Discussion of the Key Trends, Industrial Strategy, and Impact on Ireland Burger King
Introduction
Early twentieth-century strategic business developments can hardly compare, with the myriad impacts and influences of the activities of major corporations today. The international economy is at once complex, fiercely competitive, and sits on a landscape filled with the unpredictability of any number of financial storms. Burger King Worldwide (BKW) as the globe's second-biggest fast-food hamburger chain, according to recent documentation, (Burger King Worldwide 2013) has grown its presence in nearly ninety countries. With its offices headquartered in Miami, Florida, BKW has led the industry’s sales in its niche of fast-food hamburgers thus accounting for 12 percent of market share in the United States. Burger King in Ireland charts the exploratory path of management, and key trends in the industry, while also noting key players, stakeholders, and a hopefully cogent analysis of various factors – internal and external – to better understand its position. Poised to continue doing profitable operations, this examination also considers if Burger King Ireland will be able to withstand its existence over the next decade. The inquiry in the back of concerned, key players’ minds is whether the Company is currently in pursuit of a correct strategy to meet new demands, such as unfolding threats and opportunities that lie ahead.
Discussion
A brief background of Burger King Ireland is in order, since looking at the long-term reach of past conditions and records will aid in informing the present moment. Mulqueen (1999) reported that OKR, the financial holding group for Burger King Ireland, planned to hire initially 800 people in almost twenty restaurants as an expansion strategy back then, with a goal of fifty restaurants by 2005. Patrick O'Leary, the organisation’s chairman, indicated that the fast-food industry was reflecting an increasing demand. Less than ten years ago in 2008 Guider (2008) announced the slide of pre-tax profits reflecting €4.82 million, instead of the previous €5.53m of the year prior. Obviously, trends were changing, and the shift held concerns of all stakeholders, investors, shareholders, and the Company’s directors. Momentarily, moving away from the concept of changing winds in today's trends in fast-food hamburger restaurants in Ireland, a horse-meat contamination scandal-marred Burger King Ireland's reputation.
Aside from the common knowledge that scores of people, especially in Europe, value healthier foods the incident had interrupted the business model’s forward thrust to profits. King and Buckley (2013) in The Guardian documented that customers were disgusted by the discovery of meat labelling gone awry in Ireland while the Company apologised for the tiny trace bits of horsemeat found in several samples from restaurants. The repugnance from the public was unmasked. People expressed that they did not wish to be unwittingly ingesting horsemeat. Ireland's parent Company, BKW assured a strategy of a turnaround in an adequate inspection regimes in pursuit of curing the situation. The food group responsible at the time, Silvercrest was sold to Kepak as a result. The Irish agricultural minister, Simon Coveney, promised a commitment to prioritising Ireland's important role of beef in the globally branded Burger King (Burger King Contract for horsemeat 2013). Additionally, a fairly current SWOT analysis of the international conglomerate indicated one strategy for growth to boost industry-wide sales of its fast food products.
A 2013 SWOT analysis tells a partial story. In it, one business model strategy was to pay careful attention to industry trends. For example, industry sources had proclaimed sales growth to be related to proliferating activities of social caterers, in commercially managed service accounts such as hospitals, nursing homes, and workplace industrial plants (Burger King Worldwide SWOT 2013). Further initiatives for key players was to engage more intensely developed partnerships, regarding joint ventures to promote the Burger King brands in places much farther away than Ireland, like Colombia and other parts of the Caribbean region. Having understood a key incident regarding the unfortunate instance of the horsemeat debauchery, as a key and relevant external factor which impacted the Irish Burger King industry, more specified data about the Irish franchise is available. Actual figures in Ireland’s Burger King industrywide situation demonstrate that the country’s commitment to fast food restaurants comprises a rather large food-service channel of some 37 percent of the entire market share (Fay, Lawlor, & Wilson 2015). Thus, after bouncing back from the global recession several years earlier, Ireland proved to be resilient. Regarding Ireland, the fast food industry leads public preferences over pubs and cafes, as well as coffee shops. Nevertheless, consumer tastes can be fickle, and the horsemeat scandal's fallout continues to haunt – and inform – company strategy to correct that past threat to its reputation. Certainly, this has sparked exploratory forms of new marketing as a strategy.
Five Forces Model
Porters five force model entails the external forces that affect the performance and success of an organization. These external forces present a major influence on the competitive environment. The interaction of the five forces creates competition for organizations as well as businesses. Porter's five forces that might affect the competitive environment for Burger King include; threats of a new entry in the Ireland market, the power of suppliers, threats of substitutes to Burger King's products and the power of buyers. All these factors affect the competitive environment of Burger King.
The supply power for Burger King is determined by the availability of ingredients required to make some of the brands products such as buns, meat and soft drinks. These ingredients can be supplied by various suppliers. The burger industry has witnessed low buying power with low switching cost and high availability of substitutes. Ireland has a large number of restaurants serving fast food similar to Burger King. The application of differentiation by Burger King offers it a competitive edge over its competitors. It is known to produce some of the tastiest burgers through the use of the flame grill.
Interactive strategy
Quite noteworthy is the consolidation of the latest use of social media technology as a strategy, in a series of cute video commercials on YouTube. This pathway of management reflects the new, ‘cool’ attitude of the idea or concept of the larger corporations to try and make its image friendlier, or even funny by using humour to win over the hearts and confidence of consumers. For example, one 20-second commercial segment sponsored and posted by Burger King Ireland is hilarious. It begins by a written ‘warning' emphatically stating that "Nobody Likes to Seem Cheap," and, "So, To Protect These People's Identities, We've Changed Their Voices" (Burger King: Euro King 2016). Straightaway appearing on the screen is a gruff-looking he-man type of guy explaining how he loves the menu, followed by an adorably delicate little girl who has the ridiculously deep voice of a robust man. The utilisation of social media to get the corporate message out, regarding business strategy cannot be over-emphasized. Therefore, this strategy plays a crucial role in responding to key trends among both external stakeholders (investors), internal players such as directors, and smartly provides an arena for feedback from Ireland’s business unit within the larger conglomerate of BKW.
However, commercial advertising, strategy, and marketing are not all fun and games. Burger King Ireland, like the rest of the global firm, takes its strategy very seriously. Besides the key players such as Irish governmental ministers and officials, top managers at the Company are also under pressure to perform well. The key consideration contemplates whether or not Burger King Ireland will survive regarding thriving, in the decade to come. Pondering over this inquiry poses a reflection that pertains to whether the whole industry will, or its key players, will continue to exist as strong in the next decade. Of course, these types of predictions are hard to bear and even more difficult to visualise, but the secret to the future success of a major corporation whose success largely rests upon consumer tastes – literally – is how it manages to approach responses to threats, and exploits any opportunities which may lie ahead.
PEST analysis
Political
No management analysis would be complete without mention of the rubric of its current governmental politic. According to Fay, Lawlor, and Wilson (2015) Ireland’s governmental powers reflects a recently elected body in February 2011 of the Fine Gael and Labour sectors, which shall remain intact until this very year of 2016. The point of this mention assesses an understanding that new initiatives have been placed in the public eye of Ireland, to improve their national health. In other words, the focus is on an active awareness to reduce heart disease, obesity, and diabetes particularly since the latter has risen to epidemic proportions. Thus, concrete changes in Ireland’s legislative decisions have instated codes in the face of new rules, ushering in government’s protocol for putting labels of the nutritional content on food packaging, which includes the fast-food outlets (Fay, Lawlor, & Wilson 2015). This could be a problem unless Burger King Ireland can manage to lower dangerous levels of sodium and fats in their food items. Also, given the factor that Burger King Ireland effectively is a franchise, changing the food content or recipes, may not be the easiest feat to accomplish. Common knowledge dictates that large corporations are harder to change, or move into ‘revision’ mode.
Economic
So far, however, the Burger King Ireland locations are in the east end of the country along the coastal area, according to the same aforementioned source. These Burger King Ireland restaurants’ locations tend to weaken the Burger King brand simply because they have not expanded. Nature, obviously, of the fast food industry, is to be available in centrally scattered locations to promote more sales, making the branding increase in higher visibility. Regarding age, the ongoing strategy seems to be correct in defining its target market audience along that of males between 18-34 years old (Fay, Lawlor, & Wilson 2015). But the important thing to remember is that huge, worldwide businesses have a mixed bag of sorts. On one hand, they have the huge financial resources to conduct operations. But on the other hand, they must endure weaknesses just as all other enterprises must. And of course, Burger King Ireland’s main competitor is McDonalds.
Technological
Appendix
This section evaluates Burger King Ireland on the application and lack thereof some business strategies in ensuring their success as well as continuity.
Strategy clock
Differentiation
Burger King has employed this strategy to improve its competitive edge in the fast food industry. The brand has different and unique fast food products for different customer segments such as smoothies, special coffee drinks and salads. Burger King offers different products in different countries based on the tastes of each culture; this is one of the primary examples of differentiation in the business. This strategy has been demonstrated through unique taste in the brand’s fast food products as well as their unique customer service. Although there is a general model for Burger King around the world, the model can be tweaked to meet the needs of the public in a specific location, like Irelnad.
Low price
Burger King brand has effectively employed this strategy by slashing their prices. It has introduced a series of the cheap deal through the sale of a five-meal for only $4. This price is fair as compared to the competition, thus, aid the brand in raising its competitive edge By providing a meal for a family for a very low price and offering good value for the pricing, the company is able to better establish a presence. There are a number of competitors—including international competitors like McDonalds—who also offer low prices, so the company must be able to offer the best value as well as a low price.
Hybrid
Burger King has collaborated on a hybrid with various restaurants as a competitive strategy against its competitors such as Mc Donald’s. It combined key ingredients from various restaurants such as Wayback Burgers, Giraffas and Denny’s to create one burger. In addition, the company has been able to hybridise its menu items based on the location: for instance, the wasabi burger that is offered in Japan is not offered in Ireland because of the unique tastes of the Japanese and the Irish people, respectively.
Non-competitive strategy
The non-competitive strategy has not been employed at Burger King, but it has been employed by other fast food restaurants such as the introduction of new school menu like chicken wraps. Burger King prefers to keep a competitive strategy to ensure that it can retain competitive advantage.
Game theory
In most cases, Burger King Restaurants are located close to it main competitor: McDonalds. Burger King brand employs the use of game theory to research best locations which present their consumers with convenience. It exploits it knowledge on market location information similar to those employed by their competitors. They have exploited this theory always to research and locate their stores in the most appropriate areas for their consumers so as to increase their competitive edge. The company offers different deals regularly like two for one offers so that it can ensure that it can keep its customers coming back.
References
‘Burger King Contract for horsemeat-scandal factory’, 2013, Belfast News Letter, 22 May, Regional Business News Plus, EBSCOhost, viewed 25 February 2016.
Burger King: Euro King, 2016 (video file), Available from: <https://www.youtube.com/watch?v=zMaXqT28QeE>. [25 February 2016].
‘Burger King Worldwide, Inc. SWOT Analysis’ 2013, Burger King Corporation SWOT Analysis, pp. 1-8, Business Source Complete, EBSCOhost, viewed 25 February 2016.
Fay, M, Lawlor, B, & Wilson D 2015, ‘Burger King Marketing Management’, Available from: <http://www.slideshare.net/MarkFay2/brand-audit-finished>. [25 February 2016].
Guider, I 2008, ‘Profits drop 13% at Burger King Franchise operator’, Irish Examiner 26 March. Available from <http://www.irishexaminer.com/ireland/profits-drop-13-at-burger-king-franchise-operator-58745.html>. [25 February 2016].
King, M & Buckley, J 2013, ‘Horsemeat scandal leaves Burger King facing a whopping backlash’, The Guardian 1 February. Available from: <http://www.theguardian.com/money/2013/feb/01/horsemeat-scandal-burger-king>. [25 February 2016].
Mulqueen, E 1999, ‘Burger King to invest £7m in Irish expansion’, The Irish Times 17 February. Available from: <http://www.irishtimes.com/business/burger-king-to-invest-7m-in-irish-expansion-1.153888>. [25 February 2016].
