Custom «Burger King Beefs up Global Operations» Essay Paper Sample
Burger King is a worldwide and one of the leading chains of hamburger fast food restaurants with its headquarters in Miami, Florida in the US. The corporation started as a franchise restaurant chain, called Insta-Burger King over half a century ago. After two years of operation, the firm faced some financial difficulties and was bought by its franchisees and renamed Burger King. Currently the company is the world's biggest flame broiled fast food restaurant chain.
Last year statistics indicated that Burger King managed about twelve thousands restaurants in all fifty states and in over seventy countries and United States. The company employed almost four hundred thousands people around the world. Burger King is ranked the second in the fast food hamburger restaurant market and plans to raise the net operating units by three to four percent every year. The company plans to achieve most of that increase through international operations (Hamstra, 1997).
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Burger King stands out and beats its competitors through the way its hamburgers are prepared. The hamburgers are cooked by flame broiled technique as opposed to grills and this is its core competency. The method of product preparation relates to its chosen strategy of providing the customers with a preference as to how they desire their burgers. Most of Burger King's restaurants are in the US and Canadian accounting for sixty nine percent of its 2.54 billion dollars income in the last fiscal year. Initially, the company commenced by selling burgers, fries, milk shakes, and sodas but today, the menu has been enhanced to include breakfast, chicken, fish, and salad. However, burgers remain the stronghold of Burger King with Whopper sandwich being the companies' signature product creating the most value for the company (Reiter, 1996).
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Burger King pioneering advertising campaigns stands out from its competitors. Advertisements like use of a figure of a man as the Burger king and a "Whopper Virgins" campaign in where people who had never tasted a burger are assembled. The "Whopper Virgins" participate in a relative taste test between Whopper sandwiches and Big Macs. The logo of Burger King has slightly altered over the years, notably changing from two buns separating a burger to two buns separating the company's name. Burger King's ownership has evolved a lot but the company has expanded internationally (Jargon, 2010).
The company has invested in Europe, Asia, and Latin America with some of these investments turning out to be very successful and some have failed. Burger King has left unsuccessful markets mainly for two reasons, one being failure of the franchisee to perform sufficiently. The franchisee may fail to invest adequately or to make royalty payments. The market may also turn out to be very minute to sustain the required infrastructure. However, since the Burger King went public, it has taken a more methodical approach towards its expansion. The company still sees considerable growth opportunities in the US as an established market for fast food, especially for hamburgers as compared with other foreign countries (Reiter, 1996).
When analyzing for new markets, Burger King favors those countries with huge populations particularly of the young people. These are the markets with high beef consumption, capital availability to franchisees, safe business environment supporting expansion and availability of prospective franchisees with experience and ample resources. In general, the company has expanded globally presently than its chief competitor, McDonald's. This has resulted in both merits and demerits in that, in small markets, there may be few sufficient suppliers. For example, only one slaughterhouse may exist and the suppliers may not be willing to work with many customers. Conversely, in huge markets, being a recent market entrant may be beneficial because the previous entrants have made demand for fast food and have constructed a supply infrastructure. Burger King has been able to deliberate almost completely on advertising only. When entering a ne market the company has an advantage of its known reputation and established products. The company however faces the disadvantage of competing with local restaurants with already established markets and networks (Hanks, 2010).
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Burger King's headquarters are still in Miami, often regarded as the capital of Latin America. The location has made it invest in some countries with small populations neglecting others heavily populated countries. This is because many people from Latin America and the Caribbean come to or through Miami. The companies' reputation spilled over to that area early on simplifying gain in brand appreciation and recognition. Additionally, Latin American and Caribbean countries are near to Miami and therefore Burger King's administration can visit these countries and franchisees can visit its headquarters. The location of its headquarters in Miami has therefore enhanced its international relations and has strengthened its international competitive position (Smith, 2006).
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The company has demonstrated market commitment especially if the market turns out to be as good-looking as expected. In this case, the owned operations may be more lucrative for Burger King than royalties coming from the franchisees. The company has constantly focused on expansion in international portfolio. The company has entered a number of new markets and has also re-entered numerous markets that it had abandoned previously. Before entering a new market, the company first develops infrastructure, a local management team, focus growth on main cities, set up a local office and sustain incessant growth and the use of local suppliers. This strategy enabled the company to succeed while entering the Brazilian market and is being applied in Russia (Hanks, 2010).
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Burger King has numerous opportunities for growth and expansion within its existing markets and in the new markets. Statistics are evident that, despite its global growth, it is still in less than forty percent of all the countries of the world. The challenge therefore becomes the best locations are for locating its upcoming emphasis. As the chief executive officer of Burger King, I would choose the population as the basis of location of the company in future. The culture, tastes and preferences of the residents especially the youth is also a significant tool for making this decision (Hamstra, 1997).