Burger King’s core competency can be based upon two main factors. The first competency is the way they cook their burgers, “by its flame-broiled method as opposed to grills that fry” (Daniels et al., 2011). The second area is their ability to customer their burgers. They utilized the “have it your way” methodology that has proven to be successful for them because the customer can order their burgers however they like them. The chosen strategy is to choose locations for Burger King’s outlets or franchises. Their strategies need to focus on locating their core competencies through building placements. Where they can be reach their customers that want a burger “their way”.
Burger King has decided to coordinate and configure its value chain. They have determined that the best method for doing this is to open franchises and food outlets in new locations that can optimize their market share. This takes the Burger King name and puts it into places without the financial obligation. In order to be successful careful market consideration needs to be implemented. They have found success in alternate markets as well including U.K. and Latin America. “We continue to listen to our customers and the guest relations tool is critical to supporting our franchisees provide the best possible Burger King experience,” said Jose R. Costa, vice president marketing for Latin America & Caribbean Region, Burger King Worldwide” (Burger King, 2012). Through their focus they have dominated the majority of the Latin American market. Burger King generates an excessive amount of revenue by merely selling their franchises. By targeting markets that were not saturated by ‘burger joints’ they were able to gain a significant advantage.
Burger Kings delay in global expansion has proven to be an advantage over their fast food competitors. Instead of rushing into a new market void of knowing how well the market will receive the company, they were able to pick and choose which locations will work best for them. They could enter locations and countries that were unsaturated by fast food restaurants. Another advantage that Burger King had was that it was able to expand while maintaining its quality, reputation, and core competencies that have aiding in their success thus far. This was a clear competitive advantage. The clear disadvantage is that their concentration for expansion is region specific; therefore they could be missing out on additional opportunities. They also may not be able to offer the “have it your way” in countries that do not have exposure to fast food restaurants.
There are many advantages and disadvantages that an international restaurant company like Burger King would have in comparison with a local company in that market. The main advantage is that Burger King is well-established. “Burger King has the necessary capitalization and know-how in comparison to local restaurant companies in developing parts of the world” (Daniels et al., 2011). This allows them the opportunity for greater marketing, promotions, and other things that could help them compete with small competitors. “The main disadvantage that an international restaurant company such as Burger King has in comparison with a local fast-food company is that the local company has a menu that has already been adapted and adjusted to the local market. Not only are expenses such as product knowledge training and expensive equipment and infrastructure not needed to be brought in order for the local company’s operation to take place, but the local target market is familiar with the local restaurant company’s product line” (Hinshaw, 2013).
The majority of Burger King’s restaurants and revenues are in the American region and only one-third of their locations are global. This relationship will inevitably change as they continue to grow and expand. The global market is untapped and has a significant growth potential. This means that the need for fast food locations will be better served by expanding globally instead of locally. Burger King chooses to capitalize in countries where a large number of youth and shopping centers because the conditions are advantageous. This is because this type of market would provide the majority of the business. Shoppers wanting a quick and convenient meal on the go, and youth who live off of fast food restaurants. Focusing on this type of market will aid in Burger King’s success.
Burger King’s headquarters location influenced its international expansion has proven to strengthen their global competitive position. “Contract with experienced companies to handle operations for them, limit the resources they commit to foreign operations and delay entry to many countries until they are operating successfully in on or a few” (Prakash, 2013). This prevents the excess cost of creating headquarters in every global location. Burger King has the option to open up global headquarters in the event a specific location demands it.
As CEO of Burger King, the tools and strategies that would be utilized in determining possible future locations for the company would be digital marketing. “”The power of digital marketing lies in the ability to create a two-way conversation between the brand and the consumer and for the first time this is now possible for our franchisees outside of their restaurants” Burger King, 2012). Determining how well Burger King would be received in a new market and the demand for the product would be the biggest aid in determining new potential locations. The implications of the challenges identified in the case for Burger King’s strategy are just as important today as they are in the future. The cost of selling the food and the limitations of their menu could be the largest challenges that they have to face when determining new markets. Burger King has to ensure they address these challenges in order for their strategy to be successful.
- BURGER KING® Brand Continues to Innovate with Integrated Digital Marketing Strategy. (2012). Retrieved from http://investor.bk.com/burgerking/web/conteudo_en.asp?idioma=1&tipo=43682&conta= 44&id=164373
- Burger King Latin America Integrates Digital Channels. (2012). Retrieved from http://www.qsrweb.com/news/burger-king-latin-america-integrates-digital-channels/
- Daniels, J., Radebaugh, L., & Sullivan, D. (2011). International Business, Environment & Operations (13th ed.). Upper Saddle River, NJ: Prentice Hall. P.465-469
- Hinshaw, D. (2013). Burgers Face a Tough Slog in Africa. The Wall Street Journal. Retrieved from: http://online.wsj.com/news/articles/SB10001424052702304607104579214133498585594
- Prakash, Alok (2013). Country Evaluation and Selection.
