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frito lay innovation strategy

Frito lay innovation strategy: How ownership culture won Frito-Lay a new market segment?

Frito-Lay – Flamin’ Hot!

Frito-Lay, headquartered in the United States, is a snack food company. The company operates 29 snack brands, some of the notable ones being Lays, Doritos, Cheetos, and  Tostitos. This is the story of the Frito lay innovation strategy that gave the company a turning point in the 20th century.

The Frito lay innovation strategy:

In the mid-1980s, Frito-Lay’s CEO Roger Enrico initiated a drive in which he asked all 300,000 employees to “act like an owner.” This out-of-the-box idea presented to capture innovative ideas proved to be indeed very helpful.

In the process, Richard Montanez, a janitor, requested if he might follow a Salesman to learn more about the process. Richard noticed that local stores had no products targeted at Latinos, so he took home some Cheetos and covered them in a spice mixture made by him. He then packed them in baggies, drew a logo, and presented them to Frito-Lay board members. The members were very much pleased by the new concept, and eventually, in 1992, Frito-Lay launched the Flamin’ Hot Cheetos based on the notion. 

I saw our products on the shelves and they were all plain: Lay’s, Fritos, Ruffles, and right next to these chips happened to be a shelf of Mexican spices, nothing spicy or hot.”Richard Montañez.

Results of the Frito lay innovation strategy:

The snack quickly became a successful product in the market and Frito-lay was able to capture an entirely new market segment.

This story proves that innovative ideas need not only be born in higher authorities at your office but can come from any employee. Regardless of their occupation. 

Following the Frito lay innovation strategy, Capturing ideas from employees and enabling a culture of innovation has resulted in millions of dollars in profits and revenue for a bunch of companies. We are sharing all these stories on our blog. If you want to read these stories, subscribe to us by filling out the form below. 


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