BURGER KING

Burger King - Market Entry Proposal in France



Burger King - Market Entry Proposal in France

Brief Synopsis

The following report is a market entry proposal for Burger King to establish its presence in France. The report analysis the national and firm level dynamics. Further, both these dynamics are evaluated in conjunction to analyse the basis for market entry in France's fast food industry. Given the growth numbers in the French fast food industry, increasing urban population, restricted purse of the consumers and the change in trends and dynamics of consuming lunch on-the-go, gives a strong signal for Burger King to advent in the French markets. Further, year on year growth of MNC competition like McDonalds and KFC also signal a strong chance of progression in the French Fast food market by Burger King.

The concurrent section, of the report analyzes potential market entry strategies that Burger King can adopt to enter the French markets.

Recommendation

After analyzing various entry level strategies, Franchising is considered to be the most potent strategy to advent into the French fast food markets. Franchising would give Burger King Management ample control over the brand's direction in France without necessarily posing huge capital asset investments. This is because the network of franchisees would participate with capital investments to gain access to the renowned brand identity of Burger King. Further marketing initiatives, resources, training and support systems would be provided by Burger King Management to adequately equip the franchisees in delivering the corporate goals of Burger King, that is, of growth and profitability in the French fast food market.

Analysis of Market Opportunities

National Level Analysis

The fast food market in France can be distinguished into four distinct segments. These are:

Quick Service Restaurants (QSR);

Takeaways;

Mobile and street vendors, &;

Leisure locations

QSR are locations where full meals are provided though the category does not provide table services. Takeaways are entities that cater fresh cooked food for instant consumption. Mobile and other street vendors offer a narrow range of foods and beverages. Leisure locations are those that provide freshly cooked food and beverages for instantaneous consumption within the confines.

The French fast food market is expected to generate total revenues of $6.3 billion in 2011. This aggregate figure represents a compounded annual growth figure of 2.9% (CAGR). Market consumption volumes are forecasted to increase with a CAGR of 0.9%. This constitutes 773.8 million transactions in the year, 2011. This growth is observed as fast foods take away the share of traditional restaurants, especially for lunch meals. Analysts and researchers predict that the market is bound to decelerate in the future, with a forecast CAGR of 2%, for the five year period 2011-2016. Based on these estimations the market value of fast food consumption is predicted to reach the aggregate figure of $6.9 billion by 2016 (www.researchandmarkets.com).

Some of the key Macro-Economic factors that drive the demand in France for fast foods are:

Growing urban population;

Increase in the number of working people;

A trend-shift towards reduction in length of meal times;

Decline in consumption of traditional lunches at home;

Growth in the availability ...