Comm 486

Burger King recently opened up it’s first store in Russia in the hopes to scoop up some profit from McDonalds. Burger King’s entry into the new market is a great idea because the demand for fast food is there. After looking at McDonalds success in Russia, there is still plenty of profit’s for Burger King. 

A good indicator that the market is very healthy is the fact that the Pushkin Square McDonalds is the busiest in the world. The only reason for this is because McDonalds has no competition. With the introductin of Buger King, they can simply look at the success rate of their competitor and estimate accordingly. Also, the North American market is quite saturated with many competitors that have made the fast food market close to perfectly competitive. Thus limiting the opportunity for a big increase in their profit margin. 

Looking at the other side of things, Burger King has to take into account the stability of the consumers. Since Russia is relatively unstable as a country recovering from a rough past, the economic and political strength to have consistent growth may be limited. Furthermore, the opportunity cost of breaking into the Russian market is quite significant. All the expenses and costs that need to be accounted for can be invested into advertising and improvements in established markets. 

After taking all of the pros and cons into consideration, the move into Russia is one that holds an optimistic future, but on the same token, it is a long term investment that needs constant attention in order to produce any profit. Only time will tell if Burger King made the right choice in expanding their consumer base.