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Thursday, November 22, 2007

Burger King's descent into commoditization

Burger King, in a desperate move to increase market share, is planning to test a $1 double cheeseburger to compete with McDonald's, reports the Wall Street Journal.

It is interesting because McDonald's has managed to maintain their brand even though they offer deeply discounted items. Yet Burger King is damaging its brand by going the commodity route.

I remember when BK used the "broiled, not fried" strategy to great success. Why do they not make a move to distinguish themselves as a brand? Why stoop to price wars?

As always, it has to do with the pressures of Wall Street, which leads firms to focus on short-term profits rather than long-term growth strategies.

If I were in charge at BK, I would go back to the drawing board...perhaps offer "gourmet" burgers at regular price. Value for the money, but without destroying the brand.