The “King’s” Strategies-Burger King

Burger King, the popular fast food giant went public again in 2012 after being privately owned by a privately owned equity group called 3G Capital. After analyzing the numbers of Burger King’s quarterly reports from last year, it is apparent that the company is heading in the right direction after comparing the first quarter earnings this year from a year ago. Last year the company reported its first quarter earnings at $14.3 million compared to $35.8 million this year. So with these numbers on the rise, can the fast food giant compete with other companies such as McDonald’s and Chipotle while also being a valuable investment for its shareholders?

Well it looks like Burger King has a solid structured plan to make ends meet and come back to being a household name again. Last week the company sold its Canadian subsidiary, which owned 94 stores, to privately owned Redberry Investments. Now the company is planning on focusing on their operations in cutting costs in turn to making their sales more profitable. Another plan is to revamp 40% of their restaurants which will have a new 20/20 design and a change in lighting and seating arrangements. In order to increase the number of stores the company is promoting third-party financing opportunities as well as a 50% discount on the annual franchisee fee for their franchisees. Lastly, the company is focusing more on aggressive advertising techniques in order to promote their new valued items. These new strategies are from the article cited below and I should mention that Burger King has seen little changes to their menu from 1989 and 2012. Other restaurants have introduced healthier food choices for their customers such as smoothies, specialty salads, wraps, yogurts, etc.

It is obvious that the success factor of any restaurant is the quality of food it serves. Many sales at Chipotle are single burritos, burrito bowls, and tacos which can range from $7.50 to $9.50, depending on whether you want to upgrade your food with their delicious homemade guacamole. Keep in mind, Chipotle is a new restaurant that has come out in the last decade. It is also very appealing because of being considered a healthier option than most fast food restaurants. This is one of the reasons that Chipotle stock is currently being traded at $360 per share! Most of us have witnessed the long lines at the Chipotle across from the DePaul Center in the loop. So why do most of us insist on  waiting sometimes up to 15 minutes  for a burrito that costs on average around $8 rather than going to Subway or McDonald’s across the street and buying a meal that would surely cost more? Clearly, Chipotle’s plan is successful, so how does a fast food giant like Burger King raise its value and compete with all the other fast food giants?

The secret ingredient to that recipe is innovation! But what must they innovate to attract YOU personally?


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8 thoughts on “The “King’s” Strategies-Burger King

  1. I think upgrading the decor is a step in the right direction to begin with. Over the past few years, we have noticed the more luxurious styles of McDonald’s. By taking this step, Burger King might already begin to attract more customers. In order to maintain a similar value to Chiptole, the chain should add a new product line or start over. Burger King could make their menu more simple. I think that aspect is what attracts people to Chipotle. Knowing what they want, knowing that Chipotle has it, that it is good, and that there aren’t too many options to choose from.

  2. First and foremost, BK definitely has to focus more on serve time. I live in the burbs, and usually visit the Burger Kings closest to my house. However, I have visited a few BK’s in the city. Of the locations I’ve visited, they all have one thing in common. It takes forever to get food!

    Otherwise, they could make simple adjustments to the feel of the restaurant. Led televisions, comfy furniture, etc would be a big plus.

  3. I think Burger King should focus more on what they know is successful and providing the same food that people order. If a food item is not doing well then it should be removed. Recently they have started to deliver. I do not agree with this since it is already fast food and available everywhere. Delivery would only contribute to the obesity problem that we have especially with the recent health trend that everyone has followed.

  4. Very interesting article that touches upon the design of goods and services, like we’ve just been learning. I remember driving along Fullerton on the way to campus and seeing the Burger King close to 1237 West undergo construction for a little over two months. I took note of the building’s transformation from a ho-hum sit-down restaurant to some sort of lounge with a welcoming atmosphere, with big glass windows, large sofas, and wide HDTVs. After reading this article, I see now why the fast food chain is making all these changes. It’s not often you get to see a fast-food restaurant built with such ambience, so for Burger King to distinguish itself by going this route seems promising. With places like Panera and Starbucks keeping customers loyal with their “stay-and-relax” atmosphere, it’s no wonder Burger King is trying to replicate the same feeling with its restaurants. I agree with one of the commenters above in that serve time improvements could definitely boost the chain’s sales, if they can be more efficient than a place like Chipotle while keeping costs down.

  5. Aside from a more comfortable atmosphere, I think Burger King should focus on their main competition, such as McDonald’s or Wendy’s. Chipotle is a more expensive restaurant so it may be difficult to improve their service or products in a way that directly competes with a restaurant like Chipotle. I think Burger King should continue to add healthier items to their menus, so that they can attract fast-food customers seeking a healthier option.

  6. I actually prefer going to Burger King any day over McDonald’s . Why? I simply think the quality of the food they serve is better. I do agree with the comments above that have noted how long it takes to get a simple burger or fries. However, I think I would prefer a burger with fresh lettuce, tomato and onions and warm fries over the cold fries and burgers sitting at McDonald’s. I also agree with the comments above regarding the implementation of a “new look” at all Burger King restaurants. In order to differentiate themselves with the competition I think Burger King can attract more customers by expanding their menu,not completely changing it.

    Overall, productivity at all BK restaurants should certainly be at the top of operation manager’s priorities. Additionally, the remodeling of restaurants to offer a more “cozy” environment will certainly be another priority. Offering wi-fi or adding televisions is a possible way to help the company develop an effective strategy that will allow them to increase their market share in the long run.

  7. I would agree with Jasmine V. about BK over McDonald’s due to the overall quality of the food, or at least the perception I have of it. The decor of the restaurant does play a role in a person’s decision to eat there but ultimately the quality of the food will decide if the customer returns in the future. I feel BK would be smarter to invest in high quality food and differentiate itself from the likes of McDonald’s, Sonic’s, or Wendy’s. This does not mean I don’t think BK is doing a good job with the layout of its restaurants, whether that be the seating area or the kitchen area, because people like to sit in a clean and safe environment. Nowadays, consumers are willing to pay a little extra for better quality products which BK should take full advantage of.

  8. As someone who does not frequent Burger King at all, I think that many measure must be taken to ensure that it remains a popular choice among consumers and profitable. We have so many options in food choice that its so important that you take the proper measures to ensure viability even if you have been in the game for a quite a while. I think that Burger King should do a little consumer research and see what customers want from with regard to food.

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