Strategic Analysis of Burger King

Introduction
The following report is an analysis of case study of Burger King fast food chain till date 2006. It primarily takes into considerations, significant changes over the years. And , also the strategic business decisions that led to, or formed a basis, of these changes. Moreover it helps us to identify the company’s core competencies and the competitive advantage it gained. It also highlights the issues faced by the company. A small comparison with McDonald’s helps to benchmark Burger King’s performance.

Following the critical analysis of case study, it follows necessary recommendations for the Burger King Company in UK market and lastly comparioson with ‘Schools of Strategy’ which are prominent in its history. A personal conclusion that evaluates the case – study and various comparisons throughout the report.
Background
The company of Burger King Corporation was formed by Miami entrepreneurs James McLamore and David Edgerton in 1954. The Burger King Holdings is the parent company of Burger king, however in U.S. it operates as Burger Kings Brands title; whereas internationally as Burger King Corporation. Today (as of year 2006, referring to case study), it is world’s 2nd largest fast food chain based on locations (behind Mcdonalds). The company has presence in more than 70 countries and runs more than 12000 restaurants. Thus, we can see that the brand rules one whopper of whole fast food chain empire.
The company is presently run by Mr. John Chidsey who acts as a CEO and chairman of the parent company. The brand has a $2.54 billion and boasts of handling more than 38000 employees successfully catering to 11.4 million customers.
Burger King – History
Burger king is a predecessor to a company called Insta-Burger King. The Insta –Burger King was founded in 1953 in Jacksonville, Florida by owners named Keith.J .Cramer and Matthew Burns. The found the company after inspired by McDonald’s efficiency, in food preparation, delivery and architectural layout. The company Insta-Burger King was launched on the basis on an equipment known as the Insta – Broiler. The device proved as a very successful oven for cooking burgers.
Changes in Leadership – Burger King History
The Burger King Company saw changes in management from the first year over more than 50 years since its establishment. The names (CEO) and significant decisions of them over the years are as follows:
Year
Name
Former position
Significant change in Burger King
1954-1970James W. McLamore, David EdgertonPresident and chairman – Burger KingFounders, bought Insta-Burger King from Keith G.Cramer (owner of Keith’s Drive-In restaurant)
Introduced an improved version of ‘Insta-Broiler’(which had a capacity of 400 burgers an hour) called ‘flame broiler’
Launched ‘Whopper’ sandwich – the company’s signature product
By 1961, had 45 restaurants in Florida and South-east US; which they increased to 274 restaurants all over the world mainly through franchising.

Year
Name
Former position
Significant change in Burger King
1970-1976Rosewall W. LeslieNot knownFaced problems in company such as
unhealthy relationship with the franchises
confused advertising
stale menus
shabby restaurants
competition to change in customer preferences
1976-1977Pazat W. LeslieNot knownContinued problem facing
1977-1980Donald SmithMcDonald’s executiveIncreased problems between franchises and the management
Introduced a new corporate structure and developed a new management attitude
Solved the inconsistency problem in both food by providing widespread menu and services were managed by greater control over the franchises.
Year
Name
Former position
Significant change in Burger King
1980-1982Lou P. NeebNot knownFollowed former Smith’s directions, the company moved from the third position to the second in the fast food industry by 1982.
1982-1983Norman BrinkerBennigan’s ( part of Pillsbury)Company struggled to re-establish brand image
1983-1985Jaffery J. CampbellCorporate Executive of Burger kingHired different agencies to promote brand but failed and send confused messages about the products.
1989-1989Jerry W. LevinHaagen – DazsCompleted a deal of Pillsbury to Grand Metropolitan PLC (Grand Met) – a British alcoholic beverage manufacturer and distributor
1989-1993Barry J. GibbonsNot knownConcentrated on improving menu and the brand image.
Introduced the BK broiler – a broiler chicken sandwich.
Successfully increased company profits by $75 million during tenure at Burger King.
Year
Name
Former position
Significant change in Burger King
1993-1995James B. AdamsonChairman of Denny’sAttempted to increase the quality of food by introducing ‘value menus’ which consisted of extensive combination from menu under a dollar.
Simplified menu and focussed on burgers and other products
1995-1995David NashNot knownIncreased sales by 6.6% by combination of the right product with the right marketing message.
1995-1997Robert C. LowesChief Executive – European foodsThe company launched a $70 million French Fry Advertising campaign.
1997-1999Dennis N. MalmatinnasNot knownDecrease in market share.
Grand Metropolitan merges with Guinness to form Diageo PLC
2001-2002John H. DasburgCEO – Northwest AirlinesPlanned to revitalise and reorganise the company, mainly through forming a new corporate structure.
2002-2004Bradley BlumHeaded Olive Garden unit of Darden restaurantsThe company faced stiff competition and sales dropped by $0.6 million.
Year
Name
Former position
Significant change in Burger King
2004-2006Gregory BrennemanPresidant and COO of Continental AirlinesCreated ‘a turnaround’ plan named as ‘Go Forward Plan’ which included –
1) Grow profitably,
2) Fire up the customer,
3) Fund the future, and
4) Work together.
Focussed on cutting costs as ‘Drive-thrus’ generated 70% of company’s business.
Secondly, introduced a new set of products to push sales.
2006 till dateJohn ChidseyChairman and CEO of Cendant CorporationThe company faced a situation of state recession in US economy.
Significant Strategic Business decisions in Burger King History
Considering the growth of company over more than 50 years, its significant strategic decisions and success or failure of the same is listed below:
Years
Significance
Business strategy
Measure of strategy
1954
To
1967
Launch of signature product ‘Whopper’ and created brand image as ‘Home of the Whopper’
Growth of company through minimum investment
Expansion
Franchising
Successful
Company had moved from 45 restaurants within US in 1961 to 274 restaurants across the world, by the end of 1967.
1967
To
1977
Company sold to prepared foods giant ‘Pillsbury’
Expansion
Franchising
Failure
Inconsistency in food and service among the franchises
1977
To
1980
New leadership by hiring McDonald’s executive Donald Smith
Company enters UK market
Restructuring
New team management
Control over franchises
Successful
Increase in customer traffic by 15% and increase in ownership by 8 % showing effective and greater control over franchises.
Years
Significance
Business strategy
Measure of strategy
1980
To
1990
1983 – Successful increase in competitive breakfast market
1985 – $100 million to restructure company
1988 – Company plans to market as independent entity and in consequent year 1989 bought by Grand Metropolitan
Hard sell approach
Trade –off or spin –off proposal in late 80’s as an independent entity
Success
Sales up by 19% by $9 million and pre-tax profits up by 9 %