Intense competition from McDonald's, other restaurants and even retailers 4. Increasing labor costs putting pressure on bottom line margins
Burger King serves a lot of burgers that is typically not available in other fast food restaurant. Some of the examples are, BC Mushroom Swiss which serves beef patty and topped with mushroom saute©De sauce, Grilled Chicken burger which is prepared by grilling the chicken patty and others. Most of the burgers prepared in Burger King are cooked by properly grilling them over fire.
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Burger King also serve varieties of side dishes in their restaurants such as mozzarella sticks, apple pie, Hershey pie and others.
Burger King does not advertise their products like their competitors do. Muslims who are not familiar with Burger King would hesitate to try out their burgers as they are not sure whether it is hall or not. Burger King also could not produce more sales than McDonald's because of lack marketing strategy which would place them in a disadvantage spot in areas dominated by McDonald's.
Burger King could improve their sales by producing more advertisements on their products. They could also open new branches in major city all around the worlds and some rural areas. Some of the state in Malaysia doesn't eave Burger King in their city so, Burger King could try and open new outlet which will greatly improved their sales.
Burger King faces threat from other major burger fast food restaurant such as McDonald's and Wendy.
McDonald's produced the highest percentage sales among the three which is a threat for Burger King. The cost to produce the burger during inflation and lack of sales puts Burger King in a tough spot and other burger fast food restaurant could take advantage to advertise new product and hence raising their sales Geographic Diversification Burger King has over 11,500 fast food restaurants located in over 70 countries. ,207 of its restaurants are located in the United States (62%) and another 4,358 are Canada.
Established Market Share Among Fast Food restaurant chains, Burger King is second only to McDonald's and holds a 15% share of the United States market. The company's profitability has also increased in recent years. In the period 2006-08, its operating profit has increased from $170 million in PAYOFF to $354 million in PAYOFF. Globally Recognized Brand Burger King is able to boast a brand that is widely recognized thanks to its flagship slogan "have it your way', the whopper sandwich and most recently enhanced by its ascot known as "the King".
The company was recently ranked 7th in brand awareness. Superior Growth Plan Approximately 90% of Burger King Restaurants are owned and operated by independent franchisees, many of them family-owned units that have been in business for decades. The company is able to grow while minimizing large capital expenditure, meanwhile it collects fees and royalties from each franchise added. Vulnerability to Labor and Regulatory Influences Although the company operates in many international venues, the majority of restaurants are in the United States.
This concentration of operations in one geographic area increases company's exposure to local factors such as labor strikes and the influence of regulatory changes. Reliance on so-called "Super Customers" There is some indication that Burger King may have been slow to transition to leaner and healthier restaurant fare in favor of pleasing its long term customers who are fans of the big larger portion sandwiches. Opportunities New Breakfast Food Initiative Burger King is seeking to overhaul its breakfast menu and will add Cataracts Corp... 's Cattle's Best Coffee to all its U.S. Restaurants. It has introduced earlier restaurant peeing times in its United Kingdom locations. New Healthier Menu Items Burger King sponsoring its biggest new product launch in years by introducing the Tenderloins, Premium Chicken Burger and accompanying the launch with a marketing campaign called "cheat on beef". National Urban Community Marketing Initiative Burger King is seeking to strengthen its standing in the African American Community through its new "next best move" promotion which includes a well publicized tour of 41 urban communities across the country.
Brand Licensing Project
Burger King has entered into a licensing arrangement (brokered by Broad Street Licensing Group) to further increase the company's' brand awareness and broaden the presence of the iconic "King" character, various licensees of Burger King Corp... Will soon launch a line of branded T-shirts, and also an exclusive collection of sleepwear and lounge ware. Threats Unrest among Franchisees Burger Kings' new dollar cheese burger initiative and loss leader strategy has upset some of its franchise owners who feel the pricing violates the franchise agreement. Also read Beef Cattle Management Practices
The dispute spurred the National Franchisee Association to file a lawsuit against the company. In 2009 Franchisees voted twice against the new promotions. The company purportedly has dropped the $1 burger promotion, but there may be bad feelings The challenging global economy continues to hamper the company's financial strength (ranked 28th among its peers). Burger King posted weaker-than-expected quarterly results in the last half of 2009, and missed stock analysts' expectations.
The decline was driven in part by continued adverse macroeconomic conditions, including record levels of unemployed. Changing Consumer Eating Habits Burger King's same-store sales in the U. S. And Canada declined 4. 6% in the three months ended Septet. 30, 2009. People 18 to 34 cut their consumption of fast-food eels from November 2006 to November 2009 according to the market-research firm NYPD Group. The combination of the economy and better health information has influenced people to eat at home and to opt for leaner lower calorie foods.
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