Beruflich Dokumente
Kultur Dokumente
second largest hamburger franchise chain in the world after Mc Donald. This fast
food chain was established by Keith Kramer and Matthew burns on 1953. In
1955, after facing financial difficulty this company was sold to Miami based
franchised and being renamed Burger King by its new owner called James
Mclamore and David Edgerton. In 1989, this company bought by diego a British
Spirit company. Under Diego management BK has fall off in the business because
As per June 2010, it is recorded that Burger king has 12 174 outlets in 76
countries, which is 66 percent of them are in the US and 90 percent are privately
owned and operated worldwide. Burger King is the second largest chain of
mainly from three sources that is retail sales at company owned restaurant,
royalty payment from sales and fee from franchises and also property income
that can help boost sales and production performance and investing on
promoting the brand. The company also specifically plan on growing its chain
market for example countries that has potential on positive growth and attractive
According to industry analysis, burger kings share price had fallen by half
from 2008 to 2010, this is according to them burger king is having significant
management problem. In this study case we will recommend several strategic
SWOT ANALYSIS
a. Burger King is known for its strong brand. Burger King, formerly known as
survived in the industry and has built a strong brand in the US and
worldwide.
b. Burger king has a strong market position, being the second largest fast-
franchisees.
d. Has its own distribution cooperative which is, Restaurant Services Inc.
(RSI), that manage and act as the purchasing agent for the Burger King
system in the U.S.. This ensures items move smoothly and efficiently from
the country.
e. Has a long term exclusive contracts with other strong brand names which
was Coco Cola and with Dr. Pepper/Seven-Up, to purchase soft drinks for
its restaurant.
f. Reduce its costs and boost efficiency by installing point-of-sale cash
Burger King business, the performance was poor to the point that major
franchises went out of business and the total value of the firm declined.
c. Its high percentage of franchisees also cause Burger King to have limited
management control.
d. Its restaurant mostly concentrated in the United States (60%). And has a
and marketing to the wrong target market. For example, While McDonalds
healthier salads and upgraded its already good coffee, Burger King
This marketing concept not only promotes an unhealthy diet but also
targeting the wrong target market, which was the men, that having
difficulties and was hit hard on employment and such during the fiscal
year.
f. Cannibalized its existing sales by putting too much emphasis on value
meals, which they sell it in lower price compared to its production cost.
a. The potential growth and new market of other countries led to Burger King
community where people are more concern on their health by offering and
this, Burger King have the competitive advantage to further increase its
Burger King.
b. Legislation for unhealthy fast food threatens not only Burger King but the
passed by the U.S. Congress in 2010 required restaurant chains to list the
competitors such as Taco Bell, KFC, and Pizza Hut etc. Burger King may
face other small growing competitors as the barrier for entry is low.
EFE MATRIX
Rating indicates how effective the firms current strategies respond to the factor.
while ratings are company-specific. Total weighted scores well below 2.5 point
internal position. The total weighted score of 2.40 indicates that the business has
Score
1 International expansion 0.20 3 0.60
2 Growing health conscious population 0.20 3 0.60
Score
1 Economic recession (2008-2010) 0.20 2 0.40
food companies
Total 1.0 2.40
IFE MATRIX
will be rated as 4. Since we are using the rating scale 1 to 4, then strengths must
weighted scores well below 2.5 indicate to internally weak business. Scores
significantly above 2.5 indicate a strong internal position. Burger King company
score of 2.60 shows that the company has an internally strong business.
Score
1 Strong brand name 0.13 4 0.52
operation
No Weaknesses Weight Rating Weighted
Score
1 Reliance of franchisee as source of 0.13 2 0.26
revenue
2 Continuous leadership changes 0.09 2 0.18
certain country
5 Wrong marketing strategy 0.10 2 0.20
CPM MATRIX
The overall competitiveness of a firm can be evaluated on the basis of its overall
strength rating. If the difference between a firms overall rating and the scores of
lower-rated rivals is higher then the firm has greater net competitive advantage.
Whereas, if the difference between a firmss overall rating and the scores of
higher-rated rivals is bigger then the firm has greater net competitive
disadvantage. The competitive profile matrix shows that the total weighted score
of McDonalds is higher than Yum Brands and Burger King which means that it
has the strongest competitive position. While Burger King has the net
Factors
Brand Name 0.15 4 0.60 3 0.45 2 0.30
Product 0.09 2 0.18 3 0.21 3 0.21
Quality
Public Image 0.07 2 0.14 3 0.24 2 0.14
Market Share 0.10 4 0.40 3 0.30 3 0.30
Price 0.05 3 0.15 2 0.10 3 0.15
Competitive
Innovation 0.04 3 0.12 2 0.08 2 0.08
Advertising 0.06 4 0.24 3 0.18 2 0.12
Market 0.08 4 0.32 4 0.32 4 0.32
Expansion
Financial 0.06 4 0.24 3 0.18 2 0.12
Position
Sales 0.08 3 0.24 3 0.24 3 0.24
Distribution
Strategic 0.04 3 0.12 3 0.12 2 0.08
Partnership
and Aliances
Number of 0.10 3 0.30 4 0.40 3 0.30
Locations
Geographic 0.08 3 0.24 4 0.32 2 0.16
coverage
1.0 3.29 3.14 2.52
PROBLEM STATEMENT
LIST OF PROBLEMS
since it was founded in 1953 by Keith Kramer and Matthew Burns. Even
though Burger King has established itself as a well known brand over the
years, its history of poor management has put a toll on its brand name.
re-energized Burger King after the take-over of TPG Capital in 2002, but
when the advertisements and campaigns stopped, the sales of its items
also declines. Furthermore, Burger King led by TPG Capital invested too
2008-2010 recession in the U.S., Burger King showed the lack of flexibility
suitable target market at that time as they were the ones having
difficulties and was hit hard on employment and such during the fiscal
year.
and low-priced ends of the product continuum did not really help much in
the growth of Burger King. Since fast food often associated with low price.
Moreover, its menu development was deemed as horrible and too much
the franchisees.
The growing concern of health and fitness in the U.S. as well as the
passing of the health reformed bill in 2010 by the U.S. Congress is one of
the most important issues to be taken into consideration for the quick
promoting and creating high calorie and unhealthy food items on the
menu.
means a lower capital requirements but it also meant Burger King had
limited control over franchisees. The limited control by Burger King
disregard their aging restaurant. And this will led to the downgrade of its
brand name.
sources. Two of them are from the franchisees. This posed as a threat to
Based on the listed problems above, we can conclude that the main problem is
poor leadership and management and loss of brand vision that leads to
innovations.
ALTERNATIVE STRATEGIES
1. Rebranding
A firm's brand is its most valuable asset. When your firm has a confident,
and can charge more for your services. Rebranding is a marketing strategy
launced the Have It Your Way advertising campaign in 1974. But the
market. The product development should take into account the current
demand of the market. At times like this where the community are more
concerns on their health, they will think more of their family and
protection against having high calories food. In short, Burger King must be
able to create a product that caters the community concerns and needs.
Which include more healthy food items on the menu as well as targeting a
wider market segments and consumers. The marketing campaign that will
be used must be able to reach certain target group for certain products
3. Market Expansion
For the organic growth (slow and steady growth) of the company, Burger
King must expand its market to potential countries like to Kuwait, Bahrain,
Qatar and United Arab Emirates and South Africa while the existing market
and the vast cultural impact of western culture to the other parts of the
1. Rebranding
Burger King has lost direction with the constant changes of management
and leadership style. With rebranding, a new and fresh image of Burger
King will be introduced with the new takeover. With rebranding it can help
value of the brand which will be of help in hiring more suitable staff and
boost morale and make them ambitious to take on a new level. The cons
for this are to rebrand, we must took into account the resources and the
only represent only 17% of the fast food market. Wider range of
consumers can be achieved with new marketing strategies that target the
whole gender and age group. With the new product development aiming
to promote more healthy food items, it does not only fit to the current
trend of health and fitness but also in line with the passing of the health
they often wish that new product or services could be more than what is
that focuses on the need of the customers and change in the companys
image and services could establish the company as industry leader. The
requires the company to have a well define road map and commitments to
campaign, it will involve a lot of capital and spending too much into
3. Market expansion
Market expansion would raise customers awareness to the existence of
the costs of doing business across more markets and customers. This
The best strategy for Burger King is to combine the two alternatives which
are re-branding and setting new product and marketing strategies. The poor
management and constant leadership change in Burger King has hurt the brand
name. Furthermore, it also provide a thin line and limited control over the
strengthen its management policy along the way as rebranding takes time and
effort from all parties in Burger King including the franchisees. This can further
strengthen the connection to its franchisees and expand its control. Rebranding
can also reintroduce Burger King to the masses and shows a conviction to the
consumer that they are ready for change and further position and strengthen its
place in the market. For the second strategy, Burger King has to change their
marketing and promotion strategies in order to survive in the fast food industry.
Focusing on its marketing strategies, Burger King need to develop new marketing
plan such as creating more family oriented menu for the restaurant, deliver new
programs, limited-time offers menu strategy, kids menu package and slightly
change the concept from a high calorie menu to healthier or low calorie menu.
Apart from that, changes on the Burger King infrastructure will gain positive
respond from customer because basically new trend attract more new customer.
Burger King need to change the target market from younger people to family
segmentation in order to increases their market share. Targeting on the children
and working parents helps Burger King to define its target market not only for
younger people but also for the family-oriented population. Thus, every new
marketing trends evolve by Burger King will promise the company a good return
competitive advantage.
IMPLEMENTATION
SHORT TERM
1 Rebranding
Burger King need to rebrand its image, to have a more focus and specific and
Burger King May offers. With rebranding, a new and fresh image of Burger
King will be introduced with the new takeover. Burger king also may merge
with another fast food operator for example DOMINO Pizza, service skills or
Pizza is one of the top major quick service restaurants in US. Furthermore,
with this move Burger King can gain more market share in the quick service
restaurant industry. Last but not least, HRM department will need to
restructure its staff and employee into a more organize group and this will
burger king new healthier food. Burger king need to showcase its various new
menu items, which include smoothies, salads, and specialty coffee drinks.
The commercials video must strike a humorous tone and should be more fun
than the old one. To attract more children consumer burger king may
introduce a mascot. To attract the busy and always on the move consumer
they may promote a video that showcase the food is ready to eat and
LONG TERM
People nowadays are more concern on health, thus Burger king can take a
chance to promote and introducing a healthier food and drinks. For example
include a fresh fruit or fresh vegetable salad to its menu. Not only that, to
promote healthier foods which also include the current food ingredient for
burger that have pickles. For its drink, they can introduce organic fresh drink
this may bring to a negative consumer perception on its company. Its only
show how weak Burger king in its management and its unstable top
management position. Burger King needs a leader who can specifically direct
its company to a clearer direction or vision. A leader that can articulate clear
vision of the company and compelling picture of a future condition that the