Thursday, May 03, 2007

On The Burger Culture

The fast food industry originated in the United States as "hamburger joints," but has become a global industry. As the industry has grown, so has the menu of a typical fast-food outlet, in number and variety of items. This trend has produced an opening for a fast food chain that concentrates on preparing a few items well, offering those items with superior quality at a competitive price. For purpose of discussion, this concept has been called Basic Burger.
Competitive Analysis of the Industry:
The fast food industry is an important and growing segment of the broader food-service industry, which can broadly be defined as providing ready-to-eat meals, as distinct from food items to be prepared at home, or snack foods requiring no preparation before eating. Fast food in some form is as old as sidewalk food vendors, but in the form we know it now it appeared in the United States in the 1950s, as particularly suited to drive-up or drive-through service.
Originally provided by individual stand-alone outlets or small local chains, since the 1960s it has been dominated by nationwide and then global chains, of which McDonald's is dominant. The primary advantage of large chains is branding (Bodine). Branding in turn implies a reliability of experience. A stand-alone outlet might well be better than any chain, but is at least as likely to be worse. At a McDonald's or KFC outlet, customers know what they can expect.
In addition to competing with one another, fast foods face competition from two sides. On one side, they are challenged by convenience stores or grocery stores offering food, sometimes heated. On the other side, they are challenged by the lower-priced and simpler-service end of the conventional restaurant spectrum, which (particularly in the United States) itself includes chains, such as Coco's, often located along highways.
This second group of restaurants have been a particular point of competition for the fast-food industry, which originated from "burger joints" appealing especially to teenagers. As the industry has grown it has broadened its scope, particularly in variety of items offered. Some of this growth has come in the form of chains that emphasize items different from the traditional hamburger-centered menu, such as KFC, which concentrates on chicken. The hamburger-centered chains, such as McDonald's, however, have tended over time to greatly increase the number and variety of their menu items, for example fish items and salads.

The Basic Burger Concept:
The expansion of fast-food menus has had important implications for their operations. As the menu grows, the kitchen operation becomes more complex. The imperatives of operating with a small and generally low-skilled kitchen staff have tended to push preparation back along the supply chain, so that handling and preparation within the outlet is minimized. The end result, for the customer, is blander and more "synthetic" food.
Fast food was never intended or expected to be a gourmet dining experience. However, Americans old enough to remember the earlier, simpler "burger joint" experience remember it fondly, while younger Americans have a sense that they are missing something. In other countries where American-style fast food has penetrated, the comparison is drawn to traditional local forms of convenient informal dining. Fast-food chains such as McDonald's are widely viewed as symbols of "globalization" in its negative sense, even while people around the world eat in them.
At the heart of the Basic Burger concept is menu simplification, and exploitation of the resulting simpler kitchen operation to provide a tastier, higher-quality product at a price point equivalent to existing fast-food items, particularly the McDonald's Big Mac. This, and its counterparts at other chains, along with a few other items such as french fries, continue to account for a large share of all fast-food items sold.
The center of the fast-food industry remains the United States, and the concept (including the name "Basic Burger") has been formulated with the American market in mind. However, the same concept could well be applied elsewhere, and if originating in a different national market, could draw on local casual-dining traditions rather than the American-style hamburger.
Assuming that the concept is first applied in the American market, subsequent global expansion might seem to be hampered by recent international consumer resistance to American-identified brands (Emling). Much of this recent resistance is due to US foreign policy, specifically the war in Iraq. As American public opinion has now also turned against the war and the Bush administration, however, this point of resistance can be expected to be a thing of the past before a new brand, having established itself in the American market, is ready to extend a global reach.
Returning to the Basic Burger concept, the trade-off, naturally, will be in having fewer items offered. Customers not interested in the handful of menu choices offered will have to go elsewhere. However, by offering popular items of superior quality at a competitive price, Basic Burger will still be positioned to capture a substantial proportion of fast-food customers, providing a substantial market niche that is in less competition with other segments of the food service industry such as conventional restaurants.
The Basic Burger Operation:
By selling only a few key items, the outlet can concentrate its effort on them. The kitchen and storage areas, not requiring provision for a large variety of items, can be designed with emphasis on the core competency. Less preparation at distant central distribution centers will be required, allowing greater emphasis on on-site preparation, in turn allowing delivery of fresher, more "natural" meals to the customer.
It should be noted here that some menu variations have minimal impact on operational complexity. For example, small, medium, and large hamburgers are made the same way, so this type of variety can be offered without substantially increasing the overhead of operational complexity.
Funding Mechanism and Price. The central concept of Basic Burger, as outlined above, is to reduce complexity of kitchens and supply chains, and apply the resulting savings to provide superior quality within a given price point. From the customer's-eye point of view, this can be expressed simply by saying that the offering of Basic Burger would most likely be about the size of a Big Mac, and offered for the same price, but tasting noticeably better, and in particular more natural.
It may be found in practice that a somewhat larger or smaller offering is the optimum, and as suggested above, offering two or even three sizes imposes minimal overhead. Larger sizes are generally advantaged, since the labor input is more or less identical for all sizes. It may also be found that the quality is sufficient to allow for a modest price premium as compared to other chains' similar-size offerings. However, the Basic Burger concept is not dependent on being able to charge such a premium.
Employee Management. Employee training can likewise focus on the core competency, simplifying operations. Cashiers, for example, will only have to deal with a few items. Moreover, smaller kitchen staffs will allow higher pay, at least in some positions, for example drawing cooks with a higher skill level. Additionally, though the number of items is restricted, some scope for individual skill will be available in these positions, making the outlets a reasonable entry level for cooks intending to move on to general restaurants, something that is not the case with conventional fast-food outlets today.
A reputation for quality will also tend to foster employee morale. The Basic Burger operation will not be a radical departure from fast-food operations. Thus it can draw on well-established management procedures for ensuring consistancy of quality in the product. At the same time, the focus on core competency will open the potential for pushing a bit beyond the standard, e.g., in allowing some scope for skill in cooking. The whole operation will be distinctly on the high end of the fast-food spectrum, with all the advantages that this can convey in employee management and relations.
Customer management. Customers are familiar with fast-food characteristics and operations. Thus, the Basic Burger concept is not requiring them to learn how to respond to an experience that is new to them. The customer will place orders and pick up food in the same way as at other fast food outlets. The one element of customer education required is with respect to the available variety of offerings, which will be considerably smaller than at McDonald's or other similar outlets.
In large part, this education will be handled by the advertising and overall branding, as in the proposed name, Basic Burger. People have an intuitive grasp that if you only make a few things, you probably make them better. Moreover, in a world where they are bombarded with choices, people will respond to "old-fashioned" quality and simplicity. These will be at the heart of the Basic Burger message.
Likewise, for customers who are unfamiliar with the offerings, the simplicity of the menu will simplify their task. They will see at a glance whether they want what is offered; if it isn't, their time and energy won't be wasted. More often than not they will want what is offered, and the quality of the product will bring them back.

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