McDonald’s has been eating Burger King’s lunch for more than a decade

McDonald’s has been eating Burger King’s lunch for more than a decade

By Matt Phillips @MatthewPhillips June 2, 2014

It’s been a tough decade for Burger King.

The long-time rival to McDonald’s has seen its share of the US fast-food burger market erode steadily since 2000, when it controlled nearly 19% of market. Last year, Burger King’s share had dwindled to 11.2%, according to data from market research firm Technomic, which was cited in a recent note from analysts at Morgan Stanley. Burger King’s market share loss amounted to gains for virtually every other fast-food burger joint, especially McDonald’s, which dominates the US burger market. McDonald’s controlled 47.3% of the market last year.

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Why has Burger King lost ground? Morgan Stanley analysts argue that corporate management, undercapitalized franchisees—which skimped on investment—and lack of product innovation all played a part. But change is in the air. Burger King isoverhauling its menu and slowly upgrading its stores. The company has even scrapped its 40-year-old “have it your way” slogan, launching a somewhat more new age-y tagline “be your way.”

Investors seem to like it. Shares of the company, which was bought by Brazil’s 3G capital in late 2010, taken private, and subsequently taken public again in 2012, are up more than 12% this year. That’s a lot more than both the S&P—up roughly 4%—and McDonald’s shares, which have risen about 5%.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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