Company: Burger King
Opportunity: Home delivery
For decades, Burger King has struggled to differentiate itself against McDonald's. Executives and franchise owners must cringe every time they see McDonald's launch a menu item. More often than not, its new fare proves a huge success (although it should be noted that the failures it has had are epic -- McSpaghetti and a "Hawaiian" burger among them).
By contrast, Burger King seems to perpetually throwing the menu equivalent of a Hail Mary pass.
Its Steakhouse XT failed to steal the thunder of McDonald's Angus offering and its introduction of $8.99 Fire Grilled Ribs didn't drag anyone away from the local barbecue joint.Burger King's new owner, Brazilian private equity firm 3G Capital, has a mighty challenge on its hands as it tries to cut costs and improve sales. It's probably a good idea to stick to a chainwide remodeling plan under way, especially as McDonald's is doing the same on a more limited basis. We also love the Whopper Bar concept that has been launched in Miami and Las Vegas -- upscale Burger Kings with a 20-item "toppings theater" of everything from bacon to guacamole, and the availability of beer. Expanding the footprint of these specialized locations would be an expensive proposition, however. So our suggestion is that Burger king double down on an offering it has just started to consider -- delivery service. Already under way as a trial, Burger King should take a cue from Domino's (DPZ) and independent restaurants and go national with the concept. This service could be a hit for office workers, college students and busy moms. Best of all, it fills a void left by McDonald's, which delivers only on a limited basis to Manhattan office buildings, even though delivery in other countries accounts for as much as 30% of those local sales.
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