Table of Contents
- Executive Summary
- Chapter 1. Company Background
- Chapter 2. Industrial Background
- Chapter 3. Internal Environment Analysis (Critical Issues)
- Chapter 4. External Environment Analysis (Critical Issues)
- Chapter 5. SWOT Analysis
- Chapter 6. Recommendations
For nearly 60 years, Burger King has served flame-broiled hamburgers at an affordable price. In this sense, the fast-food chain best known for its over-sized sandwich has been nothing but consistent. This paper will examine the image changes Burger King has undertaken in an attempt to reverse recent profit losses. Reasons for Burger King’s struggles will be discussed, namely its lack of vision and frequent leadership changes.
In the end, the ultimate measure of success will be whether or not these proposed new strategies positively impact the bottom line. Financial gains will not result from a poor image, poor franchisee relationships, and a poor product. These three factors are explicitly and irrevocably tied to profit, so Burger King must constantly – and consistently – monitor feedback and respond to concerns if they want to close the gap with their number one competitor cum market leader, McDonald’s.
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The history of Burger King marked approximately 20 changes in management. The changes in short term span affected organization focus over goals and objectives, affected brand image adversely and lacked consistency in operation. This paper examined how a lack of vision and constant leadership changes factored into the need for Burger King’s recent image and marketing makeover.
Chapter 1: Company Background
Burger King was originally known as Insta-Burger King. It was founded in Florida in 1953 by Keith Kramer and Matthew Burns before they had financial difficulties and sold the company to its Miami based franchisee, James McLamore and David Edgerton in 1955. The new owner renamed the company to Burger King. The first Whopper sandwich was introduced in 1957. The company again was sold to the other party, Pillsbury Corporation during their expansion exercise to 250 locations in United States.
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In 1989, Pillsbury Corporation was sold to Grand Metropolitan, which in turn merged with Guinness to form Diageo, a British spirits company. Diageo’s management neglected the Burger King business, leading to poor operating performance. The business was damaged to the point that major franchises went out of business and the total value of the firm declined. Diageo’s management decided to divest the money-losing chain by selling it to a partnership private equity firm led by TPG Capital in 2002. The company became re-energized by a series of promotional campaign and activities created by the investment group. In May 2006, the investment group took Burger King public by issuing an Initial Public Offering (IPO). The investment group continued to own 31% of the outstanding common stock.
As of June 2010, the company owned or franchised 12,174 restaurants in 76 countries and U.S territories, of which 1,387 were company-owned by franchisees. Of Burger King’s restaurant total, 60% were located in the United States. The restaurants featured flame-broiled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks, anf other low-priced food items.