Point of View: Our point of view regarding this case is that Burger King can also find a better growth opportunity in Japan by its new marketing strategy.
Problem Statement:
- Burger king failed to effectively target the cost conscious consumer and instead promoted its premium burgers.
- Failure to communicate their brand value to their Japanese consumers.
- Lack of funds for their market expansion.
- Stiff competition in fast-food industries in Japan.
Objectives: Burger King’s objective is to succeed in Japan and intends to increase market share.
SWOT Analysis for Burger King Selling Whoppers in Japan
STRENGTHS
- Strong market position.
- Strong brand equity and high quality products.
- Strong brand financial performance.
- Geographic Diversification
- Established market share
- Superior growth plan
WEAKNESSES
- Vulnerability to labor and regulating influences
- Relevance on so-called Super customer
- Few corporately owned stores.
OPPORTUNITY
- New breakfast food initiative.
- New healthier menu items.
THREATS
- The slow recovering economy.
- Changing consumer eating habits.
Alternative Courses of Action:
Burger King should improve their marketing mix strategies. For their product, it must be different from those of the competitors in terms of quality, size, and preparation. For their place, it must strategically located to attract its target customers which are the youth. For the distribution, they must open new stores to some areas of Japan to increase their distribution of products. For the price, it must be slightly higher than those of its competitors. According to Burger King, there will not be a price war as consumers are favoring quality over price.
Decision:
The Burger King should pursue their objective to succeed in Japan with the aid of their new solution which is the joint venture together with their improved marketing strategies.
Recommendation:
We recommend these following strategies for Burger King to follow:
Differentiation
Burger King can use differentiation strategy as its main strategy in competing with its rivals. Burger King also achieves differentiation through its new innovative products. Burger King continues to introduce innovative products in the breakfast segment.. Burger King’s Have It Your Way strategy is among the top things that differentiates it from its competitors. At Burger King, consumers are given more food and serving choices. Personalization coupled with fast and efficient service makes dining experience at Burger King unique.
Burger King boasts its veggie burger, said to be one of its kind in the fast food industry. Parents are also given more control when it comes to their children’s foods. For example Burger King’s kid’s menu lets parents choose applesauce and juice instead of fries and a soft drink. Burger King takes pride in its ability to provide personalized products. Guests can gave the sandwiches at Burger King the way they want them.
Market Development
Finding new markets may not guarantee success for the firm. A firm can also achieve growth in developing market. Market development strategy involves developing new markets by duplicating the business operation, with minor adaptive changes. The firm can undertake a market expansion strategy. In market expansion, the same expertise and technology and sometimes even the same plant and operations facility can be used. There is therefore potential synergy and resulting reductions in investments and operating costs.
Geographic expansion may involve changing from regional operation to a national operation, moving into another region, or expanding to another country. In order to attract new customers and to remain competitive, Burger King must continue its market expansion strategy.
Diversification
Diversification involves moving simultaneously into new products and new markets. It is a risky strategy but with careful selection of the right kind of businesses, considerable improvements in profitability can be experienced. Diversification can take place into related or unrelated products. A related diversification is one in which the new business has meaningful commonalities with the core business. These provide potential to generate economies of scale or synergies based on exchange of skills and resources.
A diversification strategy can be implemented by an acquisition (or merger), new business venture or strategic alliance. There is no doubt that among its competitors, Burger King offers the most diverse and perhaps the most innovative products. Burger King must continue to invest and remain committed to research and development in order to come up with more diverse and innovative products. One specific consumer product demand that Burger King must focus on is the demand for healthier, higher quality food items. The consumers are starting to get more health conscious and Burger King must be among the first companies to satisfy this demand.
QUESTIONS:
What aspects of Japan’s economic, political/legal, cultural environments are important for burger king to understand?
The fast-food industry is affected by various aspects. These include political, social, economic, and technological aspects. The needs, wants and demands of the consumers also affect the industry as well as competition between firms. Based from the case, the most significant aspects discussed were competition and consumer demands. As seen in the case, Burger King was severely affected by intense competition. The company’s failure to go against its competitors in the price war pushed the company to close its stores in Japan.
Price competition is still evident today in Japan. Fast-food companies still aim for competitive prices. Consumer demands also play an important role. It has a significant impact on the industry as fast-food companies need to satisfy the demands of the consumers. In the past, the demand was for low-priced fast foods. Over time, the demand has changed. Consumers are now looking for quality and are ready to pay extra for it.
Why have Burger King and other companies in the case decided to enter foreign markets? Why have they chosen Japan? Do you agree with their decision?
Burger King and other companies in the case decided to enter foreign markets because they want to find better growth opportunities internationally. They want to take a global perspective in identifying growth opportunities in their business and execute marketing strategies to capitalize on these opportunities. They chose Japan because of political, social, economic, and technological factors. The needs, wants and demands of the consumers also affect the industry as well as competition between firms and Japanese consumers are now looking for quality and are ready to pay extra for it.
Contrast Burger King’s entry strategy twenty years ago with its present entry strategy. What are the differences? Is the new entry strategy likely to be more successful? If so, why?
Burger King’s entry strategy twenty years ago was franchising while their present entry strategy was joint ventures. The difference between the two strategy is that franchising is a form of business by which the owner of a product, service or method obtains distribution through affiliated dealers while joint ventures is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets.
Evaluate Burger King’s proposed marketing strategy and program for Japan? Which elements of its marketing program do you think will be successful? Which ones are likely to be less successful?
If the company will be able to sustain its growth and will continue to develop its products and services according to the needs, wants and demands of the consumers, it will be successful. At present, Burger King’s strategy seems to go well. However, the fact that consumer demands are quick to change and competitors are fast to catch up cannot be discounted. Therefore, Burger King must widen its strategies.
