Dynamics in the global economy, as well as the transformation in working culture, has led to a rapid growth of the fast food industry. This growth is linked to an increase in the need for quickly prepared food in various locations. In the modern work environments, people tend to work for longer hours than before. Unfortunately, this translates to shorter breaks for meals. It is also observed that there is an influx in the number of women commuting to work. The Americans are known to be the highest consumers of fast foods. As people travel for leisure or business purpose, time is of the essence, and thereby fast food is preferred to other meals. Fast foods are relatively affordable and more convenient than other meals. People also tend to stick to their culture and food taste; thus, when they traverse geographical boundaries, they expect to maintain the same eating habits and taste. This has called for a need to expand operations of fast food franchise on the international scale.
McDonald's Corporation versus Burger King Corporation, Inc.
As of April 3, 2013, McDonald's was the biggest fast food chain across the United States of America. MacDonald's was originally found by Maurice and Richard McDonald as a barbecue drive-in restaurant in the 1940s, in San Bernardino, California. McDonald's Corporation was formed on April 15, 1955, at Des Plaines, Illinois, by Ray Kroc.
MacDonald's primary operations and activities are headquartered in Oak Brook, Illinois. McDonald's relocated to the McDonald's Plaza in Oak Brook in 1971. The McDonald's headquarters facility foundation sits on the site of its former location. McDonald's Corporation is a public company with its stocks traded at the New York Stock Exchange (NYSE). As of April 3, 2013, a single McDonald's Corporation (MCD) share was traded at $100.26. McDonald's operates on the global scale as an affiliate, investor in properties, franchise or the corporation itself. About 15% of the McDonald's restaurants are owned and directly run by McDonald's Corporation. Some of its principal subsidiaries include McDonald's Deutschland, McDonald's Restaurants Limited (U.K.), Boston Market Corporation, McDonald's Franchise GmbH (Austria), McDonald's France and Moscow-McDonald's (Canada).
McDonald's primarily sells hamburgers, milkshakes, various chicken products, French fries, soft drinks, breakfast items, and desserts. The company also expanded its menu to offer products such as fish, smoothies, wraps, fruit and other localized products. This extension was a strategic response to ever-changing consumer taste. Major McDonald's outlets in Asia serve soup. McDonald's also sells beer in Germany. As of April 3, 2013, there are more than 34,000 McDonald's restaurants in 119 countries and territories, employing more than 1.7 million people.
Burger King (BK) comes second in size with respect to McDonald's. Burger King Company began in 1953 as Insta-Burger King, the Florida-based restaurant chain. Insta-Burger King was later purchased and renamed to Burger King by James McLamore and David Edgerton in 1954. The sale and purchase was a result of the financial difficulties faced by Insta-Burger King in 1954.
Burger King's core operations and central facility are headquartered in Florida, the United States. Burger King became public in 2002, after a partnership deal of Bain Capital, Goldman Sachs Capital Partners, and TPG Capital. As a public company, its stocks are traded as BKW, formerly BKC. As of April 3, 2013, Burger King's stocks traded at $19.39. Burger King also sells hamburgers, milkshakes, various chicken products, soft drinks, breakfast items, and desserts.
As of April 3, 2013, Burger King had reported the establishment of more than 12, 700 Burger King Restaurants in 73 countries. Out of these outlets, approximately 70% are in the United States. Most of the Burger King outlets are privately owned. It is projected that by the end of 2013, its new owners would have totally embraced the franchise model approach of operation. As of April 3, 2013, Burger King ranked third in the United States domestic market. The second place was occupied by its closest competitor, Ohio-based Wendy's. This comparison was based on same-store sales. Burger King is relatively expensive as compared to McDonald's which enjoys economies of scale.
McDonald's financial outlook is more stable than Burger King's, despite criticisms and the 2007 to 2010 world economic crisis. Burger King suffered financially as a result of the crisis, despite having been succeeded by new owners. Both entities maintain high-quality standards in terms of service time and customer relations. McDonald's Corporation is characterized by playgrounds in a few franchises designed to keep children busy as their parents take snacks. McDonald's also has home delivery service in some areas. Burger King and McDonald's provide a variety of choices to their customers.
A statistical analysis on the calorie content of food items from the two entities indicates that there is no significant difference in the caloric content in their non-signature food items. The variable in this research suggests that no matter which fast food restaurant one visits frequently, it is highly likely that one will still be consuming almost the same amount of calories. Caloric content is depended on the food item one consumes.
From the two comparisons, it is evident that setting up a successful restaurant business requires good decision-making skills coupled with a creative team. Branding is also a significant prerequisite for a successful restaurant business because it plays an integral role in differentiating the business from rival firms, while, at the same time, creating a picture in the minds of consumers about the product offerings. In addition, quality and service is important in the restaurant business, wherein quality focuses on providing customers with what they want. Service delivery is equally important, especially in the food businesses, wherein customer switching is very high.
Considering all the aspects of the two fast-food chains discussed above, it is evident that McDonald's Corporation has an upper hand than Burger King. Some of the aspects in which McDonald's is way ahead of Burger King include its presence in more countries, high performing brand name and turnover. The McDonald's corporation is known for its signature French fries. McDonald's and Burger King offer similar products and have almost the same menu.
In terms of corporate strategy, McDonald's Corporation is more aggressive than Burger King. This is highlighted by its extensive market share and high revenue income. Both franchises are embracing knowledge-based human resource as a measure of staying in touch with technology. The similarity in the products and services these fast food chains offer calls for innovative technology. Innovative technology is important to both entities because it is the main tool for gaining competitive advantage in the volatile fast food industry. Growth in the fast food industry is attributed to the need for readymade food. Fast foods are relatively affordable and instant as compared to cooked meals.