BurgerKing Beefs Up Global Operations
BurgerKing Beefs Up Global Operations
BurgerKing is one of the largest fast food restaurant chains in the globe.The business operates in many parts globally with the mainheadquarter located in Florida. The company began as franchise chainthat sold burgers, French fries and many other products. The companycurrently operates more than 73 countries in more than 12, 000outlets (Patton, 2013). James McLamore and David Edgerton establishedthe corporation as a private owned business but it became acorporation in 1959 (Jargon, 2013). In this year, the franchiseespurchased the right to open stores and operate it. This paperattempts to analyze the case study of Burger King Beefs up globaloperations by focusing on its core competency, competitive advantage,key strategy, and among other core concepts.
Thecore competency of Burger King is its flame-broiled burgers thecooking process that the company believes contributes to bettertesting burgers. Daniels, Radebaugh and Sullivan(2012)define corecompetence a special attitude, technology, skill, or capabilitynecessary for effective operation of the business activities acrossthe value chain. Therefore, Burger King utilizes effective skills onthe way they cook their hamburgers. Their second core competency isthe customized burgers that they offer to customers. Their corecompetency relates to its chosen strategy of franchising products toeffective locations. The core competency also seeks to enhance theirmenu by focusing on the main products while advancing their menu toappeal customers (Daniels,Radebaugh, & Sullivan,2012).Their corecompetency also focuses on driving restaurant sales through theirfood-centric marketing and communication strategy.
Thebest way of configuring and coordinating its value chain was throughopening fast food outlets, as well as, franchising stores inlocations where it can gain maximum market share. The company hassucceeded so because it has been able to gain most of the LatinAmerican market. According toJargon (2013), selling of franchises isone of the most activities that create the most value for BurgerKing. Franchising enabled the company to enter into the untappedmarkets thus, increasing market shares and revenues.
Theexpansion of Burger King than its core fast food competitor likeMacDonald has created many advantages. One of them is gaining a hugemarket share in countries and locations where no other reputable andknown fast food restaurants are present. The company did notcompromise on its core competency and its quality while expandingglobally (Daniels,Radebaugh, & Sullivan,2012). This offeredthem a competitive edge over their competitors. However, despitethis, this expansion has some disadvantages and one of them is theconcentration of its outlets in a specific region only. The companyopened the outlets in a very concentrated region and this is the maincause for competitive threats.
BurgerKing will face many challenges when entering another state. One ofthe disadvantages is stiff competition from the domestic foodrestaurant chains, as price differential exists. The internationalcompany willencounter expenses of training people on productknowledge but the local market is familiar to the local companyproducts. However, the main advantage that Burger King will have incomparison to the local restaurant is that due to globalization,which will result to cultural influence. The product lines of BergerKing are reorganized in the oversea markets and this is because ofglobalization.
Despitethe challenges that Burger King face in its Americas region, itshould change its market shares from 60% in Canada and United States,as well as, 40% overseas (Jillani, 2013). The consumer confidence hasalso declined in the recent and sales of Burger declined in NorthAmerica by 6% in 2011, and global decline of sales by 4 % (Jillani,2013).Therefore, the company can shift its stores from Americasregion to foreignmarket thus, reducing many resources (Jargon,2013). They can also change the relationship by growing market sharein overseas markets where the company is currently operatingsuccessfully.
BurgerKing prefers to enter countries with larger number of youths andshopping centers because these conditions are effective forsubstantial business growth opportunities(Hinshaw, 2013). Suchconditions can enable the company to increase sales because largepopulation with young people and shopping center can increaseconsumption of beef, increase sales due to availability forfranchisee for growth, and potential franchise with experience, aswell as, resources.
Thelocation of the company headquarter has influenced its globalexpansion in many ways. First, this global expansion has influencedstrategic location of the company thus, strengthening its globalcompetitive position. Secondly, Florida being the headquarterlocation this has enabled the company to expand their businessglobally because of the larger population contributing to increasedconsumption. Investment in terms of technology, stable politicalenvironment, high level of economic spending by the local government,and high living standardsof people in Florida contributed to itsglobal expansion.
Asa CEO of Burger King, employing PEST and SWOT strategic tools, aswell as, porters’ five forces of competitive strategy when decidingon possible location for the company is imperative. PEST analysis isan effective strategic tool that can enable the company to identifythe variables, which can affect the supply and the demand of theproducts or services. Analyzing political, environment, social andtechnological factors is imperative when choosing on possiblelocation of the business. Employing alsolocation strategies andanalyze the competitive market by using SWOT analysis is crucial.SWOT analysis is an effective strategic tool vital for helping themanagement to determine possible internal and external factors thatmay be favorable for the company when deciding for possible locationof the business. For example, creating new products can be anopportunity for attractingcustomersin the new location of thecorporate.
Thechallenges identified in this case study can affectthe companystrategy currently and in the future in various ways. First, it willaffect the strategy of the company in the present and this is becauseof fierce internal and external factors, which can affect the force.These factors can affect the objectives of the company because theycan alter the company strategy (McFarlin,&Sweeney,2011).Moreover, despite the company having opportunities forexpansion, the challenges they face can affect their strategy, thusmaking it difficult for them to decide the best locations for futurebusiness expansions.
Daniels,J. D., Radebaugh, L. H., & Sullivan, D. P. (2012). InternationalBusiness: Environments
Hinshaw,D. (2013). Burgers Face a Tough Slog in Africa. TheWall Street Journal.Retrieved on
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McFarlin,D. B., & Sweeney, P. D. (2011). InternationalManagement: Strategic Opportunities
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