Burger King Vs. McDonalds

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Burger King and McDonalds have historically been pretty similar companies. They both provide fast and convenient food for a low price, and tend to offer similar types of food. This past year, however, the two companies have been losing some of those similarities. As a result of this, both have been performing differently as well.

For almost every player currently in the fast food industry, the last couple of years have been rough. Consumer preferences have been changing, there is more competition, and economic problems have hit the industry hard in comparison to many other industries. Burger King, however, has been able to make some progress while their biggest competitor, McDonalds, has continued to take a hit. The reason behind this seems to be the difference in strategy both companies have chosen.

As Burger King continues their attempts to rebrand themselves, they’ve done a couple things that have worked out well for them. Most notably, they have reduced the size of their menu but increased the quality of items they continue to offer. McDonalds on the other hand continues to develop and offer more items. This has caused an increase in complexity and a decrease in the quality of what they’re offering. After looking at how both companies have performed over the last year, it’s pretty obvious that Burger King has taken the better route.

When attempting to choose the process strategy of a company, the executives need to focus on customer requirements, cost, and efficiency. Burger King’s strategy has done a good job in all of these aspects. They’ve been able to increase the quality of the products they offer, tailoring them the preferences of their customers, while also reducing cost. Their money isn’t tied up in new product development or in item lines that aren’t attractive to the market. McDonalds has basically done the opposite. By continuing to develop and introduce multiple new products, their cost has risen and they haven’t been able to focus on what their customers’ preferences are. McDonalds is big enough and does have the money to do this and not notice any substantial loss in market share, but if they continue to do it, that might not continue. If the trends of this last year continue, the gap between them and Burger King is only going to get smaller.

The view of McDonalds seems to be that their strategy has worked in the past, so eventually it should work again. Do you think that Burger King is just utilizing a recovering economy, and that their new strategy will eventually stop working when it fully recovers, or is this a trend likely to continue? Is it better for a fast food restaurant to place more value on quality or variety?

Source:
http://www.businessweek.com/articles/2014-11-05/hard-times-for-hamburgers-hurt-mcdonalds-more-than-burger-king#r=read

The King Delivers: Burger King’s New Delivery Service

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The world of fast food has always been about convenience for customers in terms of pricing, locations, accessibility, etc. Burger King has decided to take it a step further by introducing a delivery service in major U.S. Metropolitan areas. The service is now offered in Chicago, Los Angeles, and San Francisco from 11 a.m. until 10 p.m. Customers must order a minimum of $10 worth of food to be eligible for the delivery service.

Ordering food for delivery has been trending for quite some time now thanks to websites like Grub Hub. Although delivery service has been around for many years at places like Pizza Hut and Dominos, it has risen in popularity with more restaurants offering it as well as providing convenient ways of ordering such as via the phone, Internet, or mobile app.  Out of the major fast food restaurants (McDonalds, Burger King, Taco Bell, Subway, Wendy’s), Burger King is the first one to test the market for delivery service.

Currently, Burger King is in the maturity stage of its product life cycle because its competitors are well established and they are focused on innovation. They are forecasting a positive return for their delivery service and hope to be the trendsetters among other fast food giants. The very popular drive-thru option was introduced in 1975 at both Burger King and McDonalds and became a standard at fast food restaurants. McDonalds is clearly untouchable in terms of competition with sales four times greater than Burger King, but Burger King’s delivery service strategy can help them get a step ahead and be the first company to introduce it.

I believe that Burger King is going to have some success with their delivery service with their already established, loyal customers, but will not have a lot of impact on irregular consumers. Although America has always been a nation of fast food, the new trend is eating healthy and being fit. Healthy lifestyles are more and more promoted and gym memberships are on the rise. Burger King’s delivery service does not align with the new trend, but instead makes it easier for people to eat unhealthy.

A way that the company can utilize the delivery service is to introduce healthier menu options. They can then combine the two ideas by promoting the delivery of new salads or other products. Other than that, I do not see this service surviving in the long run. I also do not think that McDonalds will invest in it because if deemed to be successful, then the number one fast food chain would have tried it a lot sooner.

Although Burger King’s delivery service is in the trial stage, they are still following their commitment to convenience for customers. May the odds be ever in their favor.

 

Sources:

http://www.huffingtonpost.com/2013/04/23/burger-king-delivery-chic_n_3141940.html

http://www.businessinsider.com/the-most-popular-fast-food-restaurants-in-america-2012-7?op=1

http://www.bk.com/en/us/company-info/about-bk.html

http://www.mcdonalds.com/us/en/our_story/our_history.html