Latin American country a complex political and social- economical context: strong dependence on external resources, limited instruments for substantive support from headquarters to the country office, frequent changes in the senior management of the country office as well as limited mechanisms at the country level to introduce greater continuity in the achievement of its strategic objectives beyond government cycles.8

3. Pollo Campero’s best practices

According to Oxford Dictionaries, best practice is described as: “[c]ommercial or professional procedures that are accepted or prescribed as being correct or most effective“.9 So what have been Pollo Campero’s best practices? Pollo Campero started out as a small family business in 1971, and grew to a big global company with estimated revenues of nearly US$450-million in 2007.10 Clearly, the company must have used several best practices in order to have been able to become such a big multinational player. In this paper, we will focus on the best practices the company was using in their home market (i.e. Guatemala) and the U.S. market.

3.1 Best practices in the Guatemalan market

Starting at the end of 1974, Pollo Campero “experienced slow development as it faced fierce competition by a group of cafeterias selling from fried chicken to hot dogs and soft drinks”.11 In 1982, however, things started to change. This year marked the take-over of Juan José Gutiérrez, who soon combined the company’s operations and also reorganized the firm into a single entity, which made it more competitive.12

As of 2010, over 112 Pollo Campero restaurants can be found in Guatemala.13 The successful expansion of the company in Guetemala can be attributed to “building a network of outlets through direct investment”.14

So which are the additional reasons why Pollo Campero could grow so much? The company has been tied to its Guatemalan roots right from the start, which Casanova and Hoeber describe as the firm’s “most important and valuable asset”.15 Casanova and Hoeber also ascribe Pollo Campero “four essential attributes”.16 The first essential attribute is the strong emotional bond the company has with its home country. Pollo Campero is making good use of these strong ties, which becomes apparent in the slogan the company uses to attract local clientele - “As Guatemalan as you”. Secondly, Pollo Campero has been known to have a successful CSR strategy, which gave the company the reputation of supporting the Guatemalan people even during hard times. Thirdly, the company effectually joined various segments of the market, i.e. people of various ages and with different social and ethnic backgrounds enjoy eating at Pollo Campero. The firm has put the idea of catering to several different market segments into the slogan “Campero is for everyone”. Finally, the company’s fourth essential attribute is the pricing of its products - it provides “an attractive price-performance ratio” .17

Wrapping up, the best practices Pollo Campero used in Guatemala were the following:

- combining the company’s operations
- reorganizing the firm into a single entity
- building a network of outlets through direct investment
- being tied to its Guatemalan roots
- strong emotional bond with its home country
- successful CSR strategy
- joining various segments of the markets
- attractive price-performance ratio

3.2 Best practices in the Latin American market

When third-generation successor Juan José Gutiérrez took over Pollo Campero in 1982, he restructured the firm into a single entity. Pollo Campero became famous for providing high-quality food that is served quickly, offering customers table service, takeout, drive-in and home delivery. PC is part of the conglomerate called Corporación Multi Inversiones (CMI) and thanks to this receives financial support that enables the company to build an integrated network of operations with continuous acquisitions such as the Costa Rican integrated poultry farmer Propokodusa.

To better adapt to the Latin American market than their competitors, PC has dishes in its portfolio that are typical for Latin America, for instance tortas and sincronizadas in Mexico. Also other dishes on the menu have a strong Central American touch: burritos, salads and marinated, broaded and fried chicken as a core product. Although the company does not consider itself as a fast food chain, it has the big fast food chains like McDonald’s or Burger Kind as its competitors.18

To increase its market share and in order to adapt to the Latin American desire for chicken to go, the company founded on 1 September 2012 the Don Pollo fried chicken carryout in El Salvador with 47 stores in total. The outlet operates under the name Pollo Granjero in Guatemala, but they have the same chicken and the same color scheme.19

One reason for Pollo Campero’s expansion to foreign markets was market seeking. After successfully marketing a product and concept in its domestic market, the company watched out for markets with similar characteristics and found it in the Latin American market. Another reason was macroeconomic, because Pollo Campero wanted to reduce its dependence of the Guatemalan market.

[...]


1 The secret to our wildly delicious, authentically Latin food? Heritage. Pride and a true sense of adventure. (2015). Retrieved February 10, 2015, from http://www.campero.com/latin-flavors.aspx.

2 Casanova, L., & Hoeber, H. (2010). A Guatemalan Chicken Flying Across Global Borders. From multilatinas to global latinas: The new Latin American multinationals. Compilation case studies. (p. 159). Washington, D.C.: Inter-American Development Bank.

3 Casanova, L., & Hoeber, H. (2010). A Guatemalan Chicken Flying Across Global Borders. From multilatinas to global latinas: The new Latin American multinationals. Compilation case studies. (p. 23). Washington, D.C.: Inter-American Development Bank.

4 Taft-Morales, M. (2014). Guatemala: Political, Security, and Socio-Economic. 1-1. Retrieved February 9, 2015, from https://www.fas.org/sgp/crs/row/R42580.pdf.

5 Gonzalez, N. (2006). Countries and Their Cultures. Retrieved February 12, 2015, from http://www.everyculture.com/Ge-It/Guatemala.html.

6 Same source.

7 Same source.

8 OECD - Assessment of development results. (2009). Retrieved February 12, 2015, from http://www.oecd.org/countries/.

9 http://www.oxforddictionaries.com/definition/english/best-practice.

10 Casanova, L., & Hoeber, H. (2010). A Guatemalan Chicken Flying Across Global Borders. From multilatinas to global latinas: The new Latin American multinationals. Compilation case studies. (p. 23). Washington, D.C.: Inter-American Development Bank.

11 Same source.

12 Same source.

13 Same source.

14 Same source.

15 Same source.

16 Same source.

17 Same source.

18 Pollo Campero Is Big Competition for Domestic Chains. (2009). Retrieved February 12, 2015, from http://www.qsrmagazine.com/news/pollo-campero-big-competition-domestic-chains.

19 Don Pollo, Restaurantes en Cuernavaca, Restaurantes en Mexico, Comida Mexicana, Don Pollo. (n.d.). Retrieved February 12, 2015, from http://www.donpollo.com.mx/.

Excerpt out of 18 pages

Details

Title
Pollo Campero's Best Management Practices. Introduction to Management in Latin America
College
EGADE Business School
Course
Business in Latin America
Grade
1,0
Author
Year
2015
Pages
18
Catalog Number
V295946
ISBN (eBook)
9783656944539
ISBN (Book)
9783656944546
File size
1962 KB
Language
English
Tags
pollo, campero, best, management, practices
Quote paper
Joannis Paul Schweres (Author), 2015, Pollo Campero's Best Management Practices. Introduction to Management in Latin America, Munich, GRIN Verlag, https://www.grin.com/document/295946

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