Burger King is a global chain of fast food restaurants serving hamburgers, with a turnover which amounted to $102.5 billion in 2009 when they sold 524 million units. It owns 12,000 franchisees in 74 countries around the world. Two out of three restaurants are established in the U.S. It has set up franchises in Europe but all the French restaurants have closed down since 1997. That is why this analysis will be based on the reasons why Burger King failed in France. To solve this case, we will present the company along with its marketing strategy. Then we will analyze the problems and finally we will make recommendations which would help the company return to France.
The company was founded in 1954 by two students, James McLamore and David Edgerton, who were inspired by their visit to a McDonald's restaurant in California. Originally the first Burger King fast-food was based in Jacksonville, Florida and was called Insta-Burker King.
Due to financial difficulties Burger King was purchased by Pillsbury Company, one of the largest producers of grain and other foodstuffs, in 1967.
In the late 70s and early 80s, the Pillsbury management attempted to reorganize and restructure the chain restaurants. In 1978, Burger King hired McDonald's executive Donald N. Smith to help revamp the company. This plan was called "Operation Phoenix", and the aim was to restructure all franchising agreements. It brought about prominent changes in the menu and design.
In spite of all these efforts made by Pillsbury, Burger King still faced financial problems for many years. This crisis continued even after the company was acquired by the British entertainment conglomerate Grand Metropolitan and its successor Diageo in 1989, which did not succeed in saving the company. Thus Burger King was sold in 2000 to TPG Capital for $1.5bn.
Burger King's customers suffered from this crisis, and thus, Burger King needed an infusion because it was in decline compared to its direct competitor McDonald's, which saw its turnover growing thanks to a larger target and lower prices. Thus, in 2010, the company was acquired by 3G+ for $4 billion.
Burger King benefits from some strengths, which enable it to be one of the leaders on the fast food market. Indeed, it is the second largest fast-food chain in the world, behind McDonald's and before Wendy's, thanks to a strong brand recognition ensured very attractive advertisements (especially on television), among other factors. Besides the quick service which is increasingly appreciated by customers, and very competitive prices (its cheaper hamburger costs $0.99), Burger King has a lot of reasons to benefit from such a good place in the fast-food market. Moreover, it distinguishes itself particularly by numerous new menus, a guide of nutrition intended for the customers, and national and international expansion.
[...] The company should also bet on children by focusing their advertising on Burger King Kids Club. If the company sets up in France, it could be beneficial for it to extend its services. Indeed, it could provide its customers with a home-delivery service. Bibliography Main articles and commentaries - http://www.nytimes.com/1997/07/30/business/burger-king-citing-poor- profits-will-bid-france-adieu.html BURGER KING, CITING POOR PROFITS, WILL BID FRANCE ADIEU Published: July 30,1997 The Burger King Corporation said yesterday that it planned to end its operations in France because of poor profits. [...]
[...] Burger King sells more than 20 burgers composed of different meats such as beef, chicken, fish or vegetarian burgers, enough to delight all consumers. Customers can choose the size of the burger i.e. one, two, three or four steaks. To accompany this burger, clients have a choice between French fries and salads. The brand also sells onion rings, crown-shaped chicken tenders, chicken fries and several drinks such as Coca-Cola, Sprite, Minute Maid, shakes, coffees etc. Burger King sells products to accompany the main dish until the end of the meal. [...]
[...] Compared to its major competitor McDonald's and Quick, Burger King did not show any significant handicaps. The situation in 1997 However, in 1997, Burger King closed down all its restaurants in France, and fired all the employees. The 23 restaurants which belonged to franchisers had to stop their activity under the name of Burger King before December They could choose either to retain their activity being self-employed, or find another brand. Causes of the decline Given the fact that Burger King was not able to face competition, it opted to close down its restaurants, which appeared to be the best solution. [...]
[...] Burger King's customers suffered from this crisis, and thus, Burger King needed an infusion because it was in decline compared to its direct competitor McDonald's, which saw its turnover growing thanks to a larger target and lower prices. Thus, in 2010, the company was acquired by 3G+ for billion. Strengths, Weaknesses, Opportunities & Threats of Burger King Burger King benefits from some strengths, which enable it to be one of the leaders on the fast food market. Indeed, it is the second largest fast-food chain in the world, behind McDonald's and before Wendy's, thanks to a strong brand recognition ensured very attractive advertisements (especially on television), among other factors. [...]
[...] On the one hand, the owners of bakeries and pubs did their best to promote their sandwiches, and on the other hand, McDonald's appealed to kids with their “Happy whereas Burger King did not have the assets to attract families and children. Another cause for the failure of Burger King could be the appearance of the mad cow disease during the 90s. During this period, people were afraid of eating meat, which was also a drawback for the fast-food chain. [...]
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