Burger King Beefs Up Global Operations

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Table of Contents

Introduction
Discussion
Conclusion
Reference list

Introduction

Burger King is a global fast food restaurant with its headquarters in the USA. It initially started as a franchise restaurant chain. The company is publicly traded with various investment firms. In September 2010, the company was sold to 3G capital. As from 2009 it had more than 12,000 outlets in 73 countries (Burger King, 2010, p. 2).

United States accounts for 66% of this outlets with most of them (90%) being privately owned (Burger King, 2010, p.3). As a matter of fact, the company serves more than 11.4 million customers in a single day while employing 37, 000 employees. In an international perspective, licenses are sold on a regional basis.

Discussion

Core competency

The company’s core competence is in its franchising. Initially its strategy involves diversification of franchising to increase its operational performance. Because of its competence in franchising the company has been able to open 12,000 outlets in more than 73 countries around the world (Jargon, 2010, p. 7).

This relates well with the strategy it had chosen to use in penetrating and retaining the market. It had discovered that with franchising it was easy to have a good market control and as a matter of fact it has used it well to compete with other market competitors.

In America, licensing is done on a per store basis. On the other hand, various international location licenses are usually given on a regional basis.

This means that the franchise will exclusively own all the development rights in that given country or location (Martin, 2007, p. 6). Because of this, the company has been able to in initiate various franchises in different countries thereby making it easy to advance its business. Although other competitors have been vibrant, they have not been able to challenge it well.

Value chain activity

The way Burger King cooks its hamburgers has been distinct from its competitors. In addition, it offers its customers distinct options in relation to how they want their burgers done. Franchising is a value chain activity which has enabled the company to add value to its products.

This activity has made it easy for the products to reach the market through well coordinated avenues. Regional franchising has been responsible for opening new restaurants. This has also in another way enhanced the performance of standards oversight in all restaurants thereby ensuring that they offer the best products to the market (Smith, 2006, p. 9).

Following the company’s initiation in 1954, it has advanced from offering basically burgers to more diversified arrays of offerings. In addition, the company has introduced many products to enhance diversity in the market. These products have been designed to suit various diverse market needs and interests.

Later expansion

Burger King globally expanded later than its main fast food competitor McDonalds. This has created various advantages and disadvantages. By expanding later, the company has been able to get demand for fast foods; built by early entrants. This has also enabled it to identify numerous opportunities that it has used to its advantage. Later expansion also allowed it to know its competitors weaknesses and therefore gave it an upper hand in dealing with customers.

There are various disadvantages that the company has faced as a result of late entry. In small markets it has not been able to get adequate suppliers (Jermaine, 2003, p. 12). On the other hand, this has made it to use a lot of money in advertising and marketing to get more customers unlike its competitor that was able to lock in customers.

Foreign countries ventures

When a global company such as the Burger King, ventures into domestic markets it had experienced numerous benefits as well as challenges relative to the local companies. An international company like Burger King can be able to advertise and launch a proper marketing campaign more effectively because they have a large financial pool of resources than the local company.

These companies have a large pool of human resources to choose from and therefore they will be able to attract a lot of talent. In addition, they have experience on how to deal with various dynamic market needs unlike their local competitors (Martin, 2007, p. 8). Wholesomely, they will be able to enhance their potential for expansion of the business. Although they have all these advantages, they are also likely to encounter various disadvantages.

For instance, they might not be able to understand the local market better than their local counterparts. This means that their strategies can fail. International companies can not be well received in countries that value their own companies’ as they might be viewed to be foreigners. The company will also have to incur added administrative costs as a result of expansion. On the other hand, they might be forced to deal with special regulations and licenses (Jermaine, 2003, p. 5).

Two-thirds of Burger King’s restaurants and revenues are in its Americas region

This has been the company’s core market and as a matter of fact it has got a lot of revenues. One-third of the company’s market is elsewhere and this is not supposed to change in any way. Since Burger King has an upper hand in the American region it should not shift this in a bid to capture other emerging markets (Burger King, 2010, p. 7).

Rather, it will be wise for the company to continue advancing its global expansion activities to increase its market share. Loosing the American region for other markets elsewhere is not viable at all since it is a mature market. The company should expand on its existing market share by engaging in more franchises.

A Large youthful population and numerous shopping hubs

It has a priority of venturing into countries numerous shopping hubs and a huge youthful population (Burger King, 2010, p. 6). This has been a good strategy that the company has used to its advantage. Youths form majority of the population in many countries and this will enable the company to have a large market share. Most of the foods that the company offers suit the youths well and that is why they are likely to buy more.

They are also well known to have a good brand loyalty compared to other age brackets and that is why the company prefers them. Shopping centers are well known to customers and it will be easy for the company to market its activities. In addition, a shopping centre has the entire infrastructure that the company needs to open an outlet and as such will be less costly. With a large number of shopping centers, the company is able to access many people and make more sells.

Headquarters location

The company has its headquarters in a nine storey building in Miami. Initially, the company had opted to move away from Miami to another area but this was rejected by politicians (Burger King, 2010, p. 13). The company’s headquarters are very strategic and that is why nobody has been willing to see it change to another place.

This headquarters have not weakened its global position in any way. It has strengthened its global competitive position in a broad perspective. This is because the company has opened other branches in different regions that have helped to monitor progress. The headquarters have only been used to coordinate activities. Through coordination from its headquarters, the company has ended up strengthening its global activities.

Tools and strategies for the future

The company continues to expand globally and as such needs good tools and strategies to enhance growth. As the CEO, the company needs to focus on emerging economies as they will likely give it an opportunity for growth.

More attention should be paid on diverse market needs to diversify our products. This is because various countries have different customers who are well informed. Therefore to satisfy them, the company will have to do a lot of research to know the best locations. The company will also need to asses the market well to know the best cost effective locations.

Implications of the challenges

These implications mean that the company will have to do a lot of market research to ensure that it satisfies its customers well as they are ever coming up with different needs. The future will see a lot of increased competition and the company needs to be innovative with its products to be strategic.

There are occasions where the company has launched products but they have not been well received. This means that it needs to be involved in more partnerships that may end up being healthy. For enhanced sustainability more diversification is needed as far as franchising is concerned.

Conclusion

Burger King is a global company and as such has more opportunities to expand further. Its franchising activities have been successful and only need a little reinforcement for enhanced sustainability.

Reference list

Burger King. (2010). Company information. Retrieved from https://www.bk.com/about-bk.

Jargon, J. (2010). As Sales Drop, Burger King Draws Critics for Courting ‘Super Fans. New York: Wall Street.

Jermaine, J. (2003). The burger king and queen of Mattoon. Illinois: The Illinois Times.

Martin, A. (2007). Burger King Shifts Policy on Animals. New York: The New York Times.

Smith, A, F. (2006). Encyclopedia of junk food and fast food. Westport, Connecticut: Greenwood Publishing Group.

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