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Strategy Analysis Comparison
The strategy of BKC relies on increasing sales growth, enhancing restaurant profitability, developing innovative marketing strategies, improving value and quality, expanding the international platform, improving the restaurant development and expansion, using proactive portfolio management in order to influence growth, and others.
BKC's management understands that it is important to develop and implement strategies that influence the growth of the company. The growth rate of the company has reduced, which means the company must develop different strategies that reach this objective. The company must adapt its strategies to the modified behavior of customers.
Burger King also intends to increase the profit of each operating unit. By increasing restaurant profitability, BKC expects to improve its position on the market, which can further help the company expand its activity to other markets. The profitability of restaurants is a complex issue that requires strategies able to address several sides of the business at the same time.
Regarding marketing strategies, the companies understands that consumers require innovative marketing strategies in order to be convince to remain loyal customers, when the competition offers significant discounts for similar products. Therefore, the company invests in such marketing campaigns that address a series of aspects, like sports sponsorships.
Also, the financial crisis has determined consumers to modify their buying behavior. Most of them are not willing to spend their money on products and services that they do not necessarily require. Therefore, when purchasing a product, they expect the highest quality level for the product in case. Burger King has decided to make investment efforts in improving the quality of its products.
The company has identified a series of international markets that present potential that can be efficiently exploited. The company is present in several countries, but there is still room for expansion of its activity in other geographical areas also.
The strategy of JACK focuses on the growth strategy, brand reinvention, improving the business model, and franchising expansion (Jack in the Box, 2008).
The similarity between the strategies of the two companies is represented by the fact that they are both interested in company growth. Jack in the Box intends to increase the growth rate of its business, although the size of the company does not allow for a growth rate similar to that of Burger King. However, given the fact that Jack in the Box is concentrated on a reduced area, the company has the opportunity of expanding its business on markets that are not saturated.
JACK admits that the brand is not necessarily an attractive one. In order to change this situation, the company is trying to reinvent the brand by addressing menu innovation, service, and the environment.
Burger King's strategy regarding franchising has proven to be a successful one. Jack in the Box intends to intensify its franchising activity, in order to benefit from the advantages of franchising.
There are several financial aspects that can be analyzed and compared between the two companies. However, the most important financial information is represented by the earnings per share.
Burger King's earnings per share reached $1.48 in 2009 (Annual Report, 2010). Jack in the Box's earnings per share reached $2.03 in 2008 (Annual Report, 2009). Even if Jack in the Box seems to be more financial efficient from this point-of-view, it is difficult to determine if the company will be able to maintain this value and how it can be affected by economic factors. The financial power of Jack in the Box is reduced in comparison with that of Burger King. This means that Burger Kings has the ability to counteract the effects of macroeconomic factors more efficiently than Jack in the Box.
Conclusions and Recommendations
The two companies present a series of similarities, but a series of differences also, which should be taken into consideration by potential investors. The companies are affected or threatened by the same factors, but they respond differently to these threats and address them with different efficiency, given the difference between the two companies regarding their financial power.
Although Jack in the Box may present better financial data, the economic crisis can significantly affect the activity of this company, which makes it more difficult to be addressed by investors. It is recommended that investors orient towards Burger King, given the advantages that the company provides in comparison with Jack in the Box. Although the company sees to be less profitable for investors, it provides the advantage of stability and of lower risks associated with such an investment. The security of Burger King should be considered more valuable, for investors, given the instability of the environment that characterizes the global economy.
1. Burger King Corporation (2010). Datamonitor. Retrieved November 4, 2010.
2. Annual Report (2009). Burger King. Retrieved November 5, 2010 from http://www.mediantonline.com/0/000/166/708/HTML2/burger_king-10k2009_0004.htm.
3. Jack in the Box Inc. (2010). Datamonitor. Retrieved November 5, 2010.
4. Annual Report (2008). Jack in the Box. Retrieved November 5, 2010 from http://library.corporate-ir.net/library/94/944/94497/items/319125/CF7EF997-7B01-4ECC-9141-88A01B2A52E6_08ar.pdf.
5. Jargon, J. (2010). BK's Strategy: Play Catch-Up. The Wall Street Journal. Retrieved November 5, 2010 from…[continue]
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