Burger King Case Analysis

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BURGER KING

VIEWPOINT

This case was analyzed from the point of view of Burger King’s Marketing Manager. TIME CONTEXT

The case happened in September of the 2010.

STATEMENT OF THE PROBLEM

• How to minimize the negative feedback/perception of the company’s buy-in from a private company?

• What measures could Burger King do to dethrone McDonald’s as well as hold off the challenge of a number of other chains that were growing in size and competitive power?

STATEMENT OF THE OBJECTIVES

• To boost the image/brand image of the company.
• To assess the company’s overall performance,
• To provide measure(s) to improve the company’s performance in the market.

AREAS OF CONSIDERATION
Strengths

1. Strong market position.

BKC is the world's second-largest Fast Food Hamburger Restaurant (FFHR) chain as measured by the total number of restaurants and system-wide sales.

2. Strong brand equity.

Burger King’s Whopper is known for its quality and it is the best known brand in fast food. The Whopper (and by extension, Burger King) presents a well integrated “package”, where product attributes, benefits, values and personality are distinctive, positive and mutually reinforcing.

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3. Growth model not capital intensive: 90% of its restaurants are owned by franchisees

4. Strong brand financial performance.

5. High quality products.

6. Wide variety of food products.

Weaknesses

1. Heavily concentrated in the US.

Though the company operates in 65 countries, its operations are heavily concentrated in the US and Canada. About 65% of its restaurants are located in the US and Canada. Concentration of operations in one geographic area increases company's exposure to local factors such as adverse economic situation, labor strikes and changes in regulations that can affect its operations.

2. Few corporately owned stores.

Not enough corporately owned stores mean it relies heavily on franchisees to execute its brand promise.

3. Inconsistent management and strategy. Changing Executives.

Management lacked focus and direction and has struggled with marketing mix decisions.

4. Narrow-based target market.

5. Confusing ad campaigns.

Ineffective ad campaigns were one of the problems facing BK. Burger king lost its core product-flame broiled burgers, made the way the customer wanted them. Many in store promotion also failed. They fail to efficiently promote products, because they are too busy trying to promote “The King” character. 6. Service is slow.

Service was slow and food preparation wasn't consistent.

7. High prices.

Another thing that hurt them was the fact they didn't lower prices to keep competing with their competitors this led to a below average sales growth.

Opportunities

1. New product development, particularly around breakfast.

BK value menu featuring six items at less than $1, breakfast sandwiches, and specialty burgers.

2. Keep building its brand through ad campaign, such as the Whopper virgins.

3. Expansion into emerging markets.

4. Wide-based target market.

Threats

1. Changing consumer habits towards healthier food choices.

2. Intense competition from McDonald’s, other restaurants and even retailers.

The company's competition in the broadest perspective includes restaurants, quick service eating establishments, pizza parlors, coffee shops, street vendors, convenience food stores, delicatessens and supermarkets.

3. Increasing labor costs putting pressure on bottom line margins.

4. The major competitor McDonald is way ahead in market share.

ASSUMPTIONS

Operations

• Burger King has more than 12,150 restaurants in all 50 states and in 76 countries and U.S. territories worldwide. They support every franchisee by offering world class support services, including training, operations, and marketing.

• Approximately 90 percent of BURGER KING(R) restaurants are owned and...
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