Navdeep Mann

Kanika Saini
Fatema Khatib
Final Project: David Loureiro
Burger King
Whopper vs. Adrian D’Andrea
McDonald’s Big Mac
Although the concept of fast food has been around for centuries, the fast food industry
has become one of the fastest growing sectors in North America. Today, the term fast
food has often been referred to as unhealthy, cheap and ready to go meals. With the
growth of multinational fast food chains, consumers have grown accustom to receive
food on demand without having to wait or resort to cooking. The image and influence of
the fast food industry has now become part of modern day living.

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. The
two companies that we chose to analyze and compare are Burger King vs. McDonald’s.

Market: Quick Service Restaurants (Appendix B)

Product Category (Appendix A): Mid-Tier Ham Burger specifically Big Mac vs.
Whopper. 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. At the
same time it is not a value burger such as the junior whopper or a Mc Double.

Functions and Needs:

The product aims to satisfy hunger while creating a sense of comfort. This image is
created through the brand recognition that the two companies have built over the last few
decades. The iconic products inspire a nostalgic feeling for their customers, by
associating products with consumers’ identity. 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. Over the years both companies have expanded
their reach globally to gain market share and profitability. As the market has stabilized,
there is less room for expansion, thus the need for profitability and remaining market
leaders have become more dire than ever before.

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, as these products are not high-
ticket items. Both companies promote economies of scale in majority, if not all of their
products. In the fast food industry, the target consumers are looking for a quick, cheap,
satisfying meal. The most important factor consumers’ value for repurchase is
convenience, they aim to purchase at the closest location. Often the franchisee located
near to the target market wins, or the one that out numbers with locations.

Product Attributes: (Rating Scale 7 highest, 1 lowest level of importance)

Customization- Allows for customers to have their burgers their way (high
customization) or made by default (low customization); most customers enjoy having
higher customization. Rating: 1
Size- Total size of the sandwich (width, height, etc.); customers preference generally
differs here; height may be caused by bread in between two patties, while width is usually
determined by size of the patty. Rating: 7

Heating Method- Flame Broiled or fried; Flame broiled is often seen as a healthier
choice, fried often raises health concerns due to type of oil used for customers. Rating: 5

Number of Patties- one or two, 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. Rating: 4

Unique sauce- Ketchup + Mayo vs. Mac Sauce; which gives the burger that extra kick of
flavour that always sticks with the customer. Rating: 6

Icon Packaging – The standard box for the Big Mac symbolizes the product, or a simple
standard paper wrap for the Whopper. Rating: 3

MDS Dimensions
Manliness – size, flame broiled/fired
Experience – icon packaging, uniqueness
Quality – beef, 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, we can determine that Whopper should have a relatively higher
competitive positioning then McDonald’s but in reality that is not the case. To analyze
this further, we looked at both companies advertisements to analyze how two very similar
products are positioned very differently.

Both the Big Mac and the Whopper are well known hamburgers distributed
through large quick service restaurant chains. 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. The print ads could be found on
billboards, buses, and various other physical mediums while the video ads were used
primarily on television and radio (to a smaller degree)

Video Advertisement Analysis

Attributes
One of the attributes that are displayed in the Big Mac ad includes Iconic
packaging. This is showcased in the ad through the characters, as they enjoy the product
in every frame, from the first bite to the last. The ad is also able to exhibit international
adaptations of the iconic packaging, by displaying North American characters enjoying
the product in Japan as the product is presented in packaging with Japanese writing. The
ad also illustrates attributes such as size, special sauce and number of patties (two). The
first frame of the ad focuses solely on the product and the product remains prominent in
every successive frame, ensuring the focus of attention on the products size from various
angles. Some characters are even shown stopping all current activity in order to simply
handle and enjoy the product, regardless of how messy they get in the process, as pieces
of lettuce routinely fall out and the special sauce drips on clothing.
The Whopper ad displays attributes such as quality of beef, size, and number of
patties. This is done through multiple shots of the Big Mac placed next to the Whopper,
thus exaggerating the size of the Whopper compared to the Big Mac. As the taste test is
conducted, the samplers are shown struggling to grab bites out of the Whopper compared
to the Big Mac, displaying the greater size of the Whopper. The “unbiased” approval of
the “Whopper Virgins”, for the Whopper compared to the Big Mac accentuates the idea
of the Whopper as a product of better quality, one that is more delicious when compared
to the competition.

Frame of reference and differentiation

The frame of reference for the Big Mac is represented as a symbolic experience
and traditional product, while the frame of reference for the whopper is size and quality.
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. These are the essentials that a
competitor must encompass in order to be a contender.
The points of differentiation for the Big Mac include the special sauce, the two
patties and its iconic packaging. The brand recognition using the red and yellow colour
motif for the unique carton differentiates the product from the competitor. Lastly, 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, size, and
flame broiled. The method of heat or the meat being flame broiled is a distinguishable
point of difference for the Whopper. Although not overtly stated in the ad, 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 quality of beef is another POD that is touched upon in the ad,
through taste testing, with the “unbiased approvals” used as a guarantee.

Main perceptual objectives

The main perceptual objectives of the Big Mac ad were convenience and
experience (tradition). Convenience is easily visible in the ad as every character is shown
to be enjoying themselves, whether at work, at a Frisbee game, hanging with friends, or
travelling around the world (In Japan). It is available worldwide, for multiple people and
locations. The diversity of the people in the ad, combined with the numerous differing
situations, depicts the good moments and enjoyable times that people of all ages have
when sharing a Big Mac.
The main perceptual objectives of the Whopper ad were awareness and taste. The
ad illustrates the idea that the Whopper is a quality product that speaks for itself, even in
remote places such as Romania, etc. By displaying indigenous, rural people approving
the Whopper over the Big Mac during the taste test, the ad aims to authentically support
the product as superior tasting, through the means of “unbiased opinions”. The ad
portrays greater awareness of the product by promoting it in remote places and
introducing it to ignored markets by traditional QSR’s*.

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. Through its advertisement
McDonalds creates a connection with the viewer’s culture and tradition, whereas the
Whopper focuses solely on taste and taking the audience to remote ends of the world,
thus loosing that connection and familiarity. This connection is deemed very important in
McDonald’s advertising strategy as the audience always remains connected with the
characters portrayed in the commercial. The Whopper ad however is able to get their
message of a better tasting burger across, but at the cost the personal connection with its
audience as most will be unable to connect with the characters on screen.

Positioning and Strategy

The Big Mac commercial is intended to re-introduce the tried and true, classic
product. Whether the product is present when friends come together, flirtatious glances in
social events, vacationing with family, or just self enjoyment over a delicious burger
during a quick lunch break at work, it all comes together to create experiences and
become a part of memories that are forever remembered. It also illustrates the products
attributes such as size, number of patties and iconic packaging. Therefore it is a generic
positioning aiming to remind people of all the reasons, physical and or emotional, they
love this product and will continue to do so.
The Whopper commercial on the other hand focuses on only one attribute,
quality. It aims to position itself as a bigger, better tasting product compared to its main
competitor as it attempts to target consumers who are concerned with taste above all else.
Therefore both commercials have very different messages. McDonalds focus is very
broad while Burger King has a narrow positioning. The Whopper overtly differentiates
itself by naming the competitor in the ad, and focusing on quality only. The Big Mac
from McDonalds has a more well rounded strategy, which is targeted and created for its
consumers. 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.

Print Advertisements Analysis

Attributes
 There are multiple attributes represented by each ad. 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 quality of the meat is also addressed as the advertisement directly calls
attention to the burger patty itself by emphasizing the word “meat”. Lastly, the burger is
made to appear bigger than it actually is by placing it on a stage.
The Whopper advertisement clearly shows size as an attribute as the burger is
unable to fit inside a Big Mac box. The single patty and char broiled heating method
(grill marks) are also visible in the ad, which make the burger visually
appealing.Furtherrmore, 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.

Frame of reference and Differentiation

The frame of reference for both burgers is size in this case. This actually works
better for the Whopper as they have traditionally used size as a major selling point
whereas the Big Mac has not. The reason Burger King makes frequent references to the
Whopper’s size is because it is in fact the larger of the two burgers. 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. In terms of differentiation, the points of difference for
the Big Mac are its two patties and special sauce and; while the Whopper is able to
differentiate itself by means of size and the fact that it is char broiled instead of fried.

Main perceptual objectives

The main perceptual objectives for the Big Mac ad are manliness and
performance (taste). 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. Performance is also a prominent message as the burger is
depicted as too good to resist.
Like the Big Mac, the whopper ad uses the performance and manliness perceptual
objectives. The large size of the burger is a clear indication of manliness, 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.

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. As noted earlier however, the Big Mac
strays from its traditional focus of the "experience" of the burger and it seems to imitate
the traditionally manly Whopper ads. The Big Mac ad does however incorporate
sexuality to a low degree which creates an easily identifiable discrepancy between the
two ads. The use of Sexuality, like size, is also inconsistent with McDonald’s recent
marketing efforts. This inconsistency may in fact be evidence of a fault in the
McDonalds marketing campaign.
Positioning and Strategy
Both of these ads position the products towards men. The Big Mac uses size and
the personification of the burger as a woman, while the Whopper also emphasizes size
while using its char broiled attribute to further appeal to men. 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.
After reviewing the ads, the Whopper advertising strategy appears to be superior.
The reason for this is because the ad is consistent with previous marketing strategies and
it is far less cluttered. It is also more humorous and does not resort to the use of puns in
its message. Finally, 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.

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. 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 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, 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, on-the-other hand, 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.

Furthermore, 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. If the Industry ever does begin to drastically decline, it is
probable that McDonalds will emerge as the victor.
Table of Contents (appendix)

Appendix A Product and Background

Appendix B Market Size

Market Assessment

Appendix C Channels of distribution

Appendix D Advertising Strategies

Appendix E McDonalds’
Concept (Table 1)
Strategy
Vision/Mission

Appendix F Burger King

Concept (Table 2)
Strategy

Appendix G Market Share for FFHR in 2008

Appendix H What is the Big Mac Index? Figure 1

Appendix I Consumer food service Canada (Tables)

 Appendix A
Product and Background

In 1954, James Mc Lamore and David Edgerton opened their first Burger King
restaurant in Miami Florida. The vision of the company was to offer reasonably priced
quality food, served quickly, in attractive, clean surroundings1. Their signature sandwich
became the Whopper, which has been a menu staple since it was introduced across all
their locations. As a result of changing strategies, this may have contributed to the
decrease in awareness of the firm in comparison to McDonalds. Russ Klein, 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. In 2009, Burger King has launched a new marketing
campaign to revamp their positioning and target the adolescent population. They have
also made their marketing campaigns more relevant to current trends in the market. As of
2009, 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.
This was a seven-patty burger weighing more than 1.4 lbs. and had a calorie count of
2,1203.
Ray Kroc opened Des Plaines, Illinois restaurant in 1955 after pitching the idea of
opening up restaurants to the McDonald brothers. In 1968 the Big Mac sandwich was
introduced.4 As a result of the "Big Mac Attack" ad campaign of 1975, millions of
Americans came to know the ingredients by heart: two all-beef patties, special sauce,
lettuce, cheese, pickles, onions--on a sesame-seed bun.5 It's an icon to many, even if it
has a negative image among quite a few. It should be pointed out, however, that the Big
Mac (540 calories, 29g fat) compares almost favorably against a Whopper with cheese
and all the trimmings (760 calories, 47g fat). As the Big Mac celebrates forty-plus years
of sales, it remains a multi-faceted symbol of America: capitalism, commercialism, and
cholesterol. In fact, The Economist created the " Big Mac Index” as a means to illustrate
currency exchange theory.6 Over the years, McDonald's has developed TV advertising
campaigns that have become, like McDonald's, a part of our lives and culture.
McDonald's commercials have focused not only on product; but rather on the overall
McDonald's experience, portraying warmth and a real slice of ever day life. This "image"
or "reputation" advertising has become a trademark of the company and created many
memorable television moments and themes.7

1
Burger King (Canada) website. <www.burgerking.ca/companyhistory>

2
Swearingen, Wendy Guild; “Can Burger King Rekindle the Sizzle?”; Harvard Business
3
School, Working Knowledge Archives, May 3rd, 2004.

4
http://www.mcdonalds.ca/en/aboutus/history.aspx
5
http://www.associatedcontent.com/article/593619/fat_facts_about_the_mcdonalds_b
ig_mac.html?cat=51
6
IBID
7
http://www.mcdonalds.ca/en/aboutus/marketing_themes.aspx
 Appendix B

Market size
According to Consumer Foodservice, the fast food market in Canada is estimated
to be $19 Billion (as per Table 12)8. The market has been growing and the analyst
forecast the sales in units to grow by 3.1% in the next 5 years (as per Table 11)9. Many
analysts are under the assumption that the market has matured and is at a point of
stagnate growth. Comparing this to U.S, analyst estimates indicate a market size of $68
billion as per the results in 200810. Nevertheless, growth of health consciousness, rising
food prices and slowing economy has caused the fast food industry to not grow as rapidly
as it had in the past11.
Currently, Burger King has 1.1% of market share of the Canadian fast food
industry (as per Table 9)12. Burger King has been losing its market share over the last 4
years whereas, its direct competitor, McDonald’s has been maintaining its market share
approximately 10%13. Recently, Burger King Holdings Inc. reported a 6.4% drop in its
fiscal first quarter earnings because consumer spending has declined due to stiff price
competition between fast-food chains14. However, Burger King has formulated a strategy
to focus on premium burgers. Also, the company is starting to offer healthier products in
its menu. These new strategies are geared to take advantage of the growing fast food
market and a method to differentiate from fierce competition.
In regards to the market segmentation, the market can be divided into two basic
types of markets: generic market & product market. Generic market can be defined in
terms of fulfilling the need of an appetite, in other words, food. However, for the purpose
of this project, segmentation is defined by using product market, and thus, Big Mac vs.
the whopper.

Market assessment

The total global market share Burger King has in the fast food industry is 4%15,
while McDonalds has a 90% global market share. Burger King has a market share in
Canada, of 1.1% whereas McDonalds has a 10.7%16.

8
Consumer Food Service – Canadian Restaurant and Food Association
9
Consumer Food Service – Canadian Restaurant and Food Association
10
http://www.1888pressrelease.com/us-fast-food-industry-to-cross-us-170-billion-by-2010-pr-
149886.html

11
http://www.wikinvest.com/industry/Fast_Food_Restaurants_(QSR)

12
Consumer Food Service – Canadian Restaurant and Food Association
13
Consumer Food Service - Canadian Restaurant and Food Association
14
Anonymous. Wall Street Journal. (Eastern edition). New York, N.Y.: Oct 30, 2009. pg. B.4
15
16
Consumer Food Service – Canadian Food and Restaurant Association
 McDonald's Corp. has accelerated its U.S. market-share growth by selling new
products and promoting old standbys through the recession, even as consumers eat out
less, chief financial officer Peter Bensen says.17 The world's largest restaurant chain
introduced iced coffees and a larger $3.99 (U.S.) Angus beef burger, and advertised its
Big Macs to win sales. McDonald's accounted for 46.8 per cent of the U.S. hamburger
market last year, up 10 basis points from 2007, according to food-industry researcher
Technomic Inc. Burger King was second with 14.2 per cent. McDonald's says it has
raised its share of the U.S. fast-food market by 20 basis points in 2007, 30 basis points
last year and 50 basis points this year through May.18

Also, over 38% of Burger Kings franchises are International (outside US and
Canada)19. This is significant because it shows how diversified Burger King has become;
they do not have all their business centralized in one area. Also, sales growth has been
the highest in three years in 2008, at 5.4%. In the previous two years, they were at 3.9%
and 1.9% respectfully20. These are overall sales growth, opposed to growth in Canada
which has been stagnated. Revenue in the US and Canada in 2008 was $318million,
$284 million and $264 million in the previous year’s respectfully 21. Although, majority
of that revenue was made in the United States, it shows the possibility of future revenues
in Canada if there is more expansion and development in cities. There are 7,512 Burger
King Restaurants in Canada and the US. In Canada alone, there are 303 Burger King’s in
Canada, which leaves more than 7500 Burger King Restaurants in the United States
alone. The US population is roughly ten times larger than Canada’s yet they have a
disproportionate amount of Burger Kings comparative to Canada. There is definite
market available in Canada as indicated above. 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. The question then remains what are the appropriate
strategic tactics to win market share along with its customers. For starters, by analyzing
only the number of locations, it is quite evident Burger King needs to increase relative
real estate to gain competitiveness.

Appendix C

Channels of distribution
The channels of distribution utilized by Burger King and McDonald’s are
primarily their franchises and restaurants. They rely on having the physical locations
established in order to be recognized by the public within the surrounding environment.

17
http://www.wtgmarketingsummit.com/2009/06/burger-king-concedes-defeat-on-
marketing-initiative/
18
http://www.wtgmarketingsummit.com/2009/06/burger-king-concedes-defeat-on-
marketing-initiative/
19
UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANNUAL REPORT
PURSUANT TO SECTION 13BURGER KING HOLDINGS, INC., Fiscal 2008 year
20
UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANNUAL REPORT
PURSUANT TO SECTION 13BURGER KING HOLDINGS, INC., Fiscal 2008 year
21
UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANNUAL REPORT
PURSUANT TO SECTION 13BURGER KING HOLDINGS, INC., Fiscal 2008 year
Also, their ads and promotions are a big part of their channel of distribution. By
promoting products such as The Whopper and the Big Mac as their signature dishes,
these products have become a symbol of the companies that are recognizable worldwide.
Within the last 5 years, a major ad war has started between McDonalds and Burger King.
Usually whoever has the more effective ad campaign, receives a larger portion of the
relative market share.
“In the first quarter of fiscal 2008, our U.S. television advertisements were among
the top five that were recalled and the top five best liked new restaurant ads airing
nationally”, according to advertising industry researcher Nielson IAG at Burger King. In
addition, 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, one of
less than a dozen national advertisers across all categories to have that many mentions.”22
It is evident that advertisements and television and radio channels are very
important to gaining market share. 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.

Advertising Strategies

Burger King has managed to find alternative marketing strategies to continually bring
their name to the forefront, even when you skip through 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, "Wake up with the King." The commercials were a bit odd, but
definitely catchy. Burger King’s actual products remained in the commercials, but
weren’t necessarily the main piece to the ad.
In November 2009 Burger King began offering Burger King Xbox and Xbox 360
games with their value meals in three different genres; action, fighting and racing. A few
days before Christmas, it was reported that 20 million BK Xbox games had been sold; for
only being on the market exactly one month. Of course, it could’ve been the $4 price tag
when compared to the usual cost of $60-$70 for an Xbox/Xbox 360 game. Since the
games could only be purchased with a value meal, it means that BK brought a lot of
people through their doors while pocketing a nice amount of change from the promotion.
While McDonald’s is only putting Nintendo mascot toys in their Happy Meals, BK has
learned how to reach a demographic, especially when many times that demographic has
their own money to spend.
There have been many McDonald's advertising campaigns and slogans over the years.
The company is one of the most prevalent fast food advertisers. McDonald's Canada's
corporate website states that the commercial campaigns have always focused on the
"overall McDonald's experience", rather than just product.” The purpose of the image
has always been "portraying warmth and a real slice of every-day life.” Its TV ads,
showing various people engaging in popular activities, usually reflect the season and
22
UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANNUAL REPORT
PURSUANT TO SECTION 13BURGER KING HOLDINGS, INC., Fiscal 2008 year
time period. Finally, rarely in their advertising history have they used negative or
comparison ads pertaining to any of their competitors; the ads have always focused on
McDonald's alone, one exception being a 2009 billboard advertising the new Mc Cafe
espresso. The billboard read "four bucks is dumb", a shot at competitor Starbucks. 23

McDonald's

McDonald's is the largest and best-known global foodservice retailer with more than
30,000 restaurants in 121 countries. McDonald's has global brand recognition,
experienced management, site development expertise and advanced operational systems
that enable the group to pursue its global opportunities.

McDonald's concept

McDonald's operates in the foodservice industry and primarily operates quick-service

restaurant businesses under the McDonald's brand. To capture additional meal occasions,
the company also operates other restaurant concepts under its partner brands: Boston
Market, Chipotle Donatos Pizzeria and (soon to be) Fazoli's. In addition, McDonald's has
a minority ownership in Prét A Manger.

The number of restaurants operated by the company is illustrated in Table 7.8 , below.

T7.8 McDonald's restaurants, 1996-2001

No. Restaurants 1996 2001 Change

France 540 913 373

Germany 743 1,152 409
Italy 147 320 173
Netherlands 151 212 61

23
^ McDonald's publication. "Corporate FAQ". McDonald's Corporation.
http://www.mcdonalds.ca/en/aboutus/faq.aspx. Retrieved 2007-11-24.

^ Overview of McDonald's key financial metrics via Wikinvest, retrieved 9/28/2009

^ Joe Bramhall. "McDonald's Corporation". Hoovers. http://www.hoovers.com/mcdonald's/--

ID__10974--/free-co-factsheet.xhtml. Retrieved 2009-03-25.
Spain 121 309 188
Sweden 129 240 111
UK 737 1,182 445
US 12,094 13,099 1,005

SOURCE: http://www.mcdonalds.com

McDonald's strategy

McDonald's vision is to be the world's best quick service restaurant experience, offering
convenient snack and meal products in convenient locations.

The company operates several partner brands and is committed to growing these brands
carefully. They intend to scale a brand whenever it demonstrates broad consumer appeal.
The intent is to give consumers a variety of tastes and dining experiences.

To further build the business and extend the reach of the McDonald's brand, the company
is committed to innovating. Some of the most recent innovations include the McCafés,
which are now established in more than 15 countries; dessert kiosks, which are primarily
in Latin America; and the McTreat Spot, McSnack Spot and McDonald's with the Diner
Inside tests in the United States.

Outside of the core brand the company operates several partner brands. These are Boston
Market, Chipotle, Donatos Pizzeria and Prét A Manger (in which McDonald's has a
minority share), which collectively generate approximately $1 billion in annual sales.
McDonald's is quick to point out that only 12 quick-service restaurant chains generate
sales of that much or more.

On April 24, 2002, McDonald's Corporation and Fazoli's, a fast-casual Italian restaurant
concept based in Kentucky, announced their intention to form a joint venture to develop
20 to 30 Fazoli's restaurants in three US markets. McDonald's will also have an option to
purchase the entire company at a later date. 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.

The minority interest in UK-based Prét A Manger, a quick service food concept that
serves mainly sandwiches, snacks and drinks at lunchtime was acquired in January 2001.
The stated aim was to support Prét A Manger's plans for international growth, extending
its reach in the US and Asia. At the end of 2001, McDonald's approved a plan to dispose
of its Aroma Café business in the UK, which was completed in March 2002.
Globally, the company aims to add between 1,300 and 1,400 new McDonald's restaurants
in 2002.

McDonald's vision McDonald's vision is to be the world's best quick service restaurant
experience. Being the best means providing outstanding quality, service, cleanliness, and
value, so that we make every customer in every restaurant smile.

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; and

• Achieve enduring profitable growth by expanding the brand and leveraging the
strengths of the McDonald's system through innovation and technology.

Burger King

Burger King Corporation is a wholly-owned subsidiary of Diageo, the international food

and drinks company, headquartered in the UK. However, Diageo has announced its
intention to spin off the company to concentrate on its core activities.

Burger King's concept

Burger King is the world's second largest burger fast-food chain (after McDonald's). The
company's restaurants are located in each US State and nearly 60 other countries. In
2001, Burger King recorded system-wide sales of US$11.20billion/€12.36billion.

The number of restaurants operated by the Burger King Corporation is illustrated in

Table 7.9 , below. In the US, 7% of restaurants are company-owned, whilst on an
international basis, the figure rises to 15%. In 2001, approximately 56.7% of business
was drive-thru and a further 20.4% is served as take-away.

T7.9 Burger King restaurants, 2001

As at 31stDec, 2001 Company Owned Franchised Total

US 574 7,674 8,248

International 477 2,712 3,189

Total 1,051 10,386 11,437

SOURCE: http://www.burgerking.com

Burger King's strategy

The success and size of Burger King are based in such areas as product development,
expertise in restaurant operation, decor, service and advertising. However, a major factor
that has helped to increase the company's expansion and growth has been the franchising
of restaurants to individuals.

Burger King's strategy in 2000 focused on investing in facility enhancements as the first
step toward revenue growth, followed by a focus on speed of service, accelerated product
innovation and superior marketing. Throughout 2001, Burger King pushed ahead with its
focus on strategic alliances and partnerships.

However, in a change in strategy towards the end of 2001, Burger King announced it was
to increase its activities towards attracting potential new franchisees. In previous years
Burger King had focused most of its growth with existing franchisees. 92% of the more
than 11,400 Burger King restaurants operating around the world are owned and operated
by independent franchisees. For many years, Burger King has enjoyed a large franchisee
community that had grown the brand almost exclusively from within. Supported by
Burger King, these franchisees have driven growth in many markets, but the company's
focus has now turned to attracting new franchisees.

In recent months the corporation has made a series of organisational changes, designed to
improve US company operations and further consolidate the company's international
business.

A new corporate structure, removing a number of division barriers was also introduced.
A key element of the new structure is the elimination of division barriers that made North
America, which accounts for 85% of the company's business, a separate unit.
Simultaneously, a series of new direct reporting positions that will be functionally, rather
than geographically aligned, were introduced.
What is the Big Mac Index?

The Economist uses the price of the ubiquitous McDonald's meal to calculate the "Big
Mac Index", a guide showing how far from fair value different world currencies are. The
Big Mac theory (a.k.a. purchasing-power parity, or PPP) says that exchange rates should
even out the prices of Big Macs sold across the world.

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. When you compare actual exchange rates with the
implied PPP rate, you will see that most currencies are trading way above or below the
US dollar, meaning that they are over- or undervalued. Keep in mind that PPP is a long-
term indicator, pointing to where currencies ought to go in the future. (It's also best to use
it only to measure currencies between countries that are at a similar stage of
development.)24

24
http://www.oanda.com/currency/big-mac-index
Country Big Mac Implied Today's Over(+) /
Price PPP rate + Exchange Under(-)
in Local in US Rate Valuation
Currency dollars 1 USD = against the
USD, % ++
United States $ 3.57 3.5700 --- 1.0000 ---
Argentina Peso 11.5 2.9191 3.22 3.9396 -18.2658
Australia A$ 4.34 3.7940 1.22 1.1439 6.6527
Brazil Real 8.03 4.5239 2.25 1.7750 26.7606
Britain £ 2.29 3.5177 0.64 0.6510 -1.6897
Canada C$ 3.89 3.7125 1.09 1.0478 4.0275
Chile Peso 1750 3.2407 490 540.002 -9.2596
China Yuan 12.5 1.8424 3.50 6.7846 -48.4126
Colombia Peso 7000 3.6911 1961 1896.44 3.4043
Costa Rica Colones 2000 3.8010 560 526.178 6.4279
Czech Koruna 67.92 3.4533 19.0 19.6684 -3.3983
Republic
Denmark DK 29.5 5.1225 8.26 5.7589 43.4302
Estonia Kroon 32.0 2.6439 8.96 12.1033 -25.9706
Eygpt Pound 13.0 2.2677 3.64 5.7327 -36.5046
Euro area € 3.31 4.2837 0.93 0.7727 20.3572
Hong Kong HK$ 13.3 1.7109 3.73 7.7738 -52.0183
Hungary Forint 720 3.3106 202 217.481 -7.1183
Iceland Kronur 640 4.9612 179 129.000 38.7597
Indonesia Rupiah 2.3115 5854 9041.59 -35.2548
20900
Israel Shekel 15.0 3.8839 4.20 3.8621 8.7491
Japan ¥ 320 3.6843 89.6 86.8560 3.1593
Latvia Lats 1.55 2.8249 0.43 0.5487 -21.6330
Lithuania Litas 7.1 2.6602 1.99 2.6690 -25.4402
Malaysia Ringgit 6.77 2.1104 1.90 3.2079 -40.7712
Mexico Peso 33.0 2.5688 9.24 12.8467 -28.0749
New Zealand NZ$ 4.90 3.5020 1.37 1.3992 -2.0869
Norway Kroner 40.0 6.4289 11.2 6.2219 80.0093
Pakistan Rupee 190 2.2064 53.2 86.1131 -38.2208
Peru New Sol 2.8196 2.26 2.8571 -20.8988
8.056
Philippines Peso 99.39 2.1408 27.8 46.4269 -40.1209
Poland Zloty 7.6 2.4004 2.13 3.1662 -32.7269
Russia Rouble 67.0 2.1999 18.8 30.4563 -38.2722
Saudi Arabia Riyal 11.00 2.9290 3.08 3.7555 -17.9870
Singapore S\$ 4.22 3.0651 1.18 1.3768 -14.2940
South Africa Rand 17.95 2.3655 5.03 7.5884 -33.7146
South Korea Won 3400 2.8213 952 1205.11 -21.0031
Sri Lanka Rupee 210 1.8595 58.8 112.933 -47.9337
Sweden SKr 39.0 5.3274 10.9 7.3206 48.8949
Switzerland SFr 6.50 6.2141 1.82 1.0460 73.9962
Taiwan NT$ 75.0 2.3346 21.0 32.1250 -34.6304
Thailand Baht 64.49 1.9937 18.1 32.3472 -44.0446
Turkey Lire 5.65 3.6748 1.58 1.5375 2.7642
UAE Dirhams 10.0 2.7221 2.80 3.6737 -23.7826