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I am a college student currently living in the Northeastern United States. My blog is for those seeking to invest in the teen sectors.
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  • Burger King Holdings, Inc.: BKC
    First, I just have to say that Burger King tastes much better than McDonald’s. If ever the two were right next to each other, I would head straight for the BK and not think twice.
    An easy decision, even if it is 20 meters farther.

    Unfortunately for me, there are about 3 Golden Arches for every Burger King worldwide (32,478 Mickey D’s and 12,115 BK’s), and while many people like to compare Burger King to McDonald’s (they are, after all, the two largest burger restaurant chains in the world) it really isn’t as much of a contest as most make it out to be. McDonald’s has been a public company since 1965. Burger King didn’t go public until 2006, not including all the years of belonging to Pillsbury, Grand Metropolitan, Diageo et al. McDonald’s stock is valued somewhere over 5,500% higher than when it first went public. Burger King’s is just almost2.6% higher.

    It's much more one-sided than this awesome picture would have you believe.

    Nowadays, the third thing people think about when they hear the words “Burger King” is their crazy, popular, and semi-successful advertising campaign. If you’re anything like me, or anything like anyone else, you have pretty mixed feelings about the resuscitated King mascot. On the one hand, he’s funny, albeit in a creepy “I’m going to chain you to the radiator for decades” kind of way. On the other hand, however, he is just straight creepy. Should Burger King really want to put it in your mind that supporting their business will in any way cause this:

    Where is your God now?

    Yeah, I didn’t think so either. Also, that Subservient Chicken thing they have is messed up. So, while the Magical Burger King may have 1,473 friends on MySpace (which actually isn’t that many) and that nightmarish chicken mascot snuff page might’ve gone a little viral, this campaign has only gotten further from the point. Getting people to chuckle at your commercials is nice, but it seems like Burger King has forgotten that they’re primary source of income is from people driving past three McDonald’s in a row just to buy aWhopper. This campaign does not make people want to eat at Burger King over any other fast food restaurant. In fact, until Burger King can effectively move their food (you know, their main purpose in life), they shouldn’t try expanding their business into, say, the fragrance industry.

    This is an ad for 'Flame', a fragrance by Burger King. It is very real and exactly what you think.

    Also video games:

    The objective is to sneak up on innocent people and offer them a Whopper before they can see you and run away. In the much-anticipated sequel you'll get to drive around in a windowless van and offer rides to children.

    “Now, that’s enough about that,” you say, “Let’s hear more about Burger King as a business. I really couldn’t care less about their misguided and mildly insulting attempts to advertise to the 18-25 year old demographic. Bring on the numbers and stuff! How much money are these guys making?” “Oh, alright,” I concede, “Here’s what I know about Burger King Holdings, Inc.”

    Burger King has 12,115 restaurants operating worldwide. Of these, 10,657 are franchises and 1,458 are company-owned. Give or take. And the average sales of a Burger King establishment is wavering around the $1.25 million mark. This means that sales are at approximately $15,143,750,000 across the company. Well, that’s a lot of money. If I had that much money nobody in my family would ever have to work again for generations to come. But of course McDonald’s, always trying to be the center of attention, has to go and have sales of $74,699,400,000. What ever will Burger King do?

    The King does not worry.

    Well, here’s what Amy Wagner, Senior Vice President of Investor Relations and Global Communications for Burger King Corp., recently said in an interview:

    “We know that we have to really talk to the consumer about what they need today, and that’s extremely affordable food offerings. We need to, and we are, helping them to stretch their dollar as far as possible. And yes, we’ve done that through most recently our $1 quarter-pound Double Cheeseburger national rollout, where we differentiate our brand and our product against our competitors’. It’s a bigger flame-grilled product, and we believe it’s a better-tasting product. We also are actively involved in value promotions at the local level that resonate with consumers, such as buy-one-get-one-free sandwich promotions, two for $3 Whopper sandwiches on certain days of the week, and many different types of local promotions that resonate with a particular market segment.”


    So, Burger King’s plan is to use special deals to make their meals even cheaper and hope that, with the help of their higher quality food, the people will choose them over McDonald’s more often. It seems a like a pretty sound plan and I wish them the best of luck with it, however I don’t think it’ll really pan out.

    Really, Burger King? Really?

    In her interview with The Wall Street Transcript, Ms. Wagner goes on to discuss how their marketing targets teenagers and the unemployed in fuller detail. If you would like to see the rest of the interview, click here.

    Stock Chart: MCD, BKC, WEN, YUM

    Disclosure: No positions

    Disclosure: No positions
    Aug 09 2:27 PM | Link | Comment!
  • McDonald’s Corporation: MCD
    It is pretty obvious why McDonald’s is among the most successful companies in the fast food industry — it’s quick, it’s easy, and they have the Dollar Menu, which made cheap food even cheaper. Also they are just the most convenient.

    You can only have two.


    No matter where you are, it is safe to assume that you are relatively close to one of McDonald’s 32,478 worldwide restaurants (6,262 are company-operated and 26,216 arefranchised). If that doesn’t seem like a very impressive number, let me do some math. If you went to a different McDonald’s establishment every day of your life, you would reach the final McDonald’s just about a week before your 89th birthday, assuming no new McDonald’s opened up anywhere during your fairly extensive lifetime. So, just to recap, McDonald’s has about 3,862 more locations than there are days in the average U.S. citizen’s life expectancy.

    Truly an impossible task.

    Of course, McDonald’s Corp. has had their fair share of controversy. Of course, everyone knows about the infamous McDonald’s coffee case: in 1992 Albuquerque resident Stella Liebeck, 79 at the time, suffered from 3rd degree burns on 6% of her skin after she spilled a cup of hot coffee purchased from a McDonald’s onto her lap. This was followed by skin grafting, weight loss, and two years of medical treatment. In the end she was granted $2.86 million. This is also the only time I have ever heard of anyone actually buying coffee from McDonald’s.

    Then there was the time in 2002 when McDonald’s paid $10 million to various Hindu and vegetarian organizations after it became known that the famous golden fries were not as ‘meat-free’ as had been advertised. And who could forget in 2003 when McDonald’s fought back and attempted to sue fancy food critiEdoardo Raspelli for $25 million because his negative review allegedly hurt business, as negative reviews are so wont to do. And even now, in this very day and age, Ronald McDonald may or may not be legally forced to ‘retire‘ for being too good at what he does.

    The clown is to blame

    In conclusion, McDonald’s isn’t going anywhere because most people really don’t care about that sort of thing. Yes, it’s not the healthiest, but as long as you limit your visits it probably won’t kill you. Regardless, people will always need a place nearby wherever to get a semi-decent meal at 3a.m. on a budget of $12 or less, especially in this wintry economic climate. McDonald’s satisfies this need, law suits and enabler clowns and gay French commercials aside. Mickey D’s is here to stay. Since 1940.

    Now, you’re probably wondering: “How can I use McDonald’s incredible financial success for my own gain?” Well, if you own McDonald's stock, you get a $2.20 dividend a year for each stock, which is something. And so now you may be wondering: “$2.20? That’s stupid. How much money does the average McDonald’s restaurant makes in a year?” And I’m glad you asked. The average sales of a U.S. McDonald’s is said to be around $2.3 million. That is for each single restaurant. What is 2.3 million multiplied by 32,478? Well, I’ve got a calculator right here and it is … 74,699,400,000. Oh, wow. And, you know, they’re opening more of those restaurants all the time. Specifically I’m talking about 500 new McDonald’s in China over the next three years.

    Stock Chart: MCD, BKC, WEN, YUM

    Disclosure: Long MCD
    Aug 04 2:11 PM | Link | Comment!
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