¶ … professional journals resources. Burger King beefs up global operations What is Burger King's core competency? How does it relate to its chosen strategy? Burger King is a fast food chain that offers two unique components to customers regarding its 'burger experience': the ability of users to customize their burgers and also the fact that its burgers are flame-broiled (Brock 2012)
Should this relationship change? If so, why and how? Given the super-saturation of the American market in terms of fast food, global expansion seems to be an excellent strategy. Americans are also switching their fast food buying habits from burgers to fresher and healthier ingredients, as sold by chains like Panera Bread, Starbucks, and In-And-Out (Brown 2012)
The entry must be strategically planned so that the most receptive venues are targeted first, after which expansion can spiral out. Recently, "Burger King's international expansion shifted into overdrive Friday with the announcement of plans to open 1,000 restaurants in China over the next five to seven years," eyeing China's large population and growing middle-class, youthful market (Jennings 2012)
It has branded itself as the 'better-tasting' burger that no one knows about, much in the same way that Pepsi has 'challenged' Coke drinkers to take the Pepsi challenge blindfolded. Burger King's Whopper Virgins campaign encouraged hardcore McDonald's users to try its sandwich by showing how people who had never eaten fast food liked Burger King's offerings better than Big Macs (Russell 2012)
"Burger King is planning to have nearly all restaurants franchised by the end of 2012, stress international unit growth and continue ongoing brand efforts including remodels, menu makeovers and marketing changes. All steps McDonald's took when it began its upswing in 2004" (Walker 2012)
What all this means for those trying to ascertain practical recommendations via financial analysis is, of course, a decrease in the reliability and the validity of projections binge made. The increasing complexity and unpredictability (at last according to current models, frameworks, and theories) of financial analyses based on company-produced reports, statements, and on industry and market movements can make it difficult if not impossible to determine what effective purchases and solid investments might be without a great deal of resource intensity (Barber et al
What all this means for those trying to ascertain practical recommendations via financial analysis is, of course, a decrease in the reliability and the validity of projections binge made. The increasing complexity and unpredictability (at last according to current models, frameworks, and theories) of financial analyses based on company-produced reports, statements, and on industry and market movements can make it difficult if not impossible to determine what effective purchases and solid investments might be without a great deal of resource intensity (Barber et al
Any such model must also take into account the effects that reporting standardization has on firm performance, and it is in this factor that a real problem of future projection and valuation can occur. Direct evidence from surveys and interviews with those in a position to have direct knowledge and influence on such decisions shows that executive and managers regularly make decisions that they know will lead to long-term losses (or diminished gains) for their firms in order to even out earnings reports and present an image of stable and sustained revenue to investors, in order to protect the value of current shareholders' ownership stakes in the company (Biddle et al
The following pages contain a brief literature review covering similar attempts and specific research areas of importance to the development of the research question at hand, as well as a methodological outline for the proposed research. Literature Review The idea that financial management and its implications for company and industry performance are complex and often nebulous at best is not new, and the vagaries and inconsistencies of certain concepts as they are understood and applied is a standard part of academic study in the area (Brigham & Erhardt, 2010)
The lack of consistency and correlation between these elements depending on the companies, industries, and markets selected for research -- and even within individual companies, industries, and markets -- is a clear and definite indicator that financial and investment analysis is a highly inexact science in need of more direct and comprehensive assessment if there is hope of gaining more stability and certainty through such assessments (Norden & Weber, 2009). The complications and uncertainties evidenced in such things as credit default swap trading and its relation to bond and stock markets are exacerbated by current research into basic macroeconomic assumptions that demonstrate current models of price, competition, and production might be fundamentally flawed, with operational capabilities and profits regularly directly contravening expectations based on the models (Carlin, 2009)
, 2009). Though smaller companies tend to be more volatile and have weaker controls over their operations and their financial reporting, larger firms are more capable of manipulating both operations and financial reporting in attempts to increase stock value at the expense of real company value (Doyle et al
, 2009). Though smaller companies tend to be more volatile and have weaker controls over their operations and their financial reporting, larger firms are more capable of manipulating both operations and financial reporting in attempts to increase stock value at the expense of real company value (Doyle et al
The three fast food companies listed are incredibly recognizable due to aggressive advertising campaigns and near-ubiquity throughout much of the developed world, and this will influence the model constructed for in-depth and accurate analyses and comparisons of these competitors. Not only is the development and construction of this model necessary to achieve greater investor confidence, efficiency, and productivity, but could also help lead to more accurate and standardized financial reporting, which could actually improve company strength and performance (Graham et al
Part of the problem experienced in the current era when it comes to the reasonable, accurate, and relevant analysis of financial statements and positions is the growing complexity of the financial tools and transactions that companies and investors utilize. This is made quite clear in an examination of the relationship between credit default swaps, bond markets, and stock prices, that finds a very complex and not always directly correlative relationship between these elements, all of which can be seen in various ways as market expectations regarding a company's strength and performance (Norden & Weber, 2009)
Burger King went public in 2003 after years of private ownership and currently operates 12,000 stores in 74 countries (Daniels, Radenbaugh & Sullivan, 2009)
, 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)
This has been very difficult to achieve. Other companies have managed to introduce new items and to fit them into their overall marketing strategy -- Burger King has managed to introduce six new products since 1988 (Branch and Gunn 122)
Everyone wants to get chance to win the millions by eating at McDonald's, and the more they eat, the more they will have a chance to win. McDonald's promotion is popular because Monopoly itself is popular (Compbell 10
Health-conscious Americans have been trimming fat from their diets in recent years. McDonald's has recently been following this trend (Cook 9)
Burger King benefited not only from trouble at McDonald's but also from giveaways of figures from Walt Disney Co. films, though McDonald's has since wooed Disney back to its stores (Gibson, "Worried McDonald's Plans Dramatic Shfits and Big Price Cuts" A6)