In China, many people pay attention to the competition between KFC and McDonald's, but if you return to the United States, the birthplace of fast food, the real cruel war is fought by Burger King and McDonald's!
The relationship between Burger King and McDonald's is like that between Pepsi and Coca-Cola, and is considered one of the fiercest competitions in the history of American business.
Let's start with the more familiar McDonald's.
It is no exaggeration to say that McDonald's has always been a symbol of America's postwar prosperity. McDonald's is one of the largest fast food chains in the world and one of the pioneers of the fast food chain concept.
It has influenced the diet and lifestyle of countless people around the world. Its enormous scale and global impact doomed it to challenge from all directions.
Of all the fast-food chains in the United States, McDonald's has the highest market capitalization. In October 2020, McDonald's had a market capitalization of more than $168 billion.
The United States has 36,000 locations in nearly 1,210 countries, employs 1.9 million people and sells more than 70 million meals a day.
However, since 2014, McDonald's numbers have been declining. This is first and foremost related to McDonald's business model, which sells operating rights to make a profit, which can reduce management costs. But when the company grows to a certain scale, it is difficult to continue to grow.
In the second quarter of 2015, McDonald's CEO Steve Easterbrook raised his concerns when presenting the results to shareholders and thought it was possible to analyze the reasons for the success of Burger King during the same period.
So how did Burger King manage to become a competitor to McDonald's?
At first, McDonald's main competitors were Subway, owned by Wendy's international fast-food chain, and Starbucks, at least in terms of profitability.
However, in 2010, private equity firm 3G Capital bought Burger King for $4 billion. Since then, Burger King has been on the road to rise.
In 2014, Burger King and Tim Horton, Canada's leading coffee supplier, merged to form a new public company called "Restaurant Brands International".
By the third quarter of 2017, Burger King's profits were significantly higher than McDonald's and Wendy's. A report by Citi Research concluded that 3G Capital made two major strategic changes — cutting business fat and simplifying its public image.
The effect was evident, with Burger King's operating margin rising from 17% in the second quarter of 2011 to more than 40% in the third quarter of 2018.
Burger King Global derives its main revenue from franchising, including franchise royalties and initiation fees. As of 2020, 99.7% of Burger King locations are franchised.
According to the Citi Institute, Burger King pursues a simpler and more convenient customer experience than McDonald's fancy image and marketing strategy.
Part of Burger King's revival strategy is to directly challenge McDonald's products. In November 2013, Burger King launched the King Burger for McDonald's Big Mac, which includes a three-tiered bag, two pies and a sauce.
When McDonald's Pork Chop Burger returned, Burger King launched a $1 BBQ Grilled Pork Burger.
In 2018, Burger King launched a two-legged three-two burger, and it is clear that the target is McDonald's three-two burger.
Of course, the "war" between Burger King and McDonald's is not limited to burgers, but also coffee.
Before that, McDonald's had partnered with Starbucks to create a recyclable coffee cup, which made McDonald's shine.
Then, Burger King acquired Tim Horton, Canada's main coffee company, in a blink of an eye. Subsequently, the shares of Burger King and Tim Horton soared, both in terms of profit and gimmick.
Burger King's philosophy is pretty much the same: it's as good as McDonald's, has the same product, just maybe a little more expensive or... Slightly lower.
However, in terms of pure "marketing", McDonald's still has to win Burger King. McDonald's, for example, understands the "celebrity effect."
In 2020, McDonald's created a "celebrity order" for the Super Bowl, using Travis Scott, Mariah Carey and other celebrity favorite foods to promote the brand.
In addition, McDonald's pays attention to nostalgia, which also leads to a higher brand intimacy with customers. Burger King still has a long way to go when it comes to building brand culture.
What do you think about McDonald's and Burger King?