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The Auction For Burger King A 2

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The Auction for Burger King (A) Summary and Analysis
Background
Burger King is a company that was founded in Miami, but it was sold in 1967 to
Pillsbury. The business line of business focused on quick service restaurant and its primary
products were chicken and sandwiches, grilled hamburgers, soft drinks, French fries, and other
affordable food items. Two decades later, Pillsbury was acquired by Grand Metropolitan, a
wines, and spirits company. Later, Guinness Plc, the largest beer maker in the world, formed
with Grand Metropolitan to for Diageo, which became the world's largest alcohol company. The
merge of Guinness and Grand Metropolitan was organized into four business units, which
include Guinness brewing, a unit for beer, UDV, a core wine and spirits unit, the Burger King, a
hamburger unit, and the Pillsbury a unit for packaged food. But after the merger, the financial
results presented a dilemma in the company's operations due to slow sales (Baldwin, p.2).
But as a response to these worrying financial results, Diageo introduced a strategic plan
by merging two of its key pillars, Guinness and UDV. The situation worsened in June 2000 when
Diageo announced its intention of selling its Burger King's 20% stake, which showed that its
financial performance was not good.
This financial situation of the company necessitated changing the company's
management. In July 2000, Paul Walsh assumed the company's management with a promise of
delivering top line growth in the core units of the business is UDV and Guinness. Walsh's idea

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was to simplify the company's business line by just focusing on the drinks business. It is at this
time the company sold its Pillsbury unit to General Mills.
Issues identified in the case
The following are problems that identified in BK's case
a. Burger King was more probe to inefficiencies and operational inadequacies when
compared to other units.
b. The sales of Burger King, a large company with more than eleven thousand joints around
the world sales were small.
c. The company faced customers criticizing for a lack of diversification.
d. Burger King's franchisees faced financial distress, something that affected the company's
operations.
e. There were problems with Burger King Initial Public Offer (IPO) speculation. The
speculation led to shareholders suspect that the company was not doing well.
Burger King SWOT analysis
Strengths
1. The company enjoys a strong brand, and Burger King has fantastic brand equity and
America's competitive concepts due to its size and rich history. The company has a
strong product line such as hamburgers of different sizes. It is the second-largest food
chain in the world in terms of sales and numbers of joints.
2. The company has a variety of menu. For example, it makes fire-grilled bone ribs,
shrimp kebabs, and extra-thick burgers.
3. The company has a strong market position. Apart from being the second-largest
restaurant in the world, the company enjoys wide product sales. The company enjoys

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Surname 1 Student Name Course Instructor Date The Auction for Burger King (A) Summary and Analysis Background Burger King is a company that was founded in Miami, but it was sold in 1967 to Pillsbury. The business line of business focused on quick service restaurant and its primary products were chicken and sandwiches, grilled hamburgers, soft drinks, French fries, and other affordable food items. Two decades later, Pillsbury was acquired by Grand Metropolitan, a wines, and spirits company. Later, Guinness Plc, the largest beer maker in the world, formed with Grand Metropolitan to for Diageo, which became the world's largest alcohol company. The merge of Guinness and Grand Metropolitan was organized into four business units, which include Guinness brewing, a unit for beer, UDV, a core wine and spirits unit, the Burger King, a hamburger unit, and the Pillsbury a unit for packaged food. But after the merger, the financial results presented a dilemma in the company's operations due to slow sales (Baldwin, p.2). But as a response to these worrying financial results, Diageo introduced a strategic plan by merging two of its key pillars, Guinness and UDV. The situation worsened in June 2000 when Diageo announced its intention of selling its Burger King's 20% stake, which showed that its financial performance was not good. This financial situation of the company necessitated changing the company's management. In July 2000, Paul Walsh assumed the company's management with a promise of ...
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