Burger King Core Competency

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Burger King is the world’s largest flame- broiled fast food restaurant chain. 65 As of mid- 2009, it operated about 12,000 restaurants in all 50 states and in 74 countries and U. S. territories worldwide through a combination of company- owned and franchised operations, which together employed nearly 400,000 people worldwide. Only Yum Brands ( A& W, KFC, Long John Silver, Pizza Hut, and Taco Bell), McDonald’s, and Subway, with 36,000, 32,000, and 28,000 restaurants, respectively, were larger. Given that Yum Brands has no hamburger units, Burger King is second in the fast food hamburger restaurant segment/ market. Burger King plans to increase the number of net operating units by 3 to 4 percent per year in the near future, with most of that increase coming in international operations. Two major ways in which Burger King differentiates itself from competitors are the way it cooks hamburgers— by its flame- broiled method as opposed to grills that fry— and the options it offers customers as to how they want their burgers. This latter distinction has been popularized with the “ have it your way” theme. About two- thirds of Burger King’s restaurants are in the United States, and its U. S. and Canadian operations accounted for 69 percent of its $ 2.54 billion revenue in fiscal 2009. The geographic distribution of Burger King’s restaurants is shown on Map 12.2. Although the company began in 1954 by offering just burgers, fries, milk shakes, and sodas, the menu has expanded to include breakfast as well as various chicken, fish, and salad offerings. Nevertheless, burgers remain the mainstay of the company, and 2007 marked the 50th anniversary of the Whopper sandwich, which is considered Burger King’s signature product. Burger King has also differentiated itself with some innovative advertising campaigns through the years, such as its use of a figure of a man who is the Burger “ King.” Recently, the company ran a “ Whopper Virgins” campaign in which it assembled people who had never tasted a burger— such as from remote parts of Greenland, Thailand, and Transylvania— to participate in a comparative taste test between Whopper sandwiches and Big Macs. The Burger King logo has changed slightly through the years; for example, going from two buns separating a burger to two buns separating the company’s name. Yet it has always been displayed and recognizable globally, as illustrated in the photo of a restaurant in Taiwan with Mandarin lettering. A Bit of History Burger King can trace its roots to 1954, when it started as InstaBurger King. In 2006, the company went public, and since then the company has operated independently. During its first five years, the private company grew to five restaurants, all in the Miami, Florida, area. In 1959, the name was changed to Burger King, and it began domestic franchising. In 1967, Pillsbury, which had several other retail food groups— such as Bennigan’s, Steak and Ale, and Godfather’s Pizza— bought Burger King, which by then had 274 restaurants. During the first few years of Pillsbury’s ownership, franchising increased substantially. Then in 1989 Pillsbury got out of the restaurant business and sold Burger King to the British company Grand Metropolitan, which then converted most of its Wimpy restaurants in the United Kingdom to Burger King restaurants. Grand Metropolitan merged with Guinness in 1997 to form Diageo, and Diageo divested itself of restaurant operations in 2002 when it sold Burger King to a consortium of private equity firms controlled by TPG Capital, Bain Capital Partners, and the Goldman Sachs Funds. In May 2006, Burger King consummated its initial public offering, becoming a publicly traded company listed on the New York Stock Exchange. The years of transformed ownership took a toll on Burger King as emphases changed and the company’s interests were sometimes made secondary to those of its parent company. For instance, in the period leading into the twenty- first century, some of Burger...
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