Strategic Management Analysis 2008-09
Table of contents:
Strategic Position:
1.0: The first BK strategy :...........................................................................page 2
2.0 Aims and objectives:...............................................................................page 3
3.0: Mission statement..................................................................................page 4
4.0: Objectives..............................................................................................page 4
5.0: The link between mission statement and objectives..............................page 4
6.0:Macro environment ( strategic analysis).................................................page 4
6.1: PESTEL analysis...........................................................................page 6
6.2: Porter’s five forces.........................................................................page 7
7.0: Competitive advantage............................................................................page 9
8.0: Conflicting demand of stakeholders:.......................................................page 9
8.1: Power and interest matrix..............................................................page 11
9.0: Micro environment .................................................................................page 12
9.1: structure and culture.
9.2: Strength and weakness.
Strategic Choice:..........................................................................................page 13
10.0: Identifying the current strategic approach and process and its effectiveness.
11.0: Future strategies.
Strategy in action:.........................................................................................page 14
12.0 Managing finance
13.0: Managing Strategy
14.0: Delivering its commitment ...................................................................page 15
15.0: Conclusion ...........................................................................................page 16
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Strategic Position of the Burger King:
1.0: The first BK strategy:
The first strategic decision was made by two Hotel Administration students, James McLamore
and David Edgerton on December 4, 1954 in a suburb of Miami, Florida ,United States named
InstaBurger King. McLamore first visited the McDonald’s store in San Bernardino, California
and decided to create of his own. By 1959, BK had managed to create five regional stores in the
around the metropolitan Miami area. James McLamore and David Edgerton decided to expand
their business by franchising system and formed the Burger King Corporation across the United
States.
In 1967, BK had expanded to 274 stores in the United States and Pillsbury Company , one of the
franchisee , had acquired the Burger King and it’s parent company Burger King Corporation
.Despite the Pillsbury Company acquired , the Chart House , owner of 350 stores and one of the
BK’S largest franchise , had attempted to purchase the chain from the Pillsbury Company for
$100 million. Being the Chart House failed, they merged two entities into separate companies.
In1969. Pillsbury Company opened first international restaurant in Canada.
The company’s ‘golden age’ by introducing the famous slogan “Have it your way” in 1973 in
response to Big Mac song. (en.wikipedia.org/wiki/Burger_King_advertising)
At the end of the 2008 fiscal year, there are more than 11,550 stores in 71 countries, where 66%
in United States and 90% of the stores are franchise and 3, 61,000 employees are serving
approximately 15 million customers daily in the world.
(www.wikipedia.com/burgerking)
Now Burger King is the second largest chain of hamburger fast food restaurants after the
McDonalds and fourth largest fast food restaurant after the YUM brands and Subway in the
world.
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2.0: Aims and objectives:
The aim of this assignment is to find out how the company sets its strategic position, choice and
verifies its strategy in action. In addition whether they are successful for delivering their
commitment or whether they have changed their structure and strategies.
Let’s have a look what sort of aims and objectives we are looking for.
 To find out the company’s macro environment strategy.
 To identify the mission statement and objectives and the link between them.
 To analyse about what extent their competitive advantage.
 To investigate the conflicting demand of stakeholders and how the company response to
them.
 To identify their major structure and culture and to know about their strengths and
weaknesses.
 To identify their current and future strategies.
 To analyse whether their all the strategies are working properly.
 To evaluate the strategy between Burger King and McDonalds.
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3.0: Mission statement:
The mission statement of Burger King is to prepare and sell the quick service food to fulfil their
guest’ need more accurately, quickly and courteously in a cleaner environment than their
competitors. They will conduct all the business affairs ethically and with the best employees and
they will continue to grow profitably, responsibly, and provide a career advancement opportunity
for every willing member in their organisation.
4.0 Objectives:
BK long term objectives is survival in the competition market and second long term objective is
to acquire market position, brand image, public responsibility and product innovation.
On 2nd April 09 a report was posted that their main goal and objective is the operational
excellence to make sure the organisation is positioned to support their restaurant abilities and
make the customers want to come back.
5.0: The link between objectives and mission statement:
BK’ vision statement is to acquire mission statement and accomplish the objectives. The link
between the mission statement and objectives is that operational excellence gains by the product
innovation, quick and accurate food service in cleaner environment. Public responsibility and
brand image gain through employees’ career advancement opportunities. Positioning in the
competition market is acquired by growing up profitably and responsively.
6.0: Macro environment (strategic analysis)
Whether private or public, every organisation can make sense the uncertain world around their
organisation. Organisations are facing difficulties day by day due to faster technological change,
global competition, and cultural change. Macro environmental influences which might impact to
a greater or lesser extent on almost all organisations.
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Let’s have a look the macro environmental strategic focus on Burger King.
Governmental
action
Labour Market:
Sociocultural
Burger
King
Ecology
Technology
Competition
Suppliers:
Economy
Ref: www.bk.com
Governmental action:
For example, few days ago Burger king was against the “Employee free choice Act” .Burger
King believes that this law could significant affect on Burger king system because BK has an
obligation to educate and inform all employees. (theplumline.whorunsgov.com/labor/have-it-your-wayburger-king-to-get-involved-in-war-against-employee-free-choice-act/)
Labour Market:
In November 2007 and May2008 Burger King faced a bit exploitation on low wages for labour
and lower pay for tomatoes and later on BK agreed to increase price for per tomato produced.
peopleandplanet.org/redressfashion/globallinks
Suppliers:
BK generally has its own supplier 3663 and BK offers cage free chicken and pork products.
Animal rights praised for BK commitment and they hope the suppliers will use cage free animals
.So BK is facing difficulties from Animal Rights group. news.bbc.co.uk/1/hi/business/6505937.stm
Other macro environmental issues impact like competition, ecology, sociocultural and economy
which BK manages to make profit.
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6.1: PESTEL analysis of Burger King
PESTEL analysis is certainly important to get to know about the future impact of macro
environment on an organisation.
Let’s have a look how PESTEL macro environment impacts on Burger King.
.
Politica
l
Economi
c factors
Social
factors
1.Regulation.

2. Animal
Rights.
3. Local
council

1. Costs.
2. Inflation
&
Disposable
income

1. Life style
change.
2. Attitude to
work.
3. Social
care.

1.
Technologica
l change
Technolog
ical
factors

December 2006 BK has been stopped showing TV
advert for the kid’s junk food.
Animal welfare activists always audit the BK
supplier’s slaughter house to ensure the humane
treatment.
Local council always suggest the BK to make sure it
follows environmental rules and regulations.
BK has dramatically been facing the rising costs of
operation and increasing prises for energy and
condiments.
Economic factors like rising inflation, recession and
decreasing disposable income has been impacting to
reduce the food prices on every food company
including BK.

BK strong strategy is to offer customers their own
choice to protect food allergy by “have it your own
way”.
Lifestyle change, social mobility, attitude to work
continues impacting BK to increase their operational
flexibility.



BK has been spending huge amount of money using
Macros technology for POS till touch screen and
continuity for updating system.
Other technological spend on research.
2. Research.
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1. Health and
Safety .
2. Employment
law
Legal
factors
Environment
al
Factors
Obesity
Health and Safety: BK always tries to make sure the beef
products are safe from E-coli and other food poisons. It
follows the Health and safety law properly.
Employment law: In 1995, BK paid £118 for six months to
900 employees for controversial “zero-hours” contracts. A
Glasgow student had been paid £1 for five hour work. From
2009 point based employees’ ID card invented by the State
impacts every business including BK. Failure is criminal
prosecution.

According to recent articles in Guardian UK, a number of
the increasing fast food industries results obesity and
long time chronic disease rates and healthy options in
Britain which affected the BK.
We can see from the PESTEL analysis, BK has a lot of impacts by the legal factors and
economical factors rather than technological and political factors being fast food industries.
6.2: Porter’s five forces:
Porter five forces help to make an analysis of macro environment business strategy. It helps to
analyse the value of the company outside the business and to make decision of it. Those five
forces are keys to survive in the competition .
Let’s have a look how the Burger King manages their five forces by the help of Porter’s matrix.
Threat
of new
entrant
s
Bargaining power
of suppliers
Rivalry among
existing Burger
King
Bargaining power
of buyers
Threat of
substitute
of
products
Ref: www.12manage.com/methods_five_forces.html
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Applying in Burger King
6.2.1: Bargaining power of supplier:
Burger King has had the one and main strong supplier is 3663. Instead there are few suppliers
but for BK is the main dominant supplier around the UK. The products of 3663 are really
standardised. Their corporate slogan is “First for food service”. They sell fresh, frozen, chilled
and catering equipments. It is a part of the Bidvest Group Limited (Bidvest).
Burger king is the main distributor for food service 3663. So there is no threatening of
integrating forward and backward into the industry. They don’t force to raise the price and there
is no possibility of switching the supplier.
6.2.2: Bargaining power of buyers:
McDonalds is the main rival for Burger King. There are few dominant sellers and many buyers
for BK industry. UK fast food industry is fully monopolistic competition but for hamburger
chain food industry is really duopoly competition. Despite McDonalds is the main rival, but there
are co-operative competition between the BK and McDonalds.
BK changes their products every month. So the strategy of the BK is to offer cheapest value
added products and the profitability of buyers is high. It is really easy to switch for the buyers
but they will not have probably desired or their own way food.
6.2.3: Threat of new entrants:
There is possibility of new entrants for fast food industry but for hamburger chain very little
possibility of new entrants because of the requirement of capital investment is high and access to
industry distribution channel is low.
3.2.4: Threat of substitutes:
If we talk about the quality of products of BK vs. McDonalds, many people like BK fries and
many people like Mc’ quick service. Many people like BK food for flame grilled meat.
McDonalds is famous for kid’s meal and breakfast as well. Moreover, McDonalds is strong
brand for hamburger chain and they came first in the fast food competition. So the buyer’s
willingness to substitute is more than BK.
6.2.5: Intensity of rivalry depends on:
The structure of competition is more for the fast food industry because there are Burger King ,
McDonalds, KFC, Dominos, Subway and some other brands but for the hamburger chain the
competition is less being only McDonalds and Burger King in the market. If we have a look the
structure of the industry costs, only to have BK franchisee at least £250k investment required and
for the McDonalds £150k upwards plus £30,000 for franchisee fee and £5000 for the training
cost. So the requirement of investment is quite high for the new entrants even if they are
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franchisee. So the intensity of rivalry depends on the product differentiation, level of competition
and customer switching.
Finally we understand that BK does not have with power of supplier and threat of new entrants
but intensity of rivalry and bargaining power of buyers are the main key forces to manage due to
huge competition with McDonalds, KFC and Subway.
7.0: Competitive advantage:
What you can do to make a different or better than other business, which is “competitive
advantage”. Competitive advantage is simply a firm occupies against its competitors. There are
few competitive advantage, for example same quality but low product costs, product or service
differentiation like faster service or great quality.
Product efficiency: In 2002, BK introduced high speed toaster, upgraded their Product holding
unit (PHU) for greater quality and flexBroiler to cook the meat high efficiently with a low cost.
Price differentiation: BK offers now £1.99 for cheese burger and £2.99 double cheese burger
.Marketing director for UK and Ireland Sarah hopes the deal attracts the core target of wider
range of consumers. In addition, BK offers several ice-creams for 99p and chilli bites £1.19
which is big competitive advantage against the rival McDonalds, KFC and other fast food
industries.
Burger King competitive advantage is to comply with the health and safety law and combination
of strategy and implementation of it.
8.0: Conflicting demand of stakeholders:
Generally speaking, stakeholders are those who affect or impact the organisation. There are two
stakeholders. Internal and external stakeholders. People who are affected by the influence of the
organisation are external stakeholders. For example, creditors, government, suppliers, society are
external shareholders. Furthermore, people who have high intention for the organisation are
internal shareholder. Such as managers, employees and owners.
.
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Let’s have look internal and external stakeholders.
Internal
stakeholders
External stakeholders
Suppliers
Owners
Employees
Creditors
Government
Burger
King
Society
Managers
Customers
Shareholders
Ref: http://en.wikipedia.org/wiki/Stakeholder_(corporate)
8.1.0: External and internal stakeholders:






Government demand: Government demands from the BK are corporate tax, low
unemployment, maintain health and safety law, and obey working regulation.
Private owner/ Shareholders: Private owner and shareholders main interest from BK is
profit. In addition their demand is to make BK market leader, better performance,
direction and long lasting. Last three months to the end of the December 2008 BK net
profit fell by 10% to the £30 million which is lower than 2007. BK said due to the
currency fluctuation it’s difficult to forecast. (news.bbc.co.uk/go/rss/-/2/hi/business)
Customers’ interest: Customers’ demand from the BK is lower price value meal,
quality, and healthy products.
Managerial expectation: Senior managers’ demand is to better performance, growth
and make sure the all customers are happy.
Employees demand: BK employees are really working hard. Nevertheless, their
demands are pay rise, job security and ethical manner.
Suppliers: 3663 is the BK’s main supplier. So their demand more sale and good
performance.
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Finally, from the external stakeholders, suppliers, shareholders, governmental tax and customers
are more impacts than others and internal stakeholders are keys to make success in the
competition.
8.2.0: Power and interest matrix:
If we have a look the stakeholders’ power and interest matrix invented by Johnson and Scholes
(1999). We can determine the most influence stakeholders for Burger King because no company
can satisfy all stakeholders perfectly. Nevertheless, the company has to decide level of interest
and power of the stakeholders for that company.
Level of interest
Low
Low
High
Employees/
Suppliers
Health and Safety /
Local council
Customers
Operational
Excellence Review
(OER)
Power
High
Ref: Johnson and Scholes (1999)
 Customers:
According to the BK strategy, customers have a high level of interest
and BK always try to satisfy them by fast, quality food service in cleaner environment.
 Operational Excellence Review (OER): OER
visitor comes every three
months to check the particular restaurant is operating according to the BK standard. OER
visitor has high power to the restaurant.
 Employees/ Supplier: BK has level of interest to its staff and supplier and try to
make sure the staffs are well trained and keep informed the supplier.
 Health and Safety/Local council: Health and Safety /Local council has high
power to close down any business including BK if the business is not safe for local
people.
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9.0: Micro environment:
Micro environment of an organisation is strength and weakness, culture and structure and
internal strategy.
Let’s have a look the strength and weakness, structure and culture of BK.
9.1: Strength:
Many of the customers think that whopper, Bacon double and chicken royale are the main the
strength of BK and of course the Mayonnaise and steakhouse sauce as well. Furthermore, BK
believes that quick customer service and cheaper value meal are their strength. But 3663 is
another stronger supplier and big strength for Burger King. Their continuous effort for quality
beef and chicken patty makes BK’s stronger strength.
9.2: Weakness:
When BK enter the coping zone, it’s difficult for them to maintain quick service. This is true that
rivalry against the like McDonald is another weakness for BK. Also, BK does not have loyalty
card to communicate or keep the customers for longer time.
9.3: Structure:
Burger King management structure for a particular restaurant is flat management structure
because of the quick customers response needs quick decisions. Flat structure helps to make
more productive the well trained workers and no levels of intervening between staffs and
managers.
If we discuss about the regional management structure then,
Regional
Directors
Directors of
company
operation
Team
members
Marketing
managers
Supervisors
Company
Business
managers
Salary
manager
s
Hourly basis
managers
Ref:www.bk.com/companyinfo
BK regional directors inform the marketing managers and company business managers if there is
any update of the operational manual or every month promotional products. But the company
business manager looks after the profit and loss of the particular restaurant, daily sales, labour
product costs and totally overall performance. General Manager including salary manager runs
the whole restaurant and the duties of the shift managers are to run their particular shift including
taking care of the customers.
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9.4: Culture:
Burger King’s goal is distinguishing them from the competitors by creating the culture through
Bold, Accountable, Empowered and Fun. Bold represents the dynamic and initiative thinking
in every situation. Accountable means they are determined to deliver the great value to the
shareholders and guests. Empowered shows they are customer focused. Fun means the
employees work in the BK as a team.
Strategic Choice:
10.0: Identifying the current strategic approach, process and its effectiveness:
BK current strategy is set up in various types basis. For example the marketing strategy and
operational strategy. Let’s have a look the different objectives of Burger King.
10.1: Marketing Strategy:
BK’s top goal is to build the strong brand image and awareness using integrating marketing
communication. BK targets toward the men aged 18-35 years old who eat the fast food 9-15
times per month. Their target will be achieved through traditional marketing campaign like
television adverts, print to dominant campaign, digital and interactive media such as website,
banner advertisement, and news paper.
10.2: Operational strategy:
BK strategy is to keep the operational manual up to date. In response to the McDonalds or KFC,
Burger King is now offering cheapest value meal and finding out how to make more healthy and
delicious food for customers. But the current strategy of BK is to offer new sandwich every
month. Also, for the kids the sell now chirlled grill strips including mini Angus.
10.3: Corporate Strategy:
The corporate strategy of Burger King is that they believe in “giving back”. The corporation
strives to be a model of excellent corporate citizenship. BK encourages the volunteerism and
they provide paid time off for the full and part time employees to take a part volunteer
community. Instead the main corporate strategy is to provide excellent customer service by
creating the “value for money”.
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10.4: Employees’ strategy:
The employees’ strategy of the BK is straight forward. They believe every employee comes with
the great prospect and talent to contribute to the BK. Since every employee’s talent in a great
ingredient for the BK, their strategy is always to work hard for them to maximise their potential
to learn to grow and to adapt themselves in the dynamic organisation. BK provides the medical
coverage, dental coverage, paid life insurance, accident benefits for the employees.
11.0: Future strategy:
It’s difficult to forecast the future strategy of BK in this slow down market situation but instead
they forecast to spend more on marketing strategy and brand image. Approximately £200 million
of restructuring cost will be taken for making stronger brand, strengthen financial position and
marketing in 2010.
www.diageo.com/en-row/NewsAndMedia/PressReleases/2002/7+Nov+2002+Burger+King+Update.htm
(2009)
Strategy in action:
12.0: Managing finance:
A report posted on 2nd February 2009 that comparable sales were up 2.9 percent by marking five
straight years of worldwide same-stores-sales growth. U.S and Canada comparable sales were up
1.9% .Comparable sales basically driven by key international markets including the UK, Spain,
Canada, central and South America.
Revenue for the quarter 12-2008 was $634 million which was three percent up than the same
quarter last year. An average $1.31 million increased in 12-months. The total operating income
was $86 million and the income after tax was $44 million last year.
For the quarter, the company reported earning per share of $0.33 which is due to the currency
exchange rate fluctuation.
13.0: Managing strategy:
During the global economic slowdown in November and December, the business was affected
slightly but BK Corporation has managed 3% organic sales growth and 6% operating profit
growth in this difficult market condition. They have given £0.9 billion to the shareholders back.
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Lot of arguments about the BK brand is going down for the high market competition, but we see
the sales and profit goes up in this recession.
Operational strategies are working properly because of their cheapest value meal and ice-cream.
Sales are now increasing dramatically for updating veggie meal and cheese burger meal.
In the earlier 1999, the Burger King advertising campaign was not only the reason for the market
slow down. The way food preparation was not perfect, management lacked focus on direction
and struggled with marketing mix decisions and they did not lower the prices to keep competing
in the market.
But 2002, they focused on operational strategy and food preparation was BK standard instead of
changing the strategy. Marketing campaign changed to the traditional advert like TV, web and
promotional offer. They decrease the price for competing in the market like McDonalds and
KFC. Management team is having outstanding training now. They have not changed the strategy
but they focused more customer and operational strategy.
14.0: Delivering its commitment;
Product line/ brand pledge:
BK has been serving more than 50 years their menu offerings that present taste, quality and price
which meets BK commitment. Their long lasting heritage “Have it your way” helps the
customers to customize their products with quality, choice and price. Their innovation to the
children to promote balanced diet and nutrition has been meeting the commitment.
Advertising commitment:
Burger King has been advertising for the under 12 year’s old kids meal that meets commitment.



No more than 560 calories per meal.
Less than 30 percent of calories from fat.
No more than 10 percent of calories from added sugar.
www.bk.com/companyinfo/content/news/detail.aspx?id
Failure of commitments:
Mr. Ronay, critics of restaurateur, and his team produced lot of reports about fast food and
beverage served past two years. His comments, BK big commitment is they use the best quality
beef patty and best quality beef patty comes from cooked in oil rather than flame grill broiler.
McDonald’s commitment, all products are made from the highest quality ingredients but his
comment the beef is “unhealthy”.
www.dailymail.co.uk/news/article-145796/Fast-food-burgers-inedible-says-Ronay.htm
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15.0: Conclusion:
If we have a look mission statement, strategies, macro and micro environment, competitive
advantage, mission statement says quality and faster food services in a cleaner environment by
taking care of their employees. The main strategy is growth and operational excellence. But the
impacts of the macro and micro environment and conflicting demand of stakeholders are making
them really more and more competitive to reach their goal in the fast food and hamburger chain.
Furthermore, still some little gaps in the BK strategy, they don’t keep longer than one month a
new promotion if it sells better because of the high product costs. BK’s service time no more
than three minutes, but when they get complaint customers in the busy time which means
entering coping zone , their service time doesn’t exist according to their strategy.
McDonald’s strategy is to offer superior products and service with a low cost and their strategy is
stronger because of the mass marketing efficiencies.
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Bibliography:
Exploring Corporate Strategy (six edition)
By Gerry Johnson and Kevan Scholes for best contents and
information
www.reportbuyer.com/food_drink/foodservice/fast_food_home_delivery_outlet
s
www.chainleader.com/article/CA6634866.html
news.moneycentral.msn.com/ticker/article.aspx?Feed=BW&Date=200
90205
www.independent.co.uk/news/burger-king-pays-pounds-106000-to-staffforced-to-clock-off-1526458.html
www.qsrmagazine.com/articles/news/story.phtml ( BK competitive advantage)
www.marketingmagazine.co.uk/news/rss/879747/Burger-King-adds-KingDeal-value-meal
www.wikipedia.org/wiki/Stakeholders
www.restaurantnewsresource.com/article35453Burger_King_Holdings__Inc__Reports_First_Quarter_Fiscal______Results.
html
www.burgerking.com/companyinfo/careers/culture
www.echeat.com/essay.php?t=25843
www.bk.com/companyinfo/content/news/detail.aspx?id
www.dailymail.co.uk/news/article-145796/Fast-food-burgers-inedible-saysRonay.htm
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Strategic Management Analysis 2008-09
Module assignment title:
Strategic analysis of Burger King .
University Campus Suffolk
Module leader: Andy Vassallo
Student No: S120325
Session 2008-09
Words: 4000
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