AmeriKing
Case #1 pg. 259
Ryan Platt
Anthony Pemberton
Kendra Platt
Daisaku Okada
Bryan Gauthreaux
Jordan Thompson
AmeriKing Background
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Joe Tangteau
President &
CEO.
AmeriKing owns and operates 376 Burger King
restaurants in 12 states, with the main support
center located in Westchester, IL.
Principal activity is that of an independent burger
franchisee in the United States.
Burger King Corporation owns more than 11,372
Burger King restaurants worldwide, of which
independent franchisee groups operate
approximately 1,500.
2002 Employees 13,000 (est.)
In 2002 Joe Langteau joined AmeriKing as
President & CEO.
Herando Manrique is the CIO.
Kendra
AmeriKing Products
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The standard menu of Burger King
restaurants consists of hamburgers,
cheeseburgers, fish and chicken
sandwiches, French fries, salads, shakes,
deserts, breakfast items, soft drinks,
coffee and milk. The Group often
advertises and sells toys, movie cartoon
tie-ins with its kids meals. Restaurant food
sales accounted for 97% of 2001 revenues
and Non-food sales, 3%.
Kendra
AmeriKing Background
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The company was once the ruler of a large part
of the beef kingdom. Before filing for Chapter
11 bankruptcy in 2002, AmeriKing was the
leading franchisee of Burger King restaurants. It
has since sold off many of its restaurants but
still has some fast-food eateries in Virginia and
North Carolina. It is in the process of selling its
remaining properties. AmeriKing is controlled by
Jordan Industries, a Deerfield, Illinois-based
conglomerate, which founded the company in
1994 with a group of franchisees.
Kendra
Reason for Bankruptcy
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A good example of deflation is "the burger war."
McDonald's Corp. and Burger King have been in since
September of 2002 when Burger King cut the prices of
11 menu items to 99 cents. McDonald's responded by
lowering eight items to 99 cents. Most of the markdowns were around 50% - something that was around
$2 is now $1.
the lower prices (and cashflows) pushed one of Burger
King's largest franchisees, AmeriKing, into Chapter 11
bankruptcy in December 2002.
Part of the problem stems from an increasing shift
toward slightly more upscale fast-casual dining, some
analysts say.
Daisaku
Daisaku
AmeriKing Financial Data
Year
1997
1998
1999
2000
2001
Sales
$234,546
$307,488
$395,901
$397,651
$379,056
Operating Income
(Loss)
$11,649
$20,900
$23,175
($4,104)
($24,066)
Net Income (Loss)
($2,034)
$1,813
$817
($18,952)
($54,045)
Sales
(thousands)
$500,000
$400,000
$300,000
$200,000
$100,000
$0
1997
1998
1999
2000
2001
Daisaku
AmeriKing Financial Data
Increasing (decreasing) rate
Year
1997
1998
1999
2000
2001
Sales
-
31.10%
28.75%
0.44%
-4.68%
Operating Income (Loss)
-
79%
11%
-118%
-486%
Net Income (Loss)
-
189.13%
-54.94%
-2419.71%
185.17%
(thousands)
Net Income (Loss)
$20,000
$0
1997
($20,000)
($40,000)
($60,000)
1998
1999
2000
2001
AmeriKing prepares for Portal
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A cross-functional team began by focusing on AmeriKing’s
overall business goals, as the necessary foundation for
developing objectives for the portal to obtain value and benefits
immediately and in the long term said AmeriKing CIO.
The next step was to build in prototype of html pages to show
to top management to show what the portal could do. Once
AmeriKing managers got a hands-on sense of what the portal
would do for them, they got on board with the project,
contributing ideas for what elements needed to be included.
From there, the team developed a blueprint for the portal,
which they named “AKinet.” Keeping their focus on AmeriKing’s
defined business needs, the team chose to prioritize the
elements that would have the highest immediate payback.
Anthony
Choosing the Plumtree Portal
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The first step in implementing AKinet was to upgrade
the company’s network platform that had previously
been using Microsoft Windows NT for its network
servers and Microsoft SQL Server 6 for its databases,
along with some Microsoft Windows 98 stations.
The team implemented Microsoft .NET Enterprise
Server platform, including Windows 2000, SQL Server
2000, Microsoft Outlook 2000, and Microsoft Internet
Information Server.
IT team evaluated six Enterprise Internet Portal (EIP)
products: Sequoia, Plumtree, Epicentric, Data Channel,
Hummingbird, and Viador. AmeriKing chose Plumtree
over others because of its ease of use and successful
past implementations.
Ryan
Plumtree and AmeriKing
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AmeriKing deployed the Plumtree Corporate Portal on the
aforementioned Microsoft .NET Enterprise Server platform
to more than 370 restaurants nationwide and its corporate
office.
The AKinet portal replaces AmeriKing's traditional paper-,
phone- and fax-based systems by bringing together
inventory reports, sales and finance data, Human Resources
(HR) information, corporate e-mail and more than 71,000
corporate documents on a personalized Web desktop.
AKinet went live to field and corporate office staff in June
2001 and will be rolled out to restaurant management staff
in every AmeriKing restaurant across the United States.
AmeriKing: Technology Innovation Award – Oct 23, 2001
Ryan
What is in AmeriKing's Portal?
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HR information such as physician directories, employee
profiles and employee contact information
a Myinet community which enables employees to change
their personal information
a Finance and Accounting Community with access to sales
and inventory data, P&L, trial balances, payroll and the
Decision Support System
a Marketing Community with regional calendars and timely
promotional information
an AKNews Community with corporate content such as
Burger King press releases, parent company news and
executive news
a Training Community with access to course scheduling and
materials, and the AmeriKing University for on-line training
Ryan
e-mail and calendar from Microsoft Exchange 2000
Mergers and Acquisitions
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Texas Pacific Group was going to buy AmeriKing for
$2.26 billion, as part of plans to focus on its core
spirits business.
But Texas Pacific admitted last month it had been
forced to renegotiate the deal after a deterioration in
Burger King's performance - partly due to a price
war with McDonald's Corp. (Thursday 5th December
2002)
Diageo PLC said it completed the $1.5 billion sale of
Burger King to a consortium led by Texas Pacific
Group. (Friday 13th December 2002)
In 2000 AmeriKing invests and backs Krispy Kreme
in doubling their size in units stores.
Bryan
AmeriKing's Portal Benefits
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reduces printing and distribution costs, saving more than $500,000
annually
increases employee productivity, speeding searches for information
provides common platform for company, organizing over 71,000
documents across the organization
AmeriKing is saving more than 20,000 sheets of paper and
thousands of dollars in mailing costs each month.
the portal has already paid for itself, and the Delphi Group has
calculated that it will generate a 355% Return-on-Investment within
the next three years.
As Manrique suspected, AKinet started delivering real benefits to
AmeriKing immediately, as confirmed through an in-depth financial
study by the Delphi Group. While AKinet cost the company
$411,900, Delphi’s moderate scenario projects that it will generate
actual returns of over $1,500,000 in the first three years.
Bryan
Benefits Continued…
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Improved information access
Decreased print and distribution costs
Improved centralized purchasing
Decreased communication costs
Better decision support
Enhanced corporate identity
Condensed training cycles
Bryan
Competitors and their
technology
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McDonald’s has launched a premier multi-branded restaurant inside
the Smithsonian through an enterprise portal called Radiant 6e
Technology. The 1,000 seat restaurant offers the traditional
McDonald’s menu as well as Boston Market and Donatos Pizzeria
menus through the use of this portal for point-of-sale and backoffice technology. The program manages customer service and
operational processes throughout the restaurant, an adjacent café,
and mobile hotdog and snack units. Also, McDonald’s has licensed
Yahoo!’s corporate business portal that businesses license for
internal use.
Chik-Fil-A and Dairy Queen are two of many companies to
implement PAR’s QSR (Quick Service Restaurants) Exalt solution, a
system that fulfills POS, back office, and enterprise management
needs. Its enterprise management performs analysis
instantaneously alerting appropriate managers of business rule
violations via pager, cell phone text messages, or e-mail as the
violations occur.
Jordan
Competitors and their
technology Continued…
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Carrols owns and operates 42 Pollo Tropical restaurants located
in Florida in addition to its Burger King restaurants. Carrols
selected the MICROS 3400 for its advanced functionality and
flexibility. The system's unique "conversational order-taking"
feature allows staff to enter an order whatever way the
customer places it. Orders are entered quickly and accurately
with minimal keystrokes. The MICROS 3400 helps serve
customers faster, better, and more consistently. In addition, the
new solution dramatically reduces cashier training time due to
the intuitive nature of its graphical user interface and with the
high crew turnover rates in the quick service industry.
In January 2001, Subway fitted a PC-based point-of-sale cash
register in all outlets. All weekly paperwork and accounting is
carried out on the PC and sales are electronically transmitted to
headquarters. Each franchisee also has access to Subway's
intranet and voicemail.
Jordan
1. What is the business value of an enterprise
portal like AmeriKing’s?
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Access to corporate document’s and HR forms
have lowered printing cost of $500,000
Finance and Accounting departments have
access to sales and inventory data, payroll,
and decision reducing the paper trails
AKNews community offers corporate news
and training to the AmeriKing University for
online training that was done by people
power. (Cost savings on FTE’s.)
Anthony
2.) What are several ways AmeriKing could
improve the business value of its portal?
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Can improve managerial productivity
reports to improve efficiency
Implement online job-applications to
lower HR cost and weed-out lower
quality applicants
Could eventually tie-in online ordering
to suppliers eliminating the “middleman” in the supply chain
Anthony
#3. How might an enterprise portal help you as
a business professional or manager in your
work activities? Give examples to explain your
answer.
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Keys benefits of a portal:
Increased efficiency
Improved business practices
Streamlined Management
Greater return on IT Investment
Daisaku
Question #3 continued
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Employee Scheduling
Vacation Requests / Attendance
Evaluations / Surveys / Goals
Job Openings
Training
Anything to reduce paper and automate
management tasks…