Factors Responsible for the Success of the Fast Food Chain - Case Study Example

?Burger King Case Study Factors responsible for the success of the Fast food chain The restaurant industry is divided into two broad categories; Fullservice restaurants and quick service or fast food restaurants (Gikonyo and Berndt 12). Fast food restaurants constitute of independent and chain restaurants which serve all types of food like pizza parlor, chicken grill, sandwich shops, hamburger joints etc (Gikonyo and Berndt 12). The fast food industry has been always associated with franchising, a method used for the distribution of goods and services used for the growth and expansion of businesses. The fast food industry usually attracts the franchisee because of its association with positive cash flow and high viability of the business. Franchising helps to increase the profitability of the business and eliminate unnecessary start up cost. The success of the fast food industry does not only depend upon the franchising method but also depends upon implementation of effective marketing strategies. To achieve global leadership in its industry a fast food restaurant needs to set a series of financial goal and strategic goals. Global leadership by a fast food restaurant can be attained if a company is adept at discovering the new market opportunities, establishing a strong presence in the international markets and securing a competitive advantage. Effective strategic planning is required for attaining profitability in the domestic and international markets. Firstly, the management of the company needs to clearly define its reasons for expanding its operation in the foreign market. A comparative analysis of the political social, cultural environment of different countries would be required for screening purposes. Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Critical Success Factors focus on the most important areas and getto the very heart of both what is to be achieved and how you will achieve it (Mind tools “Critical Success Factors”). In order to maintain its brand image in the domestic and international markets the fast food restaurant needs to excel in the following key success factor like 1) Consistency in product quality 2) Consistency in taste 3) Standardization of the production process (How long the French fries must be fried?) 4) Hygiene standards must be maintained in all the branches of the fast food restaurant 5) Standardized menu must be available worldwide (Cao “Comparison of customers' perceptions of service quality between different management forms in fast food restaurants”). The other key success factor include proper distribution channels, innovative advertising strategies etc. It is a well accepted fact that fast food restaurants should have a sound understanding of the consumer behavior, tastes and preferences and fast food outlets and how it differs across various countries. Understanding the cultural differences between the countries will help the fast food restaurant to customize their menu as per the taste and preference of the local customers. For example McDonalds serves lamburgers in India because beef and pork burgers are not served for religious purposes. In USA and Canada people prefer to eat most of their meals outside their homes (Vivavegie “Fast food facts from the super size me web site”). It is observed that the consumer spending on fast food does not decrease even during recession due to the quick serving ability and its reduced price. The timing of the delivery of the food also plays a prominent role in the customer service of the fast food restaurants. Since obesity has become major health concern in the USA, UK and Canada, the fast food restaurants need to lay emphasis on nutritional requirement and calorie content of the fast food. Thus we can say that factors like 1) Taste of food 2) Hygiene 3) Service response time 4) Pricing of the product 5) Courtesy and behavior of the employees 6) Operating hours 7) Variety in menu 8) Nutritional requirement in the food 9) Amenity play an important role for the success of a fast food restaurant (Cao “Comparison of customers' perceptions of service quality between different management forms in fast food restaurants”). Challenges faced by Burger King Burger King was first established in the year 1952 in Miami under the brand name “Insta Burger King”. In the year 1957 the company launched its Whopper sandwich for 37 cent which was the first high priced food product launched by the Burger King. By the end of the year 1967, Burger King had opened several franchise units in various countries. Although the company did not become a leader in its market segment it had established goodwill of its own. The advertising campaigns were not popular or effective and failed to make a positive impact on its potential consumers. In the year 1993, Burger Kings markets share was only 6.1 percent compared to a 16 percent of McDonald, Burger King’s sales were increasing at a slower pace compared to McDonald. In the year 1999 Burger King launched crispier and tastier French fries claiming that the quality of the French fries were superior to that of McDonald. The quality of the food product and the advertisement campaign failed to impress its customers. Increase in prices of the food products and poor advertisement campaigns had led to the decrease in the market performance of Burger King. The advertisements campaigns claimed that the food products were superior to that of McDonalds but in reality the quality of the food products of Burger King failed to impress the customers. Burger King frequently changed their advertisements which led to confusion among customers as each advertisement conveyed different messages. Weak advertisement campaigns and marketing strategies led to a drastic fall in the sales of the company. Burger King generated majority of its revenue from its franchisee units however, the poor marketing decision of the company were affecting the sales of these franchisee units. Customers complained about the inconsistency in the taste of the food and the poor customer service. Franchise failure not only led to a decrease in the sales of the company but also changed the customer perception about the company. The company started losing its market share from its core products whopper sandwich and the customized flame broiled burger. By the year 2000, the established companies like McDonalds, Wendy’s and Burger King were facing intense competition from the non burger fast food restaurants like Kentucky Fried Chicken (KFC), Pizza Hut, and Dominos Pizza. As the sales of these fast food restaurants increased the sales of Burger King decreased by 4 percent in USA. Burger King closed down all its franchisee units in Japan. The sudden outbreak of the foot and mouth disease and the increasing obesity among the people (Mair, Pierce and Teret 05) created a negative attitude about fast food among customers. This led to a sudden decrease in the sales of the fast food restaurants. To regain its market position McDonalds started lowering the prices of their food and modified its menu. McDonalds started offering side dishes at $1. Instead of developing unique marketing strategies Burger King started aping the strategies adopted by McDonald (Penney and Green “Burger King is too big to fix”). In spite of resistance from the franchisee unit owner, Burger King obtained an approval of 66 percent from the franchisee owners for discounts. Burger King lost most of its customers to McDonalds (Munarriz “Food's Slow Fail: Why Burger King Will Never Be Great Again”). Customers claimed that the variety of the food and the serving size of the food was bigger in McDonald compared to Burger King. Apart from the degrading food quality, customers complained that most of the food items offered by Burger King were similar to that of McDonalds (Brush “Why Burger King is no Big Mac”).These were some of the factors that led to a decrease in the sales of Burger King and made them lose their strong position in the market. References Brush, Michael. Why Burger King is no Big Mac. MSN Money. 30 July 2012. Web. 11 May. 2013. Cao, Yang. “Comparison of customers' perceptions of service quality between different management forms in fast food restaurants”. Auburn University. 06 August 2011. Web. 09 May 2013. < http://etd.auburn.edu/etd/bitstream/handle/10415/2704/Yang%20Cao%2c2011.pdf?sequence=2 > Gikonyo, Lucy, and Adele Berndt. “Critical success factors of a fast food franchise system entering the Kenyan market.” Strathmore Library. n.d. Web. 09 May 2013. Mair, Julie Samia, Matthew W. Pierce and Stephen P. Teret. “The use of zoning to restrict fast food outlets: A potential strategy to combat obesity.” Public Health Law. October 2005. Web. 09 May 2013. Mind tools. “Critical Success Factors”. Washington University. 21 November 2011. Web. 09 May 2013. < https://depts.washington.edu/oei/resources/toolsTemplates/crit_success_factors.pdf> Munarriz, Rick. Fast Food's Slow Fail: Why Burger King Will Never Be Great Again. Daily Finance. 04 April 2012. Web. 11 May. 2013. Penney, Howard, and Rory Green. Burger King is too big to fix. CNN Money. 13 April 2012. Web. 11 May. 2013. Vivavegie. “Fast food facts from the super size me web site.” n.d. Web. 11 May 2013. Read More