Burger King Hrm

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Introduction:

Burger King, often abbreviated as BK, is a global chain of hamburger fast food restaurants

headquartered in unincorporated Miami-Dade County, Florida, United tates! "he company

began in #$%& as 'nsta-Burger King, a (ac)sonville, Florida-based restaurant chain! *fter 'nsta-

Burger King ran into financial difficulties in #$%%, its t+o Miami-based franchisees, David

dgerton and (ames Mcamore, purchased the company and renamed it Burger King! .ver the

ne/t half century the company +ould change hands four times, +ith its third set of o+ners, a

partnership of "01 Capital, Bain Capital, and 1oldman achs Capital 0artners, ta)ing it public

in 2332! 'n late 23#3 &1 Capital of Bra4il acquired a ma5ority sta)e in BK in a deal valued at

6&!27 billion 8UD9! "he ne+ o+ners promptly initiated a restructuring of the company to

reverse its fortunes!

History of Burger King:

#$%: - David dgerton opens 'nsta Burger King in Miami, selling #;-cent fire-grilled

hamburgers and #;-cent mil)sha)es! "hree months later, (im Mcamore matches

dgerton - "he 0illsbury Co! acquires Burger King Corp! for 6#; million! "here are 2>:restaurants in operation +ith a total of ;,333 employees!

#$;; - 1rand Metropolitan 0C acquires "he 0illsbury Co! and its subsidiaries, including

Burger King, for 6%!>$ billion!

#$$> - 1rand Metropolitan merges +ith 1uinness to create a ne+ company, Diageo 0C!

2333 - Diageo announces its intention to spin off Burger King Corp! from its portfolio!

2332 - * group comprised of "e/as 0acific 1roup, Bain Capital and 1oldman achs

Capital 0artners buys Burger King for 6#!% billion!

2337 - Burger King goes public!

23#3 - Burger King is acquired by &1 Capital and ta)en private! "he ne+ o+ners begin a

yearlong process of reviving the ailing business +ith ne+ menu items and remodeled

stores!

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23#2 - Burger King returns to the ?e+ @or) toc) /change after &1 Capital sells a 2$

percent sta)e in the hamburger chain for 6#!: billion in cash to (ustice Aoldings "D, a

U!K!-based entity specifically set up by investors to buy a company!

Products of Burger King:

Burgers

Whopper

'ntroduced in #$%>, "he hopper is Burger King

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Rodeo cheeseburger

"he =odeo Cheeseburger +as created to coincide +ith the release of the film malloldiers in #$$>! "he =odeo Cheeseburger is a cheeseburger that is one of Burger Kingproducts targeting the value conscious demographic! 't consists of a burger patty,*merican cheese, three onion rings, and barbecue sauce served on a sesame-seed bun!

Chef's Choice burger

"he Chef

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"he original fish sand+ich sold by Burger King +as introduced in May #$>% and +ascalled "he haler and featured the tag line "he 1enuine Burger King Fish-stea)and+ich! "he BK Big fish is a fish sand+ich! "he product is sold in ?orth *mericaonly, ho+ever Burger King sells a fish sand+ich in all of its mar)ets! "he BK Big Fish

consists of a deep-fried +hite fish patty, "artar sauce and lettuce on a brioche bun!

Chick'n Crisp

"he sand+ich +as introduced in #$$; as part of a menu e/pansion that added a valuemenu +hich the company dubbed the 1reat "astes Menu! "he Chic)

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*rea served 1lobal

Key people *le/andre Behring 8Chairman9Bernard Aees 8C.9Ben K! ells 8CF.9

=evenue U62!&& billion 8F@ 23#39.perating income U6&7&!3 million 8F@ 23##9

?et income U6#3>!; million 8F@ 23##9

"otal assets U6%!%; billion 8F@ 23##9

"otal equity U6#!:% billion 8F@ 23##9

.+ner8s9 &1 Capital 8>#I9, (ustice Founders 8#&I9 J hareholders 8#7I9mployees &:,2:; 823##9

0arentCompany Burger King Aoldings 'nc!

ebsite +++!b)!com

Current Perfor&ance:

Burger King +as the second largest fast-food hamburger restaurant chain in the +orld as

measured by the total number of restaurants and system+ide sales! *s of (une &3, 23#3,the company o+ned or franchised #2,#>: restaurants in >7 countries and U!! territories,of +hich #,&;> +ere company-o+ned and #3,>;> +ere o+ned by franchisees! .f BurgerKings restaurant total, >,2%; or 73I +ere located in the United tates!

*ppro/imately $3I of Burger King restaurants +ere franchised, a higher percentage than other

competitors in the fast-food hamburger category!

Franchisees in the United tates and Canada paid an average of &!$I of sales to the company in23#3! 'n addition, these franchisees contributed :I of gross sales per month to the advertising

fund!

Management touted its business strategy as gro+ing the brand, running great restaurants,

investing +isely, and focusing on its people! pecifically, management planned to accelerate

gro+th bet+een 23#3 and 23#% so that international restaurants +ould comprise %3I of the total

number!

Management +as also +or)ing to update the restaurants by implementing its ne+ 23L23 design

and complementary hopper Bar design introduced in 233;! By 23#3, more than 233 Burger

King restaurants had adopted the ne+ 23L23 design that evo)ed the industrial loo) of corrugatedmetal, bric), +ood, and concrete! "he ne+ design +as to be introduced in $% company-o+ned

restaurants during fiscal 23##!

Management continued to loo) for +ays to reduce costs and boost efficiency! By (une &3, 23#3,

point-of-sale cash register systems had been installed in all company-o+ned, and %>I of

franchise-o+ned, restaurants! 't had also installed a fle/ible batch broiler to ma/imi4e coo)ing

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fle/ibility and facilitate a broader menu selection +hile reducing energy costs! By (une &3, 23#3,

the fle/ible broiler +as in ;$I of company-o+ned restaurants and 7;I of franchise restaurants!

Corporate goernance ( their contributionin the Business:

Bernardo Hees

Chief )*ecutie fficer and +irector

Mr! Aees has served on the board of orld+ide and Aoldings since ?ovember 23#3 and is theirChief /ecutive .fficer! Mr! Aees previously served as Chief /ecutive .fficer of * from(anuary 233% until eptember 23#3 and continues to serve as a member of its board of directors!Mr! Aees has e/perience as chief e/ecutive officer of BKC and for a large railroad and logisticscompany! Ae has )no+ledge of strategy and business development, finance, mar)eting and

consumer insight, ris) assessment, leadership development and succession planning!

+anie! S, Sch"art-

)%P. Chief $inancia! fficer

Mr! ch+art4 +as appointed as /ecutive Gice 0resident and Chief Financial .fficer ofAoldings in December 23#3, effective (anuary #, 23##! Mr! ch+art4 5oined Aoldings in .ctober23#3 as /ecutive Gice 0resident, Deputy Chief Financial .fficer! ince (anuary 233;, Mr!ch+art4 has been a partner +ith &1 Capital, +here he +as responsible for managing &1

Capitals private equity business! Ae 5oined &1 Capital in (anuary 233% as an analyst and +or)ed+ith the firms public and private equity investments until ?ovember 23#3! From March 233&until (anuary 233%, Mr! ch+art4 +or)ed for *ltair Capital Management, a hedge fund located intamford, Connecticut, and served as an analyst in the mergers and acquisitions group at Credituisse First Boston from (une 233# to March 233&! Mr! ch+art4 is a director of &1 Capital!

/onathan $it-patrick

)%P. Chief Brand and perations fficer

Mr! Fit4patric) assumed the ne+ly created role of /ecutive Gice 0resident, Chief Brand and.perations .fficer of Aoldings in February 23##! Mr! Fit4patric) +as appointed as /ecutive

Gice 0resident, 1lobal .perations of Aoldings in .ctober 23#3! Mr! Fit4patric) has +or)ed forBKC for #2 years! From *ugust 233$ to ?ovember 23#3, Mr! Fit4patric) served as enior Gice0resident of .perations, urope, Middle ast and *frica of Aoldings! During his tenure at BKC,Mr! Fit4patric) has held several positions, including enior Gice 0resident, Development andFranchising, and Gice 0resident of the information technology team!

$!aia $augeres

)%P. #!oba! Chief 0arketing fficer

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Ms! Faugeres +as appointed as /ecutive Gice 0resident, 1lobal Chief Mar)eting .fficer ofAoldings in eptember 23##! From (anuary #, 233; until (une 23##, Ms! Faugeres +as a partnerat "rueh Consultoria em ?egocios tda, a mar)eting consulting firm in o 0aulo, Bra4il +hichprovided consulting services to Aoldings from (anuary 23## until (une 23##! From May 2337until December 233>, Ms! Faugeres served as senior partner at ?'D'*, a mar)eting consultingfirm in ao 0aulo! From (anuary 233: until February 2337, Ms! Faugeres served as vicepresident of mar)et intelligence at 'nBev, a bre+ing company created in 233: from the merger ofthe Belgian company 'nterbre+ and the Bra4ilian company *mBev!

Steen 0, Wiborg

)%P and President of 1orth 2&erica

Mr! iborg has served as /ecutive Gice 0resident and 0resident of ?orth *merica of Aoldingssince .ctober 23#3! Before 5oining BKC, Mr! iborg +as 0resident and Chief /ecutive .fficerof Aeartland Food Corporation, one of the Burger King systems largest franchise operators! Ae

held the position of Chief .perating .fficer from 233& to 2337 and +as then named 0residentand Chief /ecutive .fficer in December 2337! 0rior to 5oining Aeartland, Mr! iborg +as ano+nerLoperator of %7 Aardees restaurants!

/os3 ), Ci!

)%P and President of )urope. 0idd!e )ast and 2frica

Mr! Cil has served as /ecutive Gice 0resident and 0resident of urope, Middle ast and *fricaof Aoldings since ?ovember 23#3! 0rior to this role, Mr! Cil +as Gice 0resident and =egional1eneral Manager for al-Mart tores, 'nc! in Florida from February 23#3 to ?ovember 23#3!From eptember 233; to (anuary 23#3, Mr! Cil served as Gice 0resident of Company .perations

of Aoldings and from eptember 233% to eptember 233;, he served as Division Gice 0resident,Mediterranean and ? urope Divisions, M* of Aoldings! Mr! Cil has been +ith BKC since2333!

/os3 +, To&as

President of 4atin 2&erica ( Caribbean. )%P and Chief Peop!e fficer

Mr! "omas +as appointed 0resident of atin *merica J Caribbean and G0 and Chief 0eople.fficer of Aoldings in February 23## and served as /ecutive Gice 0resident and Chief 0eople.fficer since ?ovember 23#3! Mr! "omas +as previously vice president of human resources ofAoldings from *pril 2337 until ?ovember 23#3! ince 5oining BKC in ?ovember 233:, Mr!"omas has held multiple roles +ith the company! 'mmediately prior to 5oining BKC, he held

human resources positions +ith =yder ystem 'nc! 0reviously, Mr! "omas held human resourcespositions +ith 0ubli/ uper Mar)ets!

/ac5ue!ine $riesner

%P. Contro!!er and Chief 2ccounting fficer

Ms! Friesner +as appointed Gice 0resident, Controller and Chief *ccounting .fficer of Aoldingsin March 23##! 0rior to her appointment, Ms! Friesner served as enior Director, 1lobal

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Burger King could improve their sales by producing more advertisements on their products! "hey could

also open ne+ branches in ma5or city all around the +orlds and some rural areas! ome of the state in

Malaysia doesnt have Burger King in their city so, Burger King could try and open ne+ outlet +hich +ill

greatly improved their sales!

?e+ product development, particularly around brea)fast!

Consideration of the products for 'ndia mar)et! Geteran products!

Keep building its brand through ad campaign, such as the hopper Girgin

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Substitutes: "he substitute in this sector is also lo+! Because BK or McDonalds or ub+ay all

are ma)ing hamburgers of same type and competes in the same mar)et, so if any company tries

to increase the price customers +ill s+itch to the other company! o in this case the monopoly

business po+er is severely limited!

Buyer6s po"er: Brand choice is typically a no compensatory process, +hich means that

consumers focus on +hether a brand has one or more attributes that are important to them, rather

than a compensatory process +here all attributes are traded off against each other! Aere

customers are the buyers and the business depends on their evaluation of taste and price!

Supp!iers: *s a global brand Burger King Corporation is committed to maintaining a diverse

portfolio of suppliers!=estaurant ervices, 'nc! 8='9, is the e/clusive purchasing agent for the

vast ma5ority of products and services used by Burger KingP restaurant o+ners in the United

tates and is manager of the system

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*s the franchisor for the brand, Burger King Aoldings has several obligations andresponsibilitiesN the company designs and deploys corporate training systems +hile overseeingbrand standards such as building design and appearance!"he company also develops ne+products and deploys them after presenting them to its franchises for approval per a 23#3

agreement bet+een itself and the franchise o+nership groups!Burger King has limited approvalover franchise operations such as minimum hours of operation and promotional pricing!*dditionally Burger King designates approved vendors and distributors +hile ensuring safetystandards at the productions facilities of its vendors!

Core Co&petencies of the fir&:

Burger King

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*mong Fast Food restaurant chains, Burger King is second only to McDonalds and holdsa #%I share of the United tates mar)et! "he companys profitability has also increasedin recent years! 'n the period 2337-3;, its operating profit has increased from 6#>3million in F@2337 to 6&%: million in F@233;!

#!oba!!y Recogni-ed Brand

Burger King is able to boast a brand that is +idely recogni4ed than)s to its flagshipslogan Shave it your +ayT, the +hopper sand+ich and most recently enhanced by itsmascot )no+n as Sthe KingT! "he company +as recently ran)ed >th in brand a+areness!

Superior #ro"th P!an

*ppro/imately $3I of Burger King =estaurants are o+ned and operated by independentfranchisees, many of them family-o+ned units that have been in business for decades!"he company is able to gro+ +hile minimi4ing large capital e/penditure, mean+hile itcollects fees and royalties from each franchise added!

*llocation of local sources!

>% orld+ide locations

hooper sand+ich

trong mar)et position! BKC is the +orld

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Weaknesses:

%u!nerabi!ity to 4abor and Regu!atory Inf!uences

*lthough the company operates in many international venues, the ma5ority of restaurants are inthe United tates! "his concentration of operations in one geographic area increases company

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Burger King is see)ing to strengthen its standing in the *frican *merican Community throughits ne+ Sne/t best moveT promotion +hich includes a +ell publici4ed tour of :# urbancommunities across the country!

Brand 4icensing Pro;ect

Burger King has entered into a licensing arrangement 8bro)ered by Broad treet icensing1roup9 to further increase the companys brand a+areness and broaden the presence of theiconic King character, various licensees of Burger King Corp! +ill soon launch a line ofbranded "-shirts, and also an e/clusive collection of sleep+are and lounge +are!

?e+ product development, particularly around brea)fast!

Keep building its brand through ad campaign, such as the hopper Girgin

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Burger King faces threat from other ma5or burger fast food restaurant such as McDonald

Iu23#$s and endyIu23#$s!

Burger King faces threat from other ma5or burger fast food restaurant such as

McDonalds and endys! McDonalds produced the highest percentage sales among thethree +hich is a threat for Burger King! "he cost to produce the burger during inflationand lac) of sales puts Burger King in a tough spot and other burger fast food restaurantcould ta)e advantage to advertise ne+ product and hence raising their sales!

Identification of strategic issue

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Management planned to accelerate gro+th bet+een 23#3 and 23#% so that international

restaurants +ould comprise %3I of the total number!

"he focus in international e/pansion +as to be in countries +ith gro+th potential +here

Burger King +as already established, countries +ith potential +here the firm had a small

presence, and attractive ne+ mar)ets in the Middle ast, astern urope, and *sia!

Management +as also +or)ing to update the restaurants by implementing its ne+ 23L23

design and complementary hopper Bar design introduced in 233;!

By 23#3, more than 233 Burger King =estaurants had adopted the ne+ 23L23 design that

evo)ed the industrial loo) of corrugated metal, bric), +ood, and concrete! "he ne+

design +as to be introduced in $% company-o+ned restaurants during fiscal 23##!

Management +as using a SbarbellT menu strategy to introduce ne+ products at both the

premium and lo+-priced ends of the product continuum!

BK al+ays +anted a targeted mar)eting approach! o they determined that #;- to &%-year-olds

+ere the right demographic for them! "he company has ability to compete internationally in an

intensely competitive industryN they had the ability to successfully implement an international

gro+th and development strategy and ris)s related to our international operations!

Strategies to coop "ith current high cost business situation by Burger King:

"he founders vision of providing Squality food, served quic)ly, at a reasonable priceT became a

pioneering business model that helped shape the fast-food industry! *s Burger King rose in

popularity, restaurants began to open across the United tates! 'n #$7&, Burger King opened its

first international restaurant in 0uerto =ico! 'n #$>%, drive-thru service began, and by #$>>,

Burger King had opened 2,333 restaurants on three continents! "oday the Burger King system

operates more than ##,&33 restaurants in %3 states and 7$ countries! *ppro/imately $3 percent of

Burger King =estaurants are o+ned and operated by independent franchisees! Burger King

Corporation 8BKC9 operates and grants franchises to operate quic)-service hamburger

restaurants using certain trademar)s, service mar)s and trade names, and a recogni4ed design,

equipment system, color scheme and styles of buildings and facilities, signs, certain standards,specifications and procedures of operation, quality and consistency standards for products and

services offered, and procedures for inventory control and management! BKC does not generally

offer any direct or indirect financing to Franchisees! "o reduce the higher costing in business

companies need to ta)e care of several cost related issues li)e,

The operations strategy:BK encourages patrons to customi4e burgers and other menu items,

uses a ma)e-to-order approach! BK can customi4e products because it builds burgers one at a

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time rather than batch-process them! 't saves time as +ell as money! BK has introduced a number

of innovations that have helped ma)e the company more efficient! BK, for e/ample, +as the first

to offer drive-through service 8+hich no+ accounts for %; percent of its sales9! BK +as able to

cut bac) one employee per day at every one of its more than eleven thousand restaurants!Material costs also +ent do+n because customers usually fill cups +ith more ice, +hich is

cheaper than a beverage! Moreover, there +ere savings on supply costs because most customers

dont bother +ith lids, and many dont use stra+s! .n top of everything else, most customers

li)ed the system 8for one thing, it allo+ed them to customi4e their o+n drin)s by mi/ing

beverages9, and as a result, customer satisfaction +ent up, as +ell! .verall, the ne+ process +as

a ma5or success and quic)ly became the industry standard!

$aci!ities: hen starting or e/panding a service business, o+ners and managers invest a lot of

time in selecting a location, determining its si4e and layout, and forecasting demand! * poor

location or a badly designed facility can cost customers, and inaccurate estimates of demand forproducts can result in poor service, e/cessive costs, or both! BK planners perform a detailedanalysis of demographics and traffic patterns, yet the most important factor is usually traffic

countthe number of cars or people that pass by a specific location in the course of a day! 'n the

United tates, +here +e travel almost every+here by car, BK loo)s for busy intersections,

interstate interchanges +ith easy off and on ramps, or such Sprimary destinationsT as shopping

malls, tourist attractions, do+nto+n business areas, or movie theaters! 'n urope, +here public

transportation is much more common, planners focus on sub+ay, train, bus, and trolley stops!

Si-e and 4ayout: For its first three decades, almost all BK restaurants +ere pretty much the

same! "hey all sat on one acre of land 8located Sthrough the light and to the rightT9, had aboutfour thousand square feet of space, and held seating for seventy customers! *ll )itchens +ere

roughly the same si4e! *s long as land +as cheap and sites +ere readily available, this system

+or)ed +ell enough! By the early #$$3s, ho+ever, most of the prime sites had been ta)en, if not

by BK itself, then by one of its fast-food competitors or other businesses needing a choice spot,

including gas stations and video stores! ith everyone bidding on the same sites, the cost of a

prime acre of land had increased from 6#33,333 to over 6# million in a fe+ short years! "o

continue gro+ing, BK needed to change the +ay it found and developed its locations! 0lanners

decided that they had to find +ays to reduce the si4e of a typical BK restaurant! For one thing,

they could reduce the number of seats, because the business at a typical outlet had shifted over

time from $3 percent inside dining and #3 percent drive-through to a %3-%3 split! BK customerstended to be in a hurry, and more customers preferred the convenience of drive-through Sdining!T

Capacity P!anning: stimating capacity needs for a service business isnt the same thing as

estimating those of a manufacturer! * manufacturer can predict overall demand, produce the

product, store it in inventory, and ship it to a customer +hen its ordered! ervice firms have to

build sufficient capacity to satisfy customers needs on an Sas-demandedT basis! i)e

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manufacturers, service providers must consider many variables +hen estimating demand and

capacity!Burger King developed a ne+, variable speed broiler that could handle multiple items

+ith different coo)ing rates and times! "hese ne+ unit began testing in #$$$ and eventually

evolved into the t+o models the company deployed system-+ide in 233;233$! *ccompanyingthese ne+ broilers +as ne+ food-holding equipment and a computer-based product monitoring

system for its coo)ed products! "he ne+ system allo+s for more concise trac)ing of product

quality, +hile giving its users a method to streamline costs by more precisely pro5ecting sales

and product usage!

Reco&&endation:

'nitiative of ?e+ Brea)fast Food

Discover ne+ Aealthier Menu 'tems

?ational Urban Community Mar)eting 'nitiative

/panding Business in developing mar)et such as 'ndia, =ussia, Bra4il

?e+ product development, particularly around brea)fast!

Follo+ the competitors advertising policy to capture specific target group!

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