Burger King Beefs Up Global Operations Case Study

Burger King went public in 2003 after years of private ownership and currently operates 12,000 stores in 74 countries (Daniels, Radenbaugh & Sullivan, 2009). Burger King's core competency is making flame broiled hamburgers to order which is reflected by its slogan "Have it Your Way" (Daniels et al., 2009). The company uses innovative advertising strategies to differentiate itself from the competition by emphasizing the use of its flame broiled method of cooking hamburgers (Daniels et al., 2009). Even though hamburgers are the main menu item, Burger King has successfully experimented with other foods, including most recently pork ribs which were a huge success (Orensky, 2010). This shows that the company is capable of expanding on its core competency, which is important for international growth. The bulk of Burger King's restaurants are located in the U.S. And Canada, which accounts for 69% of its revenue (Daniels et al., 2009). Burger King has not sought international growth like its competitors, a strategy that should change because the U.S. is experiencing slower growth, a saturated market for fast food and an economic recession. Countries, such as Brazil and China are high growth markets with an expanding middle class which is desirable for international expansion. Diversified companies are better positioned to handle recessions in their domestic market by taking advantage of growth opportunities in growing international markets.

International expansion has not been a big priority for the Burger King until recently. The company has perfected its strategy for entering new markets using the model it created...

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Burger King's successful value chain in Brazil includes building infrastructure prior to putting in restaurants, developing a local office and management team, focusing on major cities with established shopping mall locations, and supporting continuous development of local suppliers (Daniels et al., 2009). The development of the local supply chain is Burger King's best value chain activity because the ability to have local supplies greatly reduces costs for local franchisee's making investment in the business more attractive. The strategy that Burger King has created for the market in Brazil is also the same one it has used for its entry into Russia (Daniels et al., 2009).
On January 21, 2010 Burger King opened its first restaurant in Russia in its push to increase its global market share (Burger King, 2010). In the last five years Burger King has expanded its presence throughout Central and Eastern Europe with market entries into Poland, Czech Republic, Hungary, Bulgaria and Romania (Burger King 2010). Burger King has had the advantage of learning from the failures and troubles experienced by other franchises international ventures by waiting to enter foreign markets, but it has also missed a valuable opportunity to be first into the market (Daniels et al., 2009). McDonald's entered Russia in 1990 and has over 900 restaurants in the country making it tough competition in the Russian market (Murphy, 2010). The risks of being the first to enter a new market are many, however the benefits of becoming the staple for the products being offered is often worth the risk.

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Sources Used in Documents:

References

Daniels, J.D., L.H. Radebaugh and D.P. Sullivan (2009). International Business: Environments and Operations (12th ed.). New Jersey: Pearson Prentice Hall.

Burger King (2010 January 21). First Burger King Restaurant Opens in Russia. Retrieved from http://investor.bk.com/phoenix.zhtml?c=87140&p=irol-newsArticle&ID=1377824&highlight=

Murphy, Kevin (2010). International Franchising Strategy. Retrieved from http://www.franchisefoundations.com/internationalfranchising.html

Ozersky, Josh (2010 July 6). Burger King on the Bone: A Rib Success Story. Time. Retrieved from http://www.time.com/time/nation/article/0,8599,2001661,00.html#ixzz199m2q7OB


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