The fast-food hamburger category operated within the quick service restaurant (QSR) segment
of the restaurant industry. QSR sales had grown at an annual rate of 3% over the past
10 years and were projected to continue increasing at 3% from 2010 to 2015. The fast-food
hamburger restaurant (FFHR) category represented 27% of total QSR sales. FFHR sales were
projected to grow 5% annually during this same time period. Burger King accounted for
around 14% of total FFHR sales in the United States.
The company competed against market-leading McDonald’s, Wendy’s, and Hardee’s
restaurants in this category and against regional competitors, such as Carl’s Jr., Jack in the Box,
and Sonic. It also competed indirectly against a multitude of competitors in the QSR restaurant
segment, including Taco Bell, Arby’s, and KFC, among others. As the North American
market became saturated, mergers occurred. For example, Taco Bell, KFC, and Pizza Hut were
now part of Yum! Brands. Wendy’s and Arby’s merged in 2008. Although the restaurant industry
as a whole had few barriers to entry, marketing and operating economies of scale made
it difficult for a new entrant to challenge established U.S. chains in the FFHR category.
The fast-food hamburger category operated within the quick service restaurant (QSR) segment
of the restaurant industry. QSR sales had grown at an annual rate of 3% over the past
10 years and were projected to continue increasing at 3% from 2010 to 2015. The fast-food
hamburger restaurant (FFHR) category represented 27% of total QSR sales. FFHR sales were
projected to grow 5% annually during this same time period. Burger King accounted for
around 14% of total FFHR sales in the United States.
The company competed against market-leading McDonald’s, Wendy’s, and Hardee’s
restaurants in this category and against regional competitors, such as Carl’s Jr., Jack in the Box,
and Sonic. It also competed indirectly against a multitude of competitors in the QSR restaurant
segment, including Taco Bell, Arby’s, and KFC, among others. As the North American
market became saturated, mergers occurred. For example, Taco Bell, KFC, and Pizza Hut were
now part of Yum! Brands. Wendy’s and Arby’s merged in 2008. Although the restaurant industry
as a whole had few barriers to entry, marketing and operating economies of scale made
it difficult for a new entrant to challenge established U.S. chains in the FFHR category.
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