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Saturday, November 27, 2021

A Case Study on Burger King

Introduction

Burger King is the second-largest leading fast-food chain company in the world which specializes in providing one of the best quality hamburgers and sandwiches for their customers at an affordable price. Today, it is operating in more than 80 countries, more than 100 nations, and 100% are privately franchises owners, which serves as a strong brand equity presence in the market. It also offers soft drinks, salads, hot dogs, and some other breakfast items as complimentary. The main headquarter of the company is in Miami, Florida which is in the United States, and it was founded by James McLamore and David Edgerton. The main intention of the company is basically to provide food to their customers which must be reasonably priced, attractive, and maintain hygienic in clean surroundings. It wants to offer the best quality products so that it can fulfill the needs, demands, and requirements of customers. Burger King owns around 15,738 outlets and the country has expanded its business operations in various countries to expand as well as to diversify its product range to build its target customer’s base. Although there are intense competition and tremendous challenges, the company still holds a very strong position with the guidance of interesting marketing strategies in the market. The company believes in creating mutual understanding as well as the most important thing that is to gain trust for the organization from customers and maintain their customer relationship management. Even in the future, Burger King has planned to increase, add some new food products to its fast-food chain which gives one advantage for the company to upgrade its business operations across the world. Currently, Burger King has an employee turnover of over 35000+ and their annual revenue is around the US $ 1.78 Billion.                              

Burger King Lifetime Journey

The story of the Burger King commenced on the way back to 1953 where it was named Insta – Burger King. In the year 1954, the company faced some serious financial problems due to the lack of budget for the Miami-based franchisees. It was a very tough time but until then James McLamore and David Edgerton acquired the ownership of the company from Kramer and Matthew Burns to mitigate the crisis through which the company was renamed as the Burger King. The company’s name was renamed successfully but they needed a concept so that the business can commence. The two of them decided to buy a cooking device called an Insta Broiler. Insta Broiler was the first cooking device that was quite useful for cooking burgers, and it was proved to be so successful that their franchises required almost all the Insta broiler cooking devices to cook the burgers. James and David held the position to restructure the corporate chain to the next level and later the company soon expanded over 250 locations in the United States. In 1967, they sold the company to Pillsbury Company. The management of the Pillsbury’s made a lot of attempts to reorganize as well as restructure the fast-food restaurant chain between 1970 to 1980. Burger king thought that their competitors were moving ahead but their company was not that in a position to compete with them in the market. So, in the year 1978, the company decided to hire one of the executives from the famous fast-food chain restaurant McDonald to boost and revamp the structure of the company by introducing a project called operation Phoenix. Under the terms and conditions of franchise agreements signed with McDonald’s, Burger King had broadened their menu card and redesigned their restaurant store to expose that look and feel of the company for their competitors and customers. But despite being made huge changes and given a lot of effort, the financial performance of Burger King and its parent company McDonald suffered a huge amount of loss. At that point in time, in 1989 it was acquired by British Grand Metropolitan Diageo who damaged the major franchises of other businesses and were removed from the market due to which the total value was decreased. The company wanted to gain its independence by giving another chance by acquiring the ownership of the company from Diageo through with the help of TPG Capital investment firm Venture Capitalist company of somewhere around $1.5 billion (USD) and it took place in 2002. In 2006, the company had applied for IPO (Initial Public Offer) to convert into the listed company from the unlisted company to oversubscribe the shares.

So, when the deal was completed, Burger King’s stock was removed from the NASDAQ, New York Stock exchange which later became a public limited company. The company had to repair their business structure and continued to work without the help of McDonald’s and stood on their own feet and continued their business in the long run. 

Strategies of Burger King

Let us talk about the core strategies of Burger King which include the transformation of the production stage to the promotion stage of product or product range. This will happen by understanding the 4 Ps of Marketing Mix which is as follows: – 

 Product Mix 

Burger King usually operates their business as one of the quick and fast delivery food providers. The main food that they basically primarily focus on is to make Hamburgers as it is their primary product. The product line of Burger King includes:

  • French Fries 
  • Breakfast Meal 
  • Shakes and cold drinks 
  • Chicken products 
  • Side dish 

The company also deals with offering some other alternatives products such as Salads, Chicken Caesar, Veg Salad, fish cutlets, and some other value meals. Its’s product range is very much wider as compared to the other competitors in the industry. 


Price Mix 

Let us understand the main pricing strategy of Burger King and their strategy is based upon generic. The company tries to minimize the cost to regain its profits. It is divided into two types. They are Price bundle strategy and Market Oriented strategy 

  • Market-oriented strategy:  Under this strategy the company tries to establish the price of the product based on market trends and conditions such as a change in customer preferences, competition, and environmental changes. 
  •  Bundle Price strategy:  Under this strategy customers can purchase their value meals and meals for children which are very much affordable for buying the food products. We can say that the company relies much more on-trend of the market to make their decision on prices. 

Place Mix 

Burger King provides foods and services outlets that can be availed by everyone all over the world. This is one of the most vital and important components of Marketing Mix which is the place where the firms are entitled to conduct a transaction with their customers in the target segment market. The company uses various effective distribution channels of how the company can position its products such as mobile apps, restaurants, company websites. Customers can use Burger King mobile applications so that they can have a look at different coupons for some different discounts and offers as well. The company mainly focuses on improving the physical existence of fast-food outlets. 

Promotion Mix 

Every time this may happen that the existence and awareness of the product are not being reached successfully to customers. Burger King also focuses on adopting different strategies to encourage and enhance the promotion of products and services among its customers for that the company must apply various tactics to retain customers such as advertisement, sales promotion, publicity, and personal selling. It also focuses mainly on advertising the products through the medium of media channels such as printed media, TV, Radio, social media channels, and so on. The company also focuses on promoting its products by providing financial and economical support to some educational courses. So, this will help in making the brand image of Burger King strong. 

Swot Analysis     

Strengths 

  • The largest brand in the fast-food chain industry.
  • They have various diversified product ranges.
  • A number of the outlets is excellent enough to capture the audience. 
  • Focuses on innovation.

Weaknesses

  • The business model can easily be able to intimate 
  • The restriction is there in the product mix 
  • Difficult to handle no of franchises
  • Inefficient quality management 

Opportunities

  • Expansion of business is possible in emerging markets
  • Introduction of the new food segment 
  • Understand the need and preferences of customers 
  • Strengthen the market presence and portfolio diversification 

Threats 

  • The problem of the Recession. 
  • Increase in competition level. 
  • Global Pandemic.
  • Public awareness and legal issues. 

Conclusion

In the conclusion, we can say that Burger King is one of the well-established and fast-food restaurant chains which has the potential enough to enhance and innovate the operations of the business in the long run. The company always believes in innovating the product and also, they will always assist in enticing their customers in providing good products and services without breaking their trust. Even though they will work on introducing new segments and product mix to expand further in the market and keep healthier food products as compared to other competitors.


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Josie Patra
Josie Patra is a veteran writer with 21 years of experience. She comes with multiple degrees in literature, computer applications, multimedia design, and management. She delves into a plethora of niches and offers expert guidance on finances, stock market, budgeting, marketing strategies, and such other domains. Josie has also authored books on management, productivity, and digital marketing strategies.

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Business Upside eMagazine
Business Upside eMagazine
Business Upside eMagazine