The dual challenge of Burger King in Brazil

SÃO PAULO-Dream little gives the same job you dream big. The phrase attributed to businessman Jorge Paulo Lemann, one of the partners of the Fund 3 g, owner of Burger King global, is on the tip of the tongue of the President of the Brazilian operation, Yury Miranda. Aggressive management and the collection of results are enhanced in posters spread across the national network office walls, in Alphaville, and are reflected in the figures presented by the company, which doubled its market share in three years.
Almost expressionless in 2010, the network has exceeded the mark of 400 points of sale and over 6% market share in 2013. Despite the growth, the Burger King is still far from rival McDonald? s, present in Brazil for more than 30 years and that alone holds one-third of the national fast-food market. The mark loses to Subway, Habib? s and Bob? s, according to consulting firm Euromonitor.
Burger King arrived in the country in 2004, at the hands of Luiz Eduardo cattleman Battle. In the first six years in the country, the network's number two American fast-food could not undertake significant expansion.
Things started to change in September 2010, when the 3 g-Fund of Lemann, Marcel Telles and Beto Sicupira, owners of AB ImBev-bought the worldwide operation of Burger King. In the new planning, emerging markets have become priority. Therefore, the speed of expansion in Brazil would have to increase-and.
In June 2011, the 3 g has entered into a partnership with Vinci Partners, of the banker Gilberto Sayão, to be partners in master network in the country, franchised Burger King of Brazil (BK of Brazil). This new company, went on to coordinate all franchises in the country and became the main arm of expanding the fast-food chain.
In 2013, the network opened 109 points of sale in the country, 85 percent of them in charge of Vinci and 3 g. According to the President of Burger King of Brazil, the strategy was set because the partners have investment power. ?The trend is that the number of stores (the master franchised) is larger?, says Miranda. ?We try to apply all the knowledge in the retail business to Vinci and 3 g have.? Today, the Board of the company consists of three representatives of gestora de Sayao, senior partner, and two of the 3 g.
If kept in the model of?-franchises condo?, formed by many small investors, Burger King could hardly stand up-since the competition's acting faster and faster. According to Sergio Molinari, Managing Director of food service area of consultancy Gouvea de Souza, the expansion of the network in recent years demanded bets on points that, at first, might be deficient.
As the more established networks already occupied avenues and crowded shopping malls-spaces considered??-filet, Burger King was forced to make two movements at the same time, explains the consultant: settle in mandatory points to gain visibility and follow the expansion of competition in the outskirts of the capital and in the interior. ?We see potential not only in the capital cities?, says President of Burger King Brazil.
Price dispute
The interiorization of a fast-food restaurant closely follows the trend of attendance to the class C, so the price will be increasingly decisive for these companies. ?The fast-food originated in Brazil given the high class and had high margin. Now, the nets have won in the amount, offering options under $ 10?, explains Paulo Solmucci, President of the Brazilian Association of bars and Restaurants (Abrasel). ?In recent years, the adjustment of menu was significant. Today, it is easy to find sandwiches to $ 3 or $ 4 on these restaurants.?
The margins will be lower, but the trend is for market expansion. According to the latest data from the Survey of Family Budgets, the IBGE, 33% of Brazilians are already made meals away from home. Molinari, of Gouvea de Souza, claims that the consumption of fast-food brands have everything to keep growing: today, says the Executive, they only account for 5% of the expense of Brazilian food.
In this sense, says Molinari, more expensive offerings from fast-food chains-the? combos? with French fries and soda, which cost between $ 15 and $ 20-will be the? gateway? of part of the population in the meal away from home on the weekends. ?The public of classes C and D are eager to consume brands in all kinds of product. The advantage of fast food on his clothes, for example, is that you can't fake the experience of eating at McDonald's and Burger King?, compares.
So, companies struggle to add attributes to your brand. ?What else are the differentials, because, to be honest, is everyone selling the same stuff: bread with meat?, says a competitor. In this dispute, Miranda says that Burger King has the advantage of offering a grilled product, work with steaks and allow the consumer to customize the sandwich, changing ingredients. The idea of personalizing the offer is linked to intend to make Burger King a premium option in fast food.
Meritocracy
Inside the counter, 3 g and Vinci bet on meritocracy to motivate employees: those that reach goals are rewarded with aggressive bonus. Thus, to store managers are encouraged to think like owners. ?When everyone is having fun, we're working. Retailers must be in the blood?, says Miranda, who after 20 years in the American giant Exxon Mobil, assumed command of the Burger King in Brazil 2010.
The network system is not much different than the McDonald? s applies for decades here. ?Our concern is to be closer to the customer. We get to 20 cities only in the year 2013?, says Dorival Pereira, Vice President of development of McDonald? s Brazil. The network also is accelerating the pace of expansion: after inaugurating 69 restaurants in 2012, the number rose to 85 last year – much like Burger King, from a much larger base.
The move, combined with the strong leader's planned expansion by Subway and Bob? s for 2014, may be a sign that maybe the Burger King need to chase down? dreams? faster. The information is from the newspaper O Estado de s. Paulo.