Case Review: Burger King

Utilizing airline employee benefits with a trip from Los Angeles to Cairns via Sydney in January 2002. We continued on to Japan.

1. By mid-2011, Burger King was not in any of the following five countries: France, India, Nigeria, Pakistan, and South Africa. Compare these countries as possible future locations for Burger King.

Since mid-2011, Burger King has started operations in France, India, Pakistan, and South Africa. While Burger King has not entered the Nigerian market, other international restaurant companies are operating in Nigeria. Investors in France intend on taking 20% of the fast food market and as of mid-December 2013, Burger King will open its 4th store in France (Patton, 2013). Next, overseas markets such as India show promise due to tougher competition in the U.S. and Canada and declining consumer confidence in the U.S. (Patton, 2013). In October 2013, three Burger King outlets were opened in Pakistan (Jillani, 2013). In May 2013, Burger King opened for business in South Africa (Patton, 2013).

Next, in comparing Burger King to its stiffest global competitor, McDonalds, "Golden Arches" has 177 restaurants in South Africa but treads cautiously on entering the rest of the African continent. For the corporation that set the metric known as, "The Big Mac Theory" to show signs of hesitation on entering the rest of the African continent, it is unknown when Burger King will have a presence in Nigeria any time soon (Joy, 2013). On the other hand, 1950's nostalgic hamburger franchise, Johnny Rockets, currently operates in Nigeria with Hardees to follow suit in 2014 (Hinshaw, 2013). International pizza chain, Dominos, currently has a substantial number of restaurants in Nigeria, but to ensure that each restaurant has enough clean water for operations, franchisees are required to dig a well behind each store and install a water treatment plant at an average cost of $60,000 per store (Hinshaw, 2013). Other basic necessities such as product knowledge is scarce as only two of the 76 staff members for Dominos in Nigeria have ever eaten pizza. As a result, all of Nigeria's store management was sent to New York on a pizzeria tour to close the product knowledge gap (Hinshaw, 2013). Lastly, for a basic hamburger patty with a slice of cheddar cheese at Johnny Rockets, the cost is approximately US$14 due to another basic necessity, sizable refrigeration, having to be imported from the U.S. (Joy, 2013). Despite the steep prices, the store is averaging 300-400 customers a day. Most of these customers are comprised of oil workers, bankers, and Nigerians who have returned from the U.S. (Hinshaw, 2013).

Outside a Burger King in Seoul, South Korea in December 2006.

2. When entering another country, discuss the advantages and disadvantages that an international restaurant company, specifically Burger King, would have in comparison with a local company in that market.

The main disadvantage that an international restaurant company such as Burger King has in comparison with a local fast-food company is that the local company has a menu that has already been adapted and adjusted to the local market. Not only are expenses such as product knowledge training and expensive equipment and infrastructure not needed to be brought in order for the local company's operation to take place, but the local target market is familiar with the local restaurant company's product line. For example, an international restaurant company like Burger King's key ingredient is beef. In Africa, slaughterhouses rely on local herdsmen as a source of beef. As such, herdsmen lack consistency requiring Burger King in South Africa to invest as much as $5 million in a local cattle ranch that is prepared to generate 1.2 million Whopper patties a week (Hinshaw, 2013).

The main advantage that an international restaurant company such as Burger King has in comparison with a local fast-food company is that due to globalization, Burger King's product line is recognized in such overseas markets like Brazil due to approximately 500,000 Brazilians flying into Florida, Burger King's headquarters, each year (Daniels, Radebaugh, and Sullivan, 2013). Furthermore, Burger King has the necessary capitalization and know-how in comparison to local restaurant companies in developing parts of the world (Daniels et al., 2013).

Breaking my Whooper drought in December 2006 at a BK in Seoul, South Korea. This was due to BK not in Japan to this point. BK returned to Japan in 2007.

3. A bit over 60 % of the Burger King restaurants are in its Americas region (US and Canada) and a bit less than 40% elsewhere. Should this relationship change? If so, why and how?

Despite the many challenges of a hamburger restaurant to operate overseas, Burger King should change its market shares from 60% in the U.S. and Canada and 40% overseas to 50% overseas and 50% in the U.S. and Canada. On the one hand, consumer confidence in the U.S. is in a present state of decline and in the first quarter of 2011, same-store sales for Burger King fell in North America by 6% but was offset by gains in the rest of the world causing a global decline of only 4% (Daniels et al., 2013). However, a 50-50 adjustment might have eclipsed a global decline despite poor sales in the U.S. and Canada and is considered an integral alternative for improving performance (Daniels et al., 2013). On the other hand, how Burger King can shift 10% of its stores from North America to overseas is to first close down stores in North America that require too many resources to be updated with a more modern look.

Next, grow market share overseas in markets where Burger King is already operating and doing well. For example, Burger King's early international expansion took place because either someone overseas approached Burger King or someone at Burger King was familiar with an overseas market and felt that operations there would present opportunities (Daniels et al., 2013). Burger King has historically entered overseas markets and later retreated such as in Colombia, France, Israel, Japan, and Oman (Daniels et al., 2013). Much of this can be blamed on Burger King's underestimation of what it would take to succeed, in particular with large countries. For example, most of the Indian market comprises of those of the Hindu and Muslim religions which forbids the consumption of beef and pork. As a result, it remains to be seen if Burger King will have the lasting power of its competitor, McDonalds, who has been operating in India since 1996.

To that end, to ensure success for The BRICs (Brazil, Russia, India, and China), in 2004, when Burger King entered into Brazil and China for example, Burger King devised a strategy that yielded desired results. Burger King's management was so pleased with these results that in 2010, when Burger King entered Russia, the same strategy was implemented and will likely be implemented in 2013-2014 for India (Daniels et al., 2013). This strategy comprises of five parts which are (a) develop infrastructure before restaurants, (b) develop a local management team, (c) focus development on major cities and adjacent geographies with established shopping mall locations, (d) establish a local office, and (e) support continuous development such as slaughterhouses to meet Burger King's global specifications (Daniels et al., 2013).

References

Daniels, J., Radebaugh, L. and Sullivan, D. (2013). International Business: Environments & Operations. 14th ed.

Hinshaw, D. (2013). Burgers Face a Tough Slog in Africa. The Wall Street Journal. Retrieved from: http://online.wsj.com/news/articles/SB10001424052702304607104579214133498585594

Jargon, J. (2013). Burger King Joins Crowd in India. The Wall Street Journal. Retrieved from: http://online.wsj.com/news/articles/SB10001424052702303531204579207 792423911748

Jillani, H. (2013). Burger King Comes to Town Unannounced. International New York Times. Retrieved from: http://tribune.com.pk/story/614142/burger-king-comes-to-town- unannounced/

Joy, O. (2013). Fast-food giants want pizza the action in Africa. CNN International. Retrieved from: http://www.cnn.com/2013/10/04/business/fast-food-giants-africa/

Patton, L. (2013). Burger King Takes On McDonald’s With New Pact in France. Bloomberg News. Retrieved from: http://www.bloomberg.com/news/2013-11-26/burger-king-takes-on- mcdonald-s-with-new-pact-in-france.html

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(C) 2009-14

Which country has the cheapest Big Mac?

By Virginia Harrison @vharrisoncnn January 24, 2014: 11:17 AM ET

Burgers aren't just for eating. They can also tell you a lot about the economy.

The Economist's "Big Mac index" compares the price of the McDonald's hamburger around the world to determine whether a currency is overvalued.

So which country has the cheapest Big Mac?

India takes the crown. You can pick up chicken- or mutton-based Maharaja Macs for just $1.54. South Africa is next at $2.16, followed by Malaysia at $2.23.

Burger lovers will need deeper pockets in Norway, where a Big Mac costs a whopping $7.80.

For nearly 30 years The Economist has used the index as a lighthearted way to determine whether currencies are trading at the "correct" level.

Here's how it works: right now the average price of a Big Mac in America is $4.62; in China its $2.74.

According to the index, that makes the Yuan undervalued by 41%.

It might seem like a glib way to measure currencies, but the magazine says its burger index provides insight into the forces shaping the world economy.

Fears about the Federal Reserve scaling back its massive stimulus program last year rattled investors in emerging markets and pushed exchange rates in Brazil, Indonesia and Turkey sharply lower against the dollar.

And with the exception of Brazil, that made Big Macs more affordable: the BRICS all rate low on the burger index.

Big Macs could be getting even cheaper in emerging markets as new strains begin to show. This week, the Argentine peso collapsed and Turkey's lira plumbed fresh lows amid renewed worries about slowing growth and rising political tensions in developing economies. To top of page

First Published: January 24, 2014: 10:50 AM ET

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(C) 2009-14

What is Strategy?

Questions about your strategy-



What unique position will we be able to achieve?



What is our advantage going to be at the end of the day?






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Key to Success? Embrace Failure

So… I've been doing my rounds of interviews for my new book, Work Smarts, and one of the questions that repeatedly pops up is: How do you bounce back from a failure? It's a question that hits a nerve because everybody - and this time, I mean everybody - has failed at one point. I recount a few of my own failures in the book. And the CEOs I talked to? Some failed exorbitantly. What makes the difference between someone who fails and loses his or her way and someone who fails and goes on to become a millionaire or billionaire? Link

It's easy: You get really good at failing.

Barbara Corcoran, the star of ABC's Shark Tank, said in an online interview with Entrepreneur that the deciding factor between a successful or unsuccessful entrepreneur is how quickly he or she recovered after a setback.

"The great sales people take the hit and then they jump right back up. They've been hurt just as much as the next guy, but they work right through it," she said. "If you have that skill, you should be an entrepreneur."

So how do you "fail well?"

For that, I think back to a concept billionaire Graham Weston called the "80/20 rule." In his book, The Unstoppables, Graham wrote thatpeople should spend about 20 percent of their time pondering and thinking and 80 percent of their time actually moving and doing something. It doesn't matter if what you're doing is precisely the thing you need to be doing, it just matters that you're doing something about your situation. As Teresa Taylor, the former COO of Qwest, said to me, as long as you're in "grenade range" of what you need to do, you're moving in the right direction.

The problem, of course, is that most people do the opposite - they spend a majority of their time fretting and thinking and rethinking how something is going to work and a minority of their time executing. If I can draw an unusual analogy, think about how some people cook - a certain kind of person needs to have all the ingredients lined up, chopped and prepared before they can even turn the stove on. I've learned that a much more efficient, dynamic way is to chop, slice, sauté as you go. Stop over thinking and just do it.

Which is not to say that "failing well" is easy. It is hard work to pick yourself back up immediately and keep going. But the quicker you do it, the more chance you have for success.

One radio host asked me, "What if you keep getting fired or losing your job? You keep failing?" My answer is the same to him as here: What choice do you want to make? Do you want to give up or do you want to get back on your feet one more time? If you give up, you're destined for failure. If you try one more time, you don't know what may lie beyond. To me, the choice is pretty clear.

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(C) 2009-14

A Union For Home Health Aides Brings New Questions To Supreme Court

Read or listen here: http://www.npr.org/2014/01/21/264257440/illinois-case-brings-new-union-questions-to-supreme-court

The U.S. Supreme Court hears arguments Tuesday in an Illinois case that could drive a stake through the heart of public employee unions.

At issue are two questions: whether states may recognize a union to represent health care workers who care for disabled adults in their homes instead of in state institutions; and whether non-union members must pay for negotiating a contract they benefit from.

To understand why a growing number of states actually want to recognize unions to represent home health care workers, listen to Illinois Attorney General Lisa Madigan:

"The home services program has about 28,000 home care aides, and these people are working in homes all over the state. There isn't a centralized workplace, and the goal for the state is creating and retaining a professional group of home care aides to meet the needs of what is an ever increasing population of older people with disabilities."

Prior to the state recognizing the union in Illinois, turnover was huge, leaving large gaps in coverage for disabled adults. In the 10 years since unionization, however, wages have nearly doubled, from $7 to $13 an hour; training and supervision has increased, as well as standardization of qualifications, and workers now have health insurance.

It's no surprise then that retention has greatly increased. What may surprise many is that this arrangement is cheaper, with savings of $632 million, according to the state.

No one is forced to join the union, but non-union members — and there are three in this case — do have to pay the costs of negotiating and administering the contract. Under long-established labor law, when a majority of workers approve a union, those who do not join cannot be forced to pay for political activities of the union. But if the union is accepted by the state, as it was in Illinois, non-members still have to pay their fair share of the expenses of negotiating a contract. That's to prevent them from free-riding on the dues of members.

For some workers, however, any fee is too much.

"They just don't want to deal with this organization whatsoever," says their lawyer, William Messenger of the National Right to Work Committee.

Or, as Pam Harris, who cares for her son at home, puts it: "I object to my home being a union workplace."

Harris, however, is part of a separate and much smaller group of workers, most of whom care for family members at home, who voted down union representation. So her only claim in this case is that she fears there will be another vote someday.

Those who care for the bulk of the disabled are quite different. Not only did they approve union representation, most care for people who are not relatives.

Those opposing any fair-share fee have several claims. First, they say the state is not their employer, because under this program, the individual patients, known as customers, hire and fire their own aides. The state replies that the program was designed that way because these workers would be in people's private homes. But the aides are trained and supervised by the state, equipped with supplies by the state and paid twice a month by the state, and the state can fire them.

The second claim by the objectors is their view of the union as little more than a lobbying group. "Wages paid to government employees should be deemed a matter of public concern," Messenger says.

Does that mean public employees simply can't have a union because they are dealing with the government, and the government, per se, involves political issues? "Yes, to a large degree. Yes," Messenger says.

In other words, Messenger views bargaining for wages and health care as a political act. "I reject the notion that the [Service Employees International Union] somehow got higher reimbursement rates for them," he says. "Illinois could raise the reimbursement rates unilaterally."

"[There are only] three people who are complaining here," counters lawyer Paul Smith, who will argue on behalf of the state and the union in the Supreme Court on Tuesday.

Related NPR Stories

The U.S. Supreme Court has agreed to decide if police can seize and look through a suspect's cellphone without getting a warrant. This photo shows women in Los Angeles using smartphones on Jan. 7.

"Not one of the plaintiffs has turned down the wages they have gotten as a result of union negotiations, or even said there is anything that the union is trying to get for them that they don't approve of," Smith says.

And Smith notes that no one here claims that any of the fair-share money has gone for improper purposes like lobbying or political campaigning.

Still, Messenger sees it differently. "The question is: Can individuals be forced to support a union if they don't want to? And our position is no," he says.

In the end, what makes this case remarkable is that the Supreme Court for decades has allowed public employee unions, and has allowed them to require mandatory fair-share fees for nonmembers as long as those who do not join the union are not forced to pay for union political activities.

But the current conservative court has not been enamored with labor unions, hinting just two years ago that it might be time to revisit its decades of doctrine on this issue.

"If they say you can't have an exclusive representative union, that would be a stake in the heart of not just unions in the public sector but all unions," Smith says.

And if the court were to say unions could not have a mandatory fair-share contribution to a recognized union, "you'd have a serious free-rider problem," he says, because people "would have no incentive to pay their share of the costs if they can free-ride on everybody else."

The bottom line, Smith says, is that an adverse ruling "would substantially weaken unions."

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(C) 2009-14

Sammy Hagar - Do You Miss Your Friendship With Eddie Van Halen?

What would you do if you ran into someone who threw you out, stabbed you in the back, left you for dead, and put you through some miserable stuff that one human being should never do to another human being?  We all have choices.  When we stick it out, there is a reason.  The risks were worth the rewards for me and my family.  Karma has an interesting way to come back to haunt those that have little regard for those that do everything that was asked of them and do so to the best of their abilities.  Whether is it business or personal, have respect for those around you. 

http://daniel-j-stone.blogspot.com(C) 2009-14

A year from now, you'll regret not starting today.

It was about a year ago when the dust settled and this fog cleared and I was starting to see a new beginning with my time in Columbus. Losing your job and becoming a father all within a week is a lot to ask of someone. But that is what was asked of me. It would not have been asked of me if powers to be didn't think I could handle it. Just like it would not have been ask of me to move to Columbus in 2010 in my pursuit of full-time employment. A year ago, one of the things I did was volunteer. Volunteering is a good way to put your name out there. At one of my volunteering excursions , I met a man who was running for a school district seat in Worthington. He was out put his name out there for his position. Today, I found out that he won his seat! Upon learning this my spirits were lifted. A year from now, you'll regret not starting today.

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(C) 2009-14

10 Leadership Resolutions to Make It a Very Good Year

By Jack and Suzy Welch

New Year resolutions -- who keeps them? Practically no one. But if you're a leader, be it of three people or 3,000, it's your flat-out responsibility to not just go into work every day and improvise around the latest crisis or email flurry or employee meltdown, but to go into work every day with a cohesive plan of action about how you're going to lead. Otherwise, why would anyone follow you, except that they simply have to?

That's no good.

So here's to 2014, and 10 resolutions to make it a very good year -- for you, and for the team you lead.

1) Get In Their Skin

From the day you become a leader, your biggest role is to build trust, respect and support from your team. A mutual respect. As long as they deliver, you will support them and stand up for them in every way -- and they know it. It's a never-ending job and you can never slip up.

2) Over-Communicate

It's your job to communicate your message, your values, what's right about what's happening, and what's wrong -- over and over and over again. There can be no lack of transparency. Everybody has to be on the same page. Even when you're ready to gag over the message, you have to keep communicating it.

3) Follow-Up Relentlessly

Just because you say something once, it doesn't mean it's going to happen. Too often, managers think, "Hey, I told my team what to do." Then they come back a week later and nothing has happened. Yes, your job is to set the direction. But you also have to make it your mission to follow up -- relentlessly -- to see that things are moving in the right direction.

4) Create a Rallying Cry

I've always found that defining an enemy is very helpful. Define a competitor that's coming after you. Rally the team around every win you have against them, every new product you introduce that's better than theirs. Make that competitor come alive as your true enemy and you'll see your team galvanize around beating them and winning in the marketplace.

5) Realize Personnel Actions Speak Louder Than Words

When you pick someone for a new job, you are defining what's important. Managers love to give speeches about how their new initiative is the most important thing in the world. But then they put whatever warm body happens to be available in charge of it. Nothing could be worse. When you make an personnel appointment, you're doing much more than any speech you could ever give. The people in the organization already know who the star performers are. And matching those stars with the projects you claim are important is absolutely critical for your credibility and the trust you want to build.

6) Embrace the Generosity Gene

I happen to believe that every good leader loves to give raises to people. They are thrilled to see their employees grow and be promoted. They are turned on by their success. Good leaders understand that they are only as good as the reflected glory of their people -- and so they give until it hurts.

7) Fight Bureaucracy

Remember how much you hated bureaucracy from the bosses above you when they wanted this "i" dotted and this "t" crossed? Guess what? You're now the leader. Don't let bureaucracy creep into your place. Just because it's yours doesn't make it any prettier than when it was someone else's. Get rid of clutter. Bureaucracy slows things down and speed is one of the best competitive advantages you can have.

8) Find a Better Way

Recognize that in business, somebody out there is always doing something better than you are. Your team can get insular and come to believe they're already doing everything right. Your job is to ask, "How can we do it better? Where can we find someone doing it better?" Finding a better way of doing things every single day can become so much more than a slogan. It can become a way of life and make your group stand out above the rest.

9) Own Hiring Mistakes

Look, you're not the only person in the history of the universe who has ever made a hiring mistake. Once you understand that hiring is hard work and you'll surely have missteps along the way, realize that you've got to deal with mistakes fast and compassionately. Recognize that it was your fault that the fit didn't work and get on with it. The team will respect you more. The hire you dealt with fairly will respect you more. And your superiors will reward you for your candor and willingness to own up to your error.

10) Dig into Crises

Without doubt, crises are going to erupt in your career. You'll have someone do something wrong or have to face into a violation somewhere in your organization. To make matters worse, when you first hear about it, you're not going to get the whole story -- after all, you're the boss. You're only going to get the tip of the iceberg. Underneath the surface is a very big piece of ice. Your team will come to you and feed you, piece by piece, a slow-drip expose of the crisis. Your job is to dig deep, early and fast, to get it all to the surface. Be candid. Recognize there are no secrets anywhere. Get the right people involved immediately. And you will see a swifter resolution to problems that people all too often try to brush under the table.

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(C) 2009-14

Gene Simmons' Business Philosophy- 07/14/2013 (+playlist)

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International students a new niche for homestay industry

With area universities taking in more foreign students, demand for options has soared in the South Sound

Holly Smith Peterson

http://www.businessexaminer.com/February-2013/International-students-a-new-niche-for-homestay-industry/

Now that local colleges and universities are balancing budget cuts by tapping more into the international student markets, a new niche has opened up for the hospitality sector.

“The existing homestay industry in America has not been able to keep up with the growing demand for international students,” said Ron Davis, CEO of the new American Homestay Network, which began business out of Seattle last year.

Washington state saw a $500 million economic boost from its 20,000 international students just in the 2011-2012 academic year, according to a NAFSA/Association of International Educators report.

And, the study said, 20 percent of those students were interested in a homestay residential option, because it provides a better immersion into American lifestyle and language than dormitory- or apartment-style quarters.

“Subsequently, our schools are losing access to (those) students, who provide a significant financial and cultural benefit to our communities,” Davis said.

The fact that demand outweighs availability is just one challenge, however.

A second glitch is that there have never been any nationally recognized regulatory standards or procedures in place for this type of student housing.

Thus, the market has remained, for the most part, untapped, as international students have shied away from the experience for concerns about safety and scamming, among other problems.

That’s where AHN comes in, Davis said. The company’s goal, based on the successful model of its sister Australian Homestay Network business, is to set a new global standard for student homestays in the U.S., starting right here in the Puget Sound region.

“We’re introducing the first professionally managed homestead operation in America,” he explained, “one that utilizes a sophisticated matching and management technology, extremely high standards, and proven operational methodologies that can grow to support tens of thousands of placements per year.”

Previous to AHN, smaller high school, college and summer program student homestay businesses like Bothell-based U.S. International Inc. and Pittsburgh-based American Homestay Services have been at work to connect international students with local hosts. However, information regarding current programs was unavailable or non-verifiable, and corporate offices did not return repeated emails and calls.

Others, like ABODE, which links students with both homestay and bed-and-breakfast type experiences, serve schools only in Seattle and north, such as Highline, Shoreline, South Seattle and Everett community colleges.

As for universities, most provide dormitory or other on-campus accommodations rather than homestays, or an abbreviated homestead experience.

The University of Washington, for one, via its Foundation for International Understanding through Students program, offers a homestay opportunity for new international arrivals before their first terms begin. However, the FIUTES experience lasts only seven to 10 days.

AHN, therefore, has seized the opportunity to create a new, streamlined long-term homestay model.

To ensure safety, reliability and accountability for both hosts and students, procedures include detailed applications, national background checks, 24-hour emergency support, online payment services, online orientation and training, and airport escort service for students, among other checkpoints. This is the first time a homestead network has officially incorporated these features, and the company ultimately aims to make such practices the national standard.

So far, besides connections with Seattle-area schools, the company has relationships with South Sound institutions like Tacoma Community College, Bates Technical College, Pacific Lutheran University and South Puget Sound Community College in the works.

As for international links, AHN-USA has already placed students from China, South Korea and Saudi Arabia in homestays here while they attend local schools.

David Bycroft, executive chairman of the Australian Homestay Network and a global education expert, is all on board with AHN-USA’s mindset of industry standard-setting.

“Without implementing high standards now, there is a potential risk to lose tens of thousands of students who are coming to America to study and live,” Bycroft said.

Reach writer Holly Smith Peterson at hpeterson@BusinessExaminer.com

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