Asia Pacific University College of Technology & Innovation

Subject Title: Introduction to Management System Name: BM007-3-1-IMT-T-2 Lecturers: Ms. FARAHIDA BINTI ABDUL JAAFAR Mr. SHAHNUL NIZA BIN MOHD YUSOF Intake Code:UC1F1201-IT Word Count:2077 word

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Introduction to Management

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Table of Contents

Table of Contents ...................................................................................................................................... ii Table of Figures ....................................................................................................................................... iii 1. 2. Introduction........................................................................................................................................ 4 Overall understanding of the concepts .............................................................................................. 5 2.1 2.2 3. What is Task Environment? ....................................................................................................... 5 What is Mega Environment? ...................................................................................................... 5

Burger King Mega Environment Factors .......................................................................................... 6 3.1 3.2 Economic Environment .............................................................................................................. 6 Socio-cultural Environment ....................................................................................................... 7

4.

Burger King Task Environment Factors ............................................................................................ 7 4.1 4.2 Competitors ................................................................................................................................ 7 Suppliers ..................................................................................................................................... 8

5. 6. 7.

Conclusion ......................................................................................................................................... 8 Reference List .................................................................................................................................... 9 Group Task Report .......................................................................................................................... 12

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Table of Figures
FIGURE 1: BURGER KING HEADQUARTERS ................................................................................................ 4

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1. Introduction
Burger King is the second largest fast-food restaurants and hamburgers chain, globally and in the United States of America. It began in 1953 as Insta-Burger Kingby Keith J. Kramer and his wife's uncle Matthew Burns in Jacksonville, Florida. The story goes as when Keith J. Kramer and his wife's uncle Matthew Burns began to search for a new concept for opening a new restaurant around, and after purchasing the rights to two pieces of equipment that called "Insta" machines, Keith J. Kramer and Matthew Burns opened their first restaurant around a cooking device known as the Insta -Broiler". The Insta-Broiler oven proven its successfulness at cooking burgers, that both Keith J. Kramer and Matthew Burns required all of their franchises to carry the Insta-Broiler oven(Wikipedia, n.d.). In 1955, Insta-Burger King ran into financial difficulties were Keith J. Kramer and Matthew Burns the founders and the owners were forced to sell Insta-Burger King to two Miami-based franchisees, David Edgerton and James McLamore, were these two renamed it to Burger King and they initiated it as a corporation and ran the company as an independent company for almost eight years expanding to over 200 locations just within the United States and then eventually they sold it to Pillsbury Company in 1967(Wikipedia, n.d.).

Figure 1: Burger King Headquarters

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2. Overall understanding of the concepts 2.1 What is Task Environment?

Task environment is a collection of all the entities, factors and events surrounding an organizationwhich have a strong influence on the organizational success or failure, and affects the organizationalability to reach and achieve their business goals. Any individual, organization and consumer with a direct involvement with the organization areconsidered part of the task environment. For instance competitors, customers, suppliers and labor are all part of the task environment that define the organization(BusinessDictionary, n.d.). Competitors: A person, team, organization or a country that is engaged in commercial or economic competition against each others. Customers: Any person or organization that buys goods or services from a store or business. Suppliers: Any person, company or organization that provide things like goods and services which people want or need, especially over a long period of time. Labor: Workers, especially people who do practical work with their hands

2.2 What is Mega Environment?

Mega Environment is a general environment that can potentially reflect the conditions and trends of the societies, and have the power to influence the success or failure of the products and / orthe serviceswithin the organization. It includes technologicalenvironment, economicenvironment, legalpoliticalenvironment, socio-culturalenvironment and internationalenvironment. Technologicalenvironment: Any technological factors like changes in technology which impacts how the business operates and affect how the organization does their businesses(BusinessDictionary, n.d.) Economicenvironment: All what affects and influence the buying behavior of any consumers and organizations. It includes employment, income, inflation and

productivity(BusinessDictionary, n.d.).

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Legal-politicalenvironment: Any laws, regulations, legislation and or court decisions that affect directly on how the business operates (Wiki Answers, n.d.). Socio-culturalenvironment: All the beliefs, customs, practices and behavior that defines a certain population which affect how the organization does its operation(BusinessDictionary, n.d.).

International environment:Means all the developments that happen in countries outside any organization home country and have the potential impact and affect the organization(Blurt It, n.d.).

3. Burger King Mega Environment Factors 3.1 Economic Environment

Burger King is a capitalist company.This means that business units or factors of production are privately owned and governed. The profit earning is the sole aim of the business units and all the decisions relating to the economic activities are privately taken. The business of Burger King is greatly affected by a few factors, which is inflation and recession (Slyman, 2009). Firstly, we will discuss about inflation. Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. High inflation distorts consumer behavior. Because of the fear of price increases, people tend to purchase their requirements in advance as much as possible. This can destabilize markets creating unnecessary shortages. When inflation occurs, the cost of raw materials, supplies, and wage of employees increases. If the inflation rates are 5% then that means in one year RM100 will drop in value by 5% so it will only be worth RM100 effectively. Burger King must then put wages up to cover this expense. During inflation period, consumers will also hesitate to buy products of Burger King as it is not a necessity. This causes a huge decrease in the profit earned. As Burger King is a large business with huge budget, they are able to buffer themselves from the impact of inflation (Investopedia, n.d.). The next topic we will discuss is recession. Recession is defined as a significant decline in activity across the economy, usually lasting longer than a few months. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic

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product (GDP); although the National Bureau of Economic Research (NBER) does not necessarily need to see this occurrence to call a recession (InvestorWords, n.d.). During recession, Burger King will need to cut back on hiring new employees or freeze hiring entirely. During recession period, the sales of Burger King will drop dramatically as there will be much lesser customers visiting Burger King Outlets. Burger king deals with recession by shifting some of their marketing budget to sales. This will allow Burger King to continue operating as normal usual, minimizing the effects of recession(Slyman, 2009).

3.2 Socio-cultural Environment

Asis the case withallthe worldwide and multinational fast food restaurantsobeying and respecting the societies and their cultural,among them burger King excelled in the Socio-cultural Environment by taking in mind the religion, the culture and the behavior practice in each country before opening a branch in it. For instance, When Burger King entered India, the chain decided not to launch its meat meal like their famous double whopperas a result of deferring to the Hindu prohibition against beef consumption. The companyinstead served chicken, fish and vegetable burgers.Another example, When Burger Kingopened in Malaysia; the chain made it a HALA food only as a result for Muslim religion and culture and as Malaysia being a Muslim country.

4. Burger King Task Environment Factors 4.1 Competitors

Burger King is the second leading global fast food retailer after McDonalds with more than 20,000 local and global restaurants serving more than 40 million people in more than 100 countries each and every day. There are more than 15 fast food brands spread across the globe some of them are considered as Burger King main competitors like McDonalds, Wendy's, Carl'sJr., KFC and Subway. They all compete to take the lead of the fast food market but Burger King is still taking the second place all because their continuous data gathering about their competitors, for example the strategic strengths and weaknesses of their competitors, their objectives, strategy, marketing activity and budget. With all that information and adding over them Burger King plans of spending millions and millions of US dollars in marketing and promoting their brand name, Burger Kingtook the fight to a new level where its fully prepared for any challenges that will face then in this competitive market.
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4.2 Suppliers
Suppliers are a critical part of the task environment because organizations must have a continuous source of resources in order to serve their customers. Suppliers heavily affect the business and profits of Burger King. If any of the suppliers cut off their relationship with Burger King, Burger King would not be able to produce goods. In order to minimize the effect of this, Burger King buys their supplies from different suppliers(Blurt It, n.d.). If the supplier demands for higher price for the resources, this will cause the company a big decrease in their profit as the cost of the goods will be very high. The quality of the goods produced, which in this case is food, depends on the supply too. If the supplied food isnt fresh or in good condition, this will leave a negative impression on the customers and this might interrupt with their decision on whether to visit Burger King for food anymore. Burger King has a few significant suppliers. For the food condiment, H.J. Heinz Company is a significant supplier of condiments to Burger King. Other than that, Kraft foods have supplied many of its products to BK over the years too. For the protein supply, Tyson Foods is the main chicken meat supplier. Hudson Foods is Burger Kings biggest beef provider. BKs potato products are supplied by McCain Foods since 1998. Edwards Baking supplies BK with pre-packaged pies and pie-style desserts. Even though there are problems between the contract of Coca-Cola and BK, BK has continued using Coca-Cola as its beverage supplier. Even though these are the main suppliers, BK still have relation with other suppliers as this would prevent major problem if the contract with their major suppliers are cancelled.

5. Conclusion
Burger King offers reasonably priced quality food, served quickly, in attractive, clean surroundings to their customer.According to the Malaysian Burger King online site there are more than 15 restaurants in Malaysia. From the whole case study, we found out that Burger King clearly identify their Task and Mega environment. They take research on the possible threats that can threaten their business from the Task and Mega environment and at last prevent and overcome it with solutions found from the research done.

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6. Reference List

Blurt It, n.d.. What Do You Mean By Supplier In The Task Environment Of Organizational Management?. [Online] Available at: http://www.blurtit.com/q183253.html [Accessed 18 May 2012]. Blurt It, n.d.. What Is Mega Environment!?. [Online] Available at: http://environment.blurtit.com/q424409.html [Accessed 17 May 2012]. Blurt It, n.d.. What Is Mega Environment!?. [Online] Available at: http://environment.blurtit.com/q424409.html [Accessed 29 April 2012]. Brodsky, N., 2011. How to Prepare Your Business for Inflation. [Online] Available at: http://www.inc.com/magazine/201106/norm-brodsky-inflation-and-business.html [Accessed 19 May 2012]. BusinessDictionary, n.d.. Economic Environment. [Online] Available at: http://www.businessdictionary.com/definition/economic-environment.html [Accessed 5 May 2012]. BusinessDictionary, n.d.. Socio-cultural Environment. [Online] Available at: http://www.businessdictionary.com/definition/socio-cultural-environment.html [Accessed 15 May 2012]. BusinessDictionary, n.d.. Task Environment. [Online] Available at: http://www.businessdictionary.com/definition/task-environment.html [Accessed 4 May 2012]. BusinessDictionary, n.d.. Technological Environment. [Online] Available at: http://www.businessdictionary.com/definition/technological-environment.html [Accessed 5 May 2012].
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Cornwall, J., 2011. Inflation: how small businesses can deal with soaring prices. [Online] Available at: http://www.csmonitor.com/Business/The-Entrepreneurial-Mind/2011/0425/Inflation-howsmall-businesses-can-deal-with-soaring-prices [Accessed 19 May 2012]. Forbes, 2008. How Retailers Should Deal With Inflation. [Online] Available at: http://www.forbes.com/2008/08/07/costco-inflation-retail-ent-salescx_kw_0807whartonretail.html [Accessed 19 May 2012]. Green, C., 2008. Top Ten Ways for Your Business to Deal With a Recession. [Online] Available at: http://trustedadvisor.com/trustmatters/top-ten-ways-for-your-business-to-deal-with-arecession [Accessed 19 May 2012]. Investopedia, n.d.. Inflation: What Is Inflation?. [Online] Available at: http://www.investopedia.com/university/inflation/inflation1.asp#axzz1vJwLm99z [Accessed 18 May 2012]. InvestorWords, n.d.. Recession. [Online] Available at: http://www.investorwords.com/4086/recession.html [Accessed 19 May 2012]. Kottolli , A., 2009. Dealing with recession. [Online] Available at: http://arunkottolli.blogspot.com/2009/04/dealing-with-recession.html [Accessed 19 May 2012]. Slyman, J., 2009. The Task Environment. [Online] Available at: http://jslyman.blogspot.com/2009/09/task-environment.html [Accessed 18 May 2012]. Wiki Answers, n.d.. Definition of political legal environment?. [Online] Available at: http://wiki.answers.com/Q/Definition_of_political_legal_environment [Accessed 11 May 2012].

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Wikipedia, n.d.. Burger King. [Online] Available at: http://en.wikipedia.org/wiki/Burger_King [Accessed 25 April 2012].

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7. Group Task Report

Group Members:

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