Strategic Management

Assignment- 1

2/13/2020

Submitted To-

Dr. Pushpa Kataria

Submitted By-

Vandana Vidhani

MBA-4

0181MBA058
Corporate Plan followed by Burger King in India-
A) Marketing Strategies-

1. Adaption strategy- Due to certain religious beliefs of people in India, Burger King has replaced
their regular pork and beef items with mutton and chicken. One can easily get TenderCrisp and
TenderGrilled chicken sandwiches as well mutton whoppers in their restaurants. Keeping the Indian
market in mind they have launched vegetarian products such as Masala Whooper, Paneer King, and
Crispy Veg Supreme etc.

2. Pricing- India is a country where people are price sensitive and at the same time they associate
low price with low quality. With already existing of its rival, MC Donald’s, Burger King entered the
market with various offers and affordable rates. The cost ought to be sufficiently high with the goal
that questions are not raised about the nature of the items and low enough so the clients are eager
to pay for it. Along these lines, a mix of aggressive estimating and mental evaluating is utilized by
Burger King. By paying rupees 39 one can get a crispy veg burger at BK. The pricing goes up by 10
rupees for egg and 20 rupees for chicken burgers. For shakes one has to pay 109 rupees.

3. Promotion- Burger king applies various way to markets their products. Advertisements in print
media like newspaper, magazines and hoardings. The food content is among its more focused
advertising strategy of Burger King. Burger King also organises or sponsors different events to reach
to more customers. Offering more value-added menu for the main course during the time of
ordering is also one of the strategies of Burger King. More discounts o0n application based ordering,
distributing discount coupons during the first visit for the second visit will help to generate the
customer base. Digital marking is now emerging promotional strategy of the brands. Customer
analytics helps Burger king to strategized its marketing to reach the targeted customer. Burger King
is also publicizing their products digitally using SME and other techniques to reach to mass.
4. Positioning Strategy- Brand’s positioning can be condensed into three key points. The first one
being that Burger King is a perfectly ‘imperfect’, brand. Secondly the ‘crown’ which is a very
powerful equity, spreads the message that everyone is welcome. Lastly, the brand respects
individuality and this is reflected through its communication.

5. ‘Gamify your Experience’- Engaged consumers have a significant impact on your bottom line.
According to a research by Gallup, brands that successfully engage their customers realize 63
percent lower customer attrition and 55 percent higher share of wallet. An interesting way to
engage customers is by using games that reward them for playing with you. During the cricket
season, Burger King drove traffic from its social media handles to a micro-sitebookcricketking.com,
specially created to host a game. Playing the game would earn the users discounts on Burger King
Products.
B) Product Portfolio-

Veg EGG Chick Whooper King’s BK King Coolers Desserts Hot

en Melt Classics Savers Bevarages
1. Crispy 1.King Egg 1. 1. Veg 1.Pan 1.King 1. 1.Choco 1. BK 1.Cappucci
Veg Whoo Whooper ner Egg Crispy late Strawber no
Supreme per King Veg shake ry
Supre
me
2. Veg 2. 2. 2.Veg 2.BK 2.Chic 2.Black 2.BK 2.Latte
Supreme tandoo Chicken Chilli Veggie ken Current chocolat
r grill Whooper Chees Fries Shake e
e
3. Veg 3. chilli 3. Mutton 3.Veg 3.Crisp 3. 3.Vanilla 3.America
Whooper cheese Whooper Chilli y Veg Classic Softie no
Cheese Frappe
4. BK 4.BK 4.Chick 4.Crisp 4. 4.
Veggie Grill en y Cookie Chocolat
Chicke Tandoo Chicke Cream e Softie
n
r Grill n Crumbl
e
5. Paneer 5. 5.Chick 5.Vegg 5.Orang 5.
King Crispy en Chilli ie e Float Mango
Chicke Cheese Strips Sundae
n
6.Veg Chilli 6.BK 6.BK 6.Pepsi
Cheese Grill Straw Float
Chicken berry
Sunda
e
7. veg 7. BK 7.Moun
stripes Chocol tain
ate Dew
Sunda
e
8.Choc 8. 7up
o Dip
Softie
C) Strategic Management Process Model-Burger King

1. Strategy Analysis- Assessing Competitive Position

Mission Statement-“offer reasonably priced quality food, served quickly, in attractive, clean
surroundings.”

Vision Statement- “to be the most profitable QSR business, through a strong franchise system
and great people, serving the best burgers in the world.”

Core Values- Teamwork and family, Excellence &Respect

Objectives- Burger King’s main aims and objectives are to serve its customers with the bests meals
and services a fast food company could possibly provide. To achieve this, the organisation has a zero
compromise policy for the communication of its aims and objectives. The aims and objectives are
highly important to the organisation, for it is the only way the organisation maintains its integrity
amongst it competitors and its customers. Burger King’s aims and objectives are well set and
structured, making it relatively easy to communicate them within the organisation and also to its
customers. The organisation’s main source to communicate its aims and objectives are through the
media, banners, coupons, handouts and also through the internet.

Analysis of Organization and Environment-

Organization Strengths-

 Recognized brand name – A strong brand name and image are very important strengths for
any brand. Burger King is among one of the most notable brands in the QSR industry. A well
recognized brand name is a critical leverage when it comes to sales, profits and customer
loyalty. It has also important benefits for the franchise system which would otherwise be
riddled with problems. Burger King is easily recognized in several corners of the world by its
name and logo. It is among the most popular fast food brand names.
 International presence – Its international presence is also a key strength for Burger King. The
brand is present across 100 countries and US territories. Vast international expansion and
access to varied markets is an important strength in terms of financial stability. While the
economic conditions can fluctuate across markets, being present in various markets brings
stability in the system. Both India and China are major markets that offer great financial
opportunities for the brand.
 Successful franchise system – Burger King heavily relies on the franchise system where more
than 95% of its restaurants are run through franchises. This franchise system has been running
profitably which is evident through its financial performance and growth. Franchise systems
do face some common problems and it is true about Burger King’s business model but still it
has some inherent strengths that make the model successful
 Diverse and rich food menu – The brand offers a diverse and rich food menu that consists of
flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks
and other items. Affordable pricing of these food products is also an important strength of the
brand. A rich and diverse food menu is a must for any fast food brand if it wants to attract
customers. Menus is as per the taste of the local markets and consumers
 Focus on new product development – New product development is a key strategy used by
Burger King to grow its brand and market. The long term success of the brand depends on
this strategy. Development of new products has the potential to drive traffic by expanding
customer base.
  Heavy focus on digital technology for business operations and management – the brand is
focusing heavily on the use of technology for operations and business management. It relies
heavily on its computer systems and network infrastructure across operations including POS
processing at the restaurants.

Organizations Weaknesses-

 Overreliance on franchise model – Overreliance on the franchise model has its own problems.
Burger King is a brand that relies heavily on this model. Around 95% of its business is
operated by the franchisors. Some of the common issues that have been obstructing the
growth of every brand relying on the franchise model include the rising costs, low staff
morale as well as difficulties in the way of adapting to consumer needs. Innovation many
times becomes difficult because it becomes difficult to bring synchronization across the entire
system.
 Low brand loyalty – Even if the brand is focusing on product development and digital
technology, brand loyalty is difficult to acquire in the 21st While changes keep happening fast,
the brands also have to focus more on their consumers’ tastes and convenience. Burger King
is the part of a heavily competitive industry. Customers’ find it easy to switch brands and
building brand loyalty remains difficult. Compared to the leading brands like McDonalds,
Wendy’s and Starbucks, Burger King sees less customer loyalty.
 High aggregate indebtedness – As of December 31, 2015, the brand had an aggregate
outstanding indebtedness of $8725.6 million. Such high indebtedness makes the brand
vulnerable to several major risks. This limits the brand’s potential to respond to several
economic and financial fluctuations. It also limits the brand’s ability to respond to changes in
the business and competitive environment. Overall, high aggregate indebtedness can slow
growth by subjecting the brand to several important challenges.

Environmental Opportunities-
 Digitization for better customer service – The brand has some important opportunities in hand
including those brought by technology. Digital technology has brought important
opportunities in marketing and sales as well as customer service. By making better use of
digital technology, it can engage customers and earn loyalty. Investing in digital has several
benefits and the leading QSR brands like McDonalds, Wendy’s and Starbucks have made
significant investments in this area for better customer service and higher customer
convenience.
 Focus on growth in emerging Asian markets – China and India are significant markets for
Western businesses. These two markets offer significant opportunities of growth. The number
of Burger King Restaurants in India and China has remained very low. McDonalds already
has a heavy presence in the country with its nearly 1500 establishments. To compete with the
brand, it would need to increase its presence further. Burger King is planning to increase its
presence in both the countries. While it plans to reach at least 1000 restaurant stores in China
over the coming years, it also plans to enter the Indian market through a partnership with one
of the local private equity firm.
 Food innovation – Innovating the food menu for its customers can have several benefits apart
from higher popularity and a larger customer segment. Consumers’ tastes are changing and
even in the Western markets people have switched to healthier food choices. Burger King has
focused on food innovation and is doing more to make its food menu attractive and healthier.
Threats-

 High compliance related costs – The compliance related costs in the QSR industry have kept
rising. There are several laws as well as rules and regulations that the fast food brands are
subject to. From food preparation to health, safety standards, environment and sanitation,
there are several laws that these brands are subject to. There are federal, state and local
regulatory and licensing bodies that oversee these areas and the level of oversight has
increased a lot overtime. All of this raises the compliance related costs leading to a rise in
operational costs.
 Heavy competition – The level of competition in the QSR industry has increased a lot. In US
and Canada as well as the international markets, the brand is facing heavy competition. From
McDonalds to Dominos and KFC, there are several international brands that are competing
for market share. Apart from it, there are several local brands too that compete with Burger
King in the various local markets. Heavy competition leads to erosion of market share as well
as increased costs of marketing. For Burger King, further expansion is also difficult because
of the stiff competition.
 Increasing prices of food, commodity and labor- 21st century has seen several changes
happen and apart from economic fluctuations, there has been a major rise in the costs of raw
material and labor too. Rising costs of raw material add to operational costs and reduce profit
margins. Labor costs have increased manifold and with it the operational costs have risen.
Overall these things have led to higher investment and lower profits. Customers are
concerned for quality and convenience and the brands are investing in these things as well as
marketing to remain competitive and profitable. This is one of the most significant challenges
before Burger King and its franchisees.

Rivalry and Industry Attractiveness-

Burger King faces the threat of aggressive competition worldwide. The main competitors of the
company are McDonald’s, Subway, KFC, Taco Bell, Yum Brands, Starbucks, Chipotle, Wendy’s,
Domino’s Pizza, and Pizza Hut.

Industry attractiveness-

Burgers & Sandwiches account for 31% of the market, followed by Pizza with 28%, however this
does not account for Pizza Hut (which is classified as CDR and not QSR). Chicken had a market
share of 16% and the others category 25%. The chain market has shown impressive growth in the last
5 years – 18% CAGR. Some of the reasons for this are

 Increased eating out and ordering in behaviour – 60% of Indians eating out are
millennials (15-34 age group), companies including Burger King target this market
segment
 Increased internet and smartphone penetration
 Offering exclusively suiting the Indian palate – like the Mumbai Indian masala whopper
offered by Burger King, wraps by Domino’s, KFC rice bowl
 Rise of platforms like Zomato and Swiggy – delivery market has increased from $4.7
billion in FY16 to $8 billion in FY19, projected to reach $18 billion by 2024
 Increase availability of retail space enabling expansion of food services outlets
2) Strategy Formulation- Creating Strategies

Corporate Strategy-

Bases on the strategic options, to open more branches is considered inefficient strategy ,because it
need a lot of money to open the new branches ,but can implementing more other strategy to reach
same goal which is increase the market share like franchisee system and also the delivery system. By
using the low cost delivery system, more customers can enjoy the Burger King product everywhere
and every time .It is considered more efficiently than open more branches. In the franchisee system,
Burger King can earn more profit from the transaction and increase the market share, but to focus on
the product quality, Burger King should put more attention on it to keep the reputation maintain
and increase in the same time. The franchisee training is very important on it .For the franchisee
system, Burger King should also control the location of the branch to avoid too many branches in the
same certain place, which can reduce the competition of all franchisee and market inefficient.

Business and Functional Strategies-

Low cost strategic is a good strategic to reach the higher profit, with a good distribution network will
hit the corporate low cost strategic. Maintain the quality and lower the production cost is a good way
to increase the profit but both element should be move in the same direction .

For the “highest income brackets” of the Burger King market segmentation, will reduce the Burger
King’s customer population, because the cheaper should be more attracted. By increase the customer
population, Burger King should do more promotion and also the advertising for the short-term. On the
other hand, to increase the customers population in the long-term, Burger King should make the
product differentiation by develop more product types and favorites which can attract more new
customer. This development will increase the market shares and also the competitive advantages for
the Burger King to survive in this competition market.

Advertising is important element to reach the profit margin increase, Burger King should use the low
cost advertising which can effective and also save a huge of money .The population lifestyle is
changed and the technology improvement Burger King cannot using the traditional media to promote
their product, teenagers and adults are prefer internet more than the newspaper nowadays. Like
using the website advertisement is consider as cheaper advertising which also can filter the
population to reach the market segmentation more effective than without filter it. You will never
advertising the Burger King to a 80 years old ,so we need to filter the population first to the target
customer .

Burger King’s Intensive Strategies (Intensive Growth Strategies)

Market Penetration-. Burger King’s primary intensive growth strategy is market penetration. The
goal of this intensive strategy is to grow revenues from existing customers or markets where the firm
already has operations. For example, Burger King implements this intensive growth strategy by
opening new restaurants in its current markets to get a bigger market share. A strategic objective
connected to this intensive growth strategy is to expand Burger King’s franchise network. In relation,
Burger King’s generic strategy also supports this intensive strategy by highlighting unique product
features to penetrate markets and grow the business.

Market Development- Market development is Burger King’s secondary intensive growth strategy.
To support business growth, this intensive strategy involves entering new markets or targeting new
market segments. For example, Burger King implements this intensive growth strategy by opening
new stores in overseas locations where it does not have operations. However, this strategy is only
secondary or minor in Burger King’s business because the company already has operations in most
markets around the world. A strategic objective for this intensive strategy is to grow Burger King by
attracting new customers in new markets based on low prices. Thus, this strategic objective
emphasizes low prices in Burger King’s pricing strategy, which is supported through the cost
leadership generic strategy.

Product Development.-Product development is the least significant of Burger King’s intensive

growth strategies. This intensive strategy enables the company to grow through the introduction of
new products. Burger King only minimally implements this intensive strategy. For example, the
company introduces new products at a slow rate. Most of Burger King’s products remain on the menu
for years. A strategic objective linked to this intensive strategy is to grow Burger King’s business
through product innovation. This intensive growth strategy supports Burger King’s generic strategy
of broad differentiation by highlighting new products that are unique compared to those of competing
firms.

3) Strategy Implementation- Putting strategies into action

Strategies to be implemented-

 Market Penetration
 Product Development
 Market Development
 Low Cost Strategy

Structural changes for new strategies-

 Market Segmentation
 Targeted Advertisements
 New Product Development
 New Branches to be opened through Franchise
 Training provided in each new branch
 Control on cost- Backward integration can be adopted

Control and Evaluation

 Raising customer satisfaction by 20% by the end of 2020

 Achieving 15% growth in annual sales.
 Increasing market share by 25% by the end of 2023
 Reducing employee turnover by 30% by the end of 2024.