Case Study: Burger King Beefs Up By Janet Mosha Burger King is the world’s largest chain of flame-broiled fast food restaurants. Its core competency is its flame-broiled burgers; whereas other fast food hamburger joints serve fried burgers or no burgers at all, Burger King offers the unique flame-broiled burgers with any options that a customer might like, consumers have the benefit of having a burger they cannot find elsewhere.
Initially Burger King only sold burgers, fries, shakes, and sodas; but they have chosen to expand to offering chicken, fish, salads etc. Although they offer these extra items, they have elected to stay true to their original flame-broiled burgers and their chosen strategy is to focus on the whopper as their signature product. This product gives them an advantage over other fast food chains. Burger King began with a basic menu, but they developed a theme for their chains that stands out.
They have set themselves apart with ground-breaking advertising campaigns, for example the use of the Burger “King” as well as running a “Whopper Virgins” campaign where people in different countries that have never eaten a burger, try McDonald’s and Burger King burgers and choose which one they prefer. Burger King also developed an appealing logo with buns surrounding the Burger King name. Burger King’s decision to wait to enter the foreign market especially in the BRIC countries, I believe has created the most value for the company. This later expansion can be seen as an advantage because of the reasons stated above.
For example it has allowed for other chains such as McDonald’s to build a demand for fast food and to create a supply infrastructure. This way when they enter the country they can concentrate in pushing their unique burgers. They have also attempted to develop products to go with different tastes and pushed the “Have it your way” philosophy. There are also disadvantages such as consumers getting used to the established chain and being unwilling to try a competitor. Another disadvantage would be that in the cases of smaller markets, there may be few sufficient suppliers.
When entering a new market, Burger King would have a few advantages in comparison to a local company. The first of these is that they are bringing a new product; sometimes people are curious to try something different and this would provide business to Burger King. They would also be received well because they are providing jobs and new business for the natives and the suppliers in the country. Burger King is a huge and structured franchise-based company; they can afford to try out different things through success and failure because they have sufficient resources compared to local companies.
The disadvantages are, they may be unfamiliar with the customs and the foods of the people, for example if they opened a restaurant in India in an area where they do not eat beef, burgers may not be very successful there, they would have to alter their menu to vegetarian products that Indians are familiar with. On the other hand local companies are able to alter their menus faster to support the locals. Finally there may not be enough suppliers to support both Burger King and local restaurants. In my opinion it would be a good idea for Burger King to expand outside of North America.
North America already has a mature burger market, so for Burger King to have significant growth they need to look to other countries where they do not have so many fast-food restaurants in order to see significant growth. Looking at its biggest competitor, McDonald’s, we can see that they have had incredible success in foreign countries; Burger King would provide competition and improve its own visibility. The case mentions that there are countries that Burger King entered and exited, I feel Burger King should reevaluate these countries and see what they could change and try to reenter.
Per the case Burger King prefers countries with large populations especially those with a higher number of youths. This is advantageous because, youths are less likely to go home and cook and are more likely to pick up food on the go, research also shows that younger people have a less healthy lifestyle and once they are used to fast food it’s hard for them to quit consuming it. When people are in a center-like environment for example a mall then it is easier to pick whatever food is there rather than to look elsewhere and return to hang out or shop; therefore Burger King would have an upper hand if it is one of the foods available.
Burger King is headquartered in Miami, because of its near proximity to Latin America. This strategic position has allowed Burger King to ensure its presence in the Latin community. The South Americans who make a pit-stop in Miami in order to enter the United States are familiarize themselves with the Burger King products, and Burger King is also able to test the products on indigenous Latin community, before expanding to the Latin countries without the fear of undergoing rejection. This location in
Miami has simplified their entry into the Latin countries and businesses seeking franchises find it easier to work with them. Burger King has strengthened their global competitive position in the Latin countries, but we find that these countries are not heavily populated; they should also try to expand to denser populations like those of China, India, Nigeria etc. this could prove to be more profitable in the long run. Burger King can use the South American countries to understand how to expand appropriately in other countries.
As a CEO of Burger King, the strategies I would use to decide on possible future locations would include seeking out locations that have few competitors so that it would be easier to build many locations there. I would also have a competitive research and development department that would research the places where we would expand to before attempting to enter a new market. This team would research culture and customs so that when Burger King does expand into that country they are fully equipped.
The challenges that are identified in this case would be to find countries with higher populations and to research their customs, then to go into these places with the knowledge of what their needs are, and their likes and dislikes. Burger King would also have to learn from their errors in the countries they had retreated from, this is where the research and development team would come in handy, and they would have to alter their menus to cater to the populations they serve.
They should also, as stated in the case, look into the youth of the populations setting up their restaurants, and do so in areas such as malls, youth centers, universities, work facilities etc. Works Cited: ————————————————- Daniels, J. D. , Radebaugh, L. H. , & Sullivan, D. P. (2011). International Business: Environments & Operations. Upper Saddle River, NJ: Pearson Education.