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Chad Keith

Prof. Violet Christopher

MKT 449-13337-SP2024

February 24th, 2024

Real Burger World Case Analysis

I. Background

Real Burger World (RBW) was founded by entrepreneur Naz Choudhury in the early

2000s, in the UK, after he was unable to find a ‘quality-yet-convenient’ fast-food option, beyond

the typical chains available at the time, such as McDonald’s, Burger King, etc. Together with his

friend, Mark Viegas, and another silent investor (who later would buy Mark out of his position as

a named partner), they launched RBW. The initial capital sunk into the project was roughly a

half-million dollars, and with that, a vision to build a franchise based on delicious burgers using

fresh, natural ingredients—a “higher quality” answer to traditional fast food—was born.

Despite RBW aligning with several market trends toward healthier organic offerings,

operational issues starting with the first store carried over to a redesigned second location leading

to unsustainable costs and insufficient sales to support those expenses or achieve profitability as

a template for franchising. While the brand and concept showed an initial promise (and given

positive reception), the underlying business fundamentals were not properly addressed by the

owners, which proved too large of a mistake to recover from.

If the utmost care is not provided in starting a new restaurant, an industry that is

notoriously difficult to find success in, especially with such a large end-result vision, cutting

corners for the sake of ego, which is just one of the factors leading to the downfall of RBW, as

illustrated in the case study text, is an all but certain way to sign your business’ own death
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warrant. There is not a clearer example of this than with information that comes from 2005

research by Ohio State University, which claims approximately 60% of restaurants fail during

the first year, and 80% are doomed within the first five years (Food Industry Editorial Team,

2021). And that is the data that is on the more generous side, as there are experts, like Jay from

financesonline.com, that peg the failure rate at an astounding 90% within the first year. (Jay,

2022).

II. Analysis

Internal and external analysis reveals several strategic factors contributing to RBW’s

struggles. In the general environment, consumer tastes were shifting toward higher quality

ingredients, customization, and concern over health benefits enabled by emerging product

innovations and technologies as evidenced by trends at major competitors like McDonald’s

diversifying menus (Case Study). However, these opportunities were combined with the long-

standing challenges facing small businesses and new entrants attempting to secure real estate

locations on constrained budgets. Consumer expectations for convenience in quick serve also

remained high amid busy lifestyles. On the competitive environment side, analysis using Porter’s

Five Forces indicates threats from rivalry among incumbent brands and from substitutes able to

fulfill similar customer needs. Traditional fast-food chains possessed inherent advantages in

supply chain, operations, and ability to leverage scale in pricing models that a start-up could not

readily match at small volumes. Regarding internal factors, RBW did not demonstrate sufficient

capabilities around managing inventory, designing efficient kitchen workflows, training staff on

delivering good hospitality in the context of concept, or critically evaluating menu offerings

according to actual customer feedback rather than just personal preferences. Their core

competencies lay more in creativity, risk-taking ambition, and ability to secure publicity rather
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than retail food service operations. Strategic urgency was also impacted by overly aggressive

forecasts for growth banking on franchising rather than organic sales. (Case Study)

III. Strategic Issue

Applying the Five Whys root cause analysis, the core strategic issue facing Real Burger

World was overemphasis on brand building, novelty, and future scale at the expense of

fundamentals including product-market fit, delivering on the “real” quality positioning, and

containing expenses within reasonable limits given competitive dynamics. (Mind Tools Content

Team n.d.) The path to sustainable competitive advantage clearly required revisiting concept

viability by first testing operational integrity and consumer appeal extensively using controlled

experiments. However, founders and management remained overly fixated on interactions,

publicity wins, and superficial differentiators around being fresh and healthy which satisfied

their egos more than actually generating repeat purchase behavior or realistic franchise

feasibility. Significant compromises in terms of convenience expectations and cost structure

necessary to fulfill the concept vision were, at the cost of the business itself, heavily downplayed

in certain circumstances, and flat-out ignored in others. A better approach would have been to

address the issues methodically, after formulating a strategy, which would have laid the

foundation to deploy tactics to solve the issues in a meaningful, step-by-step process. In

detriment to the business, cherry-picking tactics and deploying them myopically, without any

semblance of a strategy, appears to be the method the two owners (and the silent-turned-not-so-

silent partner) chose to use. This affected any kind of long-term viability of the business, as they

failed in maintaining a grasp on what reality, pragmatism, and common sense actually called for.

IV. Recommendations
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In order to still achieve the original mission for RBW, my recommendation involves

stepping back from accelerated expansion plans to focus resources on core store performance

and profitability. This necessitates consolidating from two locations down to just one to

adequately contain expenses like the massive unnecessary overhead that comes with a second

location, until the original location’s productivity and sales levels had improved. Product/market

fit also clearly requires enhancement based on implementing customer feedback processes, while

also potentially contracting external food science and menu formulation data, to better tailor

offerings to the ‘quick-serve’ segment, beyond just the founders’ preferences. Streamlining

kitchen operations, and inventory management would follow, using lean principles around waste

reduction, and would help in tightening up preparation timelines. Staff should also be retrained

by someone experienced in hospitality concepts, especially ones directly fitting the updated

brand identity and unique value proposition, since the observed service style was still

inconsistent. Only after single-store profitability hits sustained milestones, over an 18–24-month

optimization period, do franchising conversations begin to become practical again.

If one were to ask for a summary of what went wrong, in an informal and conversational

style of writing, it may sound similar to this:

“Why would they fail? In areas where they needed experts (and expert

opinions) they, instead, substituted themselves and their own opinions, without even

addressing the underlying concerns adequately when they inevitably hit rough patches

and roadblocks.

These dudes ‘put the horse before the carriage’ multiple times, and when you do that

with a new business that has this big of a vision and dream, your ‘dream’ and ‘vision’
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become more like ‘delusions of grandeur.’ That alone may have been able to be

overcome if they had any sort of flexibility or ability to compromise some of their

original vision in light of all the challenges piling up at their doorstep. But did they?

Nope! They doubled down and opened a SECOND location. They were too focused on

the dream of building a giant ‘healthy’ fast-food chain, and didn’t stop for a second to

consider or think about the order of operations that would allow them to do that.

In an almost impressive display of either a bat-shit crazy level of bad luck,

or a display of staggeringly bad instincts, they also somehow chose to deploy the wrong

tactics, in the wrong situations, in the wrong place, at the wrong times. That’s a lot to get

wrong, all at once, and expect anything less than a fiscal train-wreck. They ignored the

glaringly obvious steps needed to save their ‘anti-gravy-train’ from derailing. Instead,

they doubled down on conducting that gravy-less train by increasing the speed at which

they were barreling towards becoming the eventual financial tire-fire it was in the end.

It’s like they were trying to sing the alphabet, but starting with J through P, then jumping

to Z, and singing the rest backwards, skipping every other letter, except the one’s you’ve

already listed, while hopping on one leg, with your eyes closed, across a tight rope.

Backwards. With no safety net.”

However, something of that nature would only prove appropriate if someone were to

have actually asked that question. To be fair, no one has asked that question.

V. Tactics
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From a marketing mix perspective, such a renewed strategic approach for getting RBW

basics firmly in place hinges on concentrating resources on the Four Ps within existing corporate

location(s) rather than diffuse promotional media. The four Ps of marketing are product, price,

promotion, and place (McCarthy). Let’s take a look at each of the McCarthy 4 P’s.

Product: Redevelop core menu with select items that clearly reflect quality ingredients,

taste profiles not easily replicated. Feature seasonal specials and LTO’s sparking uniqueness.

Display prep kitchen openly highlighting freshness.

Price: Use value-based and cost-plus pricing to calculate profitable models factoring in

food costs at lower volumes. Potentially position as affordable premium via messaging.

Place: As a consumer discovery and digital word-of-mouth play, ensure website, mobile

app fully reflect brand experience. Location convenience and layout for counter service matters

until awareness widens.

Promotions: Shift all advertising to concentrate on genuine point of differentiation as

“real” ingredient quality and preparation. Let that message permeate all consumer touchpoints

ahead of reaching goals. Revisit target segments.

And, because of how McCarthy’s 4 Ps are structured, we can simply deploy his template

over our own ideas, as illustrated above. (McCarthy, 1960) Through centering execution back to

tangible customer value propositions first delivered consistently, the resulting rebuilt foundations

then enable pursuing the initial franchising vision for Real Burger World from a position of

stability rather than speculation.

VI. Works Cited

Food Industry Editorial Team. (2021, July 10). What is the failure rate for US

restaurants? FoodIndustry.Com. https://www.foodindustry.com/articles/whatis-the-failure-rate-

for-us-restaurants

Jay, A. (2022, January 14). How many restaurants are there in the US? There are 1

million-plus restaurant locations in the US employing 15. Financesonline.Com.

https://financesonline.com/number-of-restaurants-in-theus/#7

McCarthy, Jerome. “Basic Marketing: A Managerial Approach.” Richard D. Irwin, 1960.

Mind Tools Content Team. "5 Whys: Finding the Root Cause of a Problem." Mind Tools.

n.d. https://www.mindtools.com/pages/article/newTMC_5W.htm. Accessed date.