Burger King is a multinational corporation that was established in 1954 with its headquarters in Miami. The company boasts as the second largest company operating fast food chain after the McDonalds Company. In addition, the firm has realized massive opening out of its operations in over seventy nations. Over the years, the company has continuously stressed on diverse points of strategies that have seen Burger King achieve increased competitive advantage over its competitors.
Further, Burger King has seen steady growth in sales and revenues over the years because of the location of its head office. In fact, the bulk of Burger King’s clients originate from the Caribbean and Latin America. In essence, through Miami headquarters, the organization has seen increased expansion in sales, recognition and increased brand image across the globe.
Business Operations
Burger King’s close to seventy-five percent of the operations are majorly carried out in the US and Canada exhibited by the location of its restaurants and incomes. The company should continue with most of its operations and thus should not change the relationship. In fact, the company has many of its clients in these countries due to the presence of large population.
Further, the company has developed more reputation among the masses in these countries thereby attracting an increasing number of clients who purchase the products. Moreover, the other markets in which the firm operates have low populations who purchase its products.
Burger King Company has been able to achieve enhanced competitiveness of its products and services in the global arena through the efficient synchronization of variety of innovative techniques as well as the incorporation of numerous flow of expertise. Just to begin with, the firm’s ability to offer distinct and strong trademark has enabled the augmented competitive advantage over its rivals.
For instance, the corporate adoption of flamed broiled technique as opposed to grills as well as preparing the hamburgers as per customer requirements through the “have it your way” theme ensure satisfaction among the buyers of purchasing healthy products. Further, the strategies enhance the customers feel towards the company’s brands.
The company’s focus on customers through entering into franchise with other companies is another key competency of Burger King in gaining competitive benefits (Daniels et al., 2011). Through franchising, the corporate is able to modify its products to ensemble the needs of customers from diverse backgrounds thereby ensuring increase in sales of the products.
The corporation’s systematic approach towards configuring and coordinating its value chain entails operations in the nations whose populaces are high such as India and Pakistan as well as having large inclination towards intake of beef. In addition, the corporation coordinates its value chain through going into franchise with the local companies to sustain its expansion globally (Bell et al., 2004).
Moreover, firm has been able to learn from the mistakes of other companies and using the mistakes as instruments for expansion. Franchising has proved to be the best activity that has created more value to the company since it enables the expansion and distribution of the organization’s products to broader markets with little investment.
The late expansion of the company globally as compared to its competitor had its pluses together with the minuses. Beginning with the advantages, the company is able to ride on the demand and delivery infrastructures that are already created by the firms that entered the market earlier.
In addition, Burger King is able to continue with the promotion of its products without suffering from the expenses on product development. On the contrary, the firm faces the disadvantage of inadequate number of suppliers who may only be willing to carry out business transactions with a specific number of clients.
Of more importance, the company’s desire to enter the local markets comes with rewards and drawbacks. First, the firm has the benefit of using sophisticated expertise in their operations thereby gaining competitive gains over the local companies. Therefore, Burger is able to achieve increase in its sales and increase revenue. In addition, through entering is markets, the firm is offered with increased choice of markets for its markets as well as low production costs.
Further, the corporate is able to gain access to bounteous of resources through lobbing of the governments that are interested only in the short-term economic gains of the operations (Coviello & Jones, 2004). Moreover, Burger King is able to reduce its tax liability in the nations that have high tax rates and elevate the tax legal responsibilities in low tax rate nations through transfer pricing that alters the cost of their products.
On the other hand, the company is faced with the shortcoming of increased expenses through taxations. Further, Burger King is likely to suffer from the resistance of from the local companies in an attempt to establish itself in their locations. The firm is also likely to overlook its social responsibilities in the host country thereby contributing to environmental degradation.
Moreover, there is a possibility that Burger King would transfer all its revenues to the headquarters in Miami and not spending in the corporate activities in the host nations. Every nation has its own cultural beliefs and the operation of the company would suffer from the incorrect forecast of the cultural behaviors of the host country.
The recent past has witnessed increased inclination of the company’s operations towards the youth as well as locations with many shopping centers. Burger King’s preference of the youths has had its advantages. In fact, the group represented by people under the age of fifty years embodies the youth. The company prefers the youth since statistics show that large amounts of currencies are in their hands.
As a result, taking advantage of the youth in the transaction of business leads to the augmented volume of sales. In addition, the company is able to augment its trade readily as well as spawn repeated visits by the youth through carrying out product adverts (Acedo & Casillas, 2005). Further, the company is able to obtain adequate space to conduct and facilitate its operations across diverse locations where there are numerous shopping stalls.
Tools and Strategies in the Deciding Future Company Locations
The company’s SWOT analysis is critical in the examination of the strengths and weaknesses faced by the corporation. In addition, the technique is vital to the business in forecasting the opportunities available in the new location that are able to spur growth. Further, the technique would enable the company identify the potential threats that could arise (Denker, 2012).
Moreover, the application of PEST analysis would be invaluable in assessing how the political, economic, social and technological aspects such as recessions, political turmoil and innovative advancements influence the new business location. Competitive analysis would also be priceless in identifying the activities of the potential competitors.
Conclusion
Burger King continues to enjoy massive revenue from the high rate of expansion of operations to other parts of the world. Further, the corporation’s differentiation strategies in its operations have enabled increase in the number of customers over its competitors. However, the company faces the challenges of ownership and management since it does operate independently but functions as a conglomerate division due to franchising of its operations.
Further, through operating franchises, the company has been unable to devise and implement articulate growth strategies. Moreover, the threat of McDonalds’ competition could jeopardize the amount of Burger King’s revenue through reducing Burger King’s customer base.
References
Acedo, F. J. & Casillas, J. C. (2005). Current paradigms in the international management field: An author co-citation analysis. International Business Review, 14(2), 616-639.
Bell, J., Crick, D. & Young, S. (2004). Small Firm Internationalization and Business Strategy. International Small Business Journal, 22(1), 23-56.
Coviello, N. E. & Jones, M. V. (2004). Methodological issues in international entrepreneurship research. Journal of Business Venturing, 19(4), 485-508.
Daniels, J., Radebaugh, L. & Sullivan, D. (2011). International business, environment and operations. Upper Saddle River, NJ: Prentice Hall.
Denker, A. (2012). Elaboration case study: Burger King. Munich: GRIN Verlag.