Burger King’s core competence is provision of flame-broiled fast food products. The company relates effectively to its strategy. Among the ways that it does this is by giving consumers what they want. The company has a slogan “have it your way”, and has helped in realization of success. Through this strategy, the food chain provides a variety of products that are differentiated in various ways. It is upon the consumers to choose what they want from the provisions (Denker, 2012). This has helped in bringing about customer satisfaction by taking care of their preferences and tastes.
Burger King has decided to configure its supply chain through inclusion of third parties. Third parties involved here are franchise outlets located in different geographical areas. However, the company likes working directly in newly established market in order to give the desired impression. New markets are tricky when left solely to franchise since they might not have a clear understanding of the food chain. Franchising though creates more value to the chain since individuals involved have good understanding of the market involved (Ivanov & Sokolov, 2010). It helps in capturing a substantial market share.
Advantages of Burger King expanding later than its competitors are that the food chain can take advantages of the shortcomings experienced by the pioneers. The company can work to provide solutions to these problems hence attain a substantial market share. Another advantage is that the organization is mature and has already established a recognized brand. This aids in efficient market entry (Pendrys, 2011). The major disadvantage is obtaining highly competent suppliers. This is because the pioneers in the market have already grabbed the best, and it might take a lot to convince them of possible accommodation in their schedule.
When entering an international market, Burger King has the advantage of capital availability compared to local companies. In case of any need to expand the business or bring in additional value creation services Burger King has it all. The company has the support of its parent restaurants hence has the ability of mounting stiff competition. Disadvantage comes along in that local companies have more knowledge and information regarding the market of operation. This means that the strategies these companies devise will trigger immense competition (Mouw, 2009).
Most revenues that Burger king enjoys comes from United States and Canada (more than 65%). Based on the nature of market in these regions, this relationship should change. This is because fast food markets in United States and Canada are already mature. As a result, there is more competition hence the prospect of making more profit in the future is not certain. The company should increase its investments in other countries around the world that are not saturated in this industry. Asia and South American countries are one of the best based on their economic growth prospects.
Burger King’s preference of entering into markets that have more youths and shopping centers is very strategic. At the shopping centers, everything is at a display and this brings the craving aspect. There is a creation of demonstration effect, whereby a consumer wants to try a product since their colleagues are having it. On the youth’s perspective, it is clear that they are the ones that create a huge market for the fast food industry. Elderly people are more concerned about their health, hence avoid fast food based on its health implications (Schlosser, 2012).
The location of Burger King headquarters has influenced its international expansion positively. Being located in United States and having operated at a profit for a long time means a lot. Through the operation the company has put a lot into its offering for success to be realized. This strengthens the global competitive position since consumers in other countries want to feel the same effect. Most businesses that make it big in the United State’s market tend to create a craving on the international scene. Everyone wants to know what the company’s brand is all about.
As a Burger King CEO, I would use demographic trends and economic conditions of relevant countries in determining possible locations in the future. Demographic trends would entail the age groups available, spending habits and size of population. Regions that are highly populated with the younger generation are more viable. This is because they are more attracted to the industry compared to the elderly individuals. On the economic aspect, countries that are experiencing aspects of growth are more significant. As the economy grows, there is more creation of employment opportunities hence people tend to get busy. There is no time to cook at home hence embrace fast foods as their preference.
The major challenge that seems to surface from the case is that of being able to coordinate the franchises. This has more implications in the future since the company will be initiating expansion into other markets. The franchise strategy might pose a challenge in this process. This is because some of them might have an idea of what the company really wants. They might end up portraying an image that is not desired by the company hence putting off possible consumers (Ivanov & Sokolov, 2010). It takes a lot to put a franchise in order.
Denker, A. (2012). Elaboration case study: Burger King. München: GRIN Verlag.
Ivanov, D., & Sokolov, B. V. (2010). Adaptive supply chain management. London: Springer.
Mouw, R. (2009). Burger King Advertising. Charleston: BiblioBazaar.
Pendrys, E. (2011). Memoirs of a fast food man. S.l.: Authorhouse.
Schlosser, E. (2012). Fast food nation: the dark side of the all-American meal. Boston: Mariner Books/Houghton Mifflin Harcourt.
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