Project Report
Submitted by
Rabia Malik
MBA-A3
0015
Project supervisor
Prof. Asad Shah
A comparative study of McDonalds and Burger King with
respect to their branding and customer loyalty
DEDICATION
To my beloved Parents and Family for their love, support and encouragement
ACKNOWLEDGEMENT
To start with I would like to thanks Prof. ASAD SHAH who was my supervisor for this
project and has remained an external associate supervisor during the entirety of this project.
Professor Asad Shah was not only the catalyst for our project but also a source of inspiration
and encouragement from the start to completion of my project.
Executive Summary:
Basically this project is based on the comparative study of McDonalds and burger king with
respect to their customer loyalty and branding. Both are the leading fast food businesses in
Pakistan and other international countries. Fast food is one of the most common businesses in
developed countries because it takes less time to prepare and delivering to the customers. In
today’s ever increasing globalization of services and brand service oriented businesses such
as fast food restaurants need to gain the loyalty of their customers.
McDonalds and burger king are in direct competition with each other and gain customer
loyalty because customer loyalty is becoming key issue and concern for business particularly
for fast food business it is used for measuring the organizational performance of a business.
Table of difference of both brands has mentioned in this project. Customer loyalty
competitive strategies, competitive edge, branding strategies, SWOT analysis, STP all are
included in this study. At the end some recommendations are mentioned
Contents
CHAPTER: 1 MCDONALD'S INTRODUCTION: .................................................................. 7
4.3 MCDONALD’S VS. BURGER KING: A CLOSE LOOK AT TWO BURGER GIANTS
.................................................................................................................................................. 32
BIBLIOGRAPHY .................................................................................................................... 45
CHAPTER: 1 MCDONALD'S INTRODUCTION:
McDonald's is known to be the largest fast food restaurants franchises in the United States as
well as in the world.MC famous food items are hamburgers, cheeseburgers, McNuggets, and
French fries. It is also popular for desserts: the apple pie and their breakfast sandwich: the
Egg McMuffin.
McDonald's current Chief Executive Officer is James Skinner. McDonald's is serving in 117
countries with more than 32000 restaurants. McDonalds has 75% independent owner
worldwide. McDonald's is working on many ethical and social policies throughout its solely
owned and franchised companies. These policies include placing the customer experience at
the core of what they do, committing to their employees by nurturing their talent and
rewarding their achievements, maintaining high standards regarding the conduct for business,
and giving back to the communities in which they are established. All of these values are
practiced through all levels of the company, which keeps McDonald's to be as successful fast
food chain restaurant.
Risk management is crucial to McDonald's. They have a risk assessment tool that they use to
determine the country risk: which related to the specific country/region they are located in;
industry risk: related to supplies produce; and facility risk: which is a combination of both
country and risk groundwork. These all factors helps the company to manage its risk.
To ensure the safety of its workers and customers McDonald's is providing security to them
which include camera system which continuously monitor all the activities within the
restaurant. McDonald's also monitors their computer software systems with an ACS system
that monitors the technological factors of their business.
Dick and Mac McDonald, the owner of MC started their business as a small hand burger
stand in Bernardino, California. And Mac wanted to enhance their business so that they close
it for three month and re-opened on dec,1948 which include drive through, self-service drive-
in restaurant, serving only nine items: hamburger, cheeseburger, potato chips, milk, coffee,
and slices of pie.
In 1954 Ray Kroc, a salesman showed interest in the hand burger business and sign a
franchise agreement with Dick and Mac McDonalds, as he observe they wanted to go on
April 15, 1955 first MC franchise was opened. From that day to till now MC successfully
working on its franching business.
"To be the best quick service restaurant experience". Being the best means providing
outstanding quality, service, cleanliness, and value, so that we make every customer in every
restaurant smile.
“McDonald's brand mission is to be our customers' favorite place and way to eat and drink.
Our worldwide operations are aligned around a global strategy called the Plan to Win, which
center on an exceptional customer experience – People, Products, Place, Price and Promotion.
We are committed to continuously improving our operations and enhancing our customers'
experience.”
1.5.1 Strengths:
• McDonald's has successfully rolled out new items with wide audience reach.
• Strong product offering.
• Operations are spread around the world.
• Successful brand name.
• Professional training for employees.
• Competitive price.
• Operating in many diverse cultures.
1.5.2 Weaknesses:
1.5.3 Opportunities:
1.5.4Threats:
1.6.1 Product:
McDonald’s offer bundle pricing with premium pricing for their consumers.
1.6.3 Promotion
McDonalds works a lot for its promotion for different targeted segment, starting from kids
happy meal, it always attracts customers with famous Animated Movie characters of that time
for example Shrek, toy story etc. It also focus on single person meals to family meals and
created share box. It uses associations and do great promotions related to different occasions
and events for example Cricket events, football events, Olympic events etc.
McDonald’s operates from busy places like famous shopping malls of cities, rest areas in
highways, busy roads etc. so that customers can easily visit the place.
1.6.5 Process:
McDonalds maintains similarity in its processes from greeting customers, preparing fast
meals to delivering them timely, it tries to deliver efficiently. It cares a lot about cultural,
legal, health and religious needs of customers.
1.6.6 People:
People at McDonalds include everyone who is directly or indirectly involved with customers.
Workers at McDonalds cares a lot of their customers from greeting them to delivering orders
they take great care of their services to customers.
McDonalds building appearance, interior decoration and painting, sitting chairs, atmosphere,
packaging of products, Comfortable, lively and fun loving environment for its customers all
are included in physical evidence.
McDonald’s is an industry leader in the fast food industry. Its key competitive advantages
have included nutrition, convenience, affordability, innovation, quality, hygiene, and value
added services. McDonald’s continuously overcome its weaknesses and embrace change.It
needs to reduce costs for operational efficiencies. It should integrate technology as a means
of ensuring that its key standards can be attainable.Burger King has been successful because
it has been able to focus on product diversification, reliable customer services, and
continuous innovation. (Hitesh, March 6, 2018)
1.7.1 Competitors:
1.8.2 Targeting:
• McDonald’s is fighting to position its brand against its competitors which includes
KFC,SUBWAY, BURGER KING.
• . McDonald’s has used advertising through social media and billboards as their
mainstream to position its brand against its competitors.
• Ronald McDonald House Charities (RMHC) is an independent nonprofit
organization whose mission is to create, find, and support programs that directly
improve the health and well-being of children.
• McDonald's utilizes Branding and Co-branding.
• McDonald's has found strategic ways to co-brand with major companies(Coca Cola,
Walmart, Walt Disney & Cadbury)
• NBA themed cups, toys, collecting cards, and even a burger named after Michael
Jordan called McJordan (Michael Jordan cups, Dennis Rodman cups where his hair
would change depending on the temperature) (5)
• NHL – Collectable Hockey Cards and various hockey memorabilia
• NFL – McDonald's signed to be the official restaurant sponsor, and created contests
like “tailgate photo sweepstakes”, happy meal toys, sweepstake contests that a
customer could win tickets to the SuperBowl
• NASCAR – McDonald's has sponsored various NASCAR cars (33)
• Olympics – Official Sponsor and themed cups, Olympic collectible cards
• Oil Companies (Such as Bharat Petroleum In India) – To have McDonald's available
at gas stations (35)
• McDonald's Uses Catchy Phrases and Messages in their Advertisements
• McDonald's has 23 different slogans in the US from 1960 to now. (37)
• Slogan is used to create a positive image in minds and Mc|Donalds is excellent in it.
McDonald's current slogan is “I'm lovin' it”. And now it’s a word of mouth (Devin,
November 5, 2014)
CHAPTER: 2 BRANDING AND BRAND LOYALTY OF MCDONALDS
From colors of yellow and red, to advertisement and its layout to its bright menu and chairs
table to the way customers in MacDonald’s behave nicely there are many brand elements
which contribute towards making McDonald’s an admired brand.
• McDonald’s is so much popular among propel that I cannot think of one person that
has not eaten at MacDonald’s at least once in their life which prove that it has strong
and successful branding strategies
• The main strategy used by McDonald’s tis that it tailors its advertisement according to
a specific demographics so that the company could promote what will be highly
successful in one place that may not be as successful in another.
• Though, Macdonald’s advertisements stay memorable, exciting, fun, and repetitive
through their slogan: “I’m loving it.” In addition, there is a goldmine behind
the McDonalds Monopoly, which is a powerful prize-game and marketing technique
running since 1987.
McDonald's Main Business Strategy Was and Still Is Investing in Advertising &
the Franchise Model
• McDonald's spends approximately 2 billion dollars in advertising – targeting different
groups including children.
• McDonald's has three objectives for advertising: make people aware of the item, feel
positive about the item, and remember the item.
• McDonald's invested in advertising earlier in their establishment.
McDonald’s is currently ranked the 6th most important brand in the world and is one of the
most visited restaurants.
It is true that the marketing and branding strategy of McDonald’s is based on uniformity,
no matter where in the world you will always be able to order the most iconic menu items
such as the Big Mac. McDonald’s fulfilled expectations with same kind of experience and
atmosphere.
CHAPTER: 3 BURGER KING INTRODUCTION:
After McDonalds Burger King Corporation Restaurant Company is the 2nd largest hamburger
chain in US. They are famous for flame-broiled fast-food hamburgers. Burger king has 14000
stores in more than 100 countries, headquarter is in Miami florida. In 1954 by James W.
McLamore and David Edgerton in Miami burger king was started.
• In 1954, Burger King Corporation was established by David Edgerton and James
McLamore
• In 1957, the trademark burger of Burger King, the Whopper was introduced
• In 1958, Burger King began their first advertisement on the television
• In 1959, they began their franchise
• In 1967, Pillsbury bought over Burger King
• In 1970s, Burger introduced the first indoor and enclosed restaurant
• In 1977, the franchise was restructured by Donald N.Smith
• In 1981, Norman E.Brinker become the head of Pillsbury’s restaurant division
• In 1989, Pillsbury was acquired by Grand Metropolitan PLC
• In 1997 Grand Metropolitan merged with Guinness and was renamed Diageo PLC
• In 1997 seventy million dollars was spent on a French fry advertisement campaign
• In 2000 Diageo was considering the possibility of either selling the company or IPO
(Initial Public Offering)
• In 2002 Texas Pacific Group’s investors acquired Burger King
• In 2006, Burger King was publicly listed in the stock exchange
• In 2009, Burger King opened its 12,000th store at Beijing.
“Offer reasonably priced quality food, served quickly, in attractive, clean surroundings.”
3.3 VISION OF BURGER KING:
“To be the most profitable QSR business, through a strong franchise system and great people,
serving the best burgers in the world.”
3.4.1 Strengths:
3.4.2 Weaknesses:
3.4.3 Opportunities:
3.4.4Threats:
• Aggressive competition
• Imitation
• Healthy lifestyles trend (Thompson, February 6, 2017)
3.5 7P'S ANALYSIS OF BURGER KING
3.5.1 Product:
Burger King produces, hamburgers, cheeseburgers as well as Fries, Salads, Hash browns,
Onion rings, Coffee, Juice, Shakes, cookies and pies.
Burger King sets itself apart from competition with its “have it your way” theme which
allows individualize each orders with many options including fries or onion rings, cheese,
bacon, mustard, ketchup, mayonnaise, lettuce, tomato, pickles, and onion. Burger king future
plan that it will add starbucks coffee to all its US restaurants. Burger king sell coffee along
with iced varities that will come along with different flavors (vanilla, mocha flavors whipped
toppings)
3.5.2 Price:
BK set their prices according to MC. Pricing strategy of BK include profit maximization
Burger King recently joined McDonalds in offering a $1 double cheese burger..
Burger King plans to sell slushy drinks for $1 leading into the summer in order to offer an
alternative to McDonalds $1 summer drink.
3.5.3 Place:
3.5.4 Promotion:
People refer to the customers, employees, management and everybody else involved in it. It
is essential for everyone to realize that the reputation of the brand that you are involved with
is in the people's hands.
John W. Chisley is Burger King’s Chief Executive Officer and Executive Chairman of The
Board.Alexandra Galindez the director of multicultural marketing for Burger King and in
charge of implementing its “Next Best Move” initiative.
3.5.6 Process:
Burger King pairs its “have it your way” theme with speedy customer service. To facilitate
fast service Burger King takes customer orders on a continual basis. After an order is taken,
the customer then moves down the line where another employee is preparing the order.
Meanwhile, the original employee is taking another customer’s order. Customers also get
their own drinks while they are waiting for their meal.
Burger King, based in suburban Miami, Florida, operates more than 11,900 restaurants in all
50 states.
Burger King has an internet presence via its website BK.com. The company is reinventing its
image via key changes in its decor. Its new restaurants will feature modern, box-like architectural
lines and urban-industrial building materials, including corrugated metal.
Firstly BK restaurant appeared in the US.BK main target market is male audience from 18 to
35 years old, but now BK focus started to women and children as well. However targeting the
kids has not become burger king key strategy. Basically burger king target young adults who
want tasty food, quick service and a good environment. International expansion now the key
targets of the company BK wants to enter different market before it becomes too tough
because in economic difficulties business environment is not always welcoming. This will be
helpful to increase overall sales of the burger king.
Burger King are utilizing concentrated targeting, it means dressed ores on functioning many
demands of a peculiar client group. This is aiming the demographic group with immature
grownup market. Notably among immature males which they do non watch telecasting
commercial and surfing on cyberspace all the clip. They are willing to seek new things.
Burger King merely aim on section within the entire market.
3.6.3 Market Positioning
Burger King had aiming immature grownup market, particularly immature males market.
They position Burger king providing high-quality, great-tasting, and low-cost nutrient.
Burger King provides better service quality with the similar pricing and more assortment pick
of nutrient than McDonalds. Burger King UK released a new ad on the event of Christmas,
where the ‘King’ gifts an extra-special gift to the clown. Campaigns of Burger king have
been amusing and quite fierce for its competitor.
In 2015, Burger King proposed that the two chains combine “the tastiest bits of Big Mac and
their Whopper, united in one delicious, peace-loving burger” which they would sell on Peace
Day, September 21. The proceeds of which, would be donated to Peace One Day, a nonprofit
that provides educational resources to thousands of schools in 131 countries. McDonald’s
however, disregarded Burger King’s proposal to create a McWhopper for peace.
3.7.1 Strong parent company: Restaurants Brand international being the parent company
has helped the Burger King in utilizing their capabilities and the infrastructure support which
is helping the company in achieving its goals and objectives.
3.7.2 Line of business: Burger King generates its revenue through three different businesses
1. Royalties in terms of fees paid by the franchisees as a percentage of total sales made.
2. Properties leased out or subleased to franchisees.
3. Revenue from the company-owned restaurant outlets
3.7.3 Intellectual Property Rights: Mora than 4600 Trademarks and above1000 domain
name registration around the world that owns by burger king. (Lawrence, February 6, 2017)
CHAPTER: 4 MARKET ANALYSIS IN THE MARKETING STRATEGY OF
BURGER KING
Due to the presence of various local, national and international fast food chains, it is
becoming difficult for the company to increase its customer. In developing nations, it is tough
for the companies in this industry to increase the market size due to several factors like
In order to keep the operating cost low Burger King is operating in the franchised model for
physical presence and it is promoting online sales by offering discounts to customers in order
to
Customers of Burger King are the people who want to enjoy safe, tasty fast foods and
beverages. Most of the customers of Burger King are in the age group of 15-40 years in
developing nations and in developed nation’s customers of all age groups prefers the Burger
King fast-food chain.
Burger King points to a weakness in what seemed like a profitable marketing strategy. It
reveals lower earnings by the company at a time when many of their so-called “Super
Customers” are leaving them and the reasons behind it were as following:
Customer focus: Part of the problem is they are not giving customers what they want. While
their competitors added lighter and healthier items to their menus, BK relied on an ad
campaign and more of what they thought customers wanted. Now that people are eating
healthier, the goofy ads and bigger burgers are not a strong enough draw.
Less focus on kids; As we can see that its biggest competitor MC main target market is kids
which is its biggest strength and competitive advantage. But BK is not focusing on this
segment it is losing some of its market.
New policies and techniques: Burger king developing new policies and techniques to gain
customer satisfaction for example burger king monitoring customer flow within store through
cameras also check the customer behavior and movement within restaurant.
4.3 MCDONALD’S VS. BURGER KING: A CLOSE LOOK AT TWO BURGER
GIANTS
McDonald's and Burger King compete closely with each other in the fast food segment.
However with its much bigger size and larger market share McDonald's is clearly the leader.
A couple of years ago, it appeared that Burger King was threatening McDonald's However,
with its All Day Breakfast and focus on healthier food items along with a renewed focus on
McCafe, it now appears that McDonald's is better positioned to compete with Burger King.
In the past two years McDonald's has been aggressively refranchising its restaurants and as
both burger giants move towards a nearly 100% franchised model we expect a similar rate of
growth in the franchised restaurants of both players. However, since McDonald's has a larger
base, its restaurant growth in absolute terms would be higher in the next few years:
The average royalty revenue per McDonald's franchisee restaurant is significantly higher
compared to Burger King, since the former serves more customers per restaurant, given its
higher market share.
We expect McDonald's royalty revenues to increase at a faster rate compared to Burger King,
as the company is driving higher traffic on the back of its menu innovation, technology
initiatives, and better branding. A comparison between the comparable sales growth numbers
for the past six quarters of both burger giants indicates that McDonald's is currently in the
lead.
McDonald's is also piloting its "Experience of The Future" stores where orders can be placed
via kiosks, saving time and making it easier for customers to personalize their orders. While
both Burger King and McDonald's are likely to launch their mobile ordering platforms this
year.
Restaurant Brands International, on the other hand, appears to be lagging behind in menu
innovation, introduction of healthier menu options, and technology initiatives. Burger King is
much smaller in size compared to McDonald's thus has a greater growth and expansion
potential. However, it appears that the company is not able to keep pace with McDonald's
menu and technology innovations and hence is unlikely to gain market share and grow at a
faster pace in the next few years.
Best fries and best burger from a burger chain.
The war between two of the biggest food chains, Burger King and McDonald’s has been
going on for ages. In fact according to reports, the term ‘burger wars’ was coined in the
seventies after a series of competitive advertising campaigns launched by the two chains.
McDonald's customer base is much wider than that of Burger King with 28,000 franchised
stores spread worldwide ranging from developed markets to developing nations in
comparison to Burger King's 13,000 franchised restaurants in selective developed markets.
What are the future plans of the company to increase customer Loyalty;
McDonald’s and Burger King both are working to introduce different business strategies to
be the market leader in fast food business in UK. Both companies have many future plan
which can help to increase customer satisfaction for example, in MC the company is planning
to focus on different market segments like kids adults and older customer segment. On the
basis of demand and expectations of different segment the company is working on
appropriate menu and balance food with keeping in mind the health of its customers. If we
talk about burger king they have mentioned that they are focusing on customer complaints
management. The company plans customer survey on regular basis and take corrective action
in the entire Burger King system to reduce number of complaint and to increase customer
satisfaction.
5.1 COMPARISON OF MCDONALDS AND BURGER KING BASED ON
CUSTOMER LOYALTY AND BRANDING;
12 Minutes
Time spent between
ordering and receiving an They are more concerned 10 minutes
order with the quality of the service
than the speed of the service
Customer preferences McDonalds fry their burgers Burger King their burgers
flame grilled. Research done
by Burger King shown that
people think that flame
grilled burgers better than
fried burgers in terms of taste
Range of burgers McDonalds have very wide Burger King has wide range
range of deserts of burgers.
Mass-produced standard
burger
Fun Laidback
Spirited
Kind Customer-focused
Family-oriented Warm
Process-oriented
Quality control McDonald’s Provide good Burger King uses the
quality, services to customer. customer and market oriented
Uses a cleanliness surveys to manage the
environment when customer quality of service on regular
enjoys their meal. The value basis.
of food product makes every
customer is smiling.
Restaurants layout Restaurants have included a The lay out of the restaurants
playground for children and are very wide and people
advertising geared toward could comfortably spend
children. The new strategy of time with their food.
re-designing of layout of the
braches create “natural” style
with a particular emphasis on
comfort introducing lounge
areas and fireplaces and
eliminating hard plastic
chairs and tables. These
facilities give comfort to
customers and create
satisfaction.
Customers also have higher expectations in terms of the food production process. As a result
of demands for better ingredient quality and less animal cruelty, companies have already been
forced to adapt. Consumers are also requesting lower prices, causing many stores to
offer discounts and deals. McDonald’s started offering breakfast all day after years of
pressure from customers.
In 1994, McDonald’s first step out and it attracting people from past 20 years.it is one of the
most love fast food chain. The reasons why people are loyal towards McDonald’s that;
• It has easiest accessibility to the main market make it first choice as compared with
burger king.
• The customers indicates that their preference is based on service quality and attractive
packing they get at McDonald’s
• It is noted that McDonalds customers remember its menu by heart they said that they
do not need any menu before ordering.
• The amount of customers at Burger King are still however a drop in the ocean of
McDonalds crowd. Burger king consumers know the fact that its outlets are less
packed than McDonald’s which makes the takeout experience less onerous
• Burger King definitely packs more flavor category, it is said that the Burger Wars are
not just about taste it’s about the overall experience and the strategies in the
background. Being an established global brands MC and BK can continue to be the
rivalry to each other in the market.
• Burger king believes that complex ideas ruin the overall brand image too many items
in menu make customers confused, provide less quantity and varieties but maintain
the quality
• Your customer are your assets if you are ignoring them they think that you are only
concerned about profit, during 2010 MC work was much better than burger king and
people negatively portrayed burger king to compete in the clown’s market however in
last five years BK came up as an extra ordinary growing brand beating popular fast
food chains. Today we see great response by brand they made a positive move by
focusing on their branding and customer loyalty.
• McDonalds thinks according to the customer tastes, value system, lifestyles,
perception and language that reflect the commitment of the business to increase and
improve customer satisfaction.
• McDonald’s has been recruiting and hiring people to ensure quality product and
services, McDonalds has been providing training to staff to develop employee
knowledge and skills to gain highest quality standards and deliver customer
satisfaction.
5.3 CUSTOMER LOYALTY OF MCDONALDS AND BURGER KING:
There are different ways to identify the level of satisfaction For example, McDonald’s do
different surveys to hear from its customers as well as recent experience from restaurants to
know customer satisfaction The Store Manager of McDonald’s has mentioned that with the
help of customer feedback the business has been developing and implementing different
actions to increase customer satisfaction for the next time.in contrast Burger King is also
using customer satisfaction tracker known as customer experience program, According to
store manager it is one of the most unique approach of measuring customer satisfaction, these
programs are helpful to investigate and analyze customer experience, it is also helpful to
retain existing customers and attract new customers. In addition, information collected
through this program helps BK to focus on the organization operational aspects of food
quality, cleanliness and speed of the service etc, these tracking programs directly feedback to
entire BK in real time.
5.5 CONCLUSION;
According to my report I think the better fast food chain is McDonalds. Today there is better
technology which helps to manage the resources more effectively.MC is very strong fast food
chain in the world as in its maturity stage it has more growth opportunities. It can also
introduce new products. McDonalds is planning to open more outlets in more countries.
Although in McDonald’s there may be more problems than Burger King but the fact is there
cannot be a perfect one in the world. burger king is also trying to compete McDonalds it
might be possible that burger king is better in many things but still McDonalds is on number
one fast food chain in world because of its strong background and more importantly due to
strong customer loyalty.
5.6 RECOMMENDATIONS:
Based on the analysis we can conclude that; to perform better and to achieve their objectives
the company should start working on solving their internal issues first.
The company should focus on the current trends in fast-food markets and thus focus
on the demands and expectations of the customers of different segments;
The company must be committed to deliver or offer quality products and services to
the customers as well as the company have to offer competitive price of their foods;
It is important to develop and implement different business strategies in line with
customers’ feedback and suggestions, so the company should carry out market
research and collect customers’ feedback and suggestions on regular basis; and
The company should build strong relationships with customers through focusing on
their economic, social and psychological perspectives.
BIBLIOGRAPHY
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branding-success/
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https://www.tronviggroup.com/brand-strategy-basics/
Jurevicius, O. (January 10, 2019). SWOT analysis of McDonald's (5 Key Strengths in 2019).
Retrieved from https://www.strategicmanagementinsight.com/swot-
analyses/mcdonalds-swot-analysis.html
Lawrence, G. (February 6, 2017). Burger King’s Generic & Intensive Growth Strategies.
Retrieved from Panmore: http://panmore.com/burger-king-generic-intensive-growth-
strategies
lewis, R. (Jan 18, 2017). Burger King Corporation. Retrieved from Britannica:
https://www.britannica.com/topic/Burger-King-Corporation