CASE - "Burger King to Expand Significantly in Canada in Growing Partnership"

A growing partnership with Redberry Restaurants is boosting Burger King's expansion plans across the country.

Recently, it was announced that Redberry would develop 50 new Burger King restaurants in Quebec and 15 new restaurants in Saskatchewan over the next five years. An additional 60 Burger King restaurants are scheduled for remodelling, which is more than half of the current Redberry-owned Burger King locations.

Matt Wright, General Manager of Burger King Canada, said the company is excited about its partnership with Redberry to rapidly grow the brand in Canada.

"Redberry is our largest franchise partner in Canada . . . Really great partner. Strong operations. They deliver really well on the guest experience. They've got a really good team and we're confident in them to be able to deliver on these development pipelines as well as the guest experience," said Wright.

The first Burger King restaurant in Canada opened in Windsor, Ontario in 1969. Today, it has 318 restaurants in the country, coast to coast.

"At Burger King, we see Canada as a huge opportunity for us. It's a market that we're under-penetrated relative to the population as well as our competitors. We're really excited. We have an iconic brand in the Burger King name in Canada. A lot of Canadians know about us. We have a really, really high awareness but the feedback that we get from our guests in the research we hear from our partners is everyone knows Burger King but no one knows where to find a Burger King," said Wright.

"A high priority for us is to be able to make our brand, the iconic Whopper sandwich, more convenient and accessible to our guests."

Redberry currently owns and operates 16 Burger King restaurants in Quebec, and more than 102 locations across Ontario and Manitoba.

"The strategic expansion of 50 new Burger King restaurants in Quebec would more than triple our current presence in this pivotal marketplace, while our plans to open 15 restaurants in Saskatchewan would allow us to expand into a fourth province," said Ken Otto, CEO of Redberry. "Our proven track record of opening many successful restaurants shows how accelerated growth is possible with our talented team members and Burger King Franchisor Partner. We have extremely ambitious plans to continue our rapid growth in 2021 and beyond."

Redberry has successfully accelerated their development with the opening of seven new Burger King locations this year with an additional nine locations to open before year end. This would bring Redberry's total count of Burger King restaurants to 127 units representing more than 40 per cent of Burger King restaurants in Canada.

Redberry plans to build and acquire an additional 168 new Burger King restaurants over the coming years, which would more than double its current size.

The Burger King system operates more than 18,700 locations in more than 100 countries and U.S. territories. Close to 100 per cent of Burger King restaurants are owned and operated by independent franchisees.

Founded in 2005, Redberry Restaurants is one of the largest and fastest growing quick service restaurant franchisees in Canada, owning and operating more than 140 restaurants under the Burger King, Pizza Hut Canada, and Taco Bell brands.

Wright said COVID-19 has been a challenging time for the restaurant industry.

"But we've worked really closely with our franchise partners. We've adapted quickly to COVID. We've realized how important our delivery business is, our digital business, our drive-thru lanes. Luckily throughout COVID, and throughout the pandemic, and coming out of it, working closely with our franchise partners, we've been able to do pretty well and we've been able to adapt pretty quickly to the changing needs of the business," he said.

Wright said Burger King is also focused on remodelling and improving the brand and restaurant image in Canada, which will complement the growth strategy of developing new restaurants.

"Redberry has recently signed on to remodel at least 60 of their restaurants in Canada. That's a big, big priority for us. But another big priority is going to be on the digital front. We launched our app earlier in 2021 - mobile order and pay - which is another channel for us to be able to be more convenient and accessible to our guests," he said.

"As we continue to move forward in addition to improving our brand image through remodels, our growth strategy to develop new restaurants with our franchise partners, digital through mobile app initiatives will be a big part of our strategy. And I think as we look to develop our restaurants, a huge focus on the restaurant - building restaurants that have a great image, that work great for our guests, double drive-thru lanes, huge focus on the guest experience at the restaurant."

Wright said company research indicates the quick service restaurant industry in Canada is large with a big market share. It's popular for Canadian consumers.

"But we feel we don't have our fair share. We feel we need to make flame grilling, our iconic brand, and our iconic sandwiches and the Whopper, more available to our guests because we believe that's a category in Canada that's under-penetrated and represents a great opportunity for us."

Case adapted from Toneguzzi, M. (2021, Nov 14) Burger King to Expand Significantly in Canada in Growing Partnership. Retail Insider. Accessed Nov 24, 2021. https://retail-insider.com/retail-insider/2021/11/burger-king-to-expand-significantly-in-canada-in-growing-partnership/

PART A - CASE QUESTIONS (Total: 35 marks)

Instructions: Please answer all of the questions below in the space provided.

1) Please write a problem statement that addresses the situation faced by Burger King Canada, as described in the case above. (5 marks)

2) Please perform a complete SWOT Analysis for Burger King Canada.Your analysis can be based on the information from the case, but you can also make educated assumptions (if you want to make an assumption please justify your assumption). Compete the table below with 2 entries for each of the four areas.(10 marks)

Strengths	Opportunities
Strength: __________________________ Explanation: Strength: __________________________ Explanation:	Opportunity: __________________________ Explanation: Opportunity: __________________________ Explanation:
Weaknesses	Threats
Weakness: __________________________ Explanation: Weakness: __________________________ Explanation:	Threat: __________________________ Explanation: Threat: __________________________ Explanation:

3) Please provide two (2) strategies ("alternatives") to potentially solve the problem facing Burger King Canada. Make sure to list the pros and cons for each strategy. (10 marks)

Strategy/"Alternative" 1
Key Decisions made: Cons
Pros:	Cons:
Strategy/"Alternative" 2
Key Decisions made: Cons
Pros:	Cons:

4) Which of your two (2) alternatives would you recommend using and why? (5 marks)

5) Please write a positioning statement for Burger King Canada.(5 marks)

PART B - SHORT ANSWER QUESTIONS (5 marks each; Total: 20 marks)

Instructions: Please select and answer ONLY FOUR (4) of the SEVEN (7) questions below.

1)Calculate the missing values. (5 marks)

Unit Selling Price	Variable Cost per unit	Unit Sales	Total Contribution Margin	Total Fixed Costs	Net Income
A)	$10	150,000	$600,000	$210,000	B)
$30	C)	140,000	D)	$650,000	$50,000
$35	$14	20,000	$420,000	E)	$12,000

2)Design at least 2 new products that can be introduced to Burger King Canada to attract customers. Please justify your answers. (5 marks)

3)Mr. Otto would like to increase brand awareness of his Burger King restaurants, especially inSaskatchewan where the brand is new to the residents there. (5 marks)

• Select an appropriate target segment/audience and create a 1-month IMC program to increase brand awareness of Burger King restaurants. Describe this program briefly.
• Identify which promotional elements you are including in this strategy and explain how each promotional element will integrate together.

4)Please describe the 5-step consumer purchase decision process for "buying a Whopper at Burger King". Make assumptions where needed. (5 marks)

5)It's December 2021 and the government has lifted all physical distancing/COVID-19 bans. (5 marks)

• Create a sales promotion for the restaurant.
• Determine a target audience, objective, and budget.
• Name one advantage and disadvantage of the sales promotion based on the textbook and what you learned in this course.

6)Redberry is also considering introducing a new luxury version of Burger King called "Burger King Deluxe", which would offer the same menu items, but using higher quality ingredients from local and organic sources. This would raise the prices of each menu item by at least 30%. Do you think Redberry should launch Burger King Deluxe? Explain why or why not? (5 marks)

7) Burger King just launched its mobile app. Assuming you are the new product marketing manager for this mobile app, what kind of functionality would you include in this app so that it remains relevant and attractive to the consumers? (5 marks)