Monday, March 9, 2009

Business Review 2: Burger Times

There's one thing the local people do well... selling burgers. It's a convenient supper snack because there's one in every corner of town. Someone came up with the idea to modify Burger King's logo and make it their own, renaming it Burger Times. 

They are relatively safe from copyright infringement because Burger King doesn't open a restaurant here. The burger is nothing special and is priced higher than others. I hardly ever buy from them because there are better burgers out there. I am reviewing this business not because I like the product, but I think there is some great thinking behind the idea.

There are roughly 6 of these burger stalls in various foodcourts around town. They have the same standard menu. The beef cheese burger that usually cost me rm 2.20 elsewhere cost rm 3 here. The business ideas I like from this business are:
  1. No direct competition - By selling at foodcourts, there are no other burger stalls that operate there for a simple reason; rent. Many are not willing to sacrifice profitability for this expense which makes Burger Times the only operator selling burgers. In business terminology, this is called "competition barriers to entry"
  2. Captured audience - Once customers sit down at the foodcourt, they usually do not change venue to dine. If a customer feels like eating a burger, they do not have an alternative. And most people do not dine alone; they have friends or family members with them. This is unlike the customer base from regular burger stalls that can drive on by.
  3. Social networking - By employing youths that fall into the target market of this product, the boss is indirectly taking advantage of his employees' social circle and turning them into customers.
  4. Economies of scale - By purchasing and preparing ingredients from the main station for the other branch stalls, they are more efficient in terms of man power and cost. 
  5. Time leverage - By having standardised menus and ingredients, the boss doesn't need to spend his time cooking for each of his customers. He multiplied his productive time by the amount of stalls he has out there i.e. time is now not a limitation to his income. Where others slave to make say 40 burgers a night, he can make 6 times that amount (taking 6 stalls as an example) and is only limited to how many more stalls he can open.

The Burger Times van being loaded with supplies at the main station for branch stalls at the start of the business day


I do not like the burger, but I admire the business. This is the concept behind how Ray Kroc turned Mc Donalds into the giant franchise it is today, starting by selling burgers... Many can cook a better burger than Mc Donalds, but they are conveniently located everywhere around the world with standardised recipes. If you're able to sell a sub-standard, over-priced product like Burger Times and still make money, you're not a good chef, but a marketing genius. Who cares about your ability to cook a good burger when you have money in the bank?

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