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McDonald’s Big Mac
Navdeep Mann Kanika Saini Fatema Khatib David Loureiro Adrian D’Andrea
Both companies promote economies of scale in majority. the target consumers are looking for a quick. Where can it be purchased? McDonald and Burger King Restaurant location’s (Appendix C) How often customers re-purchase it? The Whopper and The Big Mac are often repurchased. thus the need for profitability and remaining market leaders have become more dire than ever before. The most important factor consumers’ value for repurchase is convenience. The two companies that we chose to analyze and compare are Burger King vs. the fast food industry has become one of the fastest growing sectors in North America.Allows for customers to have their burgers their way (high customization) or made by default (low customization). Product Attributes: (Rating Scale 7 highest. This image is created through the brand recognition that the two companies have built over the last few decades. they aim to purchase at the closest location. The products offered by the fast food industry are to serve the busy consumers who are looking to satisfy their hunger in a quick and economically efficient manner. The product category is Mid-tier Ham Burger as it is not a premium burger such as the Angus burger at McDonalds or the Steakhouse XT at Burger King. Functions and Needs: The product aims to satisfy hunger while creating a sense of comfort. The iconic products inspire a nostalgic feeling for their customers. In the fast food industry. Rating: 1 . cheap. McDonald’s. by associating products with consumers’ identity. With the growth of multinational fast food chains. cheap and ready to go meals. Over the years both companies have expanded their reach globally to gain market share and profitability. We chose this particular category due to the image that the fast food companies have developed in the media and conflicting perceptions of the general population. Whopper. as these products are not highticket items. there is less room for expansion. Today. satisfying meal. 1 lowest level of importance) Customization. The image and influence of the fast food industry has now become part of modern day living. consumers have grown accustom to receive food on demand without having to wait or resort to cooking. Often the franchisee located near to the target market wins. or the one that out numbers with locations. At the same time it is not a value burger such as the junior whopper or a Mc Double. As the market has stabilized. Market: Quick Service Restaurants (Appendix B) Product Category (Appendix A): Mid-Tier Ham Burger specifically Big Mac vs.Although the concept of fast food has been around for centuries. if not all of their products. the term fast food has often been referred to as unhealthy. most customers enjoy having higher customization.
The print ads could be found on billboards. which gives the burger that extra kick of flavour that always sticks with the customer. To analyze this further.). customers preference generally differs here. Rating: 5 Number of Patties. flame broiled/fired Experience – icon packaging.Flame Broiled or fried. Mac Sauce. can signify if one has more meat or less meat Rating: 2 Quality of Beef – The FDA requires minimum standards but some products exceed these standards. Flame broiled is often seen as a healthier choice. uniqueness Quality – beef.one or two. height may be caused by bread in between two patties. and various other physical mediums while the video ads were used primarily on television and radio (to a smaller degree) Video Advertisement Analysis . The two print ads are from the 2007-2008 period and the video advertisements are both from the 2009-2010 period and are the most recent ones currently being used by the companies. Rating: 3 MDS Dimensions Manliness – size. or a simple standard paper wrap for the Whopper. Rating: 6 Icon Packaging – The standard box for the Big Mac symbolizes the product. while width is usually determined by size of the patty. fried often raises health concerns due to type of oil used for customers. height. buses.Ketchup + Mayo vs.Total size of the sandwich (width. we looked at both companies advertisements to analyze how two very similar products are positioned very differently. Rating: 7 Heating Method. customization Relative Position in terms of each attributes Customization: Whopper over Big Mac Size: Whopper over Big Mac Heating Method: Whopper over Big Mac Number of Patties: Big Mac over Whopper Sauce: Big Mac over Whopper Quality of Beef: Whopper over Big Mac Icon Packaging: Big Mac over Whopper From the above analysis. Both the Big Mac and the Whopper are well known hamburgers distributed through large quick service restaurant chains. etc. Rating: 4 Unique sauce. we can determine that Whopper should have a relatively higher competitive positioning then McDonald’s but in reality that is not the case.Size.
and flame broiled. The ad also illustrates attributes such as size. while the frame of reference for the whopper is size and quality. whether at work. one that is more delicious when compared to the competition. as pieces of lettuce routinely fall out and the special sauce drips on clothing. Frame of reference and differentiation The frame of reference for the Big Mac is represented as a symbolic experience and traditional product. Convenience is easily visible in the ad as every character is shown to be enjoying themselves. thus exaggerating the size of the Whopper compared to the Big Mac. regardless of how messy they get in the process. through taste testing. size. As the taste test is conducted. for the Whopper compared to the Big Mac accentuates the idea of the Whopper as a product of better quality. Some characters are even shown stopping all current activity in order to simply handle and enjoy the product. It is available worldwide. by displaying North American characters enjoying the product in Japan as the product is presented in packaging with Japanese writing. special sauce and number of patties (two). the samplers are shown struggling to grab bites out of the Whopper compared to the Big Mac. at a Frisbee game. and number of patties. The brand recognition using the red and yellow colour motif for the unique carton differentiates the product from the competitor. with the “unbiased approvals” used as a guarantee. size. for multiple people and . The “unbiased” approval of the “Whopper Virgins”. hanging with friends. the two patties and its iconic packaging. The points of differentiation for the Big Mac include the special sauce.Attributes One of the attributes that are displayed in the Big Mac ad includes Iconic packaging. the concept of being flame broiled is synonymous with the Burger King brand and therefore is implied in the ad as it contributes to its superior taste and is one of the main distinguishable factors of the product. The points of parity for both products are a beef patty and burger buns as these are the two most essential and basic ingredients of a hamburger. Lastly. as they enjoy the product in every frame. or travelling around the world (In Japan). The method of heat or the meat being flame broiled is a distinguishable point of difference for the Whopper. These are the essentials that a competitor must encompass in order to be a contender. This is showcased in the ad through the characters. The ad is also able to exhibit international adaptations of the iconic packaging. from the first bite to the last. Main perceptual objectives The main perceptual objectives of the Big Mac ad were convenience and experience (tradition). the special sauce used on the Big Mac can be found on no other hamburger which makes it an essential point of difference The points of differentiation for the Whopper include quality of beef. The quality of beef is another POD that is touched upon in the ad. The Whopper ad displays attributes such as quality of beef. Although not overtly stated in the ad. The first frame of the ad focuses solely on the product and the product remains prominent in every successive frame. This is done through multiple shots of the Big Mac placed next to the Whopper. displaying the greater size of the Whopper. ensuring the focus of attention on the products size from various angles.
Whether the product is present when friends come together. even in remote places such as Romania. etc. McDonalds focus is very broad while Burger King has a narrow positioning. and focusing on quality only. it all comes together to create experiences and become a part of memories that are forever remembered. through the means of “unbiased opinions”.locations. depicts the good moments and enjoyable times that people of all ages have when sharing a Big Mac. This connection is deemed very important in McDonald’s advertising strategy as the audience always remains connected with the characters portrayed in the commercial. but at the cost the personal connection with its audience as most will be unable to connect with the characters on screen. rural people approving the Whopper over the Big Mac during the taste test. Through its advertisement McDonalds creates a connection with the viewer’s culture and tradition. The Whopper ad however is able to get their message of a better tasting burger across. The main perceptual objectives of the Whopper ad were awareness and taste. better tasting product compared to its main competitor as it attempts to target consumers who are concerned with taste above all else. Positioning and Strategy The Big Mac commercial is intended to re-introduce the tried and true. It also illustrates the products attributes such as size. quality. Discrepancies and Similarities The Big Mac commercial gives the audience a sense of familiarity as the events unfolding remind the consumers of their own lives. flirtatious glances in social events. vacationing with family. The Whopper commercial on the other hand focuses on only one attribute. The ad portrays greater awareness of the product by promoting it in remote places and introducing it to ignored markets by traditional QSR’s*. the ad aims to authentically support the product as superior tasting. or just self enjoyment over a delicious burger during a quick lunch break at work. whereas the Whopper focuses solely on taste and taking the audience to remote ends of the world. The diversity of the people in the ad. combined with the numerous differing situations. Print Advertisements Analysis Attributes . The ad illustrates the idea that the Whopper is a quality product that speaks for itself. physical and or emotional. number of patties and iconic packaging. It aims to position itself as a bigger. The company stays true to its core competencies and therefore is able to deliver a stronger message and will experience a higher rate of success than Burger King’s Whopper. Therefore it is a generic positioning aiming to remind people of all the reasons. classic product. thus loosing that connection and familiarity. Therefore both commercials have very different messages. The Whopper overtly differentiates itself by naming the competitor in the ad. they love this product and will continue to do so. which is targeted and created for its consumers. The Big Mac from McDonalds has a more well rounded strategy. By displaying indigenous.
The Big Mac ad does however incorporate sexuality to a low degree which creates an easily identifiable discrepancy between the two ads. the Big Mac strays from its traditional focus of the "experience" of the burger and it seems to imitate the traditionally manly Whopper ads. and the char marks that exist on the side of the burger (char marks cannot normally occur here) are a clear indication that the burger does in fact have a distinct char broiled taste. Frame of reference and Differentiation The frame of reference for both burgers is size in this case. The points of parity for both products are the same as all that is required to be classified as a hamburger is two halves of a bun and a beef patty. The reason Burger King makes frequent references to the Whopper’s size is because it is in fact the larger of the two burgers. This inconsistency may in fact be evidence of a fault in the McDonalds marketing campaign. The quality of the meat is also addressed as the advertisement directly calls attention to the burger patty itself by emphasizing the word “meat”. In terms of differentiation. The large size of the burger is a clear indication of manliness. This actually works better for the Whopper as they have traditionally used size as a major selling point whereas the Big Mac has not. like size. is also inconsistent with McDonald’s recent marketing efforts.There are multiple attributes represented by each ad. The use of Sexuality. Like the Big Mac. Discrepancies and Similarities There is a high degree similarity between the two ads as they both attempt to use humor and manliness to get their message across. Main perceptual objectives The main perceptual objectives for the Big Mac ad are manliness and performance (taste). Lastly. while the Whopper is able to differentiate itself by means of size and the fact that it is char broiled instead of fried. Performance is also a prominent message as the burger is depicted as too good to resist. As noted earlier however. .Furtherrmore. The ad is asking whether or not you are "Mac" enough to eat the burger and even portrays it in a feminine way by using the velvet drape background in combination with the text. The Big Mac ad depicts the burger's two patties and special sauce as they are physically visible in the ad and justify the ad’s text. The Whopper advertisement clearly shows size as an attribute as the burger is unable to fit inside a Big Mac box. the whopper ad uses the performance and manliness perceptual objectives. which make the burger visually appealing. the points of difference for the Big Mac are its two patties and special sauce and. the burger is made to appear bigger than it actually is by placing it on a stage. The single patty and char broiled heating method (grill marks) are also visible in the ad. the ad draws attention to the whoppers wrapper based packaging as it is shown to be far too big to be confined within a box.
Based on sheer size. McDonalds is far larger and has a much broader global reach which leaves the company in a better position to cut its losses in failing markets or take advantage of growing ones. It is also more humorous and does not resort to the use of puns in its message. the Whopper advertising strategy appears to be superior. the picture on the ad itself is a very simple and easy to understand method of showing that the Whopper is in fact a significantly larger hamburger. on-the-other hand. quality of beef and heating method and they will use this advantage to continue competing in the quality oriented American market (their strongest market). McDonalds. The Big Mac uses size and the personification of the burger as a woman. Furthermore. while the Whopper also emphasizes size while using its char broiled attribute to further appeal to men. The reason for this is because the ad is consistent with previous marketing strategies and it is far less cluttered. it is probable that McDonalds will emerge as the victor. Burger King simply is not a threatening competitor in many of McDonalds’ markets which makes the issue of inferior quality largely irrelevant for McDonalds on a global scale. Future Trends The QSR industry has reached a metaphorical hump as growth has slowed and new entry on a significant level is next to impossible due to the strong brand equity of the current players. After reviewing the ads. will continue to market their Big Mac as an experience instead of a mere hamburger for the simple reason that they know they cannot compete directly on quality. It is likely that both competitors will continue with their existing marketing strategies for the foreseeable future as Burger King quite literally has a better product in terms of size. If the Industry ever does begin to drastically decline. . Finally. These ads can be considered to be head-to-head as they both use the same major perceptual objectives and focus on the same audience.Positioning and Strategy Both of these ads position the products towards men.
Table of Contents (appendix) Appendix A Appendix B Product and Background Market Size Market Assessment Channels of distribution Advertising Strategies McDonalds’ Concept (Table 1) Strategy Vision/Mission Burger King Concept (Table 2) Strategy Market Share for FFHR in 2008 What is the Big Mac Index? Figure 1 Consumer food service Canada (Tables) Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I .
Ray Kroc opened Des Plaines.4 lbs. like McDonald's. but rather on the overall McDonald's experience. Wendy Guild. The vision of the company was to offer reasonably priced quality food. May 3rd. McDonald's has developed TV advertising campaigns that have become. and had a calorie count of 2.7 1 Burger King (Canada) website. lettuce. In fact.mcdonalds. and cholesterol. <www.aspx http://www. millions of Americans came to know the ingredients by heart: two all-beef patties. As a result of changing strategies.html?cat=51 6 IBID 7 http://www. onions--on a sesame-seed bun. Russ Klein. pickles.ca/en/aboutus/marketing_themes.5 It's an icon to many. the Chief Marketing Officer of Burger King agrees to the above-mentioned statement and adds that Burger King’s strategy currently is to differentiate the brand and make their customers knowledgeable of the products2.burgerking. As the Big Mac celebrates forty-plus years of sales. it remains a multi-faceted symbol of America: capitalism. clean surroundings1.com/article/593619/fat_facts_about_the_mcdonalds_b ig_mac.6 Over the years. Their signature sandwich became the Whopper. McDonald's commercials have focused not only on product.Appendix A Product and Background In 1954. 47g fat). 2004. Working Knowledge Archives. commercialism. however. This "image" or "reputation" advertising has become a trademark of the company and created many memorable television moments and themes. They have also made their marketing campaigns more relevant to current trends in the market. served quickly. 29g fat) compares almost favorably against a Whopper with cheese and all the trimmings (760 calories. The Economist created the " Big Mac Index” as a means to illustrate currency exchange theory. Illinois restaurant in 1955 after pitching the idea of opening up restaurants to the McDonald brothers.4 As a result of the "Big Mac Attack" ad campaign of 1975. a part of our lives and culture. “Can Burger King Rekindle the Sizzle?”.ca/en/aboutus/history.1203. As of 2009.ca/companyhistory> 2 3 Swearingen.aspx .mcdonalds. Harvard Business School. In 2009. this may have contributed to the decrease in awareness of the firm in comparison to McDonalds. that the Big Mac (540 calories. 4 5 http://www. Burger King has launched a new marketing campaign to revamp their positioning and target the adolescent population. This was a seven-patty burger weighing more than 1. cheese. in attractive. even if it has a negative image among quite a few.associatedcontent. James Mc Lamore and David Edgerton opened their first Burger King restaurant in Miami Florida. In 1968 the Big Mac sandwich was introduced. special sauce. which has been a menu staple since it was introduced across all their locations. It should be pointed out. Burger King teamed with Microsoft and started offering a Windows 7 Whopper to its customers in Japan in order to market the release of the Windows 7 operating system. portraying warmth and a real slice of ever day life.
However. N. Wall Street Journal. These new strategies are geared to take advantage of the growing fast food market and a method to differentiate from fierce competition. Comparing this to U.4% drop in its fiscal first quarter earnings because consumer spending has declined due to stiff price competition between fast-food chains14. the whopper. Burger King has formulated a strategy to focus on premium burgers. Burger King has 1. growth of health consciousness. B. pg. reported a 6.7%16. Also. (Eastern edition). segmentation is defined by using product market. Burger King has been losing its market share over the last 4 years whereas. food. analyst estimates indicate a market size of $68 billion as per the results in 200810.1% whereas McDonalds has a 10.com/industry/Fast_Food_Restaurants_(QSR) 12 13 Consumer Food Service – Canadian Restaurant and Food Association Consumer Food Service . Burger King Holdings Inc.S. and thus.com/us-fast-food-industry-to-cross-us-170-billion-by-2010-pr149886. However. Generic market can be defined in terms of fulfilling the need of an appetite. while McDonalds has a 90% global market share.4 15 16 Consumer Food Service – Canadian Food and Restaurant Association . Recently. Many analysts are under the assumption that the market has matured and is at a point of stagnate growth.1888pressrelease. the market can be divided into two basic types of markets: generic market & product market. for the purpose of this project.Appendix B Market size According to Consumer Foodservice. McDonald’s has been maintaining its market share approximately 10%13. New York. the company is starting to offer healthier products in its menu. in other words. 8 9 Consumer Food Service – Canadian Restaurant and Food Association Consumer Food Service – Canadian Restaurant and Food Association 10 http://www.: Oct 30. 2009.Canadian Restaurant and Food Association 14 Anonymous. Burger King has a market share in Canada.1% in the next 5 years (as per Table 11)9. Currently. rising food prices and slowing economy has caused the fast food industry to not grow as rapidly as it had in the past11. of 1. In regards to the market segmentation.1% of market share of the Canadian fast food industry (as per Table 9)12. Market assessment The total global market share Burger King has in the fast food industry is 4%15.Y. Big Mac vs. Nevertheless.wikinvest. its direct competitor.html 11 http://www. The market has been growing and the analyst forecast the sales in units to grow by 3. the fast food market in Canada is estimated to be $19 Billion (as per Table 12)8.
9% and 1. McDonald's says it has raised its share of the U.. There are 7. opposed to growth in Canada which has been stagnated. Fiscal 2008 year . they were at 3. They rely on having the physical locations established in order to be recognized by the public within the surrounding environment.S. Although. there are 303 Burger King’s in Canada. has accelerated its U. ANNUAL REPORT PURSUANT TO SECTION 13BURGER KING HOLDINGS.wtgmarketingsummit.S.com/2009/06/burger-king-concedes-defeat-onmarketing-initiative/ 19 UNITED STATES SECURITIES AND EXCHANGE COMMISSION. McDonald's accounted for 46.com/2009/06/burger-king-concedes-defeat-onmarketing-initiative/ 18 http://www. In the previous two years. These are overall sales growth. which leaves more than 7500 Burger King Restaurants in the United States alone. Fiscal 2008 year 20 UNITED STATES SECURITIES AND EXCHANGE COMMISSION. they do not have all their business centralized in one area. chief financial officer Peter Bensen says.9% respectfully20. according to food-industry researcher Technomic Inc. it shows the possibility of future revenues in Canada if there is more expansion and development in cities. INC.8 per cent of the U.. ANNUAL REPORT PURSUANT TO SECTION 13BURGER KING HOLDINGS.wtgmarketingsummit. hamburger market last year. INC. by analyzing only the number of locations. fast-food market by 20 basis points in 2007.512 Burger King Restaurants in Canada and the US. 30 basis points last year and 50 basis points this year through May.) Angus beef burger. For starters. Appendix C Channels of distribution The channels of distribution utilized by Burger King and McDonald’s are primarily their franchises and restaurants.S. This is significant because it shows how diversified Burger King has become. market-share growth by selling new products and promoting old standbys through the recession. even as consumers eat out less. Burger King was second with 14. Revenue in the US and Canada in 2008 was $318million. INC. up 10 basis points from 2007.17 The world's largest restaurant chain introduced iced coffees and a larger $3.McDonald's Corp.18 Also.4%. Fiscal 2008 year 21 UNITED STATES SECURITIES AND EXCHANGE COMMISSION.. It would be highly beneficial to Burger King to compete with rival McDonald’s who holds an overwhelming 90% of market share in fast foods around the world. 17 http://www. sales growth has been the highest in three years in 2008. The US population is roughly ten times larger than Canada’s yet they have a disproportionate amount of Burger Kings comparative to Canada. In Canada alone.S. it is quite evident Burger King needs to increase relative real estate to gain competitiveness.2 per cent. The question then remains what are the appropriate strategic tactics to win market share along with its customers. over 38% of Burger Kings franchises are International (outside US and Canada)19. majority of that revenue was made in the United States. at 5. Also. $284 million and $264 million in the previous year’s respectfully 21. ANNUAL REPORT PURSUANT TO SECTION 13BURGER KING HOLDINGS. and advertised its Big Macs to win sales.99 (U. There is definite market available in Canada as indicated above.
even when you skip through the commercials.”22 It is evident that advertisements and television and radio channels are very important to gaining market share. the television advertising made IAG’s monthly “Top 10 New Ads” list (published by the magazine Ad Age) a total of five times in calendar year 2007.” The purpose of the image has always been "portraying warmth and a real slice of every-day life. receives a larger portion of the relative market share. While McDonald’s is only putting Nintendo mascot toys in their Happy Meals. rather than just product. for only being on the market exactly one month. according to advertising industry researcher Nielson IAG at Burger King. action. Usually whoever has the more effective ad campaign.S. It is a very large determinant of how well a company will grow and can dictate how much sales can be achieved during the fiscal year. “In the first quarter of fiscal 2008. it means that BK brought a lot of people through their doors while pocketing a nice amount of change from the promotion. one of less than a dozen national advertisers across all categories to have that many mentions. There have been many McDonald's advertising campaigns and slogans over the years. Burger King’s actual products remained in the commercials. "The King" ad campaigns brought about attention when a strange oversized plastic King could be found in bed next to an unsuspecting person or just outside of their window to the catchphrase of. BK has learned how to reach a demographic. ANNUAL REPORT PURSUANT TO SECTION 13BURGER KING HOLDINGS. The company is one of the most prevalent fast food advertisers. "Wake up with the King. it could’ve been the $4 price tag when compared to the usual cost of $60-$70 for an Xbox/Xbox 360 game. showing various people engaging in popular activities. television advertisements were among the top five that were recalled and the top five best liked new restaurant ads airing nationally”. Since the games could only be purchased with a value meal. but definitely catchy. it was reported that 20 million BK Xbox games had been sold. a major ad war has started between McDonalds and Burger King. Advertising Strategies Burger King has managed to find alternative marketing strategies to continually bring their name to the forefront.” Its TV ads. By promoting products such as The Whopper and the Big Mac as their signature dishes. especially when many times that demographic has their own money to spend. INC.. Within the last 5 years. their ads and promotions are a big part of their channel of distribution. fighting and racing. McDonald's Canada's corporate website states that the commercial campaigns have always focused on the "overall McDonald's experience". Fiscal 2008 year . In November 2009 Burger King began offering Burger King Xbox and Xbox 360 games with their value meals in three different genres. our U. In addition." The commercials were a bit odd. but weren’t necessarily the main piece to the ad. Of course. usually reflect the season and 22 UNITED STATES SECURITIES AND EXCHANGE COMMISSION.Also. these products have become a symbol of the companies that are recognizable worldwide. A few days before Christmas.
^ Overview of McDonald's key financial metrics via Wikinvest.aspx. McDonald's has global brand recognition. The number of restaurants operated by the company is illustrated in Table 7.8 McDonald's restaurants. experienced management.mcdonalds. a shot at competitor Starbucks. http://www. T7. Hoovers. The billboard read "four bucks is dumb". one exception being a 2009 billboard advertising the new Mc Cafe espresso. "McDonald's Corporation". below. retrieved 9/28/2009 ^ Joe Bramhall. site development expertise and advanced operational systems that enable the group to pursue its global opportunities. McDonald's Corporation.hoovers. In addition. http://www.152 320 212 373 409 173 61 ^ McDonald's publication. the ads have always focused on McDonald's alone. . 1996-2001 No.xhtml. rarely in their advertising history have they used negative or comparison ads pertaining to any of their competitors. Retrieved 2007-11-24.000 restaurants in 121 countries.ca/en/aboutus/faq. McDonald's concept McDonald's operates in the foodservice industry and primarily operates quick-service restaurant businesses under the McDonald's brand. "Corporate FAQ". McDonald's has a minority ownership in Prét A Manger. To capture additional meal occasions. Finally. 23 McDonald's McDonald's is the largest and best-known global foodservice retailer with more than 30.com/mcdonald's/-ID__10974--/free-co-factsheet.time period. Restaurants 1996 2001 Change France Germany Italy Netherlands 23 540 743 147 151 913 1. Retrieved 2009-03-25. Chipotle Donatos Pizzeria and (soon to be) Fazoli's.8 . the company also operates other restaurant concepts under its partner brands: Boston Market.
mcdonalds. McDonald's approved a plan to dispose of its Aroma Café business in the UK. . which was completed in March 2002. To further build the business and extend the reach of the McDonald's brand.Spain Sweden UK US 121 129 737 12. McDonald's will also have an option to purchase the entire company at a later date.com McDonald's strategy McDonald's vision is to be the world's best quick service restaurant experience. McSnack Spot and McDonald's with the Diner Inside tests in the United States.182 13. They intend to scale a brand whenever it demonstrates broad consumer appeal. dessert kiosks.099 188 111 445 1. Some of the most recent innovations include the McCafés. the company is committed to innovating. snacks and drinks at lunchtime was acquired in January 2001. The company operates several partner brands and is committed to growing these brands carefully.005 SOURCE: http://www. The minority interest in UK-based Prét A Manger. which are now established in more than 15 countries. On April 24. which are primarily in Latin America. The intent is to give consumers a variety of tastes and dining experiences. Donatos Pizzeria and Prét A Manger (in which McDonald's has a minority share). 2002. a quick service food concept that serves mainly sandwiches. Chipotle. extending its reach in the US and Asia. Outside of the core brand the company operates several partner brands. and the McTreat Spot. These are Boston Market. The Fazoli's chain operates about 400 restaurants in 32 states and their menu focuses primarily on pasta and also offers panini sandwiches and salads.094 309 240 1. offering convenient snack and meal products in convenient locations. a fast-casual Italian restaurant concept based in Kentucky. McDonald's is quick to point out that only 12 quick-service restaurant chains generate sales of that much or more. announced their intention to form a joint venture to develop 20 to 30 Fazoli's restaurants in three US markets. The stated aim was to support Prét A Manger's plans for international growth. which collectively generate approximately $1 billion in annual sales. McDonald's Corporation and Fazoli's. At the end of 2001.
T7. so that we make every customer in every restaurant smile. In the US.400 new McDonald's restaurants in 2002. In 2001.Globally. Diageo has announced its intention to spin off the company to concentrate on its core activities.300 and 1.248 . McDonald's vision McDonald's vision is to be the world's best quick service restaurant experience. Burger King Burger King Corporation is a wholly-owned subsidiary of Diageo. 7% of restaurants are company-owned. In 2001. However. the international food and drinks company. and value. The company's restaurants are located in each US State and nearly 60 other countries. and Achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonald's system through innovation and technology. below. cleanliness. 2001 Company Owned Franchised Total US 574 7.674 8. approximately 56. Being the best means providing outstanding quality.7% of business was drive-thru and a further 20.36billion.4% is served as take-away. The number of restaurants operated by the Burger King Corporation is illustrated in Table 7. whilst on an international basis.9 Burger King restaurants. service. 2001 As at 31stDec. headquartered in the UK. the company aims to add between 1.20billion/€12. McDonald's Missions • • • Be the best employer for our people in each community around the world Deliver operational excellence to our customers in each of our restaurants. Burger King recorded system-wide sales of US$11.9 . Burger King's concept Burger King is the world's second largest burger fast-food chain (after McDonald's). the figure rises to 15%.
189 Total 1.burgerking. decor. Burger King announced it was to increase its activities towards attracting potential new franchisees.712 3. Burger King's strategy in 2000 focused on investing in facility enhancements as the first step toward revenue growth. In previous years Burger King had focused most of its growth with existing franchisees.386 11. a major factor that has helped to increase the company's expansion and growth has been the franchising of restaurants to individuals.com Burger King's strategy The success and size of Burger King are based in such areas as product development. rather than geographically aligned. a separate unit. For many years. A new corporate structure. which accounts for 85% of the company's business. . in a change in strategy towards the end of 2001. removing a number of division barriers was also introduced.437 SOURCE: http://www. service and advertising. accelerated product innovation and superior marketing. followed by a focus on speed of service. Simultaneously. 92% of the more than 11.400 Burger King restaurants operating around the world are owned and operated by independent franchisees. Burger King pushed ahead with its focus on strategic alliances and partnerships. Throughout 2001. Supported by Burger King. were introduced. a series of new direct reporting positions that will be functionally. Burger King has enjoyed a large franchisee community that had grown the brand almost exclusively from within. but the company's focus has now turned to attracting new franchisees.051 10. expertise in restaurant operation. In recent months the corporation has made a series of organisational changes. However. designed to improve US company operations and further consolidate the company's international business. these franchisees have driven growth in many markets. However.International 477 2. A key element of the new structure is the elimination of division barriers that made North America.
Keep in mind that PPP is a longterm indicator. you will see that most currencies are trading way above or below the US dollar.a. The implied PPP shown in the table is the exchange rate that would make a Big Mac cost the same abroad as it does in the USA.What is the Big Mac Index? The Economist uses the price of the ubiquitous McDonald's meal to calculate the "Big Mac Index". or PPP) says that exchange rates should even out the prices of Big Macs sold across the world. pointing to where currencies ought to go in the future. When you compare actual exchange rates with the implied PPP rate.k. meaning that they are over. (It's also best to use it only to measure currencies between countries that are at a similar stage of development.or undervalued. a guide showing how far from fair value different world currencies are.com/currency/big-mac-index . The Big Mac theory (a.oanda.)24 24 http://www. purchasing-power parity.
3768 7.2548 8.5 A$ 4.9962 -34.9290 3.8 3.0 Implied PPP rate + in US dollars 3.1 1.0 Riyal 11.7269 -38.0093 -38.7846 1896.50 1961 560 19.64 1.5700 2.0651 2.2 2.1 Ringgit 6.5884 1205.0 8.2596 -48.18 5.1183 38.9612 2.8560 0.0 € 3.7327 0.03 £ 2.1104 2.65 Dirhams 10.6 0.6330 -25.3572 -52.7221 Today's Exchange Rate 1 USD = --3.50 NT$ 75.3115 3.0 NZ$ 4.0 SFr 6.6690 3.3206 1.43 1.2722 -17.5046 20.13 18.0275 -9.80 United States Argentina Australia Brazil Britain Canada Chile China Colombia Costa Rica Czech Republic Denmark Estonia Eygpt Euro area Hong Kong Hungary Iceland Indonesia Israel Japan Latvia Lithuania Malaysia Mexico New Zealand Norway Pakistan Peru Philippines Poland Russia Saudi Arabia Singapore South Africa South Korea Sri Lanka Sweden Switzerland Taiwan Thailand Turkey UAE Over(+) / Under(-) Valuation against the USD.0 ¥ 320 Lats 1.1439 1.3346 1.77 Peso 33.4402 -40.1250 32.26 8.481 129.5 Kroon 32.7555 1.0183 -7.2208 -20.24 1.82 21.2658 6.99 1.3655 2.5239 3.49 Lire 5.0869 80.34 Real 8.39 Zloty 7.1408 2.2837 1.29 C$ 3.6439 2.0478 540.5 Peso 7000 Colones 2000 Koruna 67.1999 2.22 2.8196 2.92 DK 29.6737 ---18.1033 5.4533 5.64 0.7738 217.20 89.9870 -14.90 Kroner 40.6304 -44.22 1.0 18.7606 -1.8010 3.4289 2.0 Baht 64.03 952 58.08 1.6897 4.57 Peso 11.58 2.44 526.9706 -36.55 Litas 7.89 Peso 1750 Yuan 12.8988 -40.9337 48.7750 0.96 3.4302 -25.2 53.2940 -33.7642 -23.4279 -3.6 Rouble 67.0 Pound 13.6843 2.9 1.37 11.0749 -2.2219 86.09 490 3.0460 32.6911 3.2064 2.8213 1.31 HK$ 13.5177 3.5020 6.1593 -21.8571 46.8621 86.7940 4.4563 3.178 19.7125 3.9396 1.1662 30.73 202 179 5854 4.2141 2.7826 .000 9041.002 6.22 Rand 17.0000 3.2407 1.4269 3.056 Peso 99.7727 7.1225 2.3 Forint 720 Kronur 640 Rupiah 20900 Shekel 15.26 27.1131 2.95 Won 3400 Rupee 210 SKr 39.00 S\$ 4.7146 -21.8839 3.933 7.5487 2.3274 6.7491 3.8424 3.6527 26.5688 3.8249 2.7109 3.Country Big Mac Price in Local Currency $ 3.8 10.59 3.3983 43.8949 73.5375 3.7597 -35.6602 2. % ++ 1.6510 1.6684 5.4043 6.8 2.3472 1.25 0.9937 3.2677 4.2079 12.4126 3.0446 2.6748 2.7712 -28.9191 3.0 Rupee 190 New Sol 8.0031 -47.93 3.90 9.3992 6.7589 12.8467 1.11 112.3106 4.4004 2.1209 -32.8595 5.
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