Burger King Inc Organisation Strategy - Research Paper Example

? Burger King Inc Organisation Strategy \ Burger King Inc Organisation Strategy Executive Summary The contemporary intricate and systematic changes in global and local markets have compelled modern profit making entities to focus their attention in instituting and transforming their operation and management strategies. As per the research findings from modern economic scholars and thinkers, organisation strategy is described as the manner in which organization transforms their management and operation activities in order to meet the market needs and demands (Wootton & Horne, 2002). In coming up with effective organization strategies, organisations managers and leaders consider various factors and constraints. Skills and competence in an organisation, organisation structures, talent management practices, organisation culture as well as existing market dynamic are some of the core factors that define organization strategies in modern business entities (Liedtka, 2008). To prosper in modern American and international market, Burger King Inc have in the recent past instituted various strategies that have proved to be extremely effective in advancing its productivity. However, due to the emergence of market changes and increase in the number of competitors in the market, the company ought to institute more effective and complicated strategies. The Burger King Inc has numerous franchises and over 10, 400 restaurants in global market. In addition, the company has as well succeeded in establishing more than 1000 outlets in global market. In addition, the company has so far succeeded in venturing in 50 states in America and over 56 other countries in the world (Maremont, Pete & Brian, 2009). In addition, the company serves more than 15.7 million customers everyday in global and American market. 2.4 million of the Burger King Inc hamburgers are sold every day in international market At present, Burger King Inc is the second largest fast food chain in United States of America after McDonald. However, the current Burger King Inc prosperity and development is threatened by various emerging factors. For a starter, the consistent financial and economic crises in Europe countries and United States of America have threatened the organisations productivity and profitability. In addition, the entrance of new business entities in local and global market is also another major threat to the company’s productivity. The adoption of effective strategies by Burger King Inc.’s competitors has as well posed a very serious threat to the organisation development and productivity. Other factors that have threatened the organisation productivity and efficiency entails change in market and customers needs and demands, emergence of numerous competitors in food industry, new and complicated technological development as well as introduction of new policies and measures in global market. To counter the identified challenges and market complications, Burger King Inc ought to come up with new strategies to retain its position in global and local market. Additionally, in order to realise the most effective expansion and development, Burger King Inc need to restructure its organisation strategies and programs. The adoption of new promotion and marketing strategies, management strategies and effective production strategies is therefore very essential and critical in facilitating development in Burger King Inc. By evaluating some of the main challenges in contemporary market, the essay below will focus on identifying some of the most effective strategies that Burger King Inc. should introduce in order to prosper in modern dynamic and complicated market. The essay will as well explore the current Burger King Inc market position and some of its main challenges. Burger King Inc Background Burger King Inc is currently one of the largest food chain in global food-chain market. Burger King Inc was established in 1954 and was named as “Insta Burger King”. The organization headquarters are situated in Miami in Florida, United States of America. The organisation was established as a small family business entity. Due to increased demand in its products in local market, the company witnessed very consistent expansion in its initial five years. Owing to its consistent development and desire to expand in other states, the company introduced its Initial Public Offer in 2006. The 2006, Initial Public Offer was therefore the main pillar for the company’s current expansion and productivity. The resources that were acquired from the 2006 Initial Public Offer were used to open more outlets in other global markets. In 2009, Burger King Inc opened the commonly known Whopper Bar in American market. This was a division of the Miami restaurant that was used to serve drinks and Whoppers. Due to its efficiency in its service delivery, Burger King Inc. has so far won several awards in global market. In 2010, the company was awarded by Inter-Brand with an excellence certificate for being among the first top 100 global brands. At present, Burger King Inc has more than $ 2 billion annual revenue. Burger King Inc is the second largest hamburger fast food chain in global market trailing behind McDonald. Burger King Inc has more than 12000 restaurants in over 50 states in America and in numerous franchises in over 73 different countries in global market. In the recent past, the company has been witnessing consistent expansion in world market. Some of the commonly known Burger King Inc products include, fries, chicken tenders, Whopper sandwich and chicken sandwiches. Other choices that are offered by Burger King Inc include desserts, breakfast items and salads. Burger King Inc is a well known for its unique slogan “Just the Way You like Them”. The organisation’s vision has as well played a noticeable role in advancing the productivity and quality of the Burger King Inc brands. In addition, the company is guided by the values of caring, respect, accountability and transparency, high standard commitment fairness and diversity and collective celebration of the organization success and prosperity (Gibson, 2012) Situational Analysis Burger King Inc is recognised as one of the best-known brands in American and global market. The Burger King Inc mainly focuses in fulfilling its customers’ needs and demands. In addition, Burger King Inc is popularly known for its attractive and informative logo. The logo, defines the organisation quality of service delivery as well as the quality of the products that are manufactured by the company. At present, Burger King Inc is praised by American and global customers for its high quality and attractiveness products and services. However, despite producing quality products, Burger King Inc has in the recent years been experiencing constant competition both in American market and in global market. Despite encountering consistent competition in local and global market, other factors such as social and economic factors, technical changes and legal factors have to some extent affected the productivity and efficiency in Burger King Inc. The company has been relying on its franchises to distribute and market its products in American and in global markets. Burger King Inc franchising marketing entails indentifying customers’ requirements, needs, and coming up with a strategy to meet the identified needs and demands. This marketing style has so far helped the company to flourish in local and global market. The company’s systematic researches in local and global market have played a very critical role in enabling Burger King Inc to produce high quality products compared to its competitors. Production of quality products has not only improved the organisation’s profitability and productivity but has as well led to the establishment of royal customers. In local and global market, Burger King Inc has established numerous royal customers who play a very essential in the organisation’s decision-making process. Some of the Burger King Inc main competitors in global market include Starbucks, McDonalds and Subway. Burger King Inc has a very effective reputation in local and global market. Some of its main competitors have on the other hand adopted modern technological development in their value chain. As a result, these competitors have largely threatened Burger King Inc position in global and local market. To retain its position in global market, Burger King Inc should undertake consistent researches to indentify modern markets demands as well as customers’ needs. Despite the identified Burger King Inc competitors, the food market has other new entries that are threatening the company position in global market (Emerson, 2012). Burger King Inc SWOT Analysis Strengths To begin with, Burger King Inc has over 11, 500 fast food restaurants that are situated in over 74 global states. Among them, 62% (7, 207) are located in United States of America. The other 38% is located in different global market including Canada, Africa, Asia, and Middle East. The company has as well dominated fast food market in Chinese market and some countries in European continent. The establishment of numerous restaurants in global market have enabled the company to increase its productivity and annual revenue. Secondly, Burger King Inc has very consistent market share. In global market, Burger King Inc is the second largest fast food restaurant after McDonalds. At present, Burger King Inc dominates over 15% of United States of America market segment. The increased market share in American market has enabled Burger King Inc to significantly increase its profitability and quality of its service delivery. For instance, in the financial period of 2006-2008, Burger King Inc operational profit increased by $ 170 million in 2006 financial year to $354 in 2008 financial year. The increase in the organisation products has significantly enhanced its expansion and development. Burger King Inc’s products are recognised globally. The organisation slogan has so far been linked to the current popularity of the organisation’s products. In addition, the qualities of services and products that are offered by Burger King Inc have enhanced its current popularity. At present, the company is raked position seven in brand awareness in global market. The popularity of the Burger King Inc brand has not only increased its productivity and annual revenue but has as well enhanced its promotion initiatives. Superior growth plan is as well another key strength of Burger King Inc. Currently, over 90% of Burger King Inc restaurants are owned and managed by independent franchisees. A number of these franchisees are family owned units that have been in local and global market for a long period. As a result, the company have a possibility of experiencing radical growth and at the same time collecting fees and royalties from its franchise. Weakness The Burger King Inc is faced with a challenge of vulnerability to labour and regulatory influences. Although the company operate in many global countries, most of its restaurants are situated in United States of America. The concentration of many restaurants in one geographical location increases the organisations exposure to local labour complications such as labour strikes, and influence from regulatory changes. Concentration of numerous restaurants in American has as well played a very critical role in increasing the impacts of global economic and financial crises to the company’s productivity. Burger King overly relies on “Super Customers”. The company’s “Super Customers” have in the recent years significantly influenced organisation’s decisions. In most cases, the company has reported to slow its transition in order to meet needs and interests of the organisations “Super Customers”. Over reliance on the “Super Customers” opinions and ideas has therefore constrained the organisation marketing and promotion strategies in the last few financial years (Wheatley, 2009). Opportunities The new breakfast food initiative is one of the most critical opportunities for Burger King Inc. At present, Burger King Inc is seeking to alter its breakfast menu in order to include coffee drink in all its restaurants in America market. This initiative is intended to counter the popularity of Star Buck in coffee production. The organisation intends to change opening time in American restaurants. Secondly, the Burger King Inc intends introduce new healthier menu. Burger King Inc is sponsoring one of its biggest new brands in the market by introducing Tendercrisp Premium Chicken Burger. The launch will as well be accompanied by the commencement of marketing campaign “Cheat on Beef”. The aim of this launch is to increase the variety of its products in local and global market. In addition, the company intend to expand its markets in other parts of the world. National urban community marketing initiative is another core opportunity in Burger King Inc. The company is aiming at strengthening its position in African American community by instituting promotion mechanisms to access African America segment of American population. Through this promotion initiative, the company intend organise a well-publicized tour in 41 urban communities in United States of America. Brand licensing projects is also another critical Burger King Inc opportunity. The company have entered into licensing agreement with “Broad Street Licensing Group” in order to increase the company’s products awareness in global market. The initiative will include printing T-shirt with the company’s brand name. Billboard will as well be critical in promoting the organisation products. Threats The unrest among franchise is a major threat to the organisation’s productivity and development. The Burger King Inc new dollar cheeseburger plan and loss of leader strategy has to a great extent upset franchise operators. This is due to the fact that, the initiative has greatly affected the pricing of the organisation products. The dispute has therefore spurred the National Franchise Association to file a lawsuit against the company. Due to these new initiatives, the company has dropped $1 in burger promotion. Slow economic recovery has hampered the organisation financial strengths. In 2009, Burger King Inc recorded lesser than expected quarterly results. The decline was associated with continued adverse macroeconomic condition that included high level of unemployment. Change of customers eating habit is also a major threat to the organisation development. As a result of change in customers eating habit, Burger King Inc sale in United States of America and Canada declined by 4.6% in 2009. In addition between 20009 and 2011, customers who are between the 10 and 34 years reduced their consumption level by 12%. Changes in eating pattern especially among young people in America have therefore threatened the organisation development and profitability (DeGeorge, 2011). Industry Structure The company’s headquarter is situated in Miami, United States of America. At present, the company operates over 40 subsidiaries in global markets that oversee the operation of its franchise. The subsidiaries also play a very essential role in offering a linkage between the organisation’s restaurants and franchise. Despite having, the subsidiaries that help in the management of franchises, the organisation has as well established copyrights and trademarks that are used by restaurants in United States and Canada to promote the company’s products and services. Trademarks and subsidiaries as well play a very essential role in offering marketing and other related services to the parent company. In addition, over 90% of the Burger King’s Inc franchises are privately owned and managed. In places such as in North America, Burger King Inc has an established organization that have the mandate of licensing franchises that seeks to sell the company’s products. In international level, the company partners with other well established organisation in establishing some of the most effective franchise that can help in marketing the organisations products. Some franchisees are as well mandated with the responsibility of establishing and sub-licensing new stores in global market as well as in offering the required training to facilitate quality operation exercises. To expand the company market in local and global market, the Burger kings Inc support the established franchisees with financial support. Moreover, Burger King Inc offers advertising and administrative support to established franchisees in order to facilitate common marketing scheme. Despite offering all forms of support to its franchise, Burger King Inc deploys and designs training systems to new investors as well as overseeing maintenance of the company’s brand quality. Despite succeeding its using its current management and operation model, the company has lacks direct access to its initial customer. The organisation marketing chain is very long and complicated. Compared to its competitors, Burger King Inc managers do not get direct feedbacks from its customers. Most of the feedbacks that are received from the company franchisees are distorted and as a result, they do not reflect the actual opinion of its customers. Therefore, the introduction of a policy that will facilitate a direct linkage between the organisation management and customers is critical and essential. Value Chain The initial step in value chain is research and analysis. Prior to intruding new brand in the market, the department of research and development undertakes intensive researches to identify the market demands and needs. In addition, Burger King Inc undertakes a research to identify the potential suppliers of the required raw materials. The second stage in the Burger King Inc is planning for the most effective means of manufacturing the proposed product. In this stage, the organisation conducts systematic experiments to ensure that, the manufactured products meet the market demands. The third value chain step is production stage. In this stage, the company’s experts acquire the required raw materials from the identified suppliers. After that, Burger King Inc employees produce the new products according to the available guidelines and raw materials. The produced products must meet the identified global and local standards. This is the most essential step as it involves ensuring that the organization reputation is maintained and if possible advanced. After the production stage, the fourth stage is marketing stage. Burger King Inc uses both printed and electronic means to promote its brand in local and global market. The main of this stage is to ensure that, the existing and potential customers are aware of the new products. In addition, marketing is as well intended at ensuring that its customers understand how the new products are used as well as its availability. Despite relying on electronic and printed media, Burger King Inc as well uses franchisees and restaurants to promote its products. The distribution stage is as well very essential. This process entails transporting the produced products from production plants to the identified franchise. Burger King Inc used both road and airfreight to transports its products. Burger King Inc has as well established production plants in their markets to reduce the cost that is incurred in transporting the organisation products. Customers services is the final stage in Burger King Inc value chain. This stage entails selling the organisation brand to customers. This stage also entails offering after sale services to the organisation customers. Customers’ services take place in the company’s restaurants or in identified franchise (Shelton, & Darling, 2001). Competitive Advantages Burger King’s products are very popular in Middle East countries. Although the company is compelled to pay corporation taxes, the company has succeeded in dominating market in Middle East compared to other organisations. In addition, due to its popularity in Middle East market, Burger King Inc has been able to develop irrespective of the consistent global financial crises. The Burger King Inc has very competent and experienced managers and employees. The organisation cultures have ensured the employment of competent and qualified professionals. Compared to its competitors, Burger King Inc has effective and experienced leadership. The Burger King Inc has a very essential value chain model. Undertaking systemic research before producing a new product has significantly helped in improving the quality of the company’s products and services. The use of franchises has not only helped the company to improve its productivity but has as well facilitated in establishment of new ideas for improving the quality of organisation’s products. At present, Burger King Inc is rated as one of the global cooperation that has the highest number of outlets in global market (Luxenberg, 2009). Strategies By referring to the current nature, dynamic, and complexity of United States of America and global market, Burger King Inc ought to adopt strategies that address the four marketing issues, product, price, promotion and place. The adoption of strategies that seeks to strengthen the organisation marketing will not only improve the organisation productivity but will as well help the company to counter its main competitors. Product At present, Burger King Inc has succeeded in maintaining the quality of its products and services. The company good reputation has significantly helped in improving the Burger King Inc profitability and productivity. However, to flourish in modern market, Burger King ought to ensure that, the company’s products meet the demands and needs of its customers. Undertaking comprehensive and systematic researches to understand customers’ needs is very essential and critical. The research and development department have a responsibility of instituting initiatives that will ensure that, the company get consistent and direct feedback from the company’s customers on the nature and quality of its products. The company should as well understand that, customers values their money and as result, quality services and products is very essential in maintaining the organisation’s customers. Burger King Inc should as well come up with menu that fulfils customers’ demands. In addition, undertaking consistent researches will also help in identifying changes in customers’ needs and demands. Through undertaking constant studies, Burger King Inc will as well be able to introduce new products in the markets and eliminate the outdated products and services. Pricing Strategy The current global finical crises have to a great extent affected customers’ income. The limited resources have therefore forced customers to effectively and strictly utilise the inadequate resources (Moore, 2005). Adoption of a strategy that will reduce the cost of the company’s products will not only retain the existing customers but will as well increases the number of organisation’s customers. Value of customers’ perception is a very essential factor that determines the prices the company’s products and services. Therefore, Burger King Inc products and services should be similar to the amount charged on its products. On the other hand, charging products at very low prices will compromise the quality of the products and the organisation productivity. In placing the prices of its products, Burger King Inc managers should consider several factors such as product integrity, the economic development of the indentified product and the quality of its products and services Promotion Promotion is a very essential factor that determines the company brand position in local and global market. Although Burger King Inc has effective promotion and advertising strategy, the adoption of an initiative that will meet the current market demands is very essential. Adoption of a strategy that will ensure direct communication and interaction between the company’s management and customers is very essential and critical. In this case, utilisation of social media can play a very vital role in ensuring direct communication between the company’s management and customers. Conducting evaluation and researches through social media will as well a cost effective process. Online advertisement strategies will as well help in the integration of modern technology in the organisation initiative. Consistent utilisation of mass media such as radio and television and posters will as well be essential to customers who cannot access social media and other online services. The Burger King Inc should as well adopt other effective promotion services such as telemarketing, exhibitions, demonstration door drops, royalty schemes, sale promotions merchandising, direct mail, seminars and point of sale display. Adopting a marketing and promotion strategy that will incorporate both conventional and modern advertisement and promotion processes will be very essential in improving the company’s performance in American and global market. Placing Strategy Distribution of the organisation’s products and services is a very important aspect in facilitating market dominance. Burger King Inc has over years been relying on franchise in distributing its brand in global market. However, to facilitate efficiency and effectiveness, Burger King Inc ought to open many restaurants in various parts of the world. The introduction of numerous restaurants will facilitate consistent distribution of goods and services to the identified franchisees. The physical location of the company’s products should as well be assessable to ordinary customers. Burger King Inc should therefore open various outlets in rural areas to facilitate easy access to the company’s products. The adoption of effective distribution mechanisms can as well help in reducing the cost that is incurred in distributing the company’s products to potential consumer. Monitoring and Evaluation To identify the impact of the proposed strategies on the organisation productivity and efficiency, Burger King Inc leadership ought to set certain indicators for successful implementation of the proposed strategies. In addition, systematic examination and evaluation on the implementation process of the proposed strategies will play a very essential role in examining the efficiency of the proposed strategies. Increasing the number of customers in the organisations restaurants will be an effective indicator for successful implementation of product strategy. Reduction in promotion and advertisement will be a very effective indicator for successful execution of promotion strategy. Effective implementation of placing strategy can be examined by accessing the cost that is incurred in distributing the organisations’ products to the potential consumers. Finally, improvement in the number of customers who are willing and able to buy Burger King Inc at the set prices will be a very effective indicators for effective implementation of pricing strategy. References DeGeorge, G. (2011). Turning up the Gas at Burger King: It is Discounting Burgers and Dumping Yet another Ad Campaign. Business Week, 15 (7), 62-67. Emerson, R., (2012). Fast Food: The Endless Shakeout, New York, NY: Lebhar-Friedman Books Gibson, R. (2012). Burger King Overhaul Includes Refocus on Whopper. Wall Street Journal, 1 (5), 19-35 Liedtka, J. (2008). Linking strategic thinking with strategic planning. Strategy and Leadership, 1 (10), 120 -129 Luxenberg, S. (2009). Roadside Empires: How the Chains Franchised America. New York, NY: Viking Maremont, M., Pete E., & Brian B., (2009). Trying to Get Burger King Out of the Flames: It'sa Tall Order, Even for Grand Met Hotshot Gibbons. Business Week, 19 (89), 29-37 Moore, M. H. (2005).Creating public value: Strategic management in government. Cambridge, Mass.: Harvard University Press Shelton, C. K., & Darling, J. R. (2001). The quantum skills model in management: A new paradigm to enhance effective leadership. Leadership and Organizational Development Journal, 22(6), 264-273. Wheatley, M. J. (2009). Leadership and the New Science: Learning about Organization from an Orderly Universe. San Francisco: Berret- Koehler Wootton, S. & Horne, T. (2002). Strategic Thinking: A Step-By-Step Approach to Strategy, Second Edition. Dover, NH: Kogan Page. Read More