In this article, we conduct the the SWOT analysis of Burger King. Burger King is an American-based company that is a multinational hamburger fast food industry. The company is set up in the year 1953 and is headquartered in Florida and is one of the fast food restaurants in the world. It was formed initially as Insta-Burger King, a Florida-based restaurant brand. In 1954, Insta-Burger King ran into financial difficulties and were later purchased by David Edgerton and James McLamore, Miami-based franchise owners. Later on, Burger King changed hands four times, and the third set of owners are Bain Capital, TPG Capital, and Goldman Sachs Capital Partners. It went public in 2002. In the year 2010, 3G Capital of Brazil acquired most of its stake in the company.
Currently, Burger King Corporation, its franchise owners, and its affiliates collectively operate about 17,000 restaurant businesses in about 100 countries. The company serves around 11 million customers per day. Customers keep coming back for flame grilled burgers. This American chain has a majority of its restaurants in the US and has a global impact. In the year 2020, Burger King UK asked customers to connect with smaller restaurants to help small businesses during the pandemic.
Burger King brand is owned by Restaurant Business International Inc. (RBI). RBI owns three of the world’s top restaurant brands, that is, Burger King, Popeyes Louisiana Kitchen, and Tim Hortons.
Owing to the company’s history and its excellent business description in the restaurant industry, let us discuss the SWOT analysis of Burger King.
SWOT analysis is an excellent tool that helps an organization check on its strengths, weakness, opportunities, and threats. It is a strategic planning technique that a company uses to identify the various areas the business performs well. These areas have helped in the company’s success and will help to maintain the company’s business model. Let us discuss the SWOT analysis of Burger King.
Strengths in SWOT Analysis of Burger King
Strengths in Burger King SWOT analysis identifies the various strengths that are based on the company’s business capabilities. Here are Burger King’s strengths.
1. International Presence
Burger King has more than 18,000 stores that are spread across 100 countries across the globe. Burger King is the sixth-largest fast food chain in the world serving about 11 million customers per day. Having such a vast international presence is a major strength of the company.
2. Effective Strategies
Burger King employs effective management strategies and finds ways to rejuvenate and sustain the market. After being stagnated for some years, Burger King appointed a young CEI, Daniel Schwartz to transform Burger King into a great company. This is a great strength of Burger King.
3. Franchising Model
At present, almost 90% of Burger King has been franchised with about 15,000 outlets that are owned by franchisees. A franchise fee is associated to own its franchise with a minimum initial investment. Having many franchises is yet another strength of the company.
4. Wide Range of Products
Burger King provides a lot of local and global menu items and caters to any traveler. A few of the products are plant-based whoppers, bacon-studded buns, grilled burgers, poutine-covered fries, taro-filled pies, beverages, chicken items, desserts, beverages, etc. These many items are preferred and this is a major strength of the brand.
5. Innovative Products
Burger King always comes up with new offerings by always reinventing and rejuvenating itself. It introduced the Impossible Whopper which is a plant-based sandwich. It attracted new customers and has helped the company to achieve great profits.
6. Innovative Marketing
Marketing is essential for a brand’s success. Burger King has innovative marketing and it attracts the viewers soon while making them stay with them always. Burger King recently released a repulsive advertisement that showed a preservative-free hamburger deteriorating over 34 days. This attention has grabbed many people and ensured the consumers that the brand is always natural. Their natural feature is a strength for the brand.
7. Healthier Products
Burger King is not yet on the health-conscious consumers list, however, it provides healthy eating options than its competitors. This is considered a strength for the brand.
Weaknesses in SWOT Analysis of Burger King
Weaknesses in Burger King SWOT analysis identifies the limitations or any defect in the company that hinders the company’s objectives. Here are Burger King’s weaknesses.
1. More Dependent on US Market
Almost 44 % of Burger King’s restaurants are located in the US and it contributes to its major revenue source. This model is considered a weakness for the brand as any challenges in the US market hits its revenue.
2. Deceptive Ads
As more and more people are health conscious, Burger King’s deceptive ads about the ingredients of their products are a weakness. It takes away trust and customers turn away. Recently, the brand was taken to task for implying that Whopper is a vegan substitute, yet it contains egg-based mayonnaise. Such kind of misleading statement can bring down customer’s trust.
3. Over Franchising
Burger King has been successful in its franchising, however when there is rapid franchising it weakens the sustainability of the business model. Sometimes, there can be conflicts with the Burger King’s franchises owners and it can lead to business loss.
4. Lack of Stability
When there is a change in leadership and ownership of a business, then the business operations continuity is affected. Burger King’s ownership has changed almost six times and Restaurant Brands International has taken for a few years. This is a weakness for the brand.
There has been some controversy about feeding Burger King’s customers horsemeat, offering non-vegan Whoopers while listing them as vegan, etc. Each of these controversies has impacted its brand and has caused negative publicity. It has taken off customer trust. These kinds of controversies is a weakness for the brand at a time when it has reached a high level in business.
6. Low Value
Many customers seek value for their money. However, Burger King provides low value products from the cheapest to the expensive burgers. Hence, the brand does not have a loyal customer base. This is a weakness for Burger King because it tends to lose customers to its competitors.
Opportunities in SWOT Analysis of Burger King
Opportunities in Burger King SWOT analysis identifies those areas that are a favorable situation for its growth. Here are Burger King’s opportunities.
1. Increase Market Presence
Having a strong market presence for a brand ensures that every customer can access its outlet everywhere. Burger King understands that a strong market presence is essential for its business growth. Hence, Burger King has a lot of opportunities as it has many outlets across the world. It also plans to expand further by having many more restaurants.
2. Increase Vegan Options
Burger King saw a big hit in its healthy sandwich recipes that are know as Impossible Whooper. This led to an increase in its earnings. With this, Burger King can try to explore opportunities by exploiting more on healthier food where there is increasing demand. It can include more vegan food in its menu.
3. Increase its Portfolio
Burger King can expand its portfolio to other sectors from the existing restaurant business. For example, it can explore on grocery business and take the raw materials required for the products from the grocery business itself. This will see a lot of opportunities for the brand and Burger King’s earnings will increase.
4. Focus More on Emerging Economies
Burger King has more opportunities on expanding to other emerging economies. In Asia, the Middle East, Africa, and Latin America, the brand gets an unsaturated market and there is a high potential for growth.
Threats in SWOT Analysis of Burger King
Threats in Burger King SWOT analysis identifies the various external factors with the potential to cause any issues in the organization. Here are Burger King’s threats.
1. Global Recession
Although food is very important, during financial crisis, customers usually reduce eating outside. Such situations are a threat for the brand as already some of its franchisees have declared bankruptcy.
2. Tight Competition
Burger King faces tight competition from its competitors and has limited its market share. This is a threat for the business and it affects its profits, market share, and sustainability. Their main competitors are KFC, Subway, McDonald’s, Dominos, and many more.
3. More and More Health-Conscious People
Consumers are becoming more and more health-conscious these days. Yet, most of Burger King’s products has animal products, fats, and are unhealthy. So, people tend to purchase from those selling healthier options. This situation is a threat for Burger King as they will lose customers.
4. Strict Regulations
Governments across the globe are trying to manage various diseases that are linked to unhealthy food choices. They are trying to promote a healthy lifestyle and various authorities have set up regulations. Burger King has been one of its targets to reduce unhealthy foods. This is a threat to the brand as it impacts its business.
5. Increase in Farm Products Price
There is a decrease in the supply of fresh farm products due to increase in population and rapid urbanization. Due to this, there is a scarcity of fresh beef and its prices have increased. This is a threat to the brand as it impacts Burger King’s profit margins.
6. Global Pandemic
The global pandemic has impacted businesses in the world to a great extent. Some Burger King franchisees have gone while a few burger king franchisees are struggling to pay rent. This situation is a threat for the brand.
Table of Contents
- Strengths in SWOT Analysis of Burger King
- Weaknesses in SWOT Analysis of Burger King
- Opportunities in SWOT Analysis of Burger King
- Threats in SWOT Analysis of Burger King