AmeriKing Case #1 pg. 259

1. AmeriKingCase #1 pg. 259 Ryan Platt Anthony Pemberton Kendra Platt Daisaku Okada Bryan Gauthreaux Jordan Thompson

2. AmeriKing Background 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

3. AmeriKing Products • 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

4. AmeriKing Background • 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

5. Reason for Bankruptcy • 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 mark-downs 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

6. Daisaku AmeriKing Financial Data

7. Daisaku AmeriKing Financial Data

8. AmeriKing prepares for Portal • 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

9. Choosing the Plumtree Portal • 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

10. Plumtree and AmeriKing • 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

11. What is in AmeriKing's Portal? • 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 • e-mail and calendar from Microsoft Exchange 2000 Ryan

12. Mergers and Acquisitions • 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

14. AmeriKing's Portal Benefits • 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

15. Benefits Continued… • Improved information access • Decreased print and distribution costs • Improved centralized purchasing • Decreased communication costs • Better decision support • Enhanced corporate identity • Condensed training cycles Bryan

16. Competitors and their technology • 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 back-office 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

17. Competitors and their technology Continued… • 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

18. 1. What is the business value of an enterprise portal like AmeriKing’s? • 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

19. 2.) What are several ways AmeriKing could improve the business value of its portal? • 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 “middle-man” in the supply chain Anthony

20. #3. How might an enterprise portal help you as a business professional or manager in your work activities? Give examples to explain your answer. • Keys benefits of a portal: • Increased efficiency • Improved business practices • Streamlined Management • Greater return on IT Investment Daisaku

21. Question #3 continued • Employee Scheduling • Vacation Requests / Attendance • Evaluations / Surveys / Goals • Job Openings • Training • Anything to reduce paper and automate management tasks…