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Application of Machiavelli’s Theory by Burger King, Inc.

Free analysis essay

Burger King, Inc. Application of Machiavelli

Burger King, Inc. has been mentioned by the media as the largest chain of fast food restaurants. The corporation has an excellent reputation in marketing strategies and providing of services. It still surprises me how the company is able to compete with McDonald’s so successfully. Probably, the management has mastered the ideologies needed to make such company thrive and explore new markets. There are many giant companies that offer fast food services, yet Burger King, Inc. is among the most noticeable ones in the whole world. Burger King provides quality fast food which includes hamburgers, salads, fries, tacos, sandwiches and soft drinks. This is a company to learn from, and its example should be followed. I believe the business has its secrets. It must have utilized Machiavelli’s ideology and logic of ruling in the business world. Incredibly, basing its headquarters in Miami, the company operates in approximately 100 countries. The model of political governance exhibited in The Prince by Machiavelli appears to be similar to the one used by the company to oversee its resources and interests. Personally, I think there is a need to investigate to which extent the company has utilized the logic behind Machiavelli’s propositions. Probably, if the company uses the all points of Machiavelli’s guidance, it will be performing much better than its present financial standing represented below.

Burger King, Inc. Assets Values and Financial Standings (Justifications)

Truly, the company was able to survive the stiff market competition as demonstrated by the figure below. The following is the financial analysis retrieved from Mergent Online Hoovers and Yahoo Finance (table 1). However, according to the research done by Julie Jargon, the company has not always been performing well in its sales (2010).

Table 1: Burger King, Inc. Financial Standing Analysis from 2011 to 2015

At the end of Yr 2015 2014 2013 2012 2011
Total Revenuea 1140000 1163300 1146300 1966300 2335700
Profitsa 201211 192130 233700 117700 88100
Profit Margin% 17.65% 16.52% 20.38% 5.99% 3.77%
Stock Pricea 35.5 35.5 22.86 16.44 15.01

Source: Mergent Online; Burger King Holdings Inc.; Web. 2 June 2016.

a. Numbers for the categories “Total Revenue”, “Profits”, and “Stock Price” are in U.S. dollars.

Financial Standing Analysis

Considering the statistics, everything does not appear to be moving smoothly. Evidently, the company has been experiencing a decline in revenues. The profits have been increasing since the year 2013. Also, the stock prices have increased, which is a good sign that the company excels itself. The financial hiccups experienced by the corporation need to be reassessed for the company to maintain its standards and the loyalty of its customers. It is evident from the income statements that the company has been trying to sell more so as to retain the loyalty of its shareholders. Probably, that is the main pillar that enables the company to survive the intense competition. The shareholders have strong confidence about possessing the shares in the business. Here, it is clear that Machiavelli’s logic was applied. In the book The Prince it is stated that “princes and barons who hold that rank by inheritance and not by appointment by the prince have states and their subjects, who recognize them as lords and have a natural loyalty to them” (Machiavelli 6). This means that the company is protecting the interests of the shareholders who have a vital say in the performance of any business. They are the people who invested a lot of resources with an aim of getting attractive returns from their investments. As such, the company realizes the need of safeguarding the shareholders’ interests.

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The competition was serious, but the company managed to succeed. More importantly, it was able to provide the shareholders with a reason to keep their investments. Figures show that the corporation may be able to repay any debts and compensate any negative outcomes of the financial risks. As such, the company operates the business using principles analogous to Machiavelli’s. The company has developed strong financial security. The management must have utilized the logic to keep the commerce safe and cover both speculative and reasonable risks. A prosperous company has to be aware of economic ups and downs that may result in financial risks and losses. Financial strength can be compared to an army in a kingdom which is always ready to protect the territory from attacks. It is a factor of preparedness, as Machiavelli suggested in his book of leadership and ruling wisdom.

Table 2: 2015 Fast food Industry Profitability and Liquidity Ratios

Burger King McDonalds Wendys Jack In the Box
Current Ratio 3.11 1.52 2.29 0.65
ROA (%) 4.1 13.42 3.84 8.48
ROE (%) 17.37 32.97 12.83 8.48
Collection period 20 72 14 8

Source: Mergent Online; Burger King Holdings Inc.; Web. 2 June 2016.

The company is facing overwhelming competition that may put the company in a losing position. According to Jargon, other companies like McDonald’s are showing even better performance as compared to Burger King (2010). In essence, the company faces the risk of losing its customers and the loyalty of the shareholders. Obviously, once the company loses their loyalty and its own reputation, it will be extremely difficult to regain it.

Probable Solutions and Mistakes of the Company (Avoidance of Machiavelli’s Ideas and Philosophy)

The company is producing foodstuffs that are easily substituted. In a competitive market, a business has to create unique products. The innovation should be heavily emphasized to ensure that the customers are satisfied with the products. It is important to note that fulfilling the customers’ needs is an aspect of paramount importance in the business. As the company wishes to make the shareholders feel secure, they should not forget the significance of the customers in making the business thrive in the market. In Machiavelli’s perspective, soldiers are less important than the people. He says that the people are of primary importance as far as reinforcement of a kingdom is concerned. “It is now more necessary for all princes, except the leader of the Turks and the ruler of Egypt, to satisfy the people rather than soldiers, because the people are the most powerful” (Machiavelli 32). These words extracted from his books are worth reconsideration by Burger King, Inc. to make prudent decisions and remain among the leaders of this business. According to Machiavelli, establishing a friendly relationship with people helps the ruler to gain control. Probably, this is a statement the company seems to have ignored. The company must employ qualified staff management who will make the long-lasting decision for the benefit of the enterprise.

The company must train the staff to make their services special to the customers by any possible means. In my opinion, the customers’ needs have to be prioritized. The company should show flexibility of leadership and management of the company. The bylaws should be less rigid to make certain that the demands of the customers are fully met. Moreover, the company’s rules have to ensure that the quality of offered products always adheres to the health standards.

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Personally, I think that the company has not put enough emphasis on eliminating its vulnerability. The management should consider Machiavelli’s logic of defense which goes as follows: “the prince, with little reluctance, will take the opportunity of the rebellion to punish the rebels, to clear out the suspects, and to strengthen himself in the weakest places” (Machiavelli 3). This approach may be applied by the company to eliminate the chances of the entrance of strong competitors that might replace Burger King, Inc. in the market. The thinking behind Machiavelli’s ideas is that the management should never relax or get distracted from doing what is best for the company to retain its customers. Similarly, the rebels here represent the competitors. It is vivid that the firm is making substitutable products. Hence, the company should come up with an initiative that will help to present new goods and protect the products from competition.

Another instance in which the company avoided Machiavelli’s ideas is ignoring the special tactics applied by the competitors. Machiavelli said that “It teaches him to surprise his enemy, to select places to camp, to lead armies, to organize the soldiers in a battle, and to besiege towns in the best way” (Machiavelli 23). The idea is that one must be prepared to deploy all tactics to outdo the competitor. The biggest competitor, McDonald’s, currently holds a strong position in the world market. That means that this company occupied the space once held by Burger King. The management should involve its staff in devising the ways to provide innovative products. The company should be able to counter the actions of the competitors. Machiavellian approach means that the corporation should use all tactics and knowledge to remain better than the competitors. It is clear that there still exist untapped markets. As such, the corporation should do everything possible to ensure that it wins this market share. Machiavelli’s philosophy suggests that the soldiers should not run or hide from the battle but rather use the available skills. Consequently, at no time should we expect the company to withdraw from the market only because a new competitor entered it.

The company should always do market research. Knowledge of the market will help it to know what products are needed by the customers. It might help the company to see its weakness, strengths and develop strategies for the future. Burger King has not been diligent enough in exploring the market. There lies great philosophy behind Machiavelli’s words: “I have found that the possession I value above all is the knowledge of the actions of great men” (Machiavelli 1). That means knowledge and information are imperative in ensuring that the company can outdo other competitors easily. For instance, there is a need to introduce home delivery services. However, the company should do market research to validate the necessity of the new means of providing home delivery services.

Adherence to Machiavelli’s Logics and Philosophy

I admire the management style adopted by the company. It is a clear indication that the company adheres to Machiavelli’s philosophical ideas. The philosopher suggested that it would be “a double glory for him to have established a new principality, and enriched and strengthened it with good laws, good arms, good friends and good leadership “(Machiavelli 39). It is evident that the managers on local levels were given the rights to hire or fire the workers. It will make the work done efficiently. The laws of the company ensure that the company runs smoothly.

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The company made all efforts to continue being at the top. Obviously, it shares the philosophy of Machiavelli’s words that “If a prince wants to maintain his rule he must be prepared not to be virtuous, and to make use of this according to need” (Machiavelli 50). As such, the management of the company motivated its work to be the best in offering fast food and associated services. Evidently, the company has utilized the ideas suggested by the philosopher. However, like soldiers, they have to keep training and applying new market tactics to keep surviving in the market.

Conclusion

Competition will always exist in any market. Henceforth, any business should be innovative and creative to generate ideas and products that will help it to thrive. Ideas should be borrowed from all fields. In this case, Machiavelli proves to have practical and valid philosophical ideas that can help a business to survive in the market. Burger King, Inc. may not be performing poorly, but the competitors may outdo. Hence, it is a good thing for the company to implement more ideas, techniques, resources and efforts to earn more and remain the best fast food restaurant.

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