Burger King is one of the most…
Burger King is one of the most popular chains of fast food in the world which is mostly private business, franchised. In this essay, I would discuss the ownership model, strategic positioning and modes of operation by using the theories of retail management to link these factors up. The business is operating as franchising in which privately ran and owned the company. According to the research of Burger King, there are more than 12 thousands of chains that locating in 73 countries and 99% of which are privately held. More than 1.14 million customers are visiting and purchasing in Burger King every single day.
(Burger King, 2018) Burger King has a large number of total market share in fast food market field as the second most significant fast food chain in the world. Plus the competitions between Burger King and its core competitor McDonald lead me to believe that this is an excellent business to research.
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Burger King is an international franchise that owned by retail investors. Franchising is a relationship that a franchisor provides the privilege of using its brand to do business. The franchisors should also offer help in training, organising, marketing, managing and merchandising in return for the initial fee (Berman and Evans, 2012: 581). It costs a minimum investment £50,000 to become the franchise, and it needs further payments to get the other services what provided by franchisors such as training, equipment and insurance. Besides initial fee of being a franchisee, there is also a monthly payment for the franchisee to pay to the Burger King which equal to 5% monthly sales for advertising plus 6% monthly sales for royalty (FDD of Burger King, 2017).
Burger King is a mature fast food company which has strong reputation and experience of running the business. Therefore being a franchisee of Burger King could acquire varies benefits such as low investment risk which increases the chances of making a profit; Obtaining systematic training by Burger King; Using the famous brand with reputation and promotion activities to improve competitive power; Centralized stocking to reduce the cost and guarantee the source of the goods. However, in addition to these positive impacts, Being a franchisee of Burger King still need to consider high franchise fee. The franchisee needs to share profit with franchisor by the contract and is restricting to the franchisor without the right to handle enterprises’ affairs in the way of operation to limit its growth. The enforceable acceptance of unified supply prices what provided by Burger King is also an issue of being a franchisee.However, the whole business will be influenced negatively by one franchise business(Hoy F, Perrigot R and Terry A, 2017).With regards to strategic positioning, Burger King is famous as ‘serving high-quality, great-tasting, and affordable food (Burger King,2018).
‘ The main characters of strategies of Burger King can be summarised as Localization, differentiation and expansionary. Burger King fulfils the changing preferences and taste of the customers globally through applying geographic and demographic segmentation. For instance, they set up a research centre in Shanghai to design different taste of foods for Chinese consumers in different regions(Bhasin H, 2017). Since the taste of supply could meet the demand, the sales will rise definitely. The differences between Burger King and its competitors are their consumer group, distinguishing from its competitors like McDonald, Burger usually cooperates with films such as Star War and The Simpson’s what are preferred by adults (Yasmine, 2008). Burger King continuous applying its expansionary strategy to obtain more market share through operate branch stores globally and combine with its localised and differentiated strategies to earn more profit. The core goal of Burger King’s strategy is to set up sustainable competitive strengths in the competitions, and this determines the fundamental decisions that guide the business’ operating strategies, marketing and financial management.
(Rodrigo, 2012)Burger King is offering discounts to consumers online for promoting and operating in the franchised model to keep low operating. The main modes of operating of Burger King is controlling the costs and improve the consumer satisfaction level through providing conveniences. The most significant mode of operation for Burger King to fight for the amounts of customers is the ‘Drive-thru’ service. Burger King earned more than 70% sales by this service (Burger King, 2018). Although its competitors adopted this competence like McDonald, Burger King’s ‘Drive-thru’ is still famous for its efficiency and effectiveness (Rodrigo, 2012). Burger King offers delivery services as well, and this services could satisfy customers who cannot or do not want to go to the physical store. Furthermore, consumers have the ability to pre-order online to acquire discounts and save the time they suppose to spend in the queue, and the pre-order service can help consumers custom their own meal and decrease the mistakes what made by staffs.
The customer satisfaction can be increased if the self – services were convenient and efficient and under control (Liljander, V., Gillberg, F., Gummerus, J. and van Riel, A., 2006).In conclusion, Burger King is keeping focusing on its quality of food and increase the number of consumers to fight for market shares with rivals. Its specific strategies – localised, differences and expanded, working as a combination and help Burger King to build up a tremendous competitive advantage.
When Burger King opens a branch store in different regions, they will focus on researching the preference of local people to offer better taste goods with promising quality. Other than providing better taste food, their advertising is another part which can help to increase market share. The ‘savage war of advertising’ between Burger King and McDonald is fascinating; these two most prominent fast-food chain businesses have publishing niche targeting advertisement to each other continuously for 27 years (Lungyeki M, 2017). The strengths that Burger King highlighted in their advertising just presented their competitive advantages remarkably. To summarise, The sophisticated and systematic operation of Burger King causes it has a great potential to obtain more market share and keep chasing the place of the biggest fast food restaurant.