Can Burger King and Chick-Fil-A Merge and Succeed Research Paper

Pages: 5 (1644 words)  ·  Bibliography Sources: 5  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

Merger, Acquisition, And International Strategies

Chick-fil -- A is renowned as a famous restaurant chain of American fast foods with its headquarters in Atlanta suburb in College Park, Georgia. The firm has a specialty in chicken sandwiches. The company was established in 1946 in Southern United States. The Chick-fil -- A company bears more than 1,800 restaurants across 41 states in the U.S. And District of Columbia. The culture of the company is influenced by the Southern Baptist beliefs. The Chick-fil -- A restaurants remain closed for business on all Sundays. On the other hand, Burger King popularly known as BK is one of the global fast food restaurants with its headquarters in Miami-Dade County, United States. The firm started operations in 1953 under the 'Insta-Burger King' trade name. After 1954 financial difficulties, Insta-Burger King established Miami-based franchisees. The new investors renamed the company Burger King. In the period of recovery, the company changed hands severally, with its owners making strategic partnerships with Bain Capital, TPG Capital, and Goldman Sachs Capital Partners.

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The acquisition of competitor power will increase the levels of profits within the firms. The restaurants will maintain and increase the margins of interest rates in retail food markets. This is because they cannot achieve similar outcomes through wholesale banking market for which the customers develop access towards alternative financing sources. The essence of creating a broad network of the institutions will be achieved through a merger that ascertains all requirements and technology advances (Ahlstrom & Bruton, 2009). The scope of occurrences increases economies of scale within the distribution and production of hospitality services. The new technology introduction by Burger King is expensive and more affordable for Chick-fil -- A through a merger. The extensive retail store presence for both firms will demonstrate greater gains in economies as compared to traditional branch-based networks.

Research Paper on Can Burger King and Chick-Fil-A Merge and Succeed Assignment

The business tools used in risk management for Chick-fil -- A will include derivative products as well as items that appear on balance sheets as collateral. This is applied in efficient ways in terms of substantiating institutional development. The efficient confrontment for disintermediation phenomenon is directed towards connecting substantive systems in restaurant management (Krug, 2009). The restaurants have an opportunity of creating affiliate companies that offer alternative fast food products past the traditional store business. The merger of affiliates will achieve the purpose of creating new and all-powerful support with the aim of developing relevant reintermediation. Such aspects include offering the whole spectrum of restaurant services in groups.

Chick-fil -- A applies the model with a significant difference from that of Burger King and its restaurant franchises. This is especially noted with the retention of ownership for the restaurant. Chick-fil -- A established location for a restaurant, builds it, and then retain ownership. (Pahl & Richter, 2009). The firm gets close to 10,000 -- 25,000 applications among potential franchise operators to fill 60 -- 70 slots each year. Chick-fil -- A secures larger revenue shares from the franchises as compared to chains such as Burger King without the formula working well for subsequent operators. The franchisees make up to $190,000 in sales each year. Chick-fil -- A has taken industry lead for average sales for each restaurant with a $2.7 million average per restaurant 2010.

Burger King is important in history because it was a first establishment for fast food chains that later expanded to international markets and opened outlets in Canada, Mexico, Jamaica, and the United Kingdom. Throughout the operational years, Burger King has experienced many fortunes in domestic markets while promoting a series of changes in corporate ownership and without experience in the restaurant business. Previously, Burger King was under the management of Heublein. The spirits distributor was taken over by the conglomerate, R.J. Reynolds, dealing with food and tobacco and later sold the brand chain (Ulijn, Duysters & Meijer, 2010). Chains continued expanding overseas, and Burger King became one of the first Western restaurant chains to register a presence in China. The fast food chain continues to expand rapidly in China and is the single largest market for a company.

The merger will maximize shareholder's value. The merger will add positive dynamics to new financial groups that acquires confidence of investors while securing the stock price rise. The bigger influence is that there will be an increase in share capital. The expectations will take effect in the short-term (Krug, 2009). Long-term and constant rise in share prices will be developed while groups expand their profits in subsequent years. The merged firms will expect expansion of the restaurant activities due to entry to new international or domestic markets. Burger King will embrace new sources supplies in terms of raw materials as well as new ways for availing the products. The new markets conquest for Chick-fil -- A will be won due to the purposes of reducing costs of production against the allocations of expenses of greater production volumes. The element also makes it possible for merged firms to embrace the diversification purpose while the expansion of entrepreneurial activities to profitable product categories develops virtualization of the production circuits (Faulkner, Teerikangas & Joseph, 2012).

Additionally, the absorption of Burger King will promote successful operation through offering a competitive edge to Chick-fil -- A and absorbing competent management. The focus includes establishment of dependable suppliers, specialized and experienced personnel, top technological equipment, and wide network of restaurant stores. The absorption of Burger King's management fosters the planning of activities based on the previous histories of success without significant risks as absorption creates additional completer.

The "Eat mor chicken" is most prominent advertising slogan for the Chick-fil -- A chain as created in 1995 by 'The Richards Group'. The message is seen in advertisements and features cows that wear or hold signs reading "Eat more chicken" in capital letters. The campaign ad encountered a temporary halt due to mad cow disease threat in 2004. For purposes of making the chain sensitive, the company took advantage of the threats to promote its sales. Later, the advert was put up again (Ray, 2010). The core product offering of Burger King is pressure fried chicken on-the-bone pieces seasoned using "Original Recipe." The distinct product can be availed in various piece individual servings while cardboard buckets of family sizes have a typical holding of a maximum of 16 chicken pieces. Poultry in the retail is divided into nine different pieces namely two wings, two drumsticks, one keel, a backbone, and two thighs as well as breast-based cut into two pieces. The offering is hand-breaded within respective Burger King Outlets using wheat flour together mixed with elements of seasoning for four minutes (Ahlstrom & Bruton, 2009). The pressure fried chicken process is set for between 7 and 10 minutes depending on the countries' timings. In this, chicken pieces are left to cook for five minutes for sufficient cooling prior placing it in warming ovens. The Burger King policy states that chicken should be disposed off if it is not sold in 90 minutes for purposes of maintaining freshness. The quality of frying oil is different depending on the regions. The versions used are inclusive of soybean, sunflower, palm oil and rapeseed.

Merger materialization can take different practice forms. It includes total or selective, instant or gradual while translating into corresponding total and partial union for business services, premises, units while reselling and closing down others. The functional merging procedure for partial Chick-fil -- A and Burger King Merger will not coincide with formal- legal procedures of the integration (Faulkner, Teerikangas & Joseph, 2012). The consequences will involve effects of the employment as well as labor relations that make the appearance before completion of negotiations. However, the time involved in merger's formal integration is a matter of special relevance for protection and regulation of corresponding labor rights.

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