Theprinciple challenge faced by Burger King is a strategic decision bythe new management which did not work for the company. After theacquisition of the Burger King by 3G Capital Partners LP in 2010, thecompany was under new management which had limited experience in thefield. Many strategic decisions which were experimental were maderesulting into a wide range of problems.
Fastfood and fast casual share the same concept of quick service.However, the traditional fast food is being overtaken by fast casualmodel restaurants in customer traffic and revenue. Casual diningprovides more ambience and better quality of food compared to fastfood models. They have better customer experience due to betterquality of food, table service and customization, which are notoffered in fast food models. On the other hand, prices at fast foodare cheaper.
TheBurger King management accepted that it had made strategic errors andadopted a strategy to correct the mistake. Based on market surveys,the management realized that customers wanted the original identityof Burger King. The company adopted a strategic plan that wouldrevive the original identify by reintroducing the flame grilledburgers, chicken fries and simplifying the menu. Another importantstrategy involved reduction of average time from customer “drivethrough order and pickup”.
Productdevelopment plays an important role in fast food chains. New productenables the fast food chain to venture in new market niches, attractnew customers and compete favorably in the market. The new productenables the fast food chain match emerging trends in the market.
Alteringthe menu in a fast food can have numerous implications. First, changein menu can result into increased sales and revenues if the customersaccept the new menu or it attracts new customers. Secondly, thechange in menu can result into loss of customers resulting intodecline in revenue. Thirdly, the new menu can complicate theoperations of the fast food chain, especially in the kitchen.