DISCOVERING CORE COMPETENCIES
It is often a difficult process to identify the company’s core competencies because of a lack of honesty during the internal analysis. There is also the problem of selecting the capabilities and resources that do not have a competitive advantage. Capabilities are derived from the resources that a company has and these resources do not yield any competitive advantage.
One of the major resources includes its technological resources such as trade secrets, patents, copyrights, and trademarks. The company’s trademark and brand name are unique and are known across the world and not only in America and Europe.
In addition, the company has physical resources that include its strategic locations in different parts of the country as well as abroad. The company owns or franchises 12,174 restaurants across the globe of which 60% are located in the US. Proximity of Burger King franchised restaurants to customers ensures that the company maximizes its sales in the country and in the rest of the world.
Another resource that the company has is its financial resources. The company is able to expand its business and grow internationally because of its ability to generate internal funds from its franchising operations. About 10787 Burger King Restaurants are owned by franchisees that pay the company a stipend.
The company’s management is also another critical resource as the different management teams have been able to transform the company into a global powerhouse in the food service industry. Other resources include innovation resources such as the batch broiler installed in every restaurant that reduces energy costs and maximizes the cooking flexibility.
The company’s effective organizational structure and the management’s ability to foresee the future of the company are the organization’s key capabilities. The franchising system has enabled the company to expand into previously unchartered territories. The company was able to expand to international markets because of its successful franchising organizational structure.
Some of the core competencies of the company include refranchising its products, constantly pursuing international development, maintaining and increasing sales traffic in both Canada and USA, and strongly focusing on the cost structure of the company to ensure that the costs of the company at the corporate level are in line with its development agenda.
Findings of Fact
Based on the case study, the company is the second largest company in the fast-food hamburger category. The company accounts for 14% of total FFHR sales in the United States alone. However, the global recession and the increasing cases of lifestyle diseases have dented the company’s profits over the last five years.
The company’s management has been extremely instrumental in creating the profitable business especially after the TPG Capital took over the company in 2002. Before this change in management, the company was losing money because the then managers did not pay the required attention to the company. Finally, the company has had a bad run with its public image because it does not advertise to a diverse group of people. Its main customers are young men who are attracted to ‘gimmicky’ advertising. This leaves out women and older men from their customer base.