Burger King: Seeking Consistency in Leadership and Image Michael Petitti Marist College
BURGER KING SEEKING CONSISTENCY Abstract This paper will examine the image changes Burger King has undertaken in an attempt to reverse recent profit losses. Reasons for Burger King’s struggles will be discussed, namely its lack of vision and frequent leadership changes. Finally, solutions to Burger King’s fundamental flaws will be offered based upon research on change management, decision-making, and leadership methods.
BURGER KING SEEKING CONSISTENCY Burger King: Seeking Consistency in Leadership and Image For nearly 60 years, Burger King has served flame-broiled hamburgers at an affordable price. In this sense, the fast-food chain best known for its over-sized sandwich has been nothing
but consistent. Beyond the broiler, however, Burger King’s most notable trait is its inconsistency (Horovitz, 2007). The corporation’s longest CEO tenure was four years (Gross, 2004). When Brad Blum took over the position in 2004, he was the ninth to lead in 15 years. Since then, five others have held the job – the most recent being a former railroad executive with no fast-food experience (Horovitz, 2012). Some say the overriding motivation of several owners was to deprive Burger King of capital in order to pay parent shareholders quickly (Penney & Green, 2012). Others trace the chain’s decline to the mid-90s, when then-owner Diageo PLC neglected the company and its tanking sales (Horovitz, 2007). Regardless of one’s perspective, such a degree of ownership turnover leaves no time to develop a coherent strategy, let alone implement one. This paper will examine how inconsistency of leadership and its byproduct, a lack of a company vision, have overwhelmingly contributed to Burger King’s repeated financial struggles. Now more than ever, as the chain launches its broadest menu expansion in its 58-years (Choi, 2012) and makes its biggest communications push in its history (Horovitz, 2012), Burger King must establish effective leadership strategies and implement and diffuse a compelling vision. Addressing these issues will have a direct affect on its image, which will translate to consumers and increase profits. Burger King’s History James McLamore and David Edgerton founded Burger King Corporation in 1954. The men had been Miami, Florida franchisees of the restaurant’s precursor, Insta-Burger King. Their
BURGER KING SEEKING CONSISTENCY business strategy was simple: attract postwar baby boomer families with reasonably priced, swiftly served broiled hamburgers (“Burger King Corporation”). Their plan was not unique; however, McLamore and Edgerton set their chain apart by being the first to offer dining rooms
and, in 1957, the Original Whopper Sandwich. A year after the iconic burger appeared on Burger King’s first-ever television advertisements, McLamore and Edgerton expanded their five Florida restaurants into a nationwide enterprise. When Burger King was sold to the Pillsbury Company in 1967, it was the third largest fast-food chain in the United States with 275 locations. Pillsbury owned Burger King for 30 years. Yet problems within the corporation’s ranks quickly emerged. In 1970, Burger King battled with a pair of franchisees, Billy and Jimmy Trotter. The Trotters had bought up restaurants around the country before attempting to buy the chain for $100 million (“Burger King Corporation”). Pillsbury refused and sued a group of Boston franchisees who had sold to the Trotters, claiming Pillsbury had the right to refuse the sale. The Trotters compromised and relinquished their Boston holdings. The end result reinforced Pillsbury’s transactional and authoritative management style. It also paved a future path of contentious relationships with franchisees (Baertlein, 2011). Through its actions, Burger King advanced the interests of itself and individual storeowners, yet was not...