Burger Hut Company Competitive Strategy

Words: 2500
Topic: Business & Economics
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Executive Summary

Burger Hut is a small company, yet it is striving to enter the global economy environment and operate in the world market. While the entrepreneurship is likely to face rather tough competition with the companies such as McDonald’s, KFC, Burger King, etc., operating in the same market, it is likely to take a unique niche by creating an elaborate promotion campaign and choosing an original marketing approach.

The design of a brand image and the choice of a brand product, however, are crucial for Burger Hut’s success in the specified environment. It is highly recommended that the firm should use its IT resources to advertise the product to the target audience as the SWOT analysis has shown that the IT area is Burger Hut’s obvious advantage.

Apart from the development of a proper brand image to represent the company with, among the key communication objectives, delivering the required message concerning the unique menu and the discounts that the company has to offer should be listed. It is assumed that, by focusing on the sustainable use of resources and the adoption of a cost-efficient approach, Burger Hut will be able to withstand the pressure of the global competition.

Environmental Scanning/Situation Analysis

Burger Hut: History

Burger Hut was founded in 2014 by a former chef, who decided to revolutionize the fast food industry by serving both traditional and exotic fast food from all corners of the world. Although the entrepreneurship is very young, it has already gained rather wide recognition on a local level and is starting to enjoy quite a wide popularity on the national one. Although the firm has not yet developed a very strong brand image that will make it easily recognizable and is letting the quality of its products speak for themselves, the time has come for the company to try entering the global market.

SWOT Analysis

Strengths: mobile optimization

Although the company has not yet developed a solid brand product, the presence of IT innovations in its design affect the marketing process positively. Recent reports show that a range of food companies, such as McDonald’s (Wong, 2013), have developed applications that make their services more efficient and position the firms as available 24/7. The presence of mobile optimization that shines through in the Burger Hut’s overall design is obviously a strength since it allows the company retain its competitiveness rates among the corporate giants such as McDonald’s, Burger King, KFC, etc..

Weaknesses: brand image development

Unfortunately, the lack of a positive brand image that the target audiences can relate to when considering the firm’s products is likely to affect the organization’s sales and the overall competitiveness rates significantly.

When comparing the company to similar enterprises, one must admit that Burger Hut has a range of obstacles to overcome, the lack of global and even local recognition being the key one. In contrast to the corporate monsters such as Burger King, KFC, etc., the organization has not yet developed the image that is both simple and unique enough to be immediately recognizable and very memorable.

More importantly, Burger Hut does not have the time that the companies mentioned above have had to establish their brand image in the target market. At present, the imagery provided by the competitors does not even need the textual component as the image has already been imprinted in everyone’s mind. Burger Hut, on the other hand, will have to incorporate both unique imagery and a catchy slogan into the brand image so that it could become a household name.

Opportunities: expanding into the global market

Despite a comparatively gloomy prognosis outlined above, the firm still has rather high chances at becoming well known among the target denizens of the population due to a set of unique properties that, when advertised properly will doubtlessly become the trademark of the organization.

Threats: competitiveness flaws

Seeing that a very strong emphasis lies on a unique brand image to be developed, the foundational threat for the firm to beware is failing to introduce a unique and memorable brand image to the target denizens of the population.

In addition, the threat of failing to allocate the existing resources, including the financial ones, in an appropriate manner is rather tangible. There is no need to stress that the development of the brand image and its further promotion will require a substantive amount of money. Consequently, it will be essential to develop a sensible and cost-efficient financial strategy that will permit a costly promotion campaign.

Competitor Analysis

Burger Hut McDonald’s KFC Burger King
Overview and Profile Has recently entered the global market; offers unique and exotic food experiences Serves fast food worldwide since 1955 Is among the most popular fast food chains in the world The key competitor of McDonald’s; a company with a well-developed brand image
Competitive Advantage
  • Sustainability-based approach;
  • Differentiation
  • Expertise and efficacy;
  • Cost leadership;
  • Differentiation
  • – well-developed supply chain;
  • Adequate and efficient distribution system
Extensively expanded menu
Target Market
  • Families;
  • Business people;
  • Students
  • Families;
  • Business people;
  • Students
  • Families;
  • Business people;
  • Students
  • Families;
  • Business people;
  • Students
Market Share 0.15% 28% 14% 13%
Marketing Strategies Market segmentation 5 Ps 4 Ps 5 Ps
Products and Services
  • Fast food;
  • Exotic fast food;
  • Home delivery;
  • Smartphone apps
  • Fast food;
  • beverages
  • Fast food;
  • beverages
  • Fast food;
  • beverages
Pricing and Costs
  • Reasonable pricing strategy;
  • Numerous discounts
Reasonable pricing strategy Reasonable pricing strategy Reasonable pricing strategy
Distribution Channels
  • Wholesalers;
  • Direct (Internet)
“cold chain” system (Rishi, 2013) Fast food restaurants Fast food restaurants
Strengths
  • Good use of information technology;
  • Strong mission and values;
  • Emphasis on food diversity and healthy meals.
  • Is the current fast food leader;
  • Owns an extensive amount of resources;
  • Targets all denizens of the population;
  • Very strong position in the global economy;
  • Unique flavors and original recipes;
  • Cooperation with Pizza Hut and Taco Bell
  • Product diversification;
  • Presence in numerous countries
Weaknesses
  • Lack of a brand image;
  • Under-representation of the brand product;
  • Little experience.
  • Lack of healthy food;
  • Low differentiation rates;
  • High employee turnover
  • Poor choice of suppliers;
  • Unhealthy food;
  • High employee turnover
  • Possibility of facing a regulatory issue;
  • Overdependence on the long term customers
Opportunities
  • Exploring the global market;
  • Creating strong brand awareness;
  • Attracting new audience
  • Home order delivery
  • Considering expanding the list of product ingredients (other types of mean apart from chicken)
  • Healthier menu design;
  • Brand licensing;
  • Urban marketing initiative.
Threats
  • Failure to create a memorable brand image and promote the brand product successfully;
  • Being put into the shadow by stronger rivals (e.g., McDonald’s);
  • Market saturation (Patton, 2014).
  • Increase in awareness rates concerning unhealthy fast food;
  • Legal issues;
  • Market saturation (McDonald’s and its challenges worldwide: a market-by-market look, 2015).
  • Increase in awareness rates concerning unhealthy fast food;
  • Legal issues;
  • Market saturation (Hannah et al., 2014).
  • Increase in awareness rates concerning unhealthy fast food;
  • Legal issues;
  • Market saturation;
  • Lack of compromise among franchises (Bernhardt, 2013).

As the analysis carried out above shows, McDonald’s remains the most dangerous rival for the Burger Hut to face in the designated environment. Attracting a large number of customers, it may become the rival that will eventually put the organization out of business by attracting the target audience that Burger Hut aims at. Moreover, the fact that all competitors above already have a very strong brand presence in the designated market makes it quite complicated for the organization to be innovative. However, the fact that the firms in question have been in the designated market for so long also offers certain opportunities for Burger Hut. For example, the brand image and products offered by the entrepreneurship, if designed creatively, will stand out of the range of other organizations’ logos and goods that have been in the limelight for so long that they have literally become commonplace.

More importantly, each of the key competitors of the Burger Hut organization have a well-developed supply chain structure and a well put together supply chain management approach. The phenomenon above can be explained easily by the fact that KFC, McDonald’s, and Burger King have been dominating the target market long enough to build an impressive SCM infrastructure by partnering with trustworthy suppliers and working on their logistics-related routine. Regardless of their nature, though, the characteristics under analysis are going to be an impressive block on Burger Hut’s way to succeeding in the global market. The fact that the company’s current market share is lower than the ones of its key rivals is obviously a problem. However, with a proper promotion campaign and the attraction of the required amount of customers, the issue is likely to subside. The lack of experience and expertise, on the other hand, poses a much greater threat at the earliest stages of the firm’s development as the entrepreneurship may be stalled due to the influence of unexpected factors. However, the fact that the company is capable of changing the target market and introducing evidently new elements into it points to the possibility of a triumph.

Though being a minor dent in the overall process of the company’s promotion, the fact that the firm’s name is eerily similar to another famous brand should be paid due attention. On the one hand, the fact that Burger Hut and Burger King sound alike might be viewed as a competitive advantage as it may lure the fans of Burger King into trying the product. However, others may see the name as a cheap ploy to get the customers’ attention and, therefore, will be unwilling to purchase its products.

Statement of Problems

Operating in the global market is a challenging task mainly due to the necessity to create a unique competitive advantage that will make an organization stand out of a range of similar ones. Burger Hut is a graphic example of the given situation. Since the entrepreneurship does not have a clear and attractive brand image that it can use to appeal to the target demographics, it will need to create one; therefore, the choice of the branding strategy, the marketing tools, the means of getting the message across to the designated denizens of the population, tec., have to be identified successfully.

The purpose of this report, therefore, is to suggest the further course of the company’s development as far as its marketing strategy is concerned. Particularly, the identification of the tools that will help get the message across to the target population, i.e., families, students, and business people, should be viewed as the crucial step to be taken.

Statement of Marketing Communication Objectives

Seeing that the entrepreneurship clearly lacks a brand product that it could use to help people relate to the product and differentiate it from a range of similar ones produced by stronger companies in the target market, it will be necessary to consider the development thereof.

Another essential part of the marketing communication process, the creation of a brand image that people could relate to easily and associate it with the firm needs to be mentioned. Seeing that the key competitors have had an ample amount of time to make their brand image memorable, the Burger Hut marketers will have to make a significant effort to design the brand image with a staying power.

When developing the brand image in question and considering the creation of the brand product, the Burger Ht will have to define its target audience, identify the primary characteristics thereof, and shape the brand image so that it could appeal to the specified denizens of the population (Malik et al., 2013).

Recommendation and Implementation of IMC Tactics: IMC Tools

Seeing that there is a strong need to tie in both visual and textual elements in the course of the promotion so that the target audience could be presented with a well-developed brand image, it will be crucial to incorporate various marketing communication tools into the overall process. Herein the significance of IMC (integrated marketing communication) strategies lies. According to the existing definition, the approaches above permit the usage of several marketing tools at once and, therefore, addressing several issues, such as the visuals and the verbal message, simultaneously (Percy, 2014).

To be more exact, the changes to the current marketing strategy will require the application of IMC tools, including advertising, direct marketing, and sales promotion (Ang, 2014). Advertising will be the first step to getting people’s attention and attracting the target denizens of the population. Seeing that the organization serves fast food that people will most likely consume when in a hurry or in a need of a snack, it will be reasonable to view business people, students and parents with children as the primary audience to cater to. Consequently, it will be necessary to use the resources for developing a standard advertising strategy (e.g., using billboards, newspapers, etc. for placing the ads) and the one involving the use of the IT innovations (i.e., the use of social media as the platform for advertising the brand product).

Next, it is highly recommended that the designed brand image should be advertised directly to the designated audience with the help of the tools such as e-mail letters, brochures, and catalogs. Although the given formats do not allow for using an excessive amount of imagery, they may still incorporate the visual elements such as the brand image and the textual ones, i.e., the slogan and the list of the brand products.

The significance of sales promotion is not to be underrated, either. Herein the necessity to design an elaborate system of discounts and create discount cards for loyal customers lies. It is strongly suggested that at least 1,500 discount cards should be printed for the people who have made at least three orders, have made an order for a total worth of $100, etc.

As it has been stressed above, the use of the latest IT innovations and the emphasis on the R&D aspect (Eagle, ‎Dahl, ‎& Czarnecka, 2014), can be viewed as a huge advantage of the Burger Hut Company, which must be used in promoting it in the global market. For example, the firm should consider the creation of an application that could help people locate the nearest Burger Hut, check the availability of certain products, and make an order in advance.

Proposed Methods of Control & Evaluation

Needless to say, the implementation of the changes proposed above is going to be rather lengthy and will require significant effort and a large amount of resources. Moreover, the changes to occur to the Burger Hut are going to take much time, which may complicate the procedure and lead to missing one of the stages or failing to notice certain inconsistencies or errors. The introduction of a control system will help prevent the problems listed above from happening. As far as the current situation with the Burger Hut Company is concerned, it is strongly recommended that the control process should be twofold. The first part of the control to be executed will require assessments of the firm’s progress in accordance with the objectives and the deadlines set on a regular basis. In addition, the supervision of the production process should be viewed as an option since it will help avoid a variety of mistakes.

Reference List

Ang, L. (2014). Integrated marketing communications: A focus on new technologies and advanced theories. Cambridge, UK: Cambridge University Press.

Bernhardt, A. M. (2013). How television fast food marketing aimed at children compares with adult advertisements. Plos One, 8(8), e72479. Web.

Eagle, L., ‎Dahl, S., ‎& Czarnecka, B. (2014). Marketing communications. New York, NY: Routledge.

Hannah, D., Parent, M., Pitt, L., &Berthon, P. (2014). It’s a secret: Marketing value and the denial of availability. Business Horizons, 57(1), 49–59.

Malik, M. E., Ghafoor, M. M., Iqbal, H. K., Ali, Q., Hunbal, H., Noman, M., & Ahmad, B. (2013). Impact of brand image and advertisement on consumer buying behavior. World Applied Sciences Journal 23(1), 117–122.

McDonald’s and its challenges worldwide: a market-by-market look. (2015). Financial Times. Web.

Patton, L. (2014). Have we reached peak burger? Bloomberg Press. Web.

Percy, L. (2014). Strategic integrated marketing communications. New York, NY: Routledge.

Rishi, S. (2013). McSupply: On top of the food chain. CIO. Web.

Wong, V. (2013). McDonald’s new app is a glorified coupon. Bloomberg Press. Web.