Case Study on "International Given That the United States"

Case Study 5 pages (1612 words) Sources: 3

[EXCERPT] . . . .

International

Given that the United States has always championed free trade and has discouraged protectionism, should the country insist that only American raw materials, equipment, products and services be purchased with the stimulus dollars, or should foreign companies be allowed to benefit from the same as well?

In this paper we are focusing on if stimulus spending should be limited to American-based firms. At the same time, we are examining the impact of globalization on Burger King. These different elements are important, because they will illustrate how this is changing the way governments and firms are operating.

Over the last several years, the federal government has been involved in massive amounts of spending to help stimulate the economy. The reason why, is because the nation was facing a number of lingering challenges associated with the recession. As, the implosion in home prices have directly contributed to: a sharp slowdown in consumer spending and high levels of unemployment. To deal with these issues, the $787 billion in stimulus spending was supposed to provide those who are out of work with a job. While at the same time, they are addressing issues that will help to improve public infrastructure.

A good example of this can be seen with the $8 billion that was ear marked for the creation of a high speed rail service in California. At the time, this was touted as a way for the public to have improved services and to effectively create jobs. In the long-term, this will provide local economies with the support they need to be able to grow and keep up with the technological changes that are taking place. Evidence of this can be seen with Ray LaHood the Secretary of Transportation (who is in support of this project) with him saying, "I do think this is the transformational issue for this administration when it comes to transportation. A trip from San Francisco to Los Angeles, which is about 410 to 420 miles, will take two hours and 38 minutes with a one-way fare of $55. That's about half to one-third the cost of a plane ticket for a comparable trip." (Naylor) This is significant, because it is showing how the additional stimulus spending would improve the kinds of services that the public is receiving.

However, once work was about to start on this project is when negative news began to surface. What happened was is Japan offered to provide California with an additional $40 billion in financing for the construction of the high speed rail line. This is problematic, because during a time when the state is running a $9 billion budget deficit, the government is going to borrow money from overseas lenders to fund the project. At the same time, the completion of the high speed rail cars and related equipment would be manufactured in Japan. This is limiting the effects of the stimulus package by: sending jobs to overseas locations vs. hiring American workers. As a result, the net positive impact of the project will only be felt during the construction phase of the rail line. Everything else will benefit firms that are based overseas and are offering California a number of incentives for the contract. (Cooper) These elements are important, because they are showing how the country must insist that all aspects of the project are given preferences to: American workers and companies.

Part 2

By mid-2009, Burger King was not in any of the following five countries: France, India, Nigeria, Pakistan and South Africa. Compare these countries as future locations for Burger King.

France has the ability to provide Burger King with the opportunity to go into a market they had entered previously and left for different reasons. This is because executives did not understand how to make their product standout in the minds of consumers. Once this occurred, is meant that they would lose market share to rivals such as McDonalds and Yum Brands. This is significant, because it is showing how Burger King must take an approach that will allow them stand out in minds of consumers. ("Country and Evaluation")

As far as India, Nigeria, Pakistan and South Africa are concerned, the company moved away from creating a unique brand image that will stand out in minds of consumers. This is because executives have been traditionally focused on establishing their operations in Latin American and Caribbean countries. The reason why, is due to the fact that they are: headquartered in Miami and have experience in serving this population demographic. If the company can create an approach that will take specific cultural factors into account, they will be able to create a product that will stand out against competitors. This is significant, because it is showing how in both France and these other countries, the company must be focused on embracing specific traditions of a particular region to help the product stand out. ("Country and Evaluation")

When entering another country, discuss the advantages and disadvantages of an international restaurant company, specifically Burger King, would have in comparison with a local firm in that market.

The advantages that Burger King will have when entering a local market include: they have a unique menu and are offering different approach when it comes to dining. These two elements will help the firm when going to a new location by: creating a one of a kind product. Once this occurs, is when they are offering a service that will give customers a special experience when they eat at their restaurants. This is the point that people will remember them and the kind of products that they are selling. ("Country and Evaluation")

The disadvantages that Burger King will have when going into a new market include: intense competition and the inability to standout. These issues are troubling, because they have contributed directly to the failure of the firm in select markets. The reason why, is because they are seen as offering nothing new to consumers. Once this takes place, it means that sales will continue to linger in these areas. As there is no incentive for anyone to become excited about the restaurant (which will contribute directly to: decreasing profit margins in select locations). ("Country and Evaluation")

About two thirds of Burger King's restaurants and revenues are in its Americas region (United States and Canada) and one third elsewhere. Should this relationship change? If so why and how?

Yes this relationship should change. The reason why, is because the company is missing out on a tremendous amount of profits by focusing on these regions. Instead, they need to concentrate on areas that will increase their bottom line growth. The best way to do this is to concentrate on Asian nations (i.e. China, India and South Korea). This will be achieved by creating a customizable menu that will take into account specific country tastes. While at the same time, they are focused on introducing customers to the existing products on their menu. If this kind of approach can be taken, it will ensure that Burger King is able to create a brand that will stand out in the minds of consumers. ("Country and Evaluation")

The case mentions why that Burger King prefers to enter countries with large numbers of youth and shopping centers. Why do you think these conditions would be advantageous?

The reason why these conditions are advantageous, is because the brand is popular among the younger demographic of the population. These individuals will spend most of their time in locations such as shopping centers. This means that when a restaurant is placed in these areas, it is increasing the chances that they will be successful by: allowing them to reach out to their core customers. ("Country and Evaluation")

How has Burger King's headquarters location influenced its international expansion? Has this location strengthened or… READ MORE

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