BURGER KING CASE STUDY:

OBESITY CONCERNS
PRODUCT REVAMP
CONTENTS
■ About the case
■ What is obesity ?
■ About Burger King
■ Fast food Industry in US
■ Problem Statement
■ Problem Causes
■ Ethical issues
■ Obesity and Fast Food Industry
■ Public Outcry against Fast Food Industry
■ Burger king: Image makeover
■ Competitive Advantage for Burger King
■ Results of the new strategy
■ References
ABOUT THE CASE

■ Obesity was becoming a major health crises

■ Fast food was treated as health menace comparable to tobacco and alcohol.
■ Allegation towards fast food chain for serving unhealthy food.
■ The same store sales at fast food chains like burger king began to decline
■ Burger King initiated a slew of changes in its Campaign and menu to enter the health
food segments.
WHAT IS OBESITY ?

■ Over weight and Obesity are defined as abnormal or excessive fat accumulation that
may impair health.
■ Body mass index is a simple index of weight-for-height that is commonly use to classify
over weight and obesity in adults
■ The WHO Definition is:
> A BMI greater than or equal to 25 is overweight
> A BMI greater than or equal to 30 is obesity
■ The fundamental cause of Obesity and over weight is an energy imbalance between
calories consumed and calories expended
ABOUT BURGER KING

■ Burger King, is a global chain of a fast food restaurant headquarters in Florida, United
States and started its operations in 1954
■ It was founded by David Edgerton and James McLamore.
■ In 2018, Burger King had more than 13,400 outlets in 75 countries, of these, 66% are in
the United States and 90% are privately owned and operated.
■ Revenues- US $ 1.58 Billion (FY 2018)
■Vision
> We never compromise on our quality

■ Mission
> We will prepare and sell quick service food to fulfil our guests needs more accurately,
quickly, courteously, and in a cleaner environment than our competitors.
> We will continue to grow profitability and responsibility and provide career
advancement opportunities for every willing member of our organization
FAST FOOD INDUSTRY

■ The U.S Fast food Industry is by far the largest in the world, spawning global fast food
brands such as McDonald's, Burger King and Subway.
■ In 2017 the fast food Industry generated the total revenue of US $2.68 billion in more
than 3,00,000 restaurants, employing 3.9 million people.
■ Many of those establishments are operated as franchise restaurants, a concept that is
very common in fast food industry.
■ In 2017, McDonald's was the market leader in the U.S. Fast Food Industry with a
market share of 12.7percent
TARGET MARKET

 Burger King’s primary target customers were families where both partners were
working.
 Even Children of up to 16 years of age played a major role and they were the secondary
targets.
 Their marketing strategies are directed towards the low and middle class people.
PROBLEM STATEMENT

■ Fatty food products- Obesity and low nutritional value.

■ Lawsuit – against Burger King and three other fast food giants (McDonald, KFC and
Wendy’s)
■ The Company’s sales in US reached $ 7.75 billion in 2003,down from $ 10.3 billion in
1998.
■ Market share fell from 18.5% in 2001 to 15.6% in 2003
PROBLEM CAUSES

■ Food products containing high amount of unsaturated fat.

■ Low nutritional value of food products
■ Price wars among the fast food chains
■ Menu Problems
■ Untidy restaurants
ETHICAL ISSUES

■ Turning a Fast Food sandwich into a “value meal” by adding items like fries and a soft drink
was responsible for the increase in calorie content.
■ Fast Food companies did not properly disclosed the ingredients of their food and the risk of
eating too much.
■ Overeating resulted in poor health, associated with large social cost, heavily promoted and
marketing efforts targeted towards young people
■ Three major factors contributing to the rising levels of obesity are:
 The increase in portion size,
 The availability of foods and beverages at schools as well as the discontinuation of physical
education as part of the curriculum,
 The fast food companies targeted the advertisement at children
OBESITY AND FAST FOOD
INDUSTRY
■ “ Centers for disease control and prevention” found that the obesity rate in U.S was rising at an
alarming rate.
■ A study undertaken By the agency in 1999 revealed :
■ 61% of U.S. adults and 15% of children and adolescents aged between 6-19 years were either
obese or overweight.
■ The study also showed that Americans had increased their calorie and carbohydrates intake over
that past 30 years.
■ The average daily calorie intake of women was 1877 calories (1542 in 1972) and that of men was
2618 calories (2450 in 1971)
■ Moreover , US food industry produced about 3800 calories a day per person , which was about
30% more than what a man needed and double pf what woman needed.
CONTINUED

■ Studies linked obesity to a number of health problems.

■ Food consumed away- from home increased which in a way increased calorie intake
from 18% to 34% and fat intake increased from 19% to 38%.
■ “ super – size bags” and “value meals” become popular.
PUBIC OUTCRY AGAINST FAST FOOD
COMPANIES
LAW SUIT FILED

■ In mid 2002, a new York city lawyer filed a suit against four big fast food companies-
Mc Donald’s , burger king, wendy’s and KFC cop.
■ Charge- fatty food were responsible for his client’s ( Caesar barber) obesity and health
related problems.
■ His allegation was the four fast food chain were irresponsible and deceptive in posting
the nutritional information and jeopardized his client’s health with their “greasy, salty
and sugary fare.”
■ The lawsuit claimed that fast food chains were negligent in selling food high in fat, salt,
sugar and cholesterol content despite studies showing a link between such food and
obesity.
TOP FIVE IN THE WORST FAST FOOD LIST

■ In 2002, a research “Centre for sciences in the public interest” identified burger king as
the top provider of the worst fast foods. List includes:
■ Burger king old fashioned ice cream shake.
■ Burger king fries.
■ Burger king hash browns.
■ Burger king double whopper with cheese.
■ Value meals.
BURGER KING: IMAGE MAKEOVER

■ The objective behind initiating an image makeover by focusing on health segment were:
 Awareness among consumers
 To counter the lawsuits
 Changing customer preferences
NEW BUSINESS STRATEGY TO ENTER INTO
HEALTHY FOOD CATEGORY

■ In 2000, company start new policy of chiding consumers that workers could identified
as being obese.
■ In 2003, burger king steeped up its efforts to cater to increasingly health conscious
diners seeing a shift in consumer’s preference.
■ Developed special menu items for customer who are conscious of their calorie,
carbohydrate, and fat intake.
■ The sandwiches was available in two different meals:
■ Traditional value meal
■ Life combo meal
CONTINUED

■ The company promoted the new sandwiches focusing on its low fat content “ flavor
from grilling not from fat”.
■ The company also signed up celebrities to endorse the new sandwiches and juices.
■ The company partnered with some chefs like Rick Bayless to give its healthy food good
taste.
■ In January 2004, Burger King introduced a low carbohydrate version of whooper
hamburger omitting the bun. ( bunless whooper had 3 grams of carbohydrates compared
to regular having 52 grams)
CONTINUED

■ The whooper can be ordered as the part of value meals with side salads and diet coke
( more fruits , vegetables and yoghurt )
■ The company also introduced its new fresh baked baguette sandwich line with a value
meal option of salad and bottled water.
■ The sales of three new products tender crisp and spicy tender crisp chicken sandwiches ,
the Angus steak burger and Fire grilled salads had exceeded the company expectations.
■ The company changed the advertisement campaign.
■ The company also introduced a new thos “ No make fun policy”
COMPETITIVE ADVANTAGE

■ Burger King the first to emphasize customized order with its “ Hve it your way” campaign.
■ The company also designed a new interactive nutrition guide that provided nutritional
information in brochures and on its website a facility that was not provided by other
companies such as McDonalds , Wendy’s or KFC.
■ In addition , it unveiled new easy to follow nutrition information posters in its stores and
website resources .
■ Symbols on the posters guided customers on fat , carbohydrate and calorie-conscious diets
to customize their meals.
■ Burger kings sponsored 207 schools nationwide to participate in the president’s challenge.
RESULTS OF NEW STRATEGY

■ For april 2004 the company sales had increased by 7.3% and franchise sales had
increased by 3.4% year on year
■ In may 2004 , the same store revenues at company owned stores increased by 16%
■ “ have it your way” slogan had helped in increasing the same store sales by 4.4%
■ BURGER KING experienced sales growth of +9% post makeover
REFERENCES

■ http://www.bk.com/en
■ http://www.statista.com/topics/863/fast-food
■ http://www.medicalnewstoday.com/info/obesity
■ http://www.news.bbc.co.uk
■ BUSINESS ETHICS AND CORPORATE GOVERNANCE-KALYANI
PUBLICATION
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