Burger King
The Burger King company was founded in 1954, by two marketing and financial entrepreneurs, James McLamore and David Edgerton. The strategy of the Burger King has been successful and by 1959 Burger King expanded and established five stores in Miami. Similar to other fast food pioneers, the Burger King founders sought to attract investors by giving away exclusive rights to large territories through franchise arrangements (Reiter 1996). Burger King like many multinational fast-food companies has a system. Franchise is one of the most important means of achieving volume growth in a largely saturated marketplace and it is increasingly associated with multinational expansion (Felstead 1993). Most large companies in the fast-food sector are operating under the ‘format’ franchise system. The format type of franchise is the most common among the fast-food companies today. In this system, the franchisor (Burger King) not only supplies the product, but also lays down precisely the rules and procedures that have to be followed by the franchisee within a set of detailed pre-determined procedures or format. The franchisee is in effect purchasing a carefully prepared ‘blueprint’, which minimizes the risks involved in setting up a conventional small business.
Operating Industry
Burger King operates in the fast food hamburger restaurant (FFHR) category on the quick service restaurant (QSR) segment of the restaurant industry. The quick service restaurant is the largest segment of the restaurant industry in the United States (Burger King: Annual Report 2006).
Competitive Environment
The fast-food industry in the United States is very competitive. McDonald’s is the industry leader while Wendy’s and Burger King are in constant struggle for the second place. The consumer food-service market is typically broken down into eight categories according to the type of food and restaurant operations. The categories are sandwich, pizza, chicken, grill-buffet, dinner house, contract and hotel. The fierce competition in the fast food industry is evident with the pace in which strategies are changed. Fast food restaurants are always on the look out for new strategies that will enable them to gain customers and market share. The two main domestic competitors of Burger King are McDonald’s and Wendy’s.
SWOT Analysis
Strengths
1. Wide selection of menu items
Burger King offers different varieties of menu items and choices for the consumers. Through the many choices that Burger King provides, consumers can customize their orders.
2. Fast and efficient service
Burger King has a different process in order taking and preparing the orders of the customers. Unlike in McDonald’s where a single dine staff takes a customer’s order and prepare the foods for a single customer. Burger King has two separate stations. One is where the customers order and one is where the customers pick up their foods. This process of order taking and serving is considered very fas and efficient. A customer falls in line to make his or her order and to pay. He or she will be given a number and then will move down the line where he or she picks the order.
3. Innovative Products
Burger King’s distinct assets include the unique Whopper with its one of a kind charbroiled taste. The company also prepares the hamburger any way the customer wants it. In addition to the Whopper, Burger King also offers a few set items on its breakfast menu that differentiates it from its competitors. These include Croissan’wiches and French toast sticks. The rest of the menu also offered the unique Veggie burger and Chicken Ceasar salad.
Weaknesses
1. Weak Marketing Campaigns
One of the weaknesses of Burger King that I think contributed to its decline that started several years ago is its weak marketing campaigns. The company was not able to effectively communicate with the customers. The customers were also confused about the different advertisements of the company that are sometimes considered ‘eccentric’.
2. Inconsistent Quality
The consumer’s perception of the quality of the food items and the overall product offering at Burger King is poor. Many consumers view quality at Burger King as inconsistent. This is perhaps due to the inconsistency in quality standards and the poor maintenances of some Burger King stores.
Opportunities
1. Expansion
In the previous years, particularly in the year 2006 - 2007, Burger King embarked on an expansion strategy. The company started to be more active in its expansion programs. In fiscal year 2007, Burger King opened 441 new restaurants around the globe. Burger King also entered four new countries namely Indonesia, Egypt, Poland and Japan. The opportunity to expand is very promising and the company is experiencing initial benefits from its expansion strategy (Burger King: Annual Report 2007).
Threats
1. Intense Competition
One of the biggest threats to Burger King is its competitors. Burger King is considered as the second largest fast food chain next to McDonald’s. Burger King always finds itself in fierce competition with McDonald’s, Wendy’s. Hardee’s and other fast food restaurants. The increased competition among rival companies is characterized by price wars, product innovation and growth strategies.
2. Consumer Health Expectation
There is a change in the consumer attitude and behavior that is considered a threat to most fast food restaurants. Consumers are becoming more conscious when it comes to health issues. Consumers are demanding quality, healthier menu items. Although Burger King has taken the initiative in introducing ‘healthy food items’ the need to be more committed to providing healthy foods to the consumer can pose a serious threat if the company fails to satisfy the demands of the consumers.
The restaurant industry is affected by consumer preferences and perceptions. If prevailing health or dietary preferences and perceptions cause consumers to avoid Burger King’s products in favor of alternative or healthier foods, Burger King’s business could be in danger (Burger King: Annual Report 2006).
Significant Items of Burger King
Burger King is one of the major quick service restaurants in the world. In terms of size and number of stores, Burger King ranks second, next to McDonald's. One of the significant items of the company is the Burger King brand. The company's Burger King and Whopper brands are two of the most widely-recognized brands in the world. Another significant item is the company's Have it Your way brand promise. Have it your way is one of the aspects of the company's business processes that sets it apart from its competitors. The customers are given more food choices. Another significant item is the company's innovative menu. The basic menu pf all Burger King restaurants consists of hamburgers, cheeseburgers, chicken and fish sandwiches, breakfast items, french fries, onion rings, salads, desserts, soft drinks, shakes, milk and coffee. In addition, promotional menu items are introduced periodically for limited periods. Burger King continually seeks to develop new products. Burger King focuses on product development and innovation. The company always aims to introduce innovative products in order to attract customers and to remain competitive. Another significant item is product quality. Product quality is important in attracting and maintaining customers.
Marketing Mix
Achieving a favorable position in the minds of the consumers and making the product or service attractive to the target market entails careful formulation of the marketing mix. Getting the right mixture of the product, promotion, price, and distribution is important in marketing. The goal of the marketing mix is to portray an image for the product or service that will match with how the organization wants the product or service to be visualized in people’s minds. Marketing mix according to Kotler (2001) is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market.
Product – The products or services of an organization help in creating an image of the firm in the mind of the consumer. This image is reflected in the customer’s perceptions and feeling about its products or services. The product is the element in the marketing mix that includes all of the issues surrounding the development of the product or service.
Price – where market demand and the cost of producing the product or service come together and determines the profitability or lack of it.
Promotion – Promotion is consist of all of the methods of communicating the product offering to the target market, such as advertising, publicity, and sales promotion.
Place – Place is the task of getting the goods to market.
Recommended Marketing Mix for Health Conscious Consumers
Recently a new trend in the quick service restaurant industry is emerging. There is a steady growth of health conscious consumers. The reports highlighting the health risks of fastfood and the demand for healthier alternatives to these foods are both increasing. Because of these trend a new target market for Burger King has emerged. This market is health conscious whose majority is young with active lifestyles. In order to maintain its position in the industry and gain competitive advantage over its competitors, Burger King must seek to attract this new emerging market.
Product – Burger King must actively engage in product development and must come up with food products that are of high quality and healthy.
Price – Burger King’s products’ prices must remain competitive.
Place – Burger King’s store must be redesigned in order to attract more customers. The stores must invite consumers from all walks of life. The stores must become Burger King’s tool for communicating its commitment to Food Quality, Service Efficiency and Health.
Promotion – Burger King must seek to communicate its commitment to health to its consumers using different tools.
References
All Hail the King, Burger King Annual Report 2006, Burger King, viewed 18 December, 2008,
<http://media.corporate-ir.net/media_files/irol/87/87140/BKCAR2006.pdf>.
A World of Growth, Burger King Holdings, Inc. Annual Report 2007, Burger King, viewed 18 December, 2008,
<http://media.corporate-ir.net/media_files/irol/87/87140/2007_AR.pdf>.
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