St BenedictsBusiness studies
Fast food industry research task
TOC o “1-3” h z u History of Burger King Corporation PAGEREF _Toc510545234 h 1McDonald’s Products (Product Mix) PAGEREF _Toc510545235 h 2Place/Distribution in McDonald’s Marketing Mix PAGEREF _Toc510545236 h 3McDonald’s Promotion (Promotional Mix) PAGEREF _Toc510545237 h 3McDonald’s Prices and Pricing Strategy PAGEREF _Toc510545238 h 4Burger King’s Products (Product Mix) PAGEREF _Toc510545239 h 4Place/Distribution in Burger King’s Marketing Mix PAGEREF _Toc510545240 h 5Burger King’s Promotion (Promotional Mix) PAGEREF _Toc510545241 h 5Burger King’s Prices and Pricing Strategy PAGEREF _Toc510545242 h 5Political Factors Affecting Burger King’s Business PAGEREF _Toc510545243 h 8Economic Factors Important to Burger King PAGEREF _Toc510545244 h 9Social/Sociocultural Factors Influencing Burger King’s Business Environment PAGEREF _Toc510545245 h 9Technological Factors in Burger King’s Business PAGEREF _Toc510545246 h 9Legal Factors PAGEREF _Toc510545247 h 10
History of Burger King CorporationBurger King Corporation is the second largest fast-food chain in the United States, trailing only McDonald’s. The company franchises more than 10,400 restaurants and owns about 1,000 for a chainwide total exceeding 11,455, with locations in all 50 states and 56 countries. The company serves 15.7 million customers each day and over 2.4 billion Burger King hamburgers are sold each year across the globe. In the late 1990s and into the new millennium, Burger King was plagued by falling sales and deteriorating franchisee relationships. Burger King’s parent, Diageo plc, sold the company to a group of investors led by Texas Pacific Group in late 2002.
Rapid Growth under Company Founders: 1954-67
Miami entrepreneurs James McLamore and David Edgerton founded Burger King Corporation in 1954. Five years later, they were ready to expand their five Florida Burger Kings into a nationwide chain. By the time they sold their company to Pillsbury in 1967, Burger King had become the third largest fast-food chain in the country and was on its way to second place, after industry leader McDonald’s.
The story of Burger King’s growth is the story of how franchising and advertising developed the fast-food industry. McLamore and Edgerton began in 1954 with a simple concept: to attract the burgeoning numbers of postwar baby boom families with reasonably-priced, broiled burgers served quickly. The idea was not unique: drive-ins offering cheap fast food were springing up all across America in the early 1950s. In fact, 1954 was the same year Ray Kroc made his deal with the McDonald brothers, whose original southern California drive-in started the McDonald’s empire.
McLamore and Edgerton tried to give their Burger King restaurants a special edge. Burger King became the first chain to offer dining rooms (albeit uncomfortable plastic ones). In 1957 they expanded their menu with the Whopper, a burger with sauce, cheese, lettuce, pickles, and tomato, for big appetites. But prices were kept low: a hamburger cost 18 cents and the Whopper 37 cents. (McDonald’s burgers at the same time, however, cost only 15 cents.) In 1958 they took advantage of an increasingly popular medium, television: the first Burger King television commercial appeared on Miami’s VHF station that year.
McDonald’s marketing mix (4Ps) involves varied approaches that meet business concerns in different markets around the world. The marketing mix defines the strategies and tactics a firm uses to reach target customers. McDonald’s has corporate standards that its marketing mix applies globally. The company also uses some variations of its marketing mix to suit the local conditions of markets. For example, McDonald’s promotion focuses on print media in countries where such media are most popular. The company’s effectiveness in implementing its marketing mix contributes to the leading performance of the McDonald’s brand and business in the international fast food restaurant industry.
McDonald’s Products (Product Mix)McDonald’s provides mainly food and beverage products. This element of the marketing mix covers the various organizational outputs that a company provides to its target customers. McDonald’s product mix has the following main product lines:
Hamburgers and sandwiches
Chicken and fish
Snacks and sides
Desserts and shakes
Place/Distribution in McDonald’s Marketing MixMcDonald’s restaurants are the most prominent places where the company’s products are distributed. This element of the marketing mix indicates the venues or locations where the firm’s products are offered. McDonald’s main places for distributing its products are as follows:
Postmates website and app
McDonald’s mobile app
McDonald’s Promotion (Promotional Mix)McDonald’s promotes its products to attract more customers. This element of the marketing mix defines the approaches used to communicate with the customers. McDonald’s uses the following tactics in its promotional mix:
McDonald’s advertisements are the most notable among its promotion tactics. The company uses TV, radio, print media and online media for its advertisements. McDonald’s also uses sales promotions to draw more customers to its restaurants. For example, the company offers discount coupons and freebies for certain products. In addition, McDonald’s public relations activities help promote the business to the target market. For instance, the Ronald McDonald House Charities and the McDonald’s Global Best of Green environmental program support communities while boosting the value of the corporate brand. Occasionally, the company uses direct selling, such as for corporate clientele, local government or community events and parties. In this element of its marketing mix, McDonald’s emphasizes advertising as its main approach to promote its products.
McDonald’s Prices and Pricing StrategyMcDonald’s pricing strategy involves price bundling combined with psychological pricing. In price bundling, the company offers meals and other product bundles for a discount. In psychological pricing, McDonald’s uses prices that appear to be significantly more affordable, such as $__.99 instead of rounding it off to the nearest dollar. This element of McDonald’s marketing mix highlights the importance of price bundling to encourage customers to buy more products.
Burger kings environment
Burger King uses its marketing mix (4Ps) as a response to the dynamic and saturated condition of the global quick service restaurant industry. The marketing mix is a combination of strategies and tactics to effectively implement a marketing plan. In this case, Burger King’s marketing mix aims to maximize competitiveness against a wide variety of players. However, major firms like McDonald’s and Wendy’s are in the focus of Burger King’s marketing mix efforts. These efforts support the company’s long-term goal of achieving the top position in the fast food restaurant industry.
Burger King’s Products (Product Mix)Burger King operates as a quick service restaurant business focusing on burgers as its main product. This component of the marketing mix presents organizational outputs offered to target customers. Burger King’s main product lines are as follows:
Chicken and fish
Salads and veggies
Place/Distribution in Burger King’s Marketing MixBurger King’s products are available at its restaurants worldwide. This component of the marketing mix refers to the venue that firms use to transact with target customers. The following are the places Burger King uses to distribute its products:
Website for deliveries
Aside from restaurants, customers can use Burger King’s mobile app to access coupons for special offers and freebies. Customers can also use the company’s website to place their orders for home deliveries. In this component of the marketing mix, Burger King relies mainly on the physical presence of its restaurants.
Burger King’s Promotion (Promotional Mix)Burger King employs various tactics to promote its products. This component of the marketing mix covers the tactics used to communicate with the target market about the firm’s offers. Burger King uses the following promotion/marketing communications tactics, arranged according to significance:
Burger King relies mainly on advertising to promote its products. The company advertises online and on TV and print media. In addition, Burger King uses sales promotions in the form of coupons and other offers through its website and mobile app. The firm’s restaurant personnel also typically use personal selling to encourage customers to buy more products from the menu, such as desserts in addition to what the customer already ordered. In applying public relations, the Burger King McLamore Foundation gives scholarships and financial assistance for educational programs, thereby also effectively promoting and strengthening the Burger King brand. The company successfully combines various promotion tactics to address this component of the marketing mix.
Burger King’s Prices and Pricing StrategyBurger King’s pricing strategy is based mainly on its generic strategy of cost leadership, which minimizes costs and prices. In this component of the marketing mix, appropriate pricing of products is considered. Burger King’s pricing strategies are as follows:
Market-oriented pricing strategy
Bundle pricing strategy
Burger King uses market-oriented pricing strategy as its primary approach to pricing. This pricing strategy involves setting prices based on prevailing market conditions, including supply and demand conditions as well as the pricing of competing firms. Burger King’s secondary pricing approach is the bundle pricing strategy. For example, customers can buy value meals and kids meals at bundle prices that are more affordable than buying food items separately. This component of the marketing mix shows that Burger King mainly considers market conditions to determine its prices
Business Environmental Analysis Of McDonalds
The business environment means the overall (internal and external) circumstances of organization. Every organisation including McDonald’s is more or less influenced by environmental factors. In business discussion, internal factors of an organisation are discussed as a part of Micro Environment and external factors are treated as Macro Environment.
2.2: Macro environmental analysis
Macro analysis is also known as PESTEL analysis which stands for-
The business operation of an organisation is always influenced by the policies of state and its government. McDonald’s business is also under the control of government’s rules and regulations. The main issue of controlling food business is health and other issues are license, employee laws, tax issues etc. McDonald’s follows the local government’s policies as well as foreign investment policies on its franchise business strategy. Political instability of local state is also affects McDonald’s business.
Economical factors always come as vital issue to business organisations. For example, more or less all companies are affected by ongoing global economic slowdown. Due to international business operation, McDonald’s faces different scale of tax and revenue measurement in different country. McDonald’s also faces difficulties because of international currency fluctuations especially in its global food distribution. Local economical condition is also responsible for affecting McDonald’s operation. If the local economy is critical, people are usually discouraged to spend more money for their food. As a result, company is affected.
The life style of people is being changed and the demand of this change affects McDonald’s. The people of this modern urban society expect the highest level of service and all the latest facilities from a hospitality organisation. In addition, this changing demand is different in society to society and country to country. For example, in India, Hindu people prefer vegetable, Muslim people avoid pork. To fulfil the customers’ expectation, McDonald’s needs to research the market and also needs to provide effective food menu.
The impact of technological innovation is also considerable to meet the customers’ expectation. As all existing food chains for instance, KFC, Pizza Hut etc, compete each other, McDonald’s has to ensure the all technological access to influence the customers. Modern and speedy distribution channels, easy and quick payment facility, customer entertaining equipment in store, wireless internet facility in all stores etc. can help McDonald’s to keep on its success.
McDonald’s is criticised for using some harmful elements for example, non-biodegradable substances for its drinks glasses. Styrofoam containers are also being used in McDonald’s for meals and it is seriously discouraged to use. Environmentalists criticize McDonald’s because of food packaging based on polystyrene. For the greater interest of environment issue, franchisees are called by environmentalists to be aware about this issue.
Political Factors Affecting Burger King’s BusinessPolitical conditions are determinants of business performance. This part of the PESTEL/PESTLE analysis identifies governmental influence on firms’ remote or macro-environment. In Burger King’s case, the following are the main political external factors:
Governmental support for globalization (opportunity)
Political stability in major markets (opportunity)
Governmental support for e-commerce (opportunity)
Governments continually support globalization. Burger King can take advantage of this condition through global expansion. Also, the external factor of political stability helps reduce challenges to the company’s growth and expansion. In addition, Burger King can improve its e-commerce capabilities. In this part of the PESTEL/PESTLE analysis, the external factors present significant opportunities for Burger King to grow and expand internationally.
Economic Factors Important to Burger KingEconomic conditions directly affect Burger King’s remote or macro-environment. This part of the PESTEL/PESTLE analysis outlines the economic changes and trends that influence business performance. The following are the main economic external factors that affect Burger King:
Expanding international trade agreements (opportunity)
Economic stability of the U.S. (opportunity)
High economic growth in developing markets (opportunity)
As countries implement more and expanded international trade agreements, Burger King can grow through global supply chain enhancements. Also, U.S. economic stability enables the company to gradually grow in the country. In relation, Burger King has the opportunity to rapidly expand in developing economies. These conditions show that, in the political dimension of the PESTEL/PESTLE analysis model, Burger King must focus on external factors that present opportunities for growth and expansion, especially in developing economies.
Social/Sociocultural Factors Influencing Burger King’s Business EnvironmentBurger King must always account for sociocultural influences in its remote/macro-environment. The social trends and changes and their effects on consumers and employees are considered in this part of the PESTEL/PESTLE analysis. The main sociocultural external factors affecting Burger King are as follows:
Increasing consumer diversity (opportunity)
Higher health consciousness (threat & opportunity)
Increasing support for animal rights (threat & opportunity)
The increasing population diversity presents the opportunity for Burger King to innovate its products to attract consumers of various backgrounds. Higher health consciousness threatens demand for Burger King’s products, which are sometimes criticized as unhealthful. However, the company has the opportunity to improve the healthfulness of its products. Animal rights advocacy continues to attract attention, threatening the main products of Burger King. Still, the firm can implement new supply chain policies to address concerns on animal rights and welfare. This part of the PESTEL/PESTLE analysis points to Burger King’s opportunities to improve despite the threats linked to sociocultural external factors.
Technological Factors in Burger King’s BusinessBurger King’s business partly relies on technologies. In this dimension of the PESTEL/PESTLE analysis, technologies and related trends are considered in terms of their influence on the remote or macro-environment of the firm. The following are the major technological factors affecting Burger King:
Higher availability of automation technologies (opportunity)
Higher popularity of mobile technologies (opportunity)
Low R&D activity in the quick service restaurant industry (opportunity)
King can apply these technologies to improve operational efficiency. Also, the company can tap mobile users to gain a bigger market share. Relative to the low R&D activity in the fast food restaurant industry, Burger King has the opportunity to boost its R&D investments to improve performance.
The environment can impose limits to Burger King’s business. This dimension of the PESTEL/PESTLE analysis covers the impact of ecological conditions on firms’ remote or macro-environment. In the case of Burger King, the following are the most notable ecological external factors:
Climate change (threat)
Emphasis on business sustainability (opportunity)
Increasing popularity of low-carbon lifestyles (opportunity)
Climate change threatens to reduce the stability of Burger King’s supply chain. However, the company has the opportunity to improve its sustainability status. Also, Burger King has the opportunity to improve efficiency to attract consumers who advocate low-carbon lifestyles. The ecological external factors in this dimension of the PESTEL/PESTLE analysis indicate that Burger King can realistically work on sustainability and efficiency.
Legal FactorsBurger King must comply with legal requirements. The effects of legal systems on firms and their remote or macro-environment are considered in this part of the PESTEL/PESTLE analysis. The major legal external factors influencing Burger King are as follows:
Import and export regulation (opportunity)
Environmental protection laws (opportunity)
GMO regulation (threat)
Burger King has the opportunity to grow based on import and export regulations that support new international trade agreements. Also, the company can enhance its sustainability performance to exceed expectations and requirements based on environmental protection laws. However, GMO regulations, especially in Europe, limit the performance of Burger King, considering the widespread availability of GMO ingredients used in the industry. This dimension of the PESTEL/PESTLE analysis emphasizes growth and sustainability based on legal external factors.
Mcdonalds social responsibility
Mcdonalds are Supporting sustainable beef production by collaborating to develop global principles and criteria, and committing to begin purchasing a portion of beef from verified sustainable sources in 2016
Mcdonalds are Sourcing 100 percent of coffee, palm oil and fish that is verified to support sustainable production
They are Procuring 100 percent of fiber-based packaging from certified or recycled sources
They are Serving 100 percent more fruit, vegetables, low-fat dairy or whole grains in nine of its top markets
Mcdonalds are Increasing in-restaurant recycling to 50 percent and minimizing waste in nine of its top markets
Mcdonalds are Increasing energy efficiency in company-owned restaurants by 20 percent in seven of its top markets
Mcdoanlds are Committing to the Clinton Global Initiative in collaboration with the Alliance for a Healthier Generation to make nutritious choices and nutrition education a bigger part of the McDonald’s experience
They are also Offering fruits, vegetables, or low-fat dairy in Happy Meals in more than 95% of their restaurants around the world
Mcdonalds are also Sourcing 100% of whitefish from fisheries that are verified sustainable
They are also Installing approximately 300,000 pieces of more energy efficient kitchen and building equipment in restaurants worldwide since 2010
And Mcdonalds are Of the more than 34,000 restaurants surveyed in 2013, about 90% reported recycling used cooking oil and about 77% reported recycling corrugated cardboard
Social Responsibility of Burger King
With the burger king mclamore Foundation, burger king have always wanted to give a little something back to the community in which we work and live. The burger king mclamore Foundation has made it a goal to promote charitable organisations and activities in the entire company by using the power of the burger king brand to collect donations and distribute them globally
Burger king in South Africa has committed to supporting Room to Read. Founded in 2000, Room to Read has transformed the lives of seven million children in Africa by focusing on literacy and gender equality in education. In 2013, the Foundation and Room to Read continued working together to establish 10 libraries in South Africa.
QuestionaireWhat are your corporate governance?
Corporate governance in McdonaldsMcDonald’s Board of Directors is entrusted with and responsible for the oversight of McDonald’s Corporation in an honest, fair, diligent and ethical manner. The Board has long believed that good corporate governance is critical to fulfilling the Company’s obligation to shareholders. They have and will continue to strive to be a leader in this area and McDonald’s Board believes that good governance is a journey, not a destination. they are committed to reviewing their governance principles at least annually with a view to continuous improvement. The one thing that will not change is that they are committed to ensuring the integrity of the McDonald’s System in all its dealings with stakeholders.
What are your Corporate governance?
Corporate governance in Burger king
Burger king has announced its decision to purchase only chicken raised without antibiotics important to human medicine by the end of 2018, a major sustainability milestone for the world’s third-largest fast food restaurant operator.
Burger king as a non-profit shareholder advocacy group, to set timelines to prohibit the use of medically important antibiotics in its global meat and poultry supply chains. In response to this commitment.
And burger king have been donating money to local poorer areas and they have been giving out food. And they have been donating to find a cure for the bird flu that has been in chicken.
What are your Human Capital?
Mcdonalds human Capital
1. Take the initiative to learn
At McDonald’s, it’s up to employees to look for opportunities and speak up when they discover something new they’d like to train in. PR is no different. It’s up to PR pros to stay up-to-date on current trends, learn new job skills, adapt new technologies, and always keep on the look out for opportunities for their clients.
2. The art of multitasking
Work in PR is a fine balance of learning how to keep cool under pressure while meeting the demands of both internal and external clients. It’s a skill that PR pros take pride in, and it’s one that is quickly picked up in the fast-paced atmosphere of a McDonald’s restaurant.
3. Upsell, UpSell, UpSellTraining at McDonald’s includes learning how to upsell. PR pros need to apply this same line of thinking each time they meet with an external client. They need to Think about the benefits their clients can derive from using a new creative approach or trying out a new technology. This same thinking can be applied internally to sell their PR skills-set to their company’s other departments.
4. Provide great customer service each and every time
Providing great customer service is essential in any industry. Companies have been built and have fallen, It’s a fact that it isn’t lost on McDonald’s or in the PR industry. Earning and keeping a client’s trust requires providing great customer service each and every time.
5. Tell your own bad news first
This skill goes hand-in-hand with providing great customer service. While no one likes to make a mistake, they inevitability will happen. And when they do, the worst thing they can do is ignore it. If they messed up a customer’s order, whether in the literal sense or not, admit it immediately and follow-up with a solution.
What are your Human Capital?
Burger kings human capital
• Highly experienced in following set Burger King recipes to prepare and serve food• Well-versed in cooking, marinating, frying and grilling food items according to established protocols and procedures• Skilled in manning the front counter in a manner that is conducive to good customer services• Exceptionally talented in taking and recording customers’ orders and providing them with suggestions on additional food or beverage items as part of suggestive selling endeavors• Deeply familiar with maintaining appropriate portion control in accordance with Burger King’s policies• Documented success in anticipating customers’ taste and likes and providing them with correlating suggestions• Qualified to prepare and pack food items according to set procedures dictated by the company• Competent in operating cash registers and tallying cash with receipts at the end of each shift• Highly experienced in handling food rotation activities to ensure freshness of food items and decrease chances of spoilage• Proven record of effectively and efficiently cleaning and maintaining kitchen equipment such as fryers, grills and ovens• Exceptional ability to ensure continuous cleanliness and sanitization of work areas, in a bid to stay at par with Burger King’s standards for maintenance• Track record of serving customers in a timely, efficient and courteous manner, aimed at ensuring a high number of satisfied customers
Even though I think that mcdonalds food is not that great. Im going to have to go with mcdonalds as the more successful company as mcdonalds has been around for longer and they have more skills and knowledge about success. Burger king is great but they are a new franchise in south Africa and they are only just getting the hang of how things are run in south Africa. I feel that burger king is doing well but mcdonalds will always be the best.
I feel that burger king should use their environments in terms of south African ways as if they just use the same environment strategies in America, then they will not go anywhere and they will never have a competitive advantage over mcdonalds. And lastly burger king should introduce more products into the market and use the growth, focus, merger, market penetration strategy etc… as this will help them introduce better products than mcdonalds and then the level of rivalry will increase.