Burger King is a worldwide and one of
the leading chains of hamburger fast food restaurants with its headquarters in Miami,
Florida in the US. The corporation started as a franchise restaurant chain, called
Insta-Burger King over half a century ago. After two years of operation, the
firm faced some financial difficulties and was bought by its franchisees and renamed
Burger King. Currently the company is the world’s biggest flame broiled fast
food restaurant chain.
Last year statistics indicated that
Burger King managed about twelve
thousands restaurants in all fifty states and in over seventy countries and
United States. The company employed almost four hundred thousands people around
the world. Burger King is ranked the second in the fast food hamburger
restaurant market and plans to raise the net operating units by three to four
percent every year. The company plans to achieve most of that increase through international
operations (Hamstra, 1997).
Burger King stands out and beats its
competitors through the way its hamburgers are prepared. The hamburgers are
cooked by flame broiled technique as opposed to grills and this is its core
competency. The method of product preparation relates to its chosen strategy of
providing the customers with a preference as to how they desire their burgers. Most
of Burger King’s restaurants are in the US and Canadian accounting for sixty
nine percent of its 2.54 billion dollars income in the last fiscal year. Initially,
the company commenced by selling burgers, fries, milk shakes, and sodas but
today, the menu has been enhanced to include breakfast, chicken, fish, and
salad. However, burgers remain the stronghold of Burger King with Whopper
sandwich being the companies’ signature product creating the most value for the
company (Reiter, 1996).
Burger King pioneering advertising
campaigns stands out from its competitors. Advertisements like use of a figure
of a man as the Burger king and a “Whopper Virgins” campaign in where people
who had never tasted a burger are assembled. The “Whopper Virgins” participate
in a relative taste test between Whopper sandwiches and Big Macs. The logo of Burger
King has slightly altered over the years, notably changing from two buns
separating a burger to two buns separating the company’s name. Burger King’s ownership
has evolved a lot but the company has expanded internationally (Jargon, 2010).
The company has invested in Europe,
Asia, and Latin America with some of these investments turning out to be very
successful and some have failed. Burger King has left unsuccessful markets
mainly for two reasons, one being failure of the franchisee to perform sufficiently.
The franchisee may fail to invest adequately or to make royalty payments. The market
may also turn out to be very minute to sustain the required infrastructure.
However, since the Burger King went public, it has taken a more methodical
approach towards its expansion. The company still sees considerable growth
opportunities in the US as an established market for fast food, especially for
hamburgers as compared with other foreign countries (Reiter, 1996).
When analyzing for new markets, Burger King favors those countries
with huge populations particularly of the young
people. These are the markets with high beef consumption, capital availability to
franchisees, safe
business environment supporting expansion and availability of prospective franchisees with experience and ample
resources. In
general, the company has expanded globally presently than its chief competitor, McDonald’s. This has
resulted in both merits and demerits in that, in small markets, there may be few sufficient suppliers. For example, only one slaughterhouse
may exist and the suppliers may not be willing to work with many customers. Conversely, in huge markets, being a recent
market entrant may be beneficial because the previous entrants have made demand for fast food and have constructed a supply infrastructure. Burger
King has been able to deliberate almost completely on advertising only. When entering a
ne market the company has an advantage of its known reputation and established
products. The company however faces the disadvantage of competing with local
restaurants with already established markets and networks (Hanks, 2010).
Burger King’s headquarters are still
in Miami, often regarded as the capital of Latin America. The location has made
it invest in some countries with small populations neglecting others heavily
populated countries. This is because many people from Latin America and the Caribbean
come to or through Miami. The companies’ reputation spilled over to that area
early on simplifying gain in brand appreciation and recognition. Additionally,
Latin American and Caribbean countries are near to Miami and therefore Burger
King’s administration can visit these countries and franchisees can visit its
headquarters. The location of its headquarters in Miami has therefore enhanced
its international relations and has strengthened its international competitive
position (Smith, 2006).
The company has demonstrated market
commitment especially
if the market turns out to be as good-looking as expected. In
this case, the owned
operations may be more lucrative for Burger King than royalties coming from the franchisees. The company has constantly
focused on expansion
in international portfolio.
The company has entered a number of new
markets and has also re-entered
numerous markets that it had abandoned
previously. Before entering a new market, the company first develops infrastructure, a local
management team, focus
growth on main cities, set up a local office and sustain incessant growth and the use of local suppliers.
This strategy enabled the company to succeed while entering the Brazilian
market and is being applied in Russia
(Hanks, 2010).
Burger King has numerous
opportunities for growth and expansion within its existing markets and in the
new markets. Statistics are evident that, despite its global growth, it is
still in less than forty percent of all the countries of the world. The
challenge therefore becomes the best locations are for locating its upcoming
emphasis. As the chief executive officer of Burger King, I would choose the
population as the basis of location of the company in future. The culture,
tastes and preferences of the residents especially the youth is also a
significant tool for making this decision (Hamstra,
1997).
References
Hamstra, M. ( 1997, July 28). BK seeks to beef up sales
overseas. Retrieved September 9th, 2010, from The CBS Interactive Business
Network: http://findarticles.com/p/articles/mi_m3190/is_n29_v31/ai_19630428/
Hanks, D. (2010, September 9th). With new CEO, Burger King
gets set for a Brazilian makeover. Retrieved September 10th, 2010, from
Business:
http://www.miamiherald.com/2010/09/09/1816916/with-new-ceo-burger-king-gets.html
Jargon, J. ( 2010). "As Sales Drop, Burger King Draws
Critics for Courting 'Super Fans". Wall Street Journal , 778-788.
Reiter, E. ( 1996). Making Fast Food: From the Frying Pan
Into the Fryer, 2nd edition. "Burger King's early franchising arrangements
proved to be troublesome". Montreal: McGill-Queen's University Press.
Smith, A. F. ( 2006). Encyclopedia of junk food and fast
food (1st ed.). New York: Greenwood Publishing Group.
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