Burger King Case

Strategic Management  MBA Course Code: Winter 16111 16111

 Burger King 

MBA Student Name: Sherif Ibrahim Sidhom

Dr. Mahmoud A. Moursi 1

 Burger King Case

This company was undiversifed - (Fast-Food Hamburger restaurant/FFHR which operated within the quick service restaurant/ QR !

:Company Overview  Burger King was originally known as Insta-Burge King. It was founded in Florida in 1953 by Keith Kramer and Matthew Burns before they had finanial diffiulties and sold the om!any to its Miami based franhisee" #ames M$amore and %a&id 'dgerton in 1955. (he new owner renamed the om!any to Burger King. (he first )ho!!er sandwih was introdued in 195*. (he om!any again was sold to the other !arty" +illsbury .,or!oration during their e!ansion eerise to 5/ loations in 0nited tates

In 1929" +illsbury ,or!oration was sold to rand Metro!olitan" whih in turn merged with uinness to form %iageo" a British s!irits om!any. %iageo4s management negleted the Burger King business" leading to !oor o!erating !erformane. (he business was damaged to the !oint that maor franhises went out of business and the total &alue of  the firm delined. %iageo4s management deided to di&est the money-losing hain by selling it to a !artnershi! !ri&ate e6uity firm led by (+ ,a!ital in //. (he om!any  beame re-energi7ed by a series of !romotional am!aign and ati&ities reated by the in&estment grou!. In May //8" the in&estment grou! took Burger King +ubli by issuing an Initial +ubli ffering :I+;. (he in&estment grou! ontinued to own 31< of .the outstanding ommon stok 

=s of #une /1/" the om!any owned or franhised 1"1*> restaurants in *8 ountries and 0. territories" of whih 1"32* were om!any-owned by franhisees. f Burger .King4s restaurant total" 8/< were loated in the 0nited tates

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:Industry overview (he fast-food hamburger ategory o!erated within the 6uik ser&ie restaurant :?@; segment of the restaurant industry. ?@ sales had grown at an annual rate of 3< o&er the  !ast 1/ years and were !roeted to ontinue inreasing at 3< from /1/ to /15. (he fast food hamburger restaurant :FFA@; ategory re!resented *< of total ?@ sales. FFA@ sales were !roeted to grow 5< annually during this same !eriod. Burger King .aounted for around 1>< of total FFA@ sales in the 0nited tates Burger King om!eted against M%onald4s" )endy4s" and Aardeess restaurants in this ategory and against regional om!etitors" suh as ,arl4s #r." #ak in the Bo" and oni. Indiretly" they also om!eted against the ?@ restaurant segment" inluding (ao Bell" =rby4s" and KF,. =lthough the restaurant industry as a whole had few barriers to entry" marketing and o!erating eonomies of sale made it diffiult for a new entrant to hallenge established 0.. hains in the FFA@ ategory. (he ?@ segment a!!eared to  be less &ulnerable to a reession than other business as !ro&en during the 6uarter ended May /1/" both ?@ and FFA@ sales dereased /.5<" om!ared to a 3< deline at both asual dining hains and family dining hains. (he 0.. restaurant ategory as a whole .delined 1< during the same time !eriod =!art of all the abo&e" =meria4s inreasing onern with health and fitness was also  !utting !ressure on restaurants to offer healthier menu items. For eam!le" one ounty in ,alifornia had attem!ted to ban M%onald4s from inluding toys in its high-alorie .CAa!!y MealD beause legislators belie&ed that toys attrated hildren to unhealthy food

:The maor strate!i" issues that #a"in! Bur!er $in! (his ase ha!!ened in e!tember of the /1/ $imited ontrol o&er franhisee +oor sales !riing strategy Aigh e!enses ost of Burger King4s om!any-owned restaurants $ow entry barrier - market beome saturated  rowing health onsiousness low industry growth rate  -

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:Company o%e"tives .(o boost the brand image of the om!any .(o !ro&ide measures to im!ro&e the om!any4s !erformane in the market

:Bur!er $in! Ana&ysis usin! The 'WOT Ana&ysis :Strengths .trong market !osition .trong brand e6uity

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.trong brand finanial !erformane .Aigh 6uality !roduts

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.)ide &ariety of food !roduts

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:Weaknesses .Aea&ily onentrated in the 0. .Few or!orately owned stores

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.Inonsistent management and strategy- hanging eeuti&es  Earrow-based . target market .,onfusing ads am!aigns Aigh !ries

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:Opportunities  Eew . !rodut de&elo!ment :breakfast;

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.Kee! building its brand through ads am!aign :who!!er &irgins; .'!ansion into emerging markets )ide-based target market

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:Threats .,hanging onsumer habits towards healthier food hoies

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.Intense om!etition from M%onalds" other restaurants and e&en retailers .Inreasing labor osts !utting !ressure on bottom line margins .(he maor om!etitor M%onalds is way ahead in market share

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Industry ana&ysis: ana&y(in! the tas) environment A strate!i" !roup: is a set of business units or firms that !ursue similar strategies

with similar resoures. ,ategori7ing firms in any one industry into a set of strategi grou!s is &ery useful as a way of better understanding the om!etiti&e .en&ironment Business units belonging to a !artiular strategi grou! within the same industry .tend to be strong ri&als and tend to be more similar to eah other  Burger King has a great deal in ommon with M%onalds in terms of their similar .strategy In analy7ing the le&el of om!etiti&e intensity within a !artiular industry or strategi grou! it is useful to harateri7e the &arious om!etitors for !rediti&e  !ur!oses. = strategi ty!e is a ategory of firms based on a ommon strategi orientation and a ombination of struture" ulture" and !roesses onsistent with .that strategy (his distintion hel!s e!lain why om!anies faing similar situations beha&e .differently and why they ontinue to do so o&er long !eriods of time

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In this kind of firms are de#enders with a limited !rodut line that fous on im!ro&ing the effiieny of their eisting o!eration. (his ost orientation makes .them unlikely to inno&ate in new areas. )ith its em!hasis on effiieny

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:'trate!ies A strate!y of a or!oration forms a om!rehensi&e master !lan that states how the

or!oration will ahie&e its mission and obeti&es. It maimi7es om!etiti&e .ad&antage and minimi7e om!etiti&e disad&antage G(he ty!ial business firm usually onsiders three ty!es of strategy Corporate strate!y : tability " growth and retrenhment

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.Business strate!y: om!etiti&e and oo!erati&e strategies

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.*un"tiona& strate!y: @esoure !roduti&ity

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.Business firms use all three ty!es of strategy simultaneously = hierarhy of strategy is a grou!ing of strategy ty!es by le&el in the organi7ation. Aierarhy of strategy is a nesting of one strategy within another so that they .om!lement and su!!ort one another 

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:Customer per"eived va&ue

(he differene between the !ros!eti&e ustomers e&aluation of all the benefits .and all the osts of an offering and the !erei&ed alternati&es :A&ternatives #un"tiona& strate!i" options

Firms that ou!y seond" third and lower ranks in an industry are often alled .runner-u! or trailing firms (hese firms an attak the leader and other om!etitors in an aggressi&e bid for further market share as market hallengers or they an !lay ball and not rok the  boat . as market followers :Mar)et-"ha&&en!er strate!ies

General attak strategy Frontal attak  Flank attak 

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'nirlement attak  By!ass attak 

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G!eifi attak strategy +rie-disount

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+rodut !roliferation

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+rodut inno&ation

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Im!ro&ed ser&ies

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Intensi&e ad&ertising !romotion

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.ood marketing is no aident" but a result of areful !lanning and eeution = om!any an win only by fine-tuning the &alue deli&ery !roess and hoosing"  !ro&iding . and ommuniating su!erior &alue G+ri"in! strate!y in mar)etin! Is the !ursuit of identifying the o!timum !rie for a !rodut. (his strategy is ombined with the other marketing !rini!les known as the four +s :!rodut"  !lae" . !rie" and !romotion;

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+riing is one of the most im!ortant elements of the marketing mi" whih .generates a turno&er for the organi7ation (he suess in !riing strategies for businesses is heightened with larity on market onditions" an understanding of the onsumers unmet desire" and the .amount they are willing to !ay to fulfill it

Bur!er $in! +ri"e sends a stron! messa!e to its mar)et- it needs to %e ."onsistent with the va&ue you,re de&iverin! :'e&e"tin! the pri"in! o%e"tive

ur&i&al

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Maimum urrent !rofit Maimum market share

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Maimum market skimming +rodut-6uality leadershi!

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:sin! +ri"e-Adaptation strate!ies

G+rie disounts and allowanes G+romotional !riing tatis

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:A"tions shou&d %e ta)en to dea& with these issues Play it safe strategy. Make some appealing advertisement that makes fans -1 .feel important :Advantages Burger King fans ill !e " attered !e#ause BK management gi ve th em importan#e and !e#ause of that$ the loyalty of the fans ill !e lastly. At the same time$ they ill attra#t more .#ustomers and the BK fans ill !e happy and feel important :Disadvantages %ostly at the same time$ it ill need some time to !e perfe#t .!efo re it ill appear to the media

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&-%ontinue making innovative produ#ts. Advantages:

More #ustomers ill get into them and !e#ause of that' their pro(t)sales ill in#rease. Disadvantages:

*t ill !e #ostly and it ill take several time of ! r a i n s t o rm i n g i f t h e produ#t that they ill introdu#e ill !e a !ig !oom to the #ustomers)pu!li#. +-,ry to loer t heir p ri#e. Advantages:

Num!er of #ustomers ill in#rease at their sales)pro(t may !e in#rea se due to the volume ise !uying. Disadvantages:

 ,his is pa rt ly ha rd to th e ma nagem en t !e #a use thi s is ne to them. And it ill have a fear atta#h.

'pe"i#i" re"ommendation:  o#us on its to !asi# strengths / 0" ame !oiled !urgers and 0food made the ay #ustomers ant  2o operation analysis of the in-store ork and speed up the system e.g. introdu#tion of multiple #ounters for taking orders.  *ntrodu#e and enfo r# e #entrally prepared detailed food pre pa rat io n g uid eli nes to !ring in uniformity and #onsisten#y in the taste$ ingredient proportion and overall 3uality of the food.  4emodel the less aestheti#ally appealing stores

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 4 e - e va l u a t e p r o m o t i o n a l o 5 e r s . * n t r o d u # e v a l u e m e a l s ith dis#ount on !igger orders  *ntrodu#e home delivery fa#ility herever possi!le.  4etain i#e-#reams even if the ersthile menu is pruned. ,his is !e#ause the ma6or i#e-#ream !rands in 7S su#h as Baskin 4o!!ins do not have the kind of e8tensive net ork of store s like Burge r King . 9en#e it is poss i!le to gain a h uge #hun k of shares of i#e #ream market in the strategi#ally favora!le lo#ations 4 ;nter into a tie-up ith i#e-#ream !rands like 2unkin 2onuts has done ith Baskin 4o!!ins at some stores.  %ondu#t an e8tensive audien#e analysis to assess the image of the #ompany el#ome !ut no !eating around the !ush. 11

 Brand images tend to !e sti#ky. ,ry to sti#k to a #onsistent !rand image instead of #hanging #ontinuously hi#h #onfuses the #ustomers.  %ontinue hands-on approa#h ith fran#hisees. ;sta!lish a # o n t i n uo u s f e e d ! a # k me#hanism from #ustomers and fran#hisees and rea#t on the feed!a#k. .Ne

marketing #ampaign for healthier produ#ts 

.;8pansion into high potential #ountries 

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.May " /11 by #ennydhel aramento Burger King o

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