Burger King Operation Strategy Analysis
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Published: Wed, 03 Jan 2018
Today’s operation managers must have a global view of operation strategy. As the barriers such as cultural, religious, political that constrain the productivity across the countries disappear, simultaneous advances are being made in technology, reliable shipping, and cheap communication. The unsurprising result is the growth of world trade, global capital markets, and the international movement of people which drive the globalization.
It is not surprising that fast food sales are doing so well in this generation. Fast food is a fast and inexpensive food choice for everyone no matter youngster or elder. Although there are many criticisms about the fast food, they remain favorites from the consumers around the world. They have more than 12,000 restaurants in all 50 states and in 73 countries and U.S. territories worldwide. Burger King known as the second largest fast-food chain around the world which is a reputation of which they should be proud.
Understand the Environment (SWOT)
There are many fast-food restaurants around the world such as McDonalds, KFC, and Wendy’s. Burger King knows that the potential competitor which is the McDonalds, serve the similar foods as hamburger. McDonalds are doing the multidomestic strategy that can maximize the response to the local market. Besides that, McDonalds have a lot of services and promotions such as the McValue meal, McDelivery, Drive Thru and others. McDonalds are also welcomed by everyone and recognize as the largest fast-foods burger chain.
The strengths of the Burger King may include wide selection of menu items and fast and efficiency services. Burger King offers different varieties of menu items and choices for the consumers. It also has a different process in order taking and preparing the orders of the customers. One is where the customers order and one is where the customers collect their foods. This process of order taking and serving is considered very fast and efficient. In contrast, the weaknesses of Burger King are not able to communicate with the customers. It has lesser promotions or advertisement in compare with other fast-food chain.
On the other hand, there are the opportunities for Burger King to expand their business internationally. In year 2007, Burger King opened 441 new restaurants around the globe. It also entered into other countries such as Indonesia, Japan, and Egypt. This is the benefit for the company to seek more profit. However, there are also some threats for the company such as potential competitors. Burger king is considered as the second larger fast-food chain next to McDonalds. Price wars, product innovation and growth strategies have increased the competition. Consumer health expectation also another threats for the fast food chain. In this generation, people more concern about the health. Consumers are demanding quality, healthier menu items.
An effective operations management effort must have a mission so it knows where it is. The mission states the rationale for the organization’s existence and provides the boundaries and focus for the organization and the concept around which the firm can rally.
Burger King Corporation’s mission is:
“The Burger King Corporation moves proudly into the future with over 50 years of experience tucked safely under our belt. As a brand, our company has never been stronger. We’ve got millions of customers, who we love to bits. And our Executive Team, along with each of our individual employees, ensures our customers always receive exceptional, consistent service (as well as burgers, fries and drinks.)”
The mission statement states that the operations need to fulfill the customers’ needs, exceed the customers’ satisfaction and expectations. Besides that, we also found that the values of Burger King (Malaysia) are fairness, diversity, respect, caring, clear accountabilities, teamwork, high standards, commitment to excellence, celebrating their successes. These provide an environment and ethics which can encourage the employees to work with fully commitment.
Competitive Advantage and Strategy
With the mission established, strategy and its implementation can begin. Strategy is an organization’s action plan to achieve the mission. Burger King has employed the differentiation strategies to enhance its profit. The ‘Have It Your Way’ slogan has encouraged the company to differentiate their products and services. Some of its innovative products are BK Chicken Fries, BK Stacker, BK Value Meal and BK Breakfast. Thus, consumers are given more choices. Furthermore, the efficient services also make customers experiencing the unique dining ways. Besides that, Burger King also competing on response. The drive-through and delivery services promote the quick and flexible response to the customers. Franchising strategy also helps to offer different foods to customers.
We explored that Burger King Corporation employed the franchise strategy to expand their business and enhance the profitability. The advantage of this strategy is maximizing a competitive response for the local market. Burger King provides different menus and foods in different countries. For example, American need to eat more in a meal, so the Burger King has served the Double Whopper, Triple Whopper, BK Quad Stacker, which are larger and larger. In addition, Burger King also serves the foods according to the common favor of the citizens. Besides that, for the Burger King Malaysia, they serve the halal foods. Furthermore, vegetarians have been avoiding taking the fast-food; however, in response to the vegetarians, Burger King also has served the BK Veggie which is a vegetarian soy-based meatless sandwich that is served at Burger King Restaurants. Burger King was also the first to offer the drive through services which can make the customers much more convenient to take away their foods. It also helped the company can operate in more effective and efficiency manners.
All these strategies can have a quick response to the local demand and expectation in order to enhance the profitability. Moreover, this is also the key success factor for Burger King because of the ability to explore the new market and survive for longer time.
Some of the Strategic Operation Decisions
In the products and services design section, as mentioned earlier, Burger King has designed the products which meet the customers’ expectations and needs such as the BK Veggie, halal food and others. Burger King also has designed the efficient services such as the drive through.
After that, when going into the process, Burger King adopts the make-to-order approach to produce the goods and provide the services. Burger King can customize the products because it builds sandwich one at a time rather than batch-process them. For instance, meat patties will be holding in the steamer after being grilled until an order comes in. Then, the patty is taken out from the steamer and then is added the requested condiments. Finally, the completed sandwich chutes to a counter worker, who gives it to the customer.
In contrast, many of Burger King’s competitors, such as McDonald’s, apply the make-to-stock. They made a batch of sandwiches in one time with the same ingredients. If a customer wants a sandwich without lettuce, he or she needs to wait for another batch of sandwiches for extra several minutes; however, Burger King can make it in several seconds.
Besides that, as a service provider, one must unceasingly look for ways to improve operational efficiency. Burger King has introduced a series of innovations that have helped make the company more efficient and profitable throughout the half century history. For example, Burger King was the first who initiated the drive through service.
Location selection is the most important issue when starting or expanding a service business. A poor location can cost the owners and customers because of inaccurate estimation for demand and therefore influence the quality. The first consideration for selecting the location is the ability to attract the customers.
The favorite catchphrase for looking a spot for expanding the business which is used by the Burger King’s planners (United States) is “Through the light and to the right.” In picking a location, Burger King’s planners execute a detailed analysis of demographics and traffic patterns. The most important consideration is the number of cars or people pass by and the population at the specific area. In the United States, Burger King finds for busy intersections, interstate interchanges with easy off and on ramps. Besides that, crowded areas as shopping malls, tourist attractions, downtown business areas, or movie theaters were also the primary concentration for location selection. Public transportation which is very common in Europe makes the planners focus on the subway, train, and bus stops also.
Furthermore, for the size and layout option, it is also important for the operation which the size and layout must be designed to attract the customers and make them more convenient while buying, serving, dining, storing and others. In the first three decades, each Burger King’s restaurant had about four thousand square feet of space. Yet the planners decided to reduce the space to continue growing and to meet the customers’ expectations because the customers tended to be in hurry, and more customers preferred the convenience of drive-through instead of dining in. So, the restaurant trims the size of a restaurant from four thousand square feet to as little as one thousand. The reduction of size had enabled the company to enter the markets that were once cost prohibitive such as airports, center-city areas and even schools.
On the other hand, forecasting demand for capacity design is easier for Burger King. Burger King can estimate the sales for a new restaurant by combining its knowledge of customer-service patterns at existing restaurants with information collected about each new location, including the number of cars or people passing the proposed site and the effect of nearby competition.
Service organizations emphasize on scheduling workers because of the stability and availability to handle the fluctuating demands. Burger King’s managers not only schedule the workers for peak period such as the three main meal time which are breakfast, lunch and dinner, but also arrange enough workers for other period in between. If the managers staff too many people, labor cost per sales dollar will be too high. If there aren’t enough employees, customers have to wait in lines. This phenomenon will discourage the customers and make the owner loss the customers and sales. That will also influence the reputation of a company.
Scheduling is made easier by information provided by a point-of-sale device built into every Burger King cash register. The register keeps track of every food items sold by the hour, every hour of the day, every day of the week. Thus, to determining the staffing levels for a specific time, managers can set it based on the data provided. Each manager can adjust this forecast to account for other factors, such as current marketing promotions or a local sporting event that will increase customer traffic.
Moreover, to do a business, everyone will worry about the inventory control problems such as high holding cost or shortage of inventory that will alter the smoothness of operations. Burger King Corporation has used the technology system which is the point-of-sale registers to track everything sold during a given time and lets each store manager know how much of everything should be kept in inventory. It also makes it possible to count the number of burgers and buns, bags and racks of fries, and boxes of beverage mixes at the beginning or end of each shift. Due to there be fixed numbers of materials or supplies in each box, employees can count boxes and multiply easily. In a consequence, manager also can detect the theft quickly.
Ethics and Social Responsibility
Burger King Corporation defines corporate responsibility as a strong bottom line to consider the impact of everything they do. These are also the guideline for the company to follow to make sure their business can do well. There are four corporate responsibilities which are commitment to food, commitment to people, Care for the environment and corporate governance.
For the commitment to food, Burger King Corporation promises to customize and design more menu options for the customers to meet the individual diets and lifestyles. They will continue to explore the new ways to make their food innovative as well as nutritious. On the other hand, Burger King Corporation also promotes commitment to people. They will continue to distinguish themselves from the competitors by being an exceptional employer. They will accomplish this goal by creating a culture that is bold (innovative thinking), accountable (responsibility to shareholders and franchisees), empowered and fun (commitment).
Furthermore, there is also an important issue which is care for the environment. Burger King Corporation also continues to make changes that will be a positive on the environment. They are researching ways to deliver consistent policies and practices across all of their operations globally. They have begun holding Burger King Green Sessions for employees, members of supply chain and others. Furthermore, as importance, Burger King Corporation has committed to purchase beef from suppliers that source only beef that has been raised in environmentally responsible ways. As a result, none of our beef comes from recently deforested tropical rainforests. At last, Burger King Corporation will continuously reinforce their policies and procedures to ensure compliance with the law as well as openness and accountability.
As conclusion for the operation strategies of Burger King, we found that Burger King’s operations are focusing on the customers’ site. They always consider about the expectations and demands of all customers include the vegetarians, kids and others. They also provide the efficient services. Both of this can enhance the profit and reputation of the Burger King. In my opinion, this is the potential strengths and strategies of Burger King and that is also a big opportunities to expand their business due to the innovative thinking that will always offer the new products that are welcomed by everyone.
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