This particular case is about the implementation of the popular fast-food chain, Burger King, into the Japanese market. Despite its’ strong market position in other countries, Burger King has some difficulties to face within the Japanese market. In this report, my team and I will analyze Burger King’s current situation and problems and suggest alternatives.
The situation at hand is Burger King’s downfalls within the competitive Japanese market. Burger King faces tremendous competition. McDonald’s controls half of the entire fast-food market in Japan having 2,000 outlets and generating $2.5 billion in sales. KFC has 1,040 stores making it number two in the fast-food market. The most effective way to analyze Burger King’s situation is through the SWOT analysis method.
One of Burger King’s most important strengths is its strong market position. It is the second largest fast food chain in the world, trailing McDonald’s. There are 11,550 stores in 71 different countries. Its geographic diversification is a competitive advantage. Burger King’s slogan, “HAVE IT YOUR WAY,” and its’ famous “WHOPPER” brand are very recognized by all consumers. These two campaigns were created in the 70s and have stuck around ever since. Talking some numbers, between 2006 and 2008, the chain’s profitability increased from $170 million to $354 million. In 2010, $2.5 billion was expected to be made and Burger King was able to reach just those projections.
Another strength is Burger King’s franchise development having 90% of its restaurants franchised. The franchise concept allowed the company to grow with minimal capital expenditure and receive royalties and fees. Burger King went above and beyond and created a new model of its restaurant to attract more franchisees. The new model featured restaurants smaller in size, which allowed franchisees to seek smaller investments. These smaller restaurants reduced average capital expenditure costs by approximately 20%. Engaging in the concept of franchising has allowed Burger King to develop its brand rapidly and penetrate the international market. Between 2007 and 2008, Burger King hit 8 new countries: Japan, Indonesia, Poland, Egypt, Columbia, Bulgaria, Romania and Curacao.
Burger King has very innovative marketing techniques including successful campaigns, strong sponsorships and creative advertisements. The strong sense of marketing allows this chain to raise sales and generate restaurant traffic. A great example of exquisite marketing is when Burger King hit some speed bumps in France. They have to revive their brand name and to do so diffused 64 unique pre-roll advertisements on YouTube. Innovative marketing techniques are key to providing more visibility to the company, which ultimately leads to increased sales.
Due to the high price of the location, Burger King found a judicious way to penetrate the Japanese market. Burger King decided to create a joint venture with a local brand, Tabacco which is partly owned by...