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