Questions and Answers
What is Burger Time?
A fast food restaurant based in Dallas, Texas, with more than 5,000 locations across the U.S.
Who founded Burger Time?
Bud Harris
What market entry strategy is recommended for Burger Time?
What is the primary concern of Mr. Harris regarding the U.S. market?
Signup and view all the answers
What is guanxi?
Signup and view all the answers
What was Jim's suggestion regarding locating suppliers?
Signup and view all the answers
What did Chen recommend regarding beef imports?
Signup and view all the answers
What limitation does the U.S. beef face in the Chinese market?
Signup and view all the answers
What decision was made regarding the beef source?
Signup and view all the answers
Within 14 months, five franchises opened in _____ and _____ (cities).
Signup and view all the answers
What was the outcome of the franchise strategy in China?
Signup and view all the answers
Why was the decision to hire Chinese employees significant?
Signup and view all the answers
Study Notes
Burger Time Overview
- Founded in 1965 by Bud Harris, Burger Time is a fast food chain based in Dallas, Texas, with over 5,000 locations in the U.S.
- The restaurant has experienced stagnant revenues recently, prompting considerations for expansion into international markets, specifically China.
Expansion Strategy
- Two main options for expansion:
- Franchising: Allows quick expansion and revenue generation through franchise fees and royalties, but offers limited control over operations.
- Wholly Owned Affiliates: Provides full control but requires significant capital investment upfront.
Decision on Market Entry
- Franchising is chosen as the optimal market entry strategy for Burger Time in China.
- Emphasis on altering the franchise operations manual to maintain brand consistency in international markets.
Supplier Relationships
- Importance of establishing local supplier connections highlighted; proposal to hire Chinese employees to assist in locating suppliers due to the business network known as guanxi.
- Franchisees may prefer to utilize their own established connections for supplier sourcing.
Logistics and Supply Challenges
- The team in China identifies the need to import beef, suggesting Australian beef due to restrictions on U.S. beef imports stemming from a ban linked to mad cow disease.
- Mr. Harris insists on using U.S. beef for brand consistency, but is informed of the impracticality due to regulatory barriers.
Importing Australian Beef
- The use of a "gray" market is suggested for importing U.S. beef, but the recommendation shifts to importing Australian beef for practicality and reliability.
- Suggestions lead to quick establishment of supply chains and successful franchise openings.
Franchise Success
- Within 14 months, five franchises successfully opened in Beijing and Shanghai, greatly favored by Chinese consumers.
- Increased royalty revenue satisfied Mr. Harris, validating the decision to prioritize franchising and Australian beef imports.
Strategic Analysis
- Franchising minimized financial risks, enabling quicker growth compared to wholly owned affiliates.
- Hiring experienced local employees helped create necessary connections and ensured consistent brand representation, crucial for future expansions.
- The decision to import Australian beef mitigated potential operational risks tied to the U.S. beef ban.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz focuses on the business model and expansion strategies of Burger Time, a popular fast food chain founded in 1965. Test your knowledge on the history, growth, and development strategies within the fast food industry.
