Burger King Corporation was founded in 1953 in Florida and initially known as Insta-Burger King (Hunger 18-1). The fast food company quickly became popular within its industry and differentiated itself from its main competitor –McDonald’s allowing the consumers to alter the ingredients of the hamburgers without a delay in preparation process.
Burger King is specialized on selling low-price fast food items such as flame broiled burgers, French fries, sandwiches and soft drinks. By 2010 the company had spread to 76 countries and had opened 12 174 restaurants (Hunger 18-2). The main revenues still were coming from the United States.
Resources
There are three main sources of the company’s revenues which are known as tangible resources. First of all, there are retail sales at the restaurants owned by the company. Secondly, the company acquires funds from royalty payments on sales and franchise fees. Finally, another resource lies in property income from restaurants leased to franchises. Out of all restaurants included into the Burger King chain, only 1387 are owned by the company, 10 787 are franchised (Hunger 18-2).
Intangible resources of Burger King include frequent innovation resulting in adding new items to the menu, and strong brand image in the market. Besides, the company has access to a huge base of human resources offering jobs to young people, part-time employees, and students.
Capabilities
In order to maintain the popularity of Burger King restaurants it was decided to re-design them and make them more attractive and contemporary. Besides, the management of Burger King also introduced new menu items in both premium and low-price categories. Among them there were Quarter pound Double Cheeseburger, the Buck Double, Steakhouse XT burger line and BK Fire-Grilled Ribs.
The latter innovation was an unusual addition because no other fast food restaurants sold bone in pork. Moreover, to maximize the efficiency Burger King installed point-of-sale cash registers at the restaurants, and introduced them to a batch boiler which made the cooking process faster and more productive. In addition, Burger King has exclusive long-term contracts with its partners such as Coca Cola and Dr. Pepper which supply soft drinks to the fast food restaurants (Hunger 18-2).
Core Competencies
To ensure its competitive advantage Burger King Company has a well-developed expansion plan. It includes the international expansion:
- To the countries where Burger King’s presence has already been established, but there is still growth potential. Such countries are Spain, Turkey, and Brazil.
- To the countries where Burger King’s presence is comparatively weak, such as Colombia, Japan, China, Italy and Indonesia.
- To the countries with markets that have not been conquered by Burger King before and have large growth potential, they are the countries of Middle East, Asia and Eastern Europe.
Findings of Fact
Burger King’s main competitor McDonald’s is outperforming the company in every aspect. McDonald’s has more restaurants all around the world, its share price is higher, its revenues are larger and it is generally more popular among the consumers because it treats customers with greater warmth and competence.
Besides, McDonald’s has increased its target group of customers adding women and older people by means of developing healthier menu and offering salads, whereas Burger King continues to target young men selling rich in calories meals (Hunger 18-3).
Since after the recession the income of target customer group of Burr King dropped significantly, the company has suffered a loss of revenue. Besides, the sales of Burger King are dropping due to the excessive emphasis put on their value menu. Finally, the advertising of Burger King products is rather poor and many items such as Steakhouse XT burger require better promotion.
Works Cited
Hunger, David, J. “Burger King (Mini Case).” Strategic Management and Business Policy Globalization, Innovation and Sustainability. 14th ed. Thomas L Wheelen, J. David Hunger, Alan N. Hoffman and Charles E. Bamford. New York, New York: Pearson, 2014. Print.