This document provides a marketing and financial analysis for the international expansion of Burger King. It examines Burger King's expansion efforts globally over time, with a focus on growing markets like Russia, Turkey, Brazil, China, and India. Burger King has expanded successfully through franchising agreements that allow local partners to operate restaurants while supporting the Burger King brand. The analysis considers factors influencing Burger King's product and process adaptations in international markets to accommodate local customs and increase success. Overall, the document evaluates Burger King's strategic expansion under CEO Daniel Schwartz that has led to increased global presence, particularly in emerging markets.
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Marketing and Financial Analysis for Expansion of Burger King Business Internationally
CHAPTER ONE
INTRODUCTION
1.1Introduction
The impact of globalization in our monitoring is very natural. As long as possible,
preventing global exchange has fallen, giving businesses access to new business entities.
Ventures have exploited these new opportunities, expanded their businesses in
different countries and open industrial industries, protections, computers, and affiliates.
The food industry specializes in developing and profitable by the global financial
integration. U.S. Organization. The nutritional diet of the Burger King organization and
the increase in all areas will be the target of this assessment proposal. The organization
has exploited the world's infinite market for its calf, and has achieved its support
through new governance, and has set up important organizations overseas. Like many
nutrients, Burger King works differently. Disturbances may be "a type of advertising or
distributing where a parent's organization often allows a corporation or organization a
2. 2
little or no right or profit, to work together ... in a permissible period of time in a
designated place" (Hackett 65). While continuing everywhere, Burger King will look at a
nearby character inside the outer market you wish to get in. The participant will be a
great deal in managing the management of any open-ended units in the area. The
Burger King offers a business plan and helps the one who works to find the suppliers.
Like the 2014 Burger King's report of the SEC, the organization collects costs from
franchisees to support efforts to promote the environment, and supports foreign unions
in their advertising activities.
Toward the end of time, Burger King faced a number of changes, largely due to
the new performance, including the new CEO, Daniel Schwartz. It has recently been
used by a firm vent firm that bought the Burger King in 2010, the 3G Capital. 3G wants
to reduce the cost and bring the Burger King and from the celebration. Past owners try
to keep up-to-date customer developments and developments over the decades. They
are trying to attract new clients who use dignified places and many things, but
franchisees could not profit (Leonard). Following the purchase of the 3G Capital of the
Burger King in 2010, various projects and changes have taken place. The respected
houses were expelled, and the company's cost was reduced. Home officials and other
countries prevented misconduct by asking for groups, and company companies were
sold (Leonard). Like the 2014 Burger King's report of the SEC, the organization faced a
process of restructuring some of the foodstuffs, renewing existing creativity, and
providing more than 1,370 organizations with world-wide meals in franchisees (see
Figure 1). Interruptions are one way to reduce the company's cost, because it is the
3. 3
franchisee's responsibility to deal with unions, lawyers, and profits (Alon 342-343). The
52 frameworks of heritage organizations are available only in the field of Miami, Florida
- The central Burger King Command of the United States - and will be used for official
testing and preparation (United States 5). As the number of units with units refuses, as
well as costs. Giving such a very important diet of food meant that 3G does not need to
pay for most of your favorite computers. Burger King's head of business has also been
severely assaulted from 38 884 to 2,425 since 2013 after disposing of an excess of the
organization (Leonardo). The pieces seemed to be satisfied, and Daniel Schwartz was
called CEO in 2013. Daniel Schwartz is one of the world's largest corporate management
agencies, and his management strategies, while disagreeing, show the success of the
burger series. For example, between his foundation for the Meami Burger King meal,
Schwartz fought against the scenario of sad things that were collected every year. His
first one goes as the Chief Manager to unlock and improve the menu (Leonard).
Counseling groups were agreed and transferred far and wide to help franchisors in
expanding technology and to maximize their benefits. Schwartz invested some energy
abroad leading arrangements with major franchisors, making quickened expansion
bargains in moderate developing markets, for example, China, Russia, and Brazil
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(Leonard).
Burger King’s Expansion Efforts
The Burger King is independent of various nations around the world. In the same
way as other cheap food agencies, foreign business companies should be incorporated
into Canada and Mexico, due to their proximity to the United States. Studies have
shown that many businesses want to start the global expansion of neighboring countries
(Rhee and Cheng 420). Accessing a nation with a culture of help helps to fix the business
in a new setting. The new national nation is filling out as a reference to future expense,
considering an assessment of the process of dealing with the general business. In their
5. 5
assessment, she and Cheng realized that these costs would be less likely to be the end-
of-risk risk reduction plan (420-421). Most of these organizations will not intensify the
desire to spend more time at the same time in the effort, especially in the new region.
Rhee and Cheng realize that one of the most serious problems facing global
organizations is the lack of learning from the developing nations (421-422).
Misunderstandings of the nation's way of life can lead to misconduct when leading a
business through a remote accomplice, and boundaries of speeches are certainly a
problem. A person cannot visit a business from China in the same way a person can
approach a German participant; a community-based change and a single accident by
ignoring a person who works at any time when we are wearing a lot of these ice cream.
As shown in Figure 3 below, the Burger King has experienced the progressive
development of the unions of universal foundations as far as temporary. Most of the
developments have occurred in distant markets. The global expansion was the most
important part of the Burger King since the rear as temporary. Studies have shown that
the strong impact of a highly-occupied home market, as well as high-quality foreign
market products, makes many businesses growing worldwide (Hackett 69). Amount of
U.S. and, in Canada, it has really declined due to the immersion of the market. In 2014
Burger King bought Tim Hortons, the Canadian donut and espresso chain. The
integration has brought Burger King's home office to Toronto. President Daniel Schwartz
hopes that the two prisoners will benefit from action, making Tim Hortons more
chances of rising Canadians, and Burger King to expand their level in Canada (Patton and
Giammona). As part of the extinction work, the Burger King also began to enter the ace
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building and the collaborative work of various international partners. Clearly, in their
SEC SEC report, Burger King is facing franchisors in Russia, France, South Africa, Mexico,
Brazil, Australia, China, India and South Korea, providing examples (5-7). As indicated by
the SEC report, Burger King often picks up a small number stake on their joint activities.
Taking a small job reduces the risk associated with the money of Burger King, while at
the same time managing, and persuading the franchisor to succeed
(Hackett 71).
Growing Markets
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Due to the efforts of CEO Daniel Schwartz, a few distinct nations received
unprecedented development that differed from different nations. In Europe, in the
Middle East and in the African continent, Russia faced 88 gourmet Burger King dining
sites between 2012 and 2013, followed by 67-step Turkey (Figure 3). The most
distinguished tribes in the EMEA provinces have a few open spaces that are open
throughout the year. France, in particular, has shown a critical situation to get inside. As
illustrated by the case of Rick Fantasia, France did not oppose the efforts of American
food organizations, but the world and the way of life did not prove useful to training.
Indeed, even McDonald's opponent has fought in the district (Fantasia 206-207).
Rhapsody recognizes that the problem is not really a reduced diet itself, as though it
were possible. Many French businesses repetitively McDonald's model at the right time
and make a riot in the angry region. McDonalds soon realized how to expand their
foundation in France in partnership with the money (207). Burger King builds a
construction ace in line with Group Bertrand, the French federal federal organization
confirming the foundation of Burger King in the region (United States 5). Within a short
period of time, in the Latin American and Caribbean region, Brazil had a great deal of
development, with the 93-year-old Burger King Business enterprise (Figure 4). Brazil has
been experiencing financial development over the last decade. The New York Times of
2009 expects Brazil to "[p] be promoted to revive the 2016 largest economy"
(Gomelsky). The summer 2016 summer Olympics will be held in Rio de Janeiro, Brazil,
and a large part of the financial development has been awaiting this event. A lot of
confidence that promotes the rise of unique features without working, and helps to
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support the global economy (Applebaum). While the hypothesis has its analysts, there is
still an open door for companies that wish to take their feet without a design.
Conversion, business trading-governmental harm does not hurt, or (Gomelsky). As
shown in Figure 4, Burger King previously had a big deal in the country, but Brazilian
continuing economic growth allowed the Burger King to quickly build the area and
continue to argue. In the Asian Pacific region, China became a home of 104 new
restaurants (Figure 5). As illustrated by the article at the Miami Herald, Burger King
wants to open something like thousands of Chinese restaurants at the following time
with the final goal of McDonald's by establishing 1,500 basics (Walker). Apart from
China, Burger King expressed its enthusiasm for building its foundation in India,
consisting of Everstone Capital Partners, a strong private value in India (United States 7).
India's pasture rates are relatively slow, with no good number shown. Cultural diversity
is likely to be a matter of factors related to the developed development in the region.
Hindu religion worships cattle cows, which lead the Indian lion's lions to do without
meat, the basis for many of the chains of nutritious food (Gauba). As the goal is to try
and get a chance to oppose different regions with romantic, nutritionists always need to
convert their menus to meet these hazards (Hackett 71). When McDonalds entered
India in 1996, he attempted to fight the KFC chicken menu, a life-style affair, adding to
its deep access to India and the south of South Asia. Therefore, McDonalds chose to
normally adjust its 70% menu, giving a new level of gear (Gauba). Burger King has
encountered similar issues when they enter the Indian market, driving them to give
their new franchise Ever stone Capital Partners a command over clear products in the
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area, including choosing options from the Vegan and the Indian ("Burger King Keen"). As
these changes are scheduled, Burger King is currently ready to fight in a major market in
India.
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1.2Problem Statement
Global showcasing is linked to conducting business trials up to directing property assets
and corporations to a consumer or more than one country customer profit. Therefore,
the International showcasing separates the advertising of the site from a stimulating
exercise that occurs more than one nation. Provides an opportunity for international
firms to take over, inspire, create, R & D and financial competition with local opponents.
Which organizations go north? What Burger King's strategy is to use access to global
markets? Did they plan their advertising plans for neighboring exhibit needs or did they
fully pursue the world center? What are the reasons and causes that influence the
consolidation of the product (Product, Price, Promotion, Location, People, State Mode,
and Process Management) that may reach International Adjustment of the Procedure
for the Sale or Establishment of the Universal Declaration? What is the Burger King's
advertising method and behavior while handling the above questions? The world's
leading travel agencies are based on how real-life markets may be either in or out of the
water, including the need to reduce trust in a few markets. Therefore, they focus on the
business sector through open-ended activities and have the basis for enhanced clients in
achieving the quality of the economy. This option is not easy because firms may face
real problems, for example, commercial trading standards, affiliate governments or jobs
and exchange rates. Vrontis D. moreover, the Vronti, P. (2005) argued that when
choosing to move on the world market, there are two low-level, acceptable criteria.
Important key choices should be made as soon as possible as to using the same method
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of promoting mixing as a part of the global system or to modify the integration and
processes to consider one of the most favorable attributes in all nearby markets. As this,
it will make an international organization; because of this situation Burger King, repair
or place its advertising parts in the world market?
1.3Research Objective
1. To determine the fact that whether burger king expansion in Latvia is beneficial.
2. To identify the marketing and financial analysis of expansion of Burger King
Business internationally.
3. To examine how much cost is required for expansion internationally.
4. To evaluate the business person’s views related to the topic.
1.4 Research Questions
2. What is the marketing analysis of expansion of Burger King Business
internationally?
3. What is the financial analysis of expansion of Burger King Business
internationally?
1.5 Significance of the Study
U-Vrontis, D (2003) states that the development of global development plans
discuss two points of view. There is one camp completing international suspension and
emphasizes that the private marketing system and institutional integration should be
14. 14
used in universal markets to limit the inclusion and development of a global image.
Another camp is a "global scholiast who guess who sees the need for marketing
addiction to be like one of the best parts and all the nearby markets". (Vrontis, 2005:
284) To make good friends and organizations to grow, there is a need to link these two
ways and consider the components and reasons that contribute to producing
integration components and advertising strategies. Designed by Vrontis, D and Cash, P
(2005) states that organizations choose the establishment of advertising centers as they
cost, enhance the business image around the world and decrease the manifestation of
indicators. Then, a client introduction can transmit their way of displaying the item
adjustment. As a result, "the selection of global development strategies depends on
various factors, and these reasons are linked to reasons and reasons." The reasons are
that behavioral 'pulling' industries into behavior that is targeted in all aspects of the
process, while the causes are factors that influence the behavior and importance of the
relative. (Vrontis, 2005: 91)
Vrontis, D (2003) found that the selection / size and resolution of land
development strategies after considering the reasons for drawing and the factors that
influence exposure components are Adaptstandation. Adapstandation resolution
solution was known as the VrontisAdaptStand process, which is the way to install
conversion and consolidation in the International design strategy, continues.
1.6 Gap of the Study
U-Vrontis, D (2003) also points out that there are six basic regulatory powers to
organize the correction. Two of these forces are the reasons for Adapstandation and
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have been identified by: - An attractive attribute of international organizations and the
ability to utilize global benefits thus leading to the standardization. Power is
summarized as the following: Global Uniformity Image - Reduction Rate - Synergetic and
Transferable Status - Compliance with Consumer - not required to edit and control -
Stock costs are reduced. - External environmental limitations to rehabilitate and
influence the market residents (Market competition, political power and law
enforcement, customer ratings and separation of customer observation) and the
environmental conditions of the Market (physical, cultural, market development,
economic divisions, the release of advertising infrastructure, Techniques). Vatican, 2003:
297) These 9 features are related to 1) regardless of whether or not the organization is
dealing with business in business or business in the customer's courtyards, 2) the
category of competence (applicable) that affects the importance of the reasons and the
conduct of the object and the development. Industrial part 4) Type of material or
management to be shown 5) Multiple support outside 6) Worldwide staff number 7) A
well-known expert to provide assistance 8) Number of land fields 9) All profits. that
Burger King is relying on Franchising as an Entry Method (it is a serious factor in
determining whether the resolution may affect the correction), I will express insight into
the Mix's Marketing Mix of the BK and immediately spread their way of fixing or setting
up an institution.
1.7 Delimitation of the Study
The study is delimited to following aspects:
1. Theme
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2. Time
3. Geography
4. Sample
CHAPTER TWO
LITERATURE REVIEW
An extensive literature on company expansion beyond domestic borders in
international business focuses on entry, in particular the issues of timing and mode of
entry, in which the latter typically takes the form of export, licensing, joint venture or
FDI (Anderson, Erin &Gatignon. 1986). While literature provides useful insights into
where and how companies enter foreign markets, entry is treated as its own end.
This focus on entry is probably partly due to the frequent use of manufacturers
as the empirical framework for analyzing expansion; a manufacturer can enter a foreign
market with a plant that is large enough to serve the market's needs for some time to
come. In this context, entry can rightly be seen as both the end and the start of the
foreign market investment of a company. But as the United States moves more and
more from a largely manufacturing economy to a more service - based economy,
understanding how service firms expand abroad becomes increasingly important. And
17. 17
the reality is that service companies typically enter foreign markets with one or several
locations and then extend their geographical coverage of the foreign market over time
in their customer search. In this case, when and how these companies develop
additional locations in foreign markets is potentially more important than selecting the
initial location(s) for the timing and entry mode.
CONCEPTUAL FRAMEWORK
The theory of economics suggests that companies should pursue projects of
positive net present value wherever they arise. This will lead to the development and
adoption of new technologies or the diversification of the product portfolio for many
companies. Geography, however, also provides one of the fundamental sources of
diversification and growth. For example, Toivanen and Waterson (2005) show how
Burger King have grown in the UK starting in London. We concentrate on international
expansion. The economic theory here tells us that a company with opportunities abroad
should pursue them all if it assumes risk neutrality. In fact, without any restrictions on
capital or management time and ignoring learning issues, theory would imply that
companies with opportunities abroad would all pursue them aggressively and rapidly. If
companies face constraints – in terms of availability of capital or management
capacities–or if there is an optional value in the accumulation of market information
opportunity gradually, Economic theory suggests that companies will maximize profits
by first pursuing the highest expected profit opportunities worldwide and allocating
resources across markets in a way that first takes advantage of all the best opportunities
(Barkema, John & Johannes, 1996). Markets in which they first enter this scenario may
18. 18
be similar, culturally or in close proximity to those in which they already operate
because product. Other factors, especially key drivers of market potential, will,
however, affect the expected profitability of a market and thus the decision of a
company to expand abroad. As suggested by LaPorta et al, institutional factors will also
contribute to the evaluation of the value of operations in different countries by a
company.
The theory of internationalization, which is the leading theory in international
business regarding the expansion of companies abroad, is a behavioral theory that
suggests that companies reduce the uncertainty associated with going abroad only
gradually, starting with modes of entry that involve little commitment, such as
exporting, and only increase their involvement in those markets where they have
(Johansen &Vahlne, 1977 and 1990). This view for example, standard economic theory
implies that a monopolist who sells a fixed quantity of output maximizes profits by
allocating output units across markets to match marginal revenue across markets. In the
same way, companies with limited resources invest in the highest NPV projects in
finance. International expansion is not inconsistent with the value options approach,
where companies only gradually commit resources and thus have the opportunity to
update their assessment of different options and opportunities. The theory of
internationalization, however, with its focus on risk aversion, also suggests that
companies only expand abroad once they have exhausted opportunities in their home
market and then first expand in markets that are " familiar to them," namely markets
19. 19
that are similar culturally or geographically close to those in which they already exist,
and that they exhaust opportunities in every market (Berndt, et. al., 2003).
Instead, the economic theory suggests that the company will continually seek
out best opportunities in all markets. Unlike a manufacturing company with export
options, a retail company like BK has no choice but to go abroad where the customers
are if it sells its product outside its home market. In addition, such a company must
increase its number of units abroad if it is to reach more customers. This reality enables
us not only to observe when BK enters a given foreign market, but also to track the
extent and timing of its expansion in a given foreign market. This, in turn, means that we
can assess whether this company mainly pursues markets that are similar to those in
which it already operates or whether it has the highest profits in the world. Although BK
cannot export its product, it can choose between different operating modes in each
product of market, some of which involve a higher degree of commitment of resources
than others. In particular, a subsidiary can enter into a joint venture with a local partner
or enter into a master franchising arrangement whereby the master franchisee owns
and operates all the outlets in his or her territory or finds franchisees to do the same.
While the level of investment that BK invests in these markets varies between
these different modes of governance, BK controls the number of outlets and the
number of outlets growing in each market. Consequently, in what follows, we assume
that it internalizes the expansion costs to a large extent–although to varying degrees
depending on the governance of each market –and that it sets the path of expansion
both within and across all markets (Berry, 1992).
20. 20
Eriksson et al. (1993)provides an overview of empirical research examining
whether manufacturing companies are gradually increasing their participation in foreign
markets over time, from low-commitment methods of sales abroad, such as exports, to
high-commitment methods involving ultimately foreign direct investment. The empirical
literature in general does not support this hypothesis of gradual involvement. However,
a number of empirical studies support the idea that companies invest first in nearby
markets whose populations are culturally similar to the home market. Most of these
studies are based on small samples and are characteristically descriptive (e.g., Johanson
and Wiedersheim-Paul, 1975; Loustarinen, 1980). Three studies involve larger sample
analyzes: Davidson (1980) examines pairs of foreign direct investment entry frequencies
for a sample of 934 new products introduced by 57 USA. Companies in the period 1945-
76. He concludes that "in the initial phase of foreign expansion, companies can be
expected to show a strong preference for close and similar culture." compete at a point
in time in a market (Bresnahan & Reiss, 1987).
Nordström and Vahlne (1994) also find a positive correlation between
psychological distance measurements from Sweden and the average entry range for
their sample of Swedish company investments. On the other hand, Benito and Gripsrud
(1992) and Pedersen and Shaver (2000) find no support for the hypothesis that there is
first expansion in culturally closer countries.
While the theory of internationalization implies that familiarity is the driving
factor in determining where BK will expand abroad, a forecast that we address
empirically below, it is useful to further discuss the factors that economic theory
21. 21
suggests could lead to the decision of a company to expand abroad. The economic
literature on company entry has explicitly focused on the importance of declining costs
in determining the number of companies that can operate and therefore 4 For example,
while Bk may not fully internalize the expansion costs in a master franchise context,
such a contract usually stipulates a development schedule that specifies the number of
outlets to be opened at different times. In this sense, Bk can still control the path of
expansion in these markets. Furthermore, because tight development schedules
impose higher costs on the master franchisee, they will not be willing to pay as much for
a contract that requires them to expand very quickly as they can expand more slowly. As
a consequence, Bk internalizes the costs of rapid development in master franchise
contexts as much as it does under joint ventures or even direct franchise.
While Bresnahan and Reiss regard homogeneous companies, this literature also
examined the impact of firm heterogeneity on the probability of entry (Berry (1992),
Scott Morton (1999)). The typical model assumes, in particular, that heterogeneous
companies simultaneously decide whether to enter and incur the entry costs.
Companies then compete on the single market and the resulting combination of
production levels and prices determines their net profits in this new market.
Our setting differs from that of these studies in that we consider a single
company deciding whether or not to enter a certain market instead of examining
several companies. However, we follow this literature in the assumption that
McDonald's faces have decreased entry costs in each market. This cost would include
the costs of understanding the rules governing each new market and the customers in
22. 22
each market. It would include the cost of the brand's advertising and making itself and
its product known in this new market (Bhattacharyya, Sugato& Francine, 1995).
We agree that in markets that are physically closer and culturally more similar to
those in which the company already operates at any time, these costs may be lower.
Furthermore, due to the limited management resources at the Chicago headquarters at
some point in time, we assume that these costs are convex in the distance –
geographical or cultural or both–of the weighted number of countries entered in a given
period of time. This convex cost function increases the profitability to enter all markets
at once (Bresnahan & Reiss, 1987)
It was suggested that McDonald's deliberately kept supplies low in some
markets to generate queues and thus increase customer interest and perception of
quality. The cost of doing so is the profit lost that the company would have gained if it
operated faster in these markets. This cost would also be part of the declining entry
costs in these markets.
For the argument that first entry abroad is particularly expensive, see Pedersen
and Shaver (2000), while the following entry is less expensive. They derive and support
the assumption that first time is longer than the second time. They also find that time to
follow up is not significantly different from time to time.
In addition to the cost of entering a new foreign market, we also add a lower
entry cost to each new outlet that the company establishes in a given country. This
assumption is the burden on local resources when many outlets are opened in a given
market at once. For example, finding enough property experts and analyzing a large
23. 23
number of sites to identify a large number of good locations for new outlets is
expensive. It is also time consuming and costly to identify and train the requisite
number of franchisees, managers, and employees to staff numerous outlets. These
limits in turn impose a constraint on the chain’s growth in any given market in a given
time period (Buckley &Casson, 1998).
BK History
BKC was established in Miami, Florida in 1954 by Jim McLamore and David
Edgerton. In 1956, the organization built up the consistent chain grill for effortlessly
cooking cheeseburgers. In 1957, BKC presented the Whopper® Sandwich, which is as yet
being sold in Burger King Restaurants today. Another of BKC's advancements in the
cheap food feasting background was encasing porch seating in their eateries to make an
indoor lounge area. Amid 1959, the organization started to establishment eateries to
business people and the quantity of areas began to develop. For a long time, the
fundamental separation for the Burger King brand from contenders, for example,
McDonald's and Wendy's was their offer to enable clients to alter their ground sirloin
sandwiches and other nourishment contributions. The organization previously utilized
its notable slogan Have It Your Way in 1974 and had utilized it at times, however not
reliably, from that point forward. By 2004, BKC had more than 11,000 organization and
establishment claimed stores over the globe, and over $1.7 billion in income from both
organization possessed and diversified stores. BKC's proprietorship changed hands
commonly amid its history. In 1967, McLamore and Edgerton sold the organization to
Pillsbury, where it was overseen as an entirely claimed backup. In 1988, Pillsbury was
24. 24
procured by Grand Metropolitan, a UK-based spirits organization that converged with
Guinness to make another organization called Diageo in 1997. Diageo chose to strip its
responsibility for in 2002 and sold it to a private value support aggregate that included
Texas Pacific Group, Bain Capital, and Goldman Sachs Capital Partners.3 This gathering
of private value firms took BKC open in 2006 with the ticker image BKC.
In 1953, by McDonald's, Keith Kramer and his uncle, Matthew Burns, supported
the InstaBurger King in Jacksonville, Florida. Despite some previous achievements, the
company dropped rapidly through difficult times, which enabled Kramer and Brands to
sell franchisees James McLamore and David Edgerton in 1954. In the next five years,
McLamore and Edgerton made many dangerous changes: introducing a company's
mascot (Burger King), building a company signature sandwich (Whopper), switching to
flame-broilers, releasing the company's first company TVs and rename a company in the
King Burger. Shortly thereafter, they sold world licenses to private franchisees. In 1967,
when BK was purchased by Pillsbury, it was proud of 274 U.S. places and it was US $ 18
million. Pillsbury made changes to the franchise agreements, put in the same store
design and created new products (e.g., special BK BK sandwich and new chickens and
poultry chickens).
Most of these changes were eventually discarded, and as a result, BK violated. In
January 1989, Pillsbury sold the BK to the Grand Metropolitan PLC with $ 5.7 billion. The
Grand Metropolitan has opened BK restaurants in 11 new countries (Hungary, Mexico,
Poland, Saudi Arabia, Israel, Oman, Dominican Republic, El Salvador, Peru, New Zealand,
25. 25
and Paraguay). In 1997, a combination of $ 22 billion between the Great Metropolitan
and Guinness led to the construction of a new company, whose name was Diageo,
whose temporary administration was filled with many problems. Income BK and market
revenue dropped, leaving Wendy's company temporarily in the U.S. market. In 2002, an
independent equity company led by TPG5 Capital consumed BK from Diageo with $ 1.5
billion.
New owners make BK a public company for the first public contribution in early
2006. TPG Capital makes a lot of changes: introduce new ad campaigns, start a proposed
menu, develop a step-by-step action for creating individual stores and creating BK
Whopper Bar.6 These changes helped to convert corporate companies around.
However, as the growth decreased, TPG Capital decided to isolate itself from BK.
3G Capital and the Daniel Schwartz Era
In September 2010, 3G Capital, a private consumer in Brazil, bought a $ 4 billion
bill. Under the 3G Capital, several managers were cast out, and 650 workers were
eliminated. Bernardo Hees has replaced CEO, Schwartz as the prime minister. Under
Schwartz's view, the BK launched many steps to reduce costs: the BK business jet was
sold; Honorable offices of senior management and deputy secretaries have been placed
in office of low, open office; and a $ 1 million annual year on the Italian coastal coast
was canceled. Additionally, 12,000 business enterprises were sold, leaving BK only about
52 food restaurants. The loading of many restaurants is expected to save more than $
26. 26
400 million, since the cost of retail shops will be transferred to franchisees. The counting
of BK's head was from 38 884 in 2010 to 2,425 in 2013.
Apart from these changes, 3G is compiled with Justice Holdings and makes BK a
public company again in 2012 (also private in 2009). Although these steps led to an
increase of 34 per cent to 2011 in 2011, BK lost two of the U.S. markets in 2012. Fast-
food chain in Wendy's. For the first time since 1970, BK is not one of the top U.S. rows.
13 July 2014, Schwartz was elected CEO. Schwart's encouragement was remarkable
because of his age - he was only 32 years old! As CEO, Schwartz negotiated with open-
air contracts in Brazil, China, Russia and France, expanding 1,493 international shopping
centers, totaling 13,667 in 85 countries. Schwartz's efforts helped BK and restore two
numbers from Wendy to U.S. sales volume. Fast food options in 2014.
In December 2014, BK received Tim Hortons about $ 18 million. The merger
created by Restaurant Brands International, the world's largest fastest growing company
has more than 18,000 locations around the world. The 3G Capital participates in 51
percent of the new company, and Tim Hortons shareholders are 22 percent and the
shareholders of BK are 27 percent. Schwartz was the head of the new company, while
Tim Hortons's head official, Marc Caira, was chairman and director.
Marketing in the Fast Food Industry
BKC confronted solid rivalry in the cheap food industry. It contended specifically
with McDonald's and Wendy's and furthermore with non-ground sirloin sandwich
serving junk food eateries, for example, KFC, Pizza Hut, and Subway. Furthermore, it
27. 27
progressively contended with ―quick casual‖ idea eateries, for example, Panera Bread
Company, which pulled in clients with an apparent larger amount of value. Generally,
junk food chains depended on new item dispatches, substantial TV publicizing, and
advancements to draw clients into eateries. In 2003, McDonald's was the second biggest
media high-roller over all classes in the United States with $547 million in media
spending. BKC was the thirteenth biggest media high-roller at $270 million (see Exhibit 1
for 2003 industry media spend). 13 Promotions frequently appeared as motion picture
tie-ins, recreations/challenges, or value limits for explicit menu things (see Exhibit 15 for
BKC's media blend spend for 2006). BKC had a continuous arrangement for year and a
half of special exercises. In June of consistently, the showcasing office built up an
arrangement for the following financial year that spread out both grown-up and kids
advancements and crusades. The grown-up line had 0-12 limited time windows. The
children line had 11-12 promotions (approximately one every month), arranged 12-15
months ahead of time. Some special windows are arranged well ahead of time, while
some are left open as ―opportunity slots‖ when BKC can design a battle to exploit
surprising social patterns.
Deals and benefit development at drive-thru food eateries was feeble amid the mid
2000s. One explanation behind this was expanded consideration paid by customers to
corpulence in the United States. Junk food Social Media and the Burger King Brand Case
#6-0025 Tuck School of Business at Dartmouth—Glassmeyer/McNamee Center for
28. 28
Digital Strategies eateries, especially prominent chains, for example, McDonald's and
Burger King, confronted analysis in the media for focusing on kids with undesirable
sustenances served in huge parts. Following quite a while of geographic development
and marked down spotlight on new items, cost limiting turned into an inexorably
imperative strategy for driving deals. Driven by McDonald's and BKC, the industry
confronted a value war amid the mid 2000s that finished in 2003. The value war saw the
expansion of 99-penny menus, which discounted the cost of customarily progressively
costly things to $0.99. Same-store deals and gainfulness for the whole business declined
over this timeframe. After 2003, the junk food industry moved far from value rivalry and
concentrated more on growing new items for which they could charge a premium.
Marketing and Burger King
Russ Klein took the situation of President of Global Marketing, Strategy, and
Innovation at Burger King Corporation (―BKC‖) in 2003. It was a troublesome time for
the organization. Deals and benefits were down. Franchisees were miserable. The
BURGER KING®* mark had lost its edge; by far most of buyers knew about the Burger
King brand yet never again thought that it was intriguing or convincing. BKC as an
organization required a turnaround, and had quite recently been acquired by a private
value gathering. Klein's central goal was to restore the Burger King brand and
reconstruct significance to the purchaser as a component of a noteworthy renewal of
the organization. What pursued was a progression of vital choices and inventive,
dangerous advertising efforts that would inhale life once again into the brand and win
29. 29
grants for BKC and its organization Crispin Porter and Bogusky (CP+B). A significant
number of the inventive advertising strategies utilized by BKC depended on intelligent,
advanced media channels. The most discussed of these activities was a site called ―The
Subservient Chicken.‖ This site, propelled for next to no cash and with little ballyhoo,
turned into a web marvel, drawing in a huge number of guests and winning different
honors for its resourcefulness as a viral advertising effort. BKC proceeded to build up
exceedingly dealt Burger King marked MySpace pages, uncommon projects where
clients could make their very own Burger King advertisements on the web, and other
non-conventional promoting programs. By mid 2006, BKC was known as a trend-setter
in substance driven showcasing and the imaginative utilization of internet based life.
Klein confronted a progression of choices about where to go straightaway. One choice
concerned the dispatch of a novel showcasing idea created with Microsoft. Amid the
2006 winter Christmas season, the organization would move Burger King-marked
Microsoft Xbox computer games, highlighting Burger King characters, for example, the
King and the Subservient Chicken. Klein expected to choose if BKC would proceed with
the battle and how such a methodology would fit in with his general image building
procedure.
Ought to BKC proceed with the Xbox advancement? How successful was BKC's non-
conventional media approach? How far would it be able to be taken? These were
30. 30
intense issues that Klein expected to investigate before giving the thumbs up for the
Xbox crusade.
BKC’s New Marketing Strategy
While trying to bounce back from its poor execution, Klein and BKC's showcasing
staff made various vital and strategic changes. Centered Consumer Segmentation The
significant players in the cheap food industry battled furiously for clients, however had
particular essential client target fragments. McDonald's image was centered around
youngsters and guaranteed more seasoned individuals the sentimentality of
encountering their adolescence once more. Wendy's focused on grown-ups with a
guarantee of a ―classic‖ ground sirloin sandwich eating background. BKC customarily
centered its advertising around youngsters and youthful grown-ups. BKC previously
utilized a social division plot that focused client types, for example, ―hamburger
eaters.‖ Under Klein's promoting administration, the organization moved to an
utilization based division conspire. This brought about an engaged focusing of what it
called ―Super Fans.‖ Super Fans were normal guests to speedy administration eateries.
They ate at cheap food ground sirloin sandwich eateries nine times each month or
more. They included 18% of BKC's client base yet represented 49% everything being
equal. Martha Flynn, Senior Director of National Promotions and Sponsorships, stated,
―Our Super Fan goes to all brisk serve eateries – McDonald's, Wendy's, and others.
He/she's not faithful to us. We simply need him/her to come in to Burger King more
than he/she does now. The Company had a board of 750 Super Fans in four noteworthy
31. 31
urban communities with which BKC imparted straightforwardly to more readily
comprehend the objective client.
New Product Introductions In 2003, the value war between McDonald's, Burger King,
and the other cheap food fastens arrived at an end when the business showcasing
center moved to new item advancement. McDonald's discovered achievement copying
the ―quick casual‖ idea by moving premium servings of mixed greens for $5.00.
Notwithstanding noting a portion of the shopper worries over wellbeing, doing as such
enabled McDonald's to move dependent on a separated item rather than cost.
BKC chose to dispatch new items focused on explicitly at Super Fans. These new items
were planned to be ―indulgent‖ dependent on their extensive size. Instances of these
liberal Social Media and the Burger King Brand Case #6-0025 Tuck School of Business at
Dartmouth—Glassmeyer/McNamee Center for Digital Strategies items were the top
notch Angus Steak Burger and the TenderCrisp® Chicken Sandwich. Sandra Howard,
BKC's Senior Director of Global Consumer Insight, stated, ―We will offer plates of mixed
greens, however our Super Fan doesn't need another serving of mixed greens. We are
not going to apologize for being a burger organization. The two new items were fruitful.
The Angus Steak Burger was separated dependent on higher quality meat, while
TenderCrisp Chicken Sandwich gave BKC an item in the chicken sandwich classification
where it was customarily feeble.
32. 32
New Approach to Brand Building First, BKC chose to bring back the ―Have It Your Way‖
motto. In December 2003, Klein initially reached Jeff Hicks, President and CEO of CP+B,
to ask whether they would propose some innovative thoughts for advancing the ―Have
It Your Way‖ trademark. Klein felt that the old motto still had value with the objective
shoppers and that the possibility of ―having it your way‖ fit great with expanded item
and administration customization found in a few enterprises that focused end
purchasers. The motto not exclusively was incorporated into the new publicizing, yet in
addition turned into a focal subject of all components of BKC's the same old thing, from
the item offering to promoting to bundling and napkins.
Second, the organization presented the Burger King character known as ―The King,
spoken to by a performing artist wearing a veil. The King picture had not been a piece of
BKC's promoting for a long time. Previously, the organization had used pictures of a lord
entirely with regards to youngsters' showcasing. The new King was thrown in a TV
notice called ―Wake Up with the King SM,‖ depicting a young fellow awakening to
discover the King serving him breakfast in bed. The promotions wacky methodology
gave the organization a lot of unintended presentation to general society. Once in the
past, the King spoke to a well disposed King of Hamburgers, yet the new manifestation
of the King appeared to depict a darker picture. Not at all like Ronald McDonald, who
had a warm and well disposed picture for youngsters, the King's plastic outward
33. 33
appearance did not change, giving him a to some degree confounding and now and
again frightening picture that appeared to reverberate with adolescents and youthful
grown-ups. Following this achievement, CP+B discovered they could utilize the King's
character and appearance extensively to speak with the objective market. From 2004
through 2006, the King showed up in 24 TV spots.15 A Burger King franchisee, Alex
Salgueiro, said of the King: [The King] appears to drive individuals in the entryway. I
think our rivals are terrified of the King … they ought to be. They state ―What's with the
King? what's more, my answer is ―It's superior to jokesters. BKC characterized an
unbending code to deliberately control how the King could be depicted in media and
openly. The organization managed that the King must dependably be depicted as
sovereignty, can't talk, must stay unpleasant, must be generous, and must be escorted
with a suitable company of alluring ladies.
Klein realized that the King had achieved VIP status when ―The Tonight Show‖ with Jay
Leno called and inquired as to whether the King could show up on the show. The King in
this manner showed up by method for pre-created productions by and by coordinated
by Leno (since the King doesn't talk). Third, the organization moved toward the manner
in which it put resources into media from another and alternate point of view. Rather
than adopting a customary strategy of permitting media stations, for example, TV and
print to command crusade speculation choices, the organization produced what Jeff
Hicks called ―media skeptic ideas.‖ He stated, ―We begin the innovative procedure
34. 34
with thoughts and disregard the media.‖ These new thoughts were proposed to move
far from the conventional model of interfering with clients amid their media utilization
and move towards Burger King efforts that are diversion all alone. Rather than
attempting to drive a client to watch a Burger King promotion for a motion picture tie-in
amid his or her most loved network show, the new battle would be proposed to draw in
clients hoping to be engaged, and to pull in them in any media channel they were locked
in. BKC diminished its ―conventional‖ publicizing spending plan and started to install its
crusades in non-customary media channels. Vitally, be that as it may, this systemdid not
suggest real changes to media blend distribution. In 2006, TV still represented by far
most of BKC's promoting spend. The organization just spent around 2.5% of its
publicizing spending plan on computerized and intelligent media, for example, web
smaller scale locales (little and impermanent sites devoted to an explicit item or
advancement) and other online crusades, and was not a noteworthy purchaser of web
media, for example, pennant promotions and interstitials.
The Subservient Chicken — BKC’s Viral Marketing Campaign
Utilizing viral promoting procedures was not another idea in 2004. Verbal
promoting had existed for a considerable length of time, however the ability of email
and other electronic types of correspondence to inexpensively and effectively forward
data and connections to other individuals made viral showcasing on the web an
energizing prospect for buyer advertisers. The intensity of ―send it to a friend‖
35. 35
showcasing was broadly credited with building major online brands, for example,
Hotmail and YouTube.
On April 7, 2004, BKC discreetly propelled a strange site called ―The Subservient
Chicken‖ (www.subservientchicken.com). The site was propelled as a major aspect of a
more extensive crusade to drive purchaser traffic to eateries and increment deals for
their singed chicken sandwich. Burger King had dependably falled behind McDonald's
and Wendy's in offers of chicken sandwiches. The TenderCrisp Chicken Sandwich was
propelled on March 19, 2004, fourteen days before the site was propelled. The
Subservient Chicken site highlighted a man dressed as a chicken in a meagerly enriched
front room. Clients were urged to advise the chicken to accomplish something. In the
wake of entering the order, the chicken did as told. For instance, if a client advised the
chicken to ―jump or ―sit on the love seat, it would comply. The webpage did not
unmistakably say that it was a Burger King site. Or maybe, it makes insignificant notice
of Burger King with just a connection to the TenderCrisp site and a BKC copyright at the
base of the page. A basic ―tell a friend‖ catch was included at the base of the site with a
simple procedure to send the connection by means of email.
The Subservient Chicken site cost under $50,000 to manufacture. It was only one of
numerous thoughts tossed around by CP+B and was not seen as a gigantically vital piece
of BKC's promoting blend at the time. Jim Poh, Vice President and Director of Creative
36. 36
Content Distribution at CP+B, stated, ―The site just expense about $50,000. On the off
chance that it had cost $100,000, it probably won't have happened.‖ The thought
behind the Subservient Chicken crusade was not exclusively to feature the new chicken
sandwich in a creative way, yet additionally to give an immediate association with BKC's
general idea of clients ―having it their way.‖ furthermore, the online channel was
regarded profoundly significant for the youthful target client base. BKC felt that its
image's proposed guarantee would fit extremely well with the web's intuitiveness and
capacity to arrange the Subservient Chicken to do what they needed. Andrew Keller,
Creative Director at CP+B, stated, ―Interactive media are an incredible place for us to
be, on the grounds that that is extremely the media that most nearly looks like what
we're endeavoring to offer in restaurants.‖17 The dispatch of the site was not joined by
a noteworthy TV and print battle to direct people to the site. Just twenty individuals
were told about the site upon its dispatch — all companions of individuals who worked
for CP+B.18 The battle was not totally without the support of customary media. Half a
month prior to the dispatch of the webpage, TV advertisements were run that portrayed
twenty-year-olds collaborating with the Subservient Chicken, yet no notice of the site
was made. A later crusade portrayed cowpokes riding ―buckin'‖ chickens, like riding a
kicking horse. In October 2004, another TV publicizing effort was propelled called
―Chicken Fight.‖ The spots advanced a battle between two individuals dressed as
chickens (named Spicy and TC), which circulated on DirectTV on November 5. Another
impermanent site, www.chickenfight.com, was propelled where buyers could cast a
37. 37
ballot on who might win. Consequent Burger King TV crusades highlighted the
Subservient Chicken nearly as noticeably as the King in the organization's promotions.
BK’S MARKETING MIX: PRODUCT, PRICE, PLACE AND PROMOTION
Product
In 2015, the main products of the BK were buses, french frames, sauces, onions,
soft drinks, milk and dessert. The sandwiches of the company's brand was Whopper,
created in 1957 and appeared as a hamburger weighing 110 pounds [110 kg] of lemon
juice, tomato, mayonnaise, pickle and ketchup. The sandwich traveled several times
over time, especially in a change from the continental plain to the 1970s, and the
massive change in the 1980s.
In the late 1970's, the BK introduced its special sandwich, which contained
poultry and fish. While most of the products from this route were banned, the Chicken
First Chicken Memorial appeared in the menu for all markets in 2015, while some of the
chickens and chickens were donated. Also, in the late 1970's, the BK began to serve in
the morning. In 2015, the company still offers regular breakfast as brown; sandwich
breakfast with eggs, cheese, sausage, cheese and ham; products like Croissan'wich;
French bag; cinnamon rolls; English sandwich; sandwich with bread of ciabatta; morning
dishes; oatmeal and non-alcoholism.
Many menu items were added years ago. In 1986, the company introduced BK
for Chicken Tenders to compete with McDonald's Chicken Nuggets. This product was
38. 38
banned several times, but it was renewed every time, and poultry payments were sold
in 2015. In 1990, the company established a growing chicken certification. This product
has been consistent with several programs and a converted product version, the tender
of Tender Grill, was awarded in 2015. In the early 1990's, the BK launched its Kids Club;
however, in 2015, no longer focuses on this market.
In 1998, the BK launched its main menu, including hamburgers, French frames,
sauces, onions, soft drinks, and milk. The price menu was supplied in 2015, and showed
additional products (chicken on the head, salad, extra drinks and dessert). In 2003, BK
introduced Angus Steak Burger. In 2015, after a slight change, the company gave
Steakhouse XT Burger.10 Over the years, the company introduced coffee, frappes,
smoothies, iced tea and a small selection of salads. In 2015, the BK worked on many
international markets, and the company made several adjustments to its menu to suit
their interests. For example, in Saudi Arabia, the pig was not identified.11 In Australia,
the BK shows Aussie Burger, a burger with a cherry egg, beetroot and other Australian
flavors. In Asian markets, the company incorporated black chicken.
Price
39. 39
While BK’s menu had changed significantly over time, its prices had not — prices
were traditionally high, and they continued to be high in 2015.12 However, the
company tried to be more price-conscious through the creation of special promotions.
In late 2014 and early 2015, for a limited time, BK offered its chicken tenders for half
price, which resulted in a lower per-unit cost than McDonald’s.
Place:
Distribution, Design and Layout of the Stores, and Store Locations Distribution
From the start of the company until 1992, individual franchisees have been
bought with their selection of products in one of the many distributors of the company.
Merchants were selling their products independently from suppliers. In the early 1990's,
BK moved to consolidate its distribution through the creation of Restaurant Services Inc.
(RSI), independent management of shared and shared distribution management of BK
franchisees and BK Corporation.14 In 2015, the RSI distributing BK, identifying new
providers and ensuring that regional distribution centers comply with operating
standards. In addition, the RSI attempted to reduce the cost of installing and
distributing. The RSI has received abusive reviews - someone said "our co-operative
franchise [RSI] is one of the few aces we've been able to collaborate ... You are one of
our co-workers who work well in any franchise system."
Design and design of stores
40. 40
The design and design of BK places are like classic fast-food outlet - many
locations feature a drive-through and a small area with limited restaurants. The interior
usually reflects the free plastic chairs, the solid tables, the bright light and the bright
colors, lifting up. In October 2009, the BK announced a 20/20 plan, which would result in
renovating its restaurants .6 Expected refund costs were 300,000 to $ 600,000 for food.
The new interior will feature candles and red circuits, TV shows and metal walls and
bricks.
In 2013, in responding to criticism of franchisee regarding renewal costs,
Schwartz introduced a new cost plan. The cost of renewal decreased almost $ 300,000
each place, and franchisees are offered low low franchise money and temporary cuts for
payment. Since January 2015, 19 percent of U.S. and Canada were hurried. New looks
reflect modern-day living and improve lighting, making this restaurant like food
visibility-with chains like Applebee or Chili. The interior was packed with wood, brick and
iron, which led to more views. The BK reported sales up to 10 to 15% in the targeted
areas.
Last Place
In 2015, the BK was conducted in restaurants throughout 50 locations, with
almost every city in the United States. Completely, in 2015, about 50 percent of BK's
restaurants are being conducted in the United States. The restaurant restaurants
operate in 85 countries around the world. In the year 2015, the company had almost
every area of entertainment in North West, and throughout Western Europe and East
41. 41
Asia. However, few industries in Eastern Europe and Africa. In fact, the BK had only
three locations in Africa - South Africa, Morocco and Egypt.
Encouragement
The first advertising efforts of BK were television advertisements in 1959. Over
the years, BK has used a lot of promotional campaigns. Some of the most successful
efforts came in the 1970s, where advertisements include jingles and reminders such as
"Taking two hands to handle Whopper" and "Be your way." The years from 1980 to
2002 saw a number of advertising organizations creating many statements and
unsuccessful programs, including a small corporate effort, "Where is Herb?" 19 In 2003,
the company introduced viral-based web-based ads designed to enhance the promotion
of newspapers, television and communications.
The company also renewed the mascot of BK (known as "Lord"), an outstanding
feature of marketing campaigns in the late 1950's and early 1980's. From 2008 to 2012,
the company has been conducting a series of ads that irritate people because of the
representation of women, socialists, nutritionists, health practitioners, Mexicans and
Hindus. Also, BK receives notice of an incident where an employee wrote to us in the
kitchen in the kitchen and sent a video to YouTube.20 under Schwartz and 3G Capital,
BK made several changes in its advertising. The retired "Lord" resident in 2013, ends 60
years of running.
The marketing strike of BK under Schwartz was surrounded by many people,
such as David Beckham, Mary J. Blige and Jay Leno.21 Jay Leno was apparently choosing
42. 42
salad, while David Beckham ordered a strike. Usually, the campaign was popular, since
the ads were deleted from a mysterious laughter, from one to another major complaint.
As a result, the BK left the market of its traditional 18-year-old man and raised a
complaint for the people. Some ads under the new plan were arguing. For example, at
the announcement of Mary J. Blige, she sang a "growing chickens" song. However, the
ad was postponed, but after an ad criticized racial discrimination. The skeptical criticism
of the area - said the complete trade was totally different from the idea presented to
him.
Other commercial disputes are being made. In 2014, a model from the BK ad
(Super Seven Incher product) held in Singapore in 2009, appeared in an ad without
permission and was disgraced.
THE FAST-FOOD INDUSTRY
Emerging Trends and Challenges in the Fast-Food Industry
Fast food chains began operating in the United States early in the 1930's. The
industry was experiencing a considerable increase as the increase rose from $ 6 billion in
the 1970's to $ 160 billion in 2014 (an average of 8.6% per annum). In 2015, fast food
packets in over 100 countries worldwide have more than 200,000 locations in the
United States alone. In 2015, the industry faced major challenges that incorporated its
profit categories.
43. 43
First of all, the amount of food offered comes with great focus. Fast food has
always been considered unclean, since it had high levels of fat, highly concentrated,
cooked and expired, and its use was shown to increase both weight and body weight.
However, by the end of 2010, the shortage of fast food began to get a test, since books
such as Fast Food Meals and Books like Super-Size I showed bad results for fast food
use. Quick diet chains try to fight this image by establishing healthy dietary decisions
and clear disclosure of the nutrition of their product offerings. They also started public
awareness campaigns that highlight product cleansing and product preparation process.
Although these measures were somewhat successful, the negative picture of the
field was not removed from the public mind. Another trend was rising prices. Farm
prices, wheat and maize have increased significantly, and as food and drink add to about
one third of the cost, high prices have reduced the profit price. As combined with the
ability to raise prices due to strong competition, price benefits fell below 10%. Market
saturation also became a problem, especially in the United States.
In 2015, fast-food franchises existed almost all U.S. cities, which are often
combined together, making "selecting" rows for customers. Since the fast-food
franchise often offers the same products as standard (and normal) prices, the result was
a few customers per place.
Market integration in the market, fast arrests focuses on the establishment of
new product offerings, such as coffee, and special drinks, such as lattés and smoothies.
They also include fresh food such as wraps and sandwiches. More concentrations were
44. 44
placed at other meals, such as breakfast and evenings. Another challenge for fast food
was the rapid release of chains, stealing an important market share in fast-packed
chains.
Financial Ratio Analysis of Burger king
Presently budgetary proportion investigation of BK is examined in correlation
with industry midpoints and solid contender. Through it, data about the execution,
productivity and proficiency of the organization is acquired when contrasted with
industry and contender. As worried about the transient dissolvability of BK, Current
proportion of the organization is great, at that point industry normal and fast proportion
is a lot higher than industry normal as appeared table 2. The Current proportion of BK
demonstrates a fluctuating positive expanding pattern in most recent 9 years, however
it was diminished in 2007. Real reasons were overwhelming sum due as notes payable.
Thus the brisk proportion of BK speaks to a similar example of current proportion and
higher than the Yum Brands. Solid current proportion and speedy proportion when
contrasted with industry midpoints and solid contender shows that BK transient liquidity
45. 45
position is great. It is fundamentally due proficient stock and momentary obligation the
executives.
Horizontal Analysis of Burger King
Over the progression of time BK benefit is expanding with positive expanding
pattern, however it decreased in 2012 because of retreat and enormous increment in
intrigue costs and also managerial and weakness costs. Organization's incomes are
expanding with a fitting rate over the time of 5 years under examination because of
increment in deals by organization worked and in addition diversified eateries. Net
revenue has expanded by 20%, working costs expanded by 3% and working pay has
ascended by 0.9%, which is lower when contrasted with increment in working costs
which should be diminished. While net deals have an expanding pattern over the time
of the initial four years from 2008 to 2011 yet diminished by a little level of 0.7% in
2012. Be that as it may, the organization is very effective in tasks since its working costs
are decreased over the era. It is appeared in figure 1of display 2. How about we talk
about the momentary liquidity position of the organization. Its momentary liquidity
position is fortifying on the grounds that a positive increment in the present resources
which is 12% is more noteworthy than the expansion in current liabilities which are
diminished by 3% in the latest year. Additionally organization's present resources are
expanding with a more prominent rate which is sufficient to take care of its working
expenses and different costs in this manner leaving an adequate add up to satisfy its
momentary commitments as these come due. It implies that organization is proficient to
46. 46
meet its momentary commitments as brought about. While breaking down the
obligation structure of the organization, it is uncovered through figure 3 that its
obligation structure intensely dependent on long haul liabilities when contrasted with
present moment. Likewise rate increment in long haul obligation which is 10% is more
when contrasted with aggregate value, which is expanded by 7%. In capital structure
proportionate of held income and treasury stock is expanding with a more noteworthy
level of 7% and 8% separately. Additionally capital structure is all the more vigorously
dependent on obligation. In any case, organization resources are not used effectively in
light of the fact that the expansion in resources isn't appeared as the rate increment in
deals.
Vertical Analysis of BK
As per the consequences of the vertical investigation, 67% of organization's net income
originates from International Journal of Accounting and Financial Reporting ISSN 2162-
3082 2014, the clearance of its own eateries while 33% from the closeout of diversified
eateries. The organization's working salary indicates positive expanding pattern up to
2011 because of decline in working costs, however in 2012 it demonstrates a slight
decline in decimals and it is 32% of aggregate organization's incomes. Net gain is 20% of
47. 47
organization's aggregate incomes from 2008 to 2011 yet diminished in 2012 because of
increment in arrangement for money charges. While intrigue costs are consistently
expanding which makes overall gain increment with a low rate in examination with
working salary. Add up to working costs are 68% of net income in 2012 with a positive
expanding pattern over the time of three years; it implies productivity of the firm is
abundantly influenced by working costs it needs to decrease them. The momentary
liquidity position is reinforcing in light of the fact that over the day and age extent of
current resources for aggregate resources is expanded with a more prominent extent
than of current liabilities. While current resources are 14% and current liabilities are
around 9% of aggregate resources. The extent of long haul obligation is likewise
expanding with a more noteworthy rate when contrasted with current liabilities which
speaks to that organization is vigorously rely upon long haul obligation which is 39% of
aggregate resources. Capital structure piece is 57% obligation and 43% value it implies
capital structure is obligation based. Also, resources are not used productively because
of lower increment in benefit.
CHAPTER THREE
RESEARCH METHODLOGY
Methodology is a discipline, studying the behaviour of human beings in various
social setting. Methodology is a system of rules and procedures that guides scientific
investigation. Methodology guides the researcher how and what steps need to be
48. 48
followed to collect the relevant data, Methodology is a complete framework of the
whole research activity. Methodology has been increasingly used as pretentions
substitute for method in scientific and technical context (Miffiline, 2009).
3.1 Management Science Research
Management science research is a collection of academic disciplines which study
any aspect of social behaviour and the functioning of society. Management science is a
broad discipline and it is include both approaches of research that is quantitative and
qualitative approach, in order to analyze or understand the phenomenon. Quantitative
research refers to the data in math-logical form that is in numeric format. This type of
data can be used to gather raw data and further form tables and graphs of received
data. On the other hand, in qualitative approach, data gathered in research non-
numerical form (ESRC, 2009).
3.2 Research Design
The research design refers to the overall strategy that you choose to integrate
the different components of the study in a coherent and logical way, thereby, ensuring
you will effectively address the research problem; it constitutes the blueprint for the
collection, measurement, and analysis of data. Present study was based on descriptive
research design (De Vaus, D. A., & de Vaus, D. 2001)
Descriptive research designs help provide answers to the questions of who,
what, when, where, and how associated with a particular research problem; a
49. 49
descriptive study cannot conclusively ascertain answers to why. Descriptive research is
used to obtain information concerning the current status of the phenomena and to
describe "what exists" with respect to variables or conditions in a situation (Anastas, J.
W. 1999).
Justification
Descriptive research design was used in the present study because it is the most
appropriate design for the study as the study is of quantitative in nature.
3.3 Research Methodology
A research method is a systematic plan for conducting research. Researchers draw on a
variety of both qualitative and quantitative research methods, including experiments,
survey research, participant observation, and secondary data. In the present study
quantitative research methodology was used. Quantitative methods aim to classify
features, count them, and create statistical models to test hypotheses and explain
observations.
Justification
50. 50
Quantitative research design has selected for data collection because it is the most
appropriate research design for investigating the public perception about the portrayal
of women in TV advertisements.
3.4 Survey Method
In the present study survey method was used in order to find out the global expansion
of Burger King. The essence of survey method can be explained as “questioning
individuals on a topic or topics and then describing their responses” (Jackson, 2011,
p.17).Survey method can be limited and specific; it is usually used to assess to thoughts,
feelings and opinions.
Justification
Survey method was used in the present study because it was the appropriate method to
assess the perception regarding business expansion internationally.
3.5 Population of the study
Population is a unique thought of a large group of cases in which an investigator draws a
sample and to which results from a sample are generalized (Neumann, 2010).
Justification
In current research population were Business experts from Pakistan because it is not
possible to gather data from all of the people.
3.6 Target population
51. 51
Cant (2005), defines a target population as a collection of elements or objects from
which information is to be gathered to solve the research problem.
Justification
In current research target population were the Business experts selected from the area
of Islamabad and Rawalpindi, Pakistan who are running fast food chains.
3.7 Sampling frame
A sample is any part of a population. Sampling refers to the selection of a subset of
individuals from a population to form the sample for the research. Sampling method is
used to select a sample from within a general population. There are two types of
sampling method; Probability sampling and Non- probability sampling. In current
research probability sampling was used. “Probability sampling is the “highest quality
level” for making a representative sample” (Neumann, 2010).
Justification
To measure current research objectively probability sampling was used because it is the
most appropriate sampling method for any research.
3.8 Sampling Technique
52. 52
Sampling method is the best technique suited to the nature of the topic in order to
select sample objectively. Probability sampling technique was applied. In this technique
every individual has equal chance to be selected.
Justification
In probability sampling, random sampling was selected because it was not possible to
gather information from whole population.
3.9 Sample Size
Sample size refers to the representation part of the target population. It is an important
feature of empirical study. The selected sample represents the entire population on
which the result has been generalized. It is represented with N. The individual in sample
size reflects the characteristics of whole population.
The sampling size for current research was
𝑛 =
𝑁
1 + 𝑁( 𝑒)2
𝑛 =
616
1 + 616(0.05)2
𝑛 =
616
1 + 616(0.0025)
𝑛 =242
3.10 Tool for data collection
53. 53
A self-administered questionnaire was developed at open or close ended questions and
licker scale had been applied to develop questionnaire. Researcher develops the
questionnaire to meet the objective of the study and to check hypothesis. The
questionnaire was discussed with supervisor in order to ensure the validity of the
research tool.
Justification
Self-administered questionnaire was selected for data collection because it was the
most appropriate tool to meet the objective of the study.
3.11 Selection criteria of the respondents
This study was designed to see the global expansion of Burger King. In order to analyze
the perception about expansion of Burger King globally, the researcher decided to
collect data from business experts. It was not possible to cover the whole universe due
to limited time and resources.
Justification
The business experts were selected from Pakistan because it was not possible to collect
data from all business experts.
3.12 Data analysis
54. 54
Data was collected through questionnaire and analysed with help of SPSS and data was
presented in the tables, = charts, frequency distribution and percentage was applied.
The data was supported with relevant literature.
3.13 Statistical Analysis
Statistical analysis is often used to explore the data and helps to examine the
distribution of values for particular attribute. It converts number into meaningful
conclusions in accordance with the purpose of study. In order to analyze and present
the collected data, researcher followed the principles of quantitative research. The
responses analyze by using statistical package for social sciences (SPSS).
3.14Uni-variant analysis
Uni-variant analysis is the simplest form of analysis. The analysis is carried out with the
description of a single variable in terms of the applicable unit of analysis (Altamira,
2006).
3.15 Bi-variant analysis
Bi-variant analysis is one of the simplest forms of quantitative analysis. It involves the
analysis of tow variables for the purpose of determinate the empirical relationship
between them. The researcher has done the bi-variant analysis in this research. It
includes the testing of hypothesis through chi-square.
55. 55
3.16 Chi square
The chi-square test is the most commonly used significance test for categorical variables
in the social sciences. It means of assessing the relationship between two categorical
variables as tabulated against each other in a contingency table (Lucinda Platt, 20014).
In the present study chi-square was applied to verify the relationship between two
variables. The two variables were TV advertisements and portrayal of women.
Chapter 4
Data Analysis
Data analysis is the procedure of systematically applying statistical techniques to
describe and illustrate data. The data analysis aim is to translate the observation made
56. 56
during the field survey into some meaningful form and to examine
association/relationship between the variables.
Quantitative analysis includes counting numbers and it’s done for hypothesis
testing. For quantitative data analysis, Statistical Package for Social Sciences (SPSS) was
used which helps the researcher in more than one way such as time saving and
reduction of large amount of data to basic pattern.
This research was based on public perception about the portrayal of women.
Researcher collected data from the students of two universities of Islamabad. 198
questionnaires were filled from students.
4.1 Uni-Variant Analysis
Uni-variant analysis is the simplest form of analysing data. “Uni” means ‘one’ so
in other words it is used when the data has only one variable. It doesn’t deal with cause
or relationships, its major purpose is to describe, uni-variate analysis takes data,
summarize that data and finds patters in the data.
Table no 4.1.1 Demographic description of respondents
57. 57
Gender of Respondents
Variable Frequency Percentage
Male 99 50
Female 99 50
Total 198 100
The above table reflects the demographic description of the respondents in this regard
and it has been divided into 3 columns. The first column is of variables which are male
and female. The second column states the frequency of the population and male and
female have an equal distribution of the population in this regard as 99 each. Similarly,
the percentage column also states an equal value of two genders of 50% in this
regard.The graphical presentation of the data has been shown in form of a pie chart and
it can be seen that an equal distribution of the gender has been made:
58. 58
Hence, the above stated graph is showing a 50% proportion of the male population and
50% proportion of the female population in this regard. In addition to that, the
demographic segmentation has been performed on the basis of age of respondents
which have been broken down into different categories including the 18-23 years
category, 24-29 years category and 30 years and above category.The highest percentage
in this regard is of 18-23 years age bracket individuals which are around 58.6% followed
by 24-29 years individuals which have an age bracket of 23.2% and the last one is 18.2%
in this regard.
Age of Respondents
Variable Frequency Percentage
18-23 116 58.6
Gender of Respondents Frequency
Male Female
59. 59
24-29 46 23.2
30 and above 36 18.2
Total 198 100
The following graph also states the distribution of population in percentage terms in this
regard and it can be seen that the 18-23 years people age group has the highest
percentage.
The demography of the sample has been further filtered out as follows in form of city-
wide distribution of the population. It can be observed that the two cities have been
selected, the Islamabad and Rawalpindi in this regard and majority of the population
116
46
36
198
0
50
100
150
200
250
18-23 24-29 30 and above Total
Age of Respondents
60. 60
belongs to the Islamabad as 114 individuals live there. Rawalpindi is at 2nd number with
84 individuals with a percentage of 42.4% in this regard.
Place of Residence
Variable Frequency Percentage
Islamabad 114 57.6
Rawalpindi 84 42.4
Total 198 100
A graphical presentation of the data has been presented as well in the case of residence
and Islamabad has the highest residency percentage.
0
50
100
150
200
250
Islamabad Rawalpindi Total
PLACE OF RESIDENCE
61. 61
The distribution on the basis of qualification has been presented as follows in terms of
frequency and percentage.
Academic Qualification
Variable Frequency Percentage
BS/BBA 96 48.5
MBA/MS 81 40.9
MPhil/PhD 21 10.6
62. 62
Similarly, the graphical presentation has been performed for the academic qualification
in this case and the BS/BBA students top the list. They are followed by the MB/MS
students in this regard and they have the second highest percentage of 40.9%.
Description
Table 4.1.1 shows that 55.5 respondents were male and 55.5 were female. This
table indicates that 58.6% of the respondents in the study were between the age group
of 18-23, 46 respondents representing 23.2% were between the ages of 24-29, 36
respondents representing 18.2% were from the age group of 30 and above. This shows
that majority of those used in the study were 18 to 24. 57.6% of the respondents in the
study were from Islamabad city while 42.4% of the respondents were from Rawalpindi
city. This shows that majority of the respondents were from Islamabad city. Out of 198
respondents, 48.5% had BS/BBA academic qualification, 81 representing 40.9% had
96
81
21
0
20
40
60
80
100
120
BS/BBA MBA/MS MPhil/PhD
Academic Qualifiaction
63. 63
MBA/MS, and 21 respondents representing 10.6% had MPhil/PhD. This shows that
majority of the respondents had BS/BBA academic qualification.
Table no 4.1.2 Perception about the Marketing Analysis of the BK Globally
The following table has been prepared in order to determine the consumer perception
regarding the product and it can be seen that the responses gathered from the
individuals are divided into four parts, the strongly agree part, agree part, disagree and
strongly disagree part in this regard. As per the first question, most of the people
strongly agree and a minute number of people disagree from the statement. Same trend
can be observed for the other figures as well.
Sr NO. Strongly Agree Agree Disagree Strongly Disagree
1. 46% 38.9% 11.6 3.5%
2. 37.9% 49% 11.1% 2%
3. 47% 35.9% 13.6% 3.5%
64. 64
4.
21.2% 34.8% 29.3% 14.6%
The responses regarding the consumer perceptions has been mapped in the form of
following graph in this regard:
Hence, from the above-mentioned graph it can be seen that the trend is variable across
the questions which have been asked regarding the consumer perceptions and in
addition to that, most of the responses are in favor of agreement in the given case.
Table no 4.1.3 Opinion about the Financial Analysis of BK globally
0%
10%
20%
30%
40%
50%
60%
1 2 3 4
Perceptions
StronglyAgree Agree Disagree StronglyDisagree
65. 65
In order to assess the correct performance of a company, its financial analysis can be
conducted by different means. So, in a questionnaire response which has been
mentioned as follows, it can be seen that most of the responses are agreeing to the
situation as first question has a response of agreement around 29.8% and 47%
respectively.
Sr.
No.
Strongly Agree Agree Disagree Strongly Disagree
1. 29.8% 47% 21.2% 2%
2. 19.2% 50% 27.8% 3%
3.
22.2% 51% 23.2% 3.5%
4. 27.8% 48.5% 20.7% 3%
5. 18.7% 36.4% 32.8% 12.1%
The above figures have been presented in form of a graph as follows:
66. 66
Hence, again in this chart, it can be observed that the most of the individuals are
responding positively in this regard and the trend is consistent across the questions
which have been asked in this regard. If the assumptions of the study are changed than
a different trend is expected out of the discussion in the due course as well.
4.2 Bi-variant Analysis
Bi-variate analysis is one of the simplest forms of quantitative analysis (statistical)
analysis. It includes the analysis of two variables, for the purpose of shaping the
observed association between them, for example independent and dependent variable.
In order to see if the variables are linked with one another, it is common to measure
how those two variables simultaneously change together. Bi-variate analysis can be
helpful in testing of hypothesis of association and causality.
4.3 Testing of hypothesis
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
1 2 3 4 5
Financials
Strongly Agree Agree Disagree Strongly Disagree
67. 67
The bi-variate analysis of the data has been passed out to test the hypothesis of the
current research and to examine the research in detail analysis. The chi-square test was
used in bi-variate analysis to terminate that whether there is any association between
different variables and selected samples. Or the selected sample of the population
mirrors a real relationship between these variables and the entire population.
Value of Chi-square was compared with significance level, 0.05. If value of, <0.05
significant value, if p>0.05 non-significant value.
Hypothesis
Gender of the
respondents
Frequency of gender responses
Strongly
agree
Agree Disagree Strongly
Disagree
Total
Male 45 35 17 2 99
Female 48 36 10 5 99
Total 93 71 27 7
Chi
Square:
3.50
DF: 3 Significance Value: .360
Burger kings Financial Ratios Comparison to Industry and Competitor
68. 68
Financial ratios are used as an important performance indicator of a company and they
compare the income statement and the balance sheet accounts of a company. There are
several kinds of ratios including the profitability, solvency, efficiency and liquidity ratios.
In this case of Burger King,the key ratios of the company have been calculated and they
are compared with that of the industry average and the Yum Brands.
Financial Ratios Burger king
Corporation
Industry Average Yum Brands
Current Ratio 1.46 1.34 0.86
Quick Ratio 1.07 1.06 0.74
Inventory Turnover 241.16 30.29 30.43
Debt to Equity 1.32 0.87 2.97
Net Profit Margin 19.82 14.20 11.71
Interest Coverage 16.66 14.18 15.39
Receivable Turnover 20.04 24.6 45.29
Average Collection
Period
17.96 14.64 7.95
Total Asset Turnover 0.78 0.95 1.51
Return on Assets 15.5 13.49 18
Return on Equity 36 30.96 71
69. 69
Ratio Analysis
Financial ratios relationships always determined a firm’s financial information that is
used for the purpose of making comparison and investigating the different piece of
financial evidence. Financial ratios are designed to evaluate the financial statements and
to predict firm’s future. The above given ratios showing some distinctive information of
Burger King Corporation, Yum Brands and industries average.
Current Ratio
One of the best known and widely used ratio is the current ratio. Burger King
corporation with a ratio of 1.46 is above the average of the industries that is the 1.34. It
represents the more current assets with respect to the current liabilities that shows the
healthy position of a company. If I talk about Yum Brands its current ratio is below to
the industries average, its means Yum Brands current assets are less than its liabilities.
Yum Brands ratio is 0.86 it is not enough to recover the current liabilities.
Quick Ratio
Burger King corporation’s quick ratio is nearly similar to the industry average ratio.
Burger King corporation can cover its current liabilities without inventory because its
liquid assets are more than to the current liabilities. Yum Brands quick ratio is below to
the burger corporation and industry average. Yum Brands don’t have sufficient current
resource to recover its current liabilities.
Inventory Turnover
70. 70
Yum Brands inventory turnover ratio is 30.43 and industry average is 30.29, both are
almost close to each other. Yum Brands is managing its inventory very effectively.
Burger King Corporation’s inventory turnover ratio is 241.16 that is much high as
compared to the industry average its means the firm is managing its inventory more
efficiently. Burger corporation’s sale volume high as compared to Yum Brands because
its inventory turned over 241.16 times in a year.
Debt to Equity
Debt to equity is also called leverage ratio. Its industry average is 0.87times and Burger
corporation 1.32times. Yum Brands has 2.92times a high ratio of debt to equity from
burger corporation. Both companied are above to the average. its means that Burger
corporation equity is greater than Yum Brands. Burger corporation is in better position
as compared to Yum Brands and less depend on debt.
71. 71
Net Profit Margin
A relatively high profit margin is desirable. Burger corporation is enjoying the above
average (19.82) profit margin but Yum Brands (11.71) is below to the industry average
(14.20). Yum Brands cost can high; generally low profit margin is also a result of low
prices so it loses money on every sale.
Interest Coverage
Both the companies are above the industry average, in this respect I can say that the
firms have sufficient finance to meet its obligations. Failure to meet this obligation can
bring legal action against the firm.
Receivable Turnover
Receivable turnover shows how fast we collect on those sales. Yum Brands receivable
turnover ratio is outstanding. Yum Brands ratio (45.29) is nearly double as compare to
the industry average. Burger corporation’s receivable turnover ratio is low to the
industry that represent the lack of control on collection of sales. Low rate of receivable
turnover ratio will lead towards to lack of financial availability. Burger corporation’s
20.04 ratio is 4percent low to the industry average. Firm need to improve its collection
process for the availability of finance and development.
Average Collection Period
When we convert receivable turnover ratio in days it is called average collection period.
Now we can see the average collection period of the industry is 14.64 days but the
72. 72
Burger corporation’s collection period is 17.96 days that is above to average. Burger
corporation need 17.96 days for collection but the Yum Brands have a good collection
period that is below even the industry average. Yum Brands need only 7.95 days to
collect is sale, due to low ratio its collection is fast as compared to the industry and
Burger corporation.
Total Assets Turnover
The final asset management ratio total assets turnover ratio, measure the turnover of all
the firm’s assets. Burger king corporation’s ratio (0.78) is below to the industry average
(0.95), indicating that the company is not generating a sufficient volume of business
given its total investment. Burger king corporation sale should be increased, some
assets should be disposed of, or a combination of these steps should be taken. On the
other hand, Yum Brands total assets turnover ratio is (1.51) above the industry average.
In the other words, for every one dollar Yum Brands generated 1.51 in sale.
73. 73
Return on Assets
Return on assets is a measure of profit per assets. Return on assets is measure after
interest and taxes. Return of assets of Burger king corporation is 15.5 % and Yum Brands
is 18%. Both the companies are above the industry average that is 13.49%. Yum Brands
have more return on assets from Burger king corporation. Yum Brands is using its assets
more wisely and gaining more return as compare to the Burger king corporation. It
means both the companies low interest cost and also less use of debt of which cause its
income to be relatively high. Yum Brands return on assets is more than Burger king
corporation. I can say that Yum Brands is managing its assets more efficiently and
effectively.
Return on Equity
Return on equity (ROE) is the ability of a firm to generate profits from shareholder’s
investment. Burger king corporation ROE is 36% that is nearly 5% more to the average
industry but Yum Brands ROE is 71% that represent a huge return against equity. Equity
is less as compared to the total assets and stockholder’s return is healthy.
Conclusion
The above analysis shows the results that ratios are favorable for the Burger king
corporation and providing more financial availability to the company. Both the
companies having sufficient finance to cover his debt. The Yum Brands collecting quickly
from his customer and also more receivable. A high rate of ROE an ROA is an indicator
74. 74
that company no need much capital to generate profit. Burger king corporation need to
improve their collection time because due late collection financial problems will occur.
Balance Sheet
The balance sheet of the company has been presented as follows stating different items.
The objective of a balance sheet is to compare the assets and liabilities of a company in
this regard. The fundamental components of a balance sheet will include the assets,
liabilities and equity in this regard.
Items (in million $) Estimation
Cash & equivalents 2336.1
Account receivables 1375.3
Inventories at cost 121.7
Prepaid & other Exp. 1089
Tt. Current Assets 4922.1
Account Payable 1141.9
Income taxes 298.7
Other taxes 370.7
75. 75
Accrued interest 217
Accrued payroll 1374.8
Current maturities of long term debt 366.6
Tt. Current Liabilities 3403.1
Current Ratio 1.44
Quick Ratio 1.09
Net Working Capital 1519
If the above-stated balance sheet is analysed then it can be seen that it is containing
different assets and liabilities which are to be explained as well. The value of cash and
equivalents is around 2336.1 which means it should be twice as the level of current
liabilities as the current liabilities will be reflecting a direct charge on the company’s
assets.
The accounts receivable should be minimal in the balance sheet of a company as the
higher the receivables are the greater chances of their turning into bad debts. In the
case of Burger King, the receivables of the company are around 1375.3 and the volume
of the receivables is half of the cash and cash equivalents in this regard.
The value of inventories which is reported at the balance sheet of the company is
around 121.7 which shows that the Burger King is keeping a low level of inventories in
76. 76
this regard. The low level of inventory is beneficial for an organization as it will reduce
the holding cost of it in this regard. If the holding cost of the inventory is more as
compare to the gains obtained from the inventory then the company will be at a loss
from the holding of inventory.
The value of prepaid expenses is 1089 which is mentioned in the balance sheet and a
higher pre-payment states the ability of the company to make advance payments by
using its excess cash and cash equivalents in this regard.
If the analysis of current liabilities is performed, it can be observed that the accounts
payable are around 1141.9, the value of income taxes is 298.7 and the other taxes are
370.7 along with the accrued interest of 217. The volume is sufficiently lower than that
of the current assets which show the favourable position of the company in this regard
and the company is able to pay the higher number of liabilities with the help of its liquid
assets.
In addition to that, the current and quick ratios have been calculated in this regard
which shows the relation of current assets with current liabilities and liquid assets with
that of the current liabilities. The current ratio of this period is 1.44 times which means
the company has a capacity of 1.44 times to pay off its current liabilities. In addition to
that, the value of the quick ratio is 1.09 which means that the company have a capacity
of paying its current liabilities with the help of liquid assets to 1.09 times of the current
liabilities.
77. 77
The market growth of the company is increasing each year and it is reflected with the
help of above graph in which the trendline is mentioning a growth phase in this regard.
The growth is dependent on the market factors in which the company is operating and if
these factors are not favourable then the growth of the company can get disturbed.
Estimated Business Investment
Average Investment (Traditional Free-
Standing Restaurant with Drive-Thru) -
$700,000 - $1,100,000
0
5000
10000
15000
20000
25000
30000
2019 2020 2021 2022
Estimated MarketGrowth
78. 78
Requirements: Net Worth Minimum $1m
Liquid Assets Minimum $300,000
Royalties 4%
Advertising 4%
Franchise Fee $55,000
The above-mentioned table reflects the amount which is required in order to start a
new facility of burger king. The necessary requisites in form of average investment,
liquid assets, royalties, advertising and franchise fee are to be paid by the one who
wants to start its franchise.
CHAPTER FIVE
DISCUSSION & CONCLUSION
COMPETITION
79. 79
In 2015, BK faces a strong competition in the fast food industry, especially for
McDonald's and Wendy's, but also for Sonic and Jack. The company also faced
competitive chain chains that are directly linked to Kentucky Fried Chicken (KFC) and
Taco Bell. The notification of these competitors is provided below. McDonald's Brothers
of McDonald, Richard and Maurice McDonald, opened the first Mcdonald's in 1940 as a
dining restaurant. In 1955, Ray Kroc joined McDonald's team and made a thorough
comment on the business, helping to become one of the world's most successful
companies. In 2015, McDonald's was the fastest fast-chain chain in the world, with
about 36,000 places in 118 countries. Additional company information can be found in
Exhibit 1. Although McDonald has produced a lot of products, its main products were
hamburgers (eg Big Mac), various chicken types, sandwich sweets, French frames, soft
drinks, many breakfast items ( eg significant Egg McMuffin), a variety of dessert and
Happy Meal for kids. In addition to these ancient products, over the years, McDonald's
added salads, wraps, vegetable products, coffee and local food. In 2002, the company
introduced its Dollar Menu. Generally, in 2015, McDonalds's product integration was
considered to be a high level of fast food; continuously, they provide their products with
competitive prices. In international markets, McDonald's made a variety of changes to
his traditional menu, which confirmed that it was in line with the region's popularity. For
example, in 2015, Mcdonald of Chile offers guacamole. In India, cattle-based products
were not sold, while New Zealand areas were shown by beetroot.28 McDonald revived
its restaurants, including McCafé, a café style similar to Starbucks. Generally, re-editing
helped create more hearings and receive more. In 2015, the new interior has been built
80. 80
with the use of rising bricks and wooden lamps, modern lighting lamps, wooden tables,
leather seats, high roofs, free Wi-Fi and screen TVs.
In addition, McDonald's intends to install a third window window to accelerate
its travel service. McDonald's distribution and sales offer network are completely
eliminated; Of its 16 largest providers, no one owned the company. In North America,
Martin-Brower Company LLC has performed 15,000 companies, operating with regional
distribution centers (usually providing 250 to 700 restaurants), offering McDonald's
various items, transport, storage and storage. Distribution centers were responsible for
providing each restaurant service. Although the McDonald's chain chain was
complicated, he received good reviews, rankings, according to the catalog ofGartner's
Supply Chain Top 25, 11th in 2010, the number 10 in 2011 and 2012, and the second
number in 2013. McDonald displayed a mix of promotional varieties. The company aims
for children with the mascot of his company's icon, Ronald McDonald, and promotional
games, toys and prizes. Over the years, McDonald used many advertising and
memorized campaigns. The slogan "I'm Lovin", which began in 2003, was well received.
In 2011, McDonald announced "What's done" in the campaign, focusing on McDonald's
traders and production processes.
The campaign provided information on the preparation and quality of
McDonald's products and was well received. Wendy's Wendy's was invented by Dave
Thomas in 1969 in Columbus, Ohio. In 2015, it was the third largest fast food chain
around the world around 6 650 (85% franchised), mostly practiced in North America.