Burger King 2011 Annual Report Download - page 5

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Table of Contents
Our Business Strategy
We believe there are significant opportunities for our Company and the entire Burger King system by:
• Accelerating international development: The expansion of our international restaurant network is an integral part of our global portfolio
realignment project. As part of this project we expect to accelerate our international development with strategic partners and joint ventures. In 2011,
we entered into a joint venture and master development agreement with a franchisee to drive development in Brazil, and we are actively seeking
strategic partners to accelerate our international expansion in other countries. Generally, these strategic arrangements grant one or more franchisees
the exclusive right to develop and manage Burger King restaurants in a specific country or region. We expect to focus our international expansion
plans predominantly in high-growth emerging markets, including Brazil, China, Russia, Turkey, the Middle East, Africa, India and other countries
where, among other things, we believe our current penetration is low relative to our potential. We entered Vietnam, Morocco, Slovenia, Macedonia
and Luxembourg in 2011 and expect to open restaurants in additional new markets during 2012 and beyond.
• Driving sales and traffic in the U.S. and Canada: We have identified the following four priorities that we believe will enable us to drive future
sales and traffic in the U.S. and Canada:
• Marketing Communications. We have established a data driven marketing process which is clearly focused on driving restaurant sales and
traffic, while targeting a broader consumer base with more inclusive messaging. Through our food-centric marketing communication
strategy, we believe we can refocus our consumers on food, which is our core asset.
• Menu. The strength of our menu has been built on our brand equities of using our distinct flame-grilled cooking platform to make better
tasting burgers. Our menu strategy seeks to optimize our menu by focusing on our core products, such as our flagship Whopper® sandwich,
while continuing to enhance our menu to appeal to a broader range of consumers. We have launched an initiative to focus on our food,
through new product launches and improving our current products, such as our soft-serve ice cream, crispy thick cut french fries, specialty
drinks and the introduction of additional platforms.
• Operations. We have restructured our field teams to significantly increase our field presence and more closely align field compensation
with restaurant performance. We believe our new field structure will help improve our restaurant operations, including speed of service and
restaurant cleanliness. We call this our “field optimization project”.
• Image. We have lowered the cost of remodeling restaurants using elements of our contemporary “20/20 design”, which draws inspiration
from our signature flame-grilled cooking process. We have provided our franchisees in the United States with financial incentives and
access to a third-party financing program to assist them in their remodeling efforts.
• Enhancing restaurant-level margins and profitability: We believe we have a substantial opportunity to improve margins in our restaurants through
both top line growth and cost management initiatives. We believe that these priorities will help to increase Company restaurant profitability to the
levels of our most successful franchisees. We also continue to work with our franchisees to improve the profitability of the entire system.
• Driving corporate-level G&A efficiencies: We are focused on identifying opportunities to drive corporate-level G&A efficiencies by
(1) maintaining our “Zero Based Budgeting” program, which is a method of annual planning designed to build a strong ownership culture by
requiring departmental budgets to estimate and justify costs and expenditures from a “zero base,” rather than focusing on the prior year’s base, and
(2) tying a portion of management’s incentive compensation specifically to our G&A budget. See “Management’s Discussion and Analysis of
Results of Operations” in Part II, Item 7 of this Form 10-K.
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Source: Burger King Holdings Inc, 10-K, March 14, 2012 Powered by Morningstar® Document Research℠