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Model for Burger King’s Change

Mar 13, 2019 at Other Essay Samples

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Introduction

After a careful analysis of the history of Burger King (BK), especially during the 20th century, it is indeed clear that the ability of a corporation to implement and run its own change model is vital in ensuring profitability. Albeit BK may be pushing to become a complete (100%) franchise corporation, it must ensure that its endeavors towards perceiving changes in its market sector and applying changes are smoothened for lean and optimum profitability. An effective change model for BK is vital since most of its operations shall rely on privately owned franchises. Before the 21st century, BK had battled franchise imperfections in its chain restaurants, especially the AmeriKing, filing for bankruptcy and even being incorporated to BK’s competitors such as Heartland Foods (Smith, 2013; Hegar & Hodgetts, 2012). Therefore, this research paper attempts to establish a viable, measurable and elaborate change model that BK can employ as it seeks to continue its worldwide expansion and change its operations into a complete franchise corporation.

Company Overview

Brief History

Before the inception of BK, its predecessor was a franchise that operated various chain restaurants. BK was only founded after two of its predecessor franchisees acquired it after financial constraints in 1954. Since then, the company has managed to survive for over a half of a century having changed ownership four times in the second decade of the 21st century (Smith, 2013; Hegar & Hodgetts, 2012). This company is now owned by Brazil’s 3G Capital that intends to revamp its (BK’s) current operations to become completely a franchise fast food global chain restaurant.

The second owner of BK was the Pillsbury Company during the late 1960s to the 1980s. It was during this time that BK saw profound changes to its overall operational and management structure. During its time, franchise agreements for BK were constantly changed and stimulated in order to facilitate growth since BK’s revenue was mostly generated from franchising. BK was also able to grow further under Pillsbury after vigorous changes, sometimes controversial, were introduced into its advertisements. The invention of its signature product, the Whooper, managed to gain more market acceptance achieving higher competition levels compared to BK’s competitors such as MacDonald’s (Smith, 2013).

Finally, after Diageo, came the TPG Capital ownership era that saw the company become public in the US. Changes that saw the company become public were majorly fueled by the use of advertisement, changes in the menus offered and the general re-design of its restaurants such as the introduction of the Whooper Bar design (Smith, 2013; Hegar & Hodgetts, 2012). The financial crisis towards 2010 let to BK sale to its current owners, 3G Capital. Thus, 3G Capital have expressed their interests in turning the corporation into a 100% franchise company and expanding its global restaurants especially to South America (which happens to be 3G Capital’s main area of operations).

Structure and Mechanism of Operations

Burger King Corporation (BKC) went public shortly in the 21st century and now forms the major parent company that franchises to BK subsidiaries that do the same to smaller restaurants based on geographical areas. Its other functions include the selling and renting of its restaurants and offering administration and advertising advice to its franchisees all over the world. The recommendations can be geographically biased depending on the culture and franchise agreement with a particular franchisee (Hegar & Hodgetts, 2012). In order to perform these tasks the company considered and implemented a global market segmentation outlook. This outlook resulted in the division of its international operations into four major regions: The Middle East, Asia-Pacific, African and Europe and, finally, the Caribbean and Latin America regions. Each of these regions has a designated BK subsidiary that is in charge of the issuance of franchise rights and licenses.

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Furthermore, it is important to note that entire brand of BK is managed as well as and any innovations towards its improving its menu, customer service, online presence and monitoring of brand standards, is done by BKC. Depending on the details of the franchise agreement, any new products developed by BKC must be accepted by the private franchisee for them to be implemented in that particular geographical area (Smith, 2013; Hegar & Hodgetts, 2012). Since the franchises are owned by private investors, it means that BKC has little influence over the restaurant daily operational rituals such as the number of hours the restaurant is opened to customers and the fixing of prices for its products, especially during promotional occasions. Thus, the owner of that restaurant possesses the right to an individual decision of lowering the prices of BK products during events intended to promote the product.

Diagnosis

Despite 3G Capital’s future plans for the company, it is vital that BK perpetually continues to introduce new ideas that place it at a better competitive level than BK’s competitors such as McDonald’s. There are a number of areas where the current management must consider further improving the prospects of raising its competitive edge and revenue generation.

  • The first area of redesign is BK’s perspective towards innovations. BK has over the years stuck to presenting most of its advertisements and restaurants with its major signature brand, the Whooper. Considering competitors, such as McDonald, they continue to make a wide array of products that are redesigned in taste and name, for instance, the pancake sandwiches called McGriddle and the chicken version called McFlurry. To achieve and look more innovative and competitive, BK can consider adapting various menus from its chain restaurants all over the world and giving them special names. Branding these products, even though present in the menu in the past, with unique names and branding symbols may facilitate advertisement ventures and an easy memorability to customers.
  • Secondly, diagnosis for the target population for most of BK’s products should also be made universal. Over the past, this corporation has focused on building products for the male population. It has been done using menus that are widely liked by the male population especially those that combine beef and minced meat. BKC should consider not only implementing chicken and meat related products but also allow deviations and variations into its products, incorporating variations in their menu. For instance, the ability to cut across vegetarian and non-vegetarian menus can have a profound effect on the BK’s customer turnouts. It should also make an attempt at incorporating children by introducing delicacies liked by the younger population and branding them in a way that communicates with them. For instance, the Whooper branded with a cartoonist like Mickey. Copying and reinventing what McDonald does in this instance can help, just like Google competes effectively with Facebook by the introduction of its own social networking site, Google+.
  • Finally, as an ever increasing number of fast food consumers are increasingly becoming aware of responsible eating habits, BK should consider designing its menu such that it also contains healthy choices. Such a change of design shall resemble that of McDonald’s McCafe for coffee, the McWraps, McBites and McChicken. Furthermore, this design shall further incorporate families in the sense that it will address parents. Furthermore, the introduction of the Satisfries was a step in the right direction, and since the product failed, BK should have considered aggressive rebranding and reinvention of the same product (Hegar & Hodgetts, 2012).

Kotter's 8-Step Approach to BK

To make the foregoing diagnosis for the implementation of the suggested changes, BK can consider organizing its implementation plan according to Kotter’s approach. To incorporate all the three diagnoses requires a step-by-step integration and implementation process that shall ensure and assure current and future success (Auguste, 2013). This order of implementing changes to BK is as shown below and is to be followed in the same order.

Creating the Sense of Urgency to the Change Model

It is vital to remember in this case that its scope in the fast food industry and franchise agreements allows BKC a limited influence on the menu choices and portfolios for each franchisee all over the globe. It shall basically seek to incentivize individual restaurants through prudent change management that instills the ideas and benefits of implementing and improving the diagnosis for raised competitiveness (Weiss, 2012). For the first diagnosis, the franchisees can be given a chance of realizing the benefit of giving each of their menu products a unique name and brand for each reference. BKC change management specialists shall undertake programs that introduce indigenous related names to BK products in each chain depending on location.

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In the second and third diagnoses, the way how McDonald has been able to implement these suggestions and improve upon them should be used to help the franchisees to realize the various opportunities presented and scenarios that could practically apply to their individual BK restaurant. Getting statistics on some of healthy products and their sale level from McDonald may also help create the incentive.

Initiatives to Guide a Consistent Coalition to Lead the Change

In this section, 3G Capital as a new owner from the South American continent can use the potential of the continent to help franchisees understand that the change is absolute. Since the company intends to change to franchising operations only, then new lean and procedural changes mean that current franchisees must orient themselves towards the influx of an increasing number of individual BK franchisees. Seizing the opportunity to attempt the implementation of the three diagnoses will make one have an upper-hand and be able to collaborate and lead new franchisees.

Initiative and Visions Inception to Support the Change

Since 3G Capital intends to have a full franchise corporation during this decade, the vision (in terms of each chain store performance and competitiveness) in implementing the three diagnoses shall seek to depict how, for instance, the first diagnosis will increase each chain stores ability to make customers remember a particular menu that he or she can order in the second restaurant using the same name. It saves time and may have positive impacts on sales since BK is a fast food service. Such an initiative seeks to meet 3G Capital vision of complete franchising operations.

Enlistment to Army to Instill Vision for the Change

In this case, in order to meet the vision of having each menu and product offered by BK to have unique names and a healthier menu that focuses on all genders and children, 3G Capital must seek and enlist an army that shall oversee that this vision is in line with that of achieving 100% franchising operations. Enlistment of this change management team shall ensure that the experience is also offered to new franchisees as they are integrated into the overall BK community of franchises (Weiss, 2012; Cooperrider & Godwin, 2015). The team shall oversee and monitor the implementation of each diagnosed change and streamline it to the vision (Cooperrider & Godwin, 2015). The effective operation of such team shall be linked to the various subsidiaries linked to BKC.

Barrier Removal Initiatives to Enable Change

The above strategy of delegating the implementation of the above diagnoses towards the improvement of BK operations further supports the ability to discover and remove obstacles that inhibit their effective implementation (Weiss, 2012). Each change specialist in every BK subsidiary shall have constant information about the implementation of the diagnoses to each restaurant. The fact that such management shall be linked geographically means that obstacles experienced and prevented in one region of BK operation can be incorporated in another region to prevent the occurrence of the same obstacle. For instance, it would be easy to discover what obstacles led to the low performance of the Satisfries for BK, and solutions for renaming the product can be obtained from other regions where the product is successful.

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Generation of Short Term Wins

The achievement of the foregoing visions will have an impression of progress if their achievement is measured, for instance, in terms of the number of customers that order using the new product names. The second success can be organized by the change specialist to be represented by the number of return customers who use the said names and their frequency. It shall especially apply to products that are branded to communicate with children. The fact that children tend to repeatedly do something they like may gauge how effective the implementation of that diagnosis has been to the BK restaurant.

Building on and Sustaining the Change

Once each set win has been achieved in each franchise restaurant, the change specialists and the entire management (especially 3G Capital) must ensure that change is ingrained into the culture of BK. It should happen even though the company seeks to integrate new franchisees into its fast food industry. An increase in the number of franchisees is expected since the new owners have expressed their vision of converting BK into a complete franchise company. It is only the build-up of BK culture, structures and policies towards observing these wins that will see the success of this diagnosis.

Institutionalization of the Changes to BK

In this final stage of change implementation, the overall process of implementation of the three diagnoses on BK will have led the change specialists in each region to become aware of possible trends of introducing names to BK products and orienting them such that children and healthy-concerned customers prefer these products. Laying down an outline in the implementation of the three diagnoses will facilitate their institutionalization into BK in succession (remember that BK has had form than three owners so far and may have more in future). It ensures the survival of the change throughout the changes of ownership that BK may go through (Cooperrider & Godwin, 2015; Weiss, 2012).

Conclusion

The basic aim of this paper was to initiate and design a possible model that BK can use to increase its competitive nature as it seeks to expand globally and become a complete franchise fast food corporation. The Kotter’s eight step approach to BK’s implementation of the diagnoses was used to illustrate and explain how the possible model can streamline 3G Capital’s visions to the company. The three diagnoses can be summarized as the need to provide unique and memorable names to the menus and products offered by BK; the incorporation of healthy food menus with the ability to change them depending on the market acceptance; and the provision of products and menus that target all genders, ages and communicate to children through branding and innovation. The urgency to implement these changes is supported by the influence of 3G Capital’s vision of increasing the number of private BK restaurants through renting the selling of current BKC operated restaurants.

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Furthermore, it is prudent to consider that this change design and its implementation is designed to facilitate institutional changes that shall foster BK’s competitiveness to competitors such as McDonald’s. In fact, before the purchase of BK by 3G Capital, it was making losses during the financial crisis period when McDonald’s recorded profits. Thus, vigorously adopting all of the diagnoses for BK by utilizing the Eight Step Model will help BK evolve in its competitive nature to other established fast food restaurants.

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