Question 4 Assess the strategic alternative used by the firm Burger King is the world’s largest flame broiled fast food restaurant chain. As of mid-2009, it operated about 12000 restaurants in all 50 states and in 74 countries and U. S. territories worldwide through a combination of company-owned and franchised operations, which together employed nearly 400,000 people worldwide. Two major ways in which Burger King differentiates itself from competitors are the way it cooks hamburgers by its flame- broiled method as opposed to grills that fry and the options it offers customers as to how they want their burgers.
They also differentiated itself with some innovative advertising campaigns through the years, such as its use of a figure of a man who is the Burger “King”. In looking for new countries to enter, Burger King looks most favourably at those with large populations (especially of young people), high consumption of beef, availability of capital to franchisees for growth, a safe pro-business environment and availability of a potential franchisee with experience and resources.
Outside of burger King’s America’s group (United states and Canada), 37. o percent of the countries and 24. 6 percent of the restautants are in Latin American and Caribbean group, yet theses countries accounted for only 13. 5 percent of the non- Americas group revenue in fiscal 2009. This is largely because many of these countries have a very small populations.
So why did Burger King develop a presence in these markets, even though at this writing it is not in countries with much bigger populations such as India,Russia and South Africa. The answer is largely due to a location factor. Burger King remains headquartered in Miami because so many people from Latin American and the Caribbean come to or through Miami, Burger King’s reputation spilled over to that area early on.. This simplified gaining brand recognition and accepatance.
Further, the nearness of the Latin American and Caribbean countries to Miami enhances the ability of Burger King management to visit these countries and for franchisees to visit Burger King’s headquarters. Overall Burger King owns 12 percent of its restaurants and franchises the rest> by owning, Burger King demonstrates market commitment and if the country turns out to be as attractive as anticipated, then the owned operations may be more profitable for Burger King than royalties received from franchisees.