Burger King Profile:

Originally called Insta-Burger King, the company was founded in

Florida in 1953 by
Keith Kramer and Matthew Burns. Their Insta-Broiler oven was so
successful at cooking hamburgers that they required all of their
franchised restaurants to use the oven. After the chain ran into
financial difficulties, it was purchased by its Miami-based
franchisees, James McLamore and David Edgerton, in 1955. The
new owners renamed the company Burger King, and the
restaurant chain introduced the first Whopper sandwich in 1957.
Expanding to over 250 locations in the United States, the
company was sold in 1967 to Pillsbury Corporation.
The company successfully differentiated itself from McDonalds,
its primary rival, when it launched the Have It Your Way
advertising campaign in 1974. Unlike McDonalds, which had
made it difficult and time-consuming for customers to special-
order standard items (such as a plain hamburger), Burger King
restaurants allowed people to change the way a food item was
prepared without a long wait.
Pillsbury (including Burger King) was purchased in 1989 by Grand
Metropolitan, which in turn merged with Guinness to form Diageo,
a British spirits company. Diageos management neglected the
Burger King business, leading to poor operating performance.
Burger King was damaged to the point that major franchises went
out of business and the total value of the firm declined. Diageos
management decided to divest the money-losing chain by selling
it to a partnership private equity firm led by TPG Capital in 2002.
The investment group hired a new advertising agency to create
(1) a series of new ad campaigns,
(2) a changed menu to focus on male consumers,
(3) a series of programs designed to revamp individual stores, and
(4) a new concept called the BK Whopper Bar. These changes led
to profitable quarters and reenergized the chain.
In May 2006, the investment group took Burger King public by
issuing an Initial Public Offering (IPO). The investment group
continued to own 31% of the outstanding common stock.
1. Industry Analysis :
1.1. Industry ( Fast-Food Restaurant Industry )
1.1.1. Industry structure :
 1.1.2. Driving forces
1.1.2.1. Natural environment
1.1.2.2. Societal environment
Economic forces
Technological forces
Political-legal forces
Sociocultural forces

1.1.2.3. Task environment

Government
Local communities
Suppliers
Competitors
Customers
Creditors
Unions
Special interest groups/trade associations

1.1.3. Wide strategic issue

1.1.4. Industry attractiveness
1.2. Competitive situation analysis
1.2.1. The Five forces Model
Burger King is one of the top competitors in the global quick service/fast-food restaurant market.
The company directly competes against firms like Wendys and McDonalds. To ensure
competitiveness, Burger King must address issues pointed out in its Five Forces analysis.
Michael Porter developed the Five Forces analysis model to determine external factors that
influence firms performance. In Burger Kings industry environment, the influences of major
competitors are just one of the main considerations. Based on the Five Forces analysis model,
Burger King must also consider strategic issues linked to suppliers, consumers, new entrants,
and substitutes.
This Five Forces analysis of Burger King shows that competition, customers and new entrants
are the most important external factors in the quick service restaurant industry environment.
Burger Kings strategies must account for and address these forces.
Overview: Burger Kings Five Forces Analysis
Burger Kings business is under the influence of external factors. The Five Forces
analysis model considers the factors that most significantly affect the business. In
the quick service/fast food restaurant industry environment, the intensities of the
Five Forces on Burger King are as follows:
 1. Competitive rivalry or competition (strong force)
2. Bargaining power of buyers or customers (strong force)
3. Bargaining power of suppliers (weak force)
4. Threat of substitutes or substitution (strong force)
5. Threat of new entrants or new entry (moderate force)
Recommendations.
Considering the intensities of the five forces, it is suitable for Burger King to focus on
competition, customers, and the threat of new entrants. To address the force of competition,
Burger King can implement more aggressive marketing. To attract and retain customers, the
company can improve its product quality. In addition, to counteract the threat of new entrants,
Burger King can improve its brand image to maintain high performance despite saturation in the
fast food restaurant industry environment.

Competitive Rivalry or Competition with Burger King (Strong Force)

Burger King competes with major firms like McDonalds and Wendys. The degree of
competition is examined in this aspect of the Five Forces Analysis model. The
following are the main external factors that create the strong force of competitive
rivalry against Burger King:
High number of competitors (strong force)

High variety of firms (strong force)

Low switching costs (strong force)

The quick service restaurant market is saturated with firms of different sizes. Burger
King must also consider the variety of firms in terms of types of products, market
focus, and other characteristics. In addition, competitive rivalry is strong partly
because of the low switching costs, which correspond to customers ease in
transferring from Burger King to other firms. This aspect of the Five Forces analysis
shows that competition is a main concern in Burger Kings business.
Bargaining Power of Burger Kings Customers/Buyers (Strong Force)
Consumers significantly affect Burger Kings performance and the quick service
restaurant industry environment. This aspect of the Five Forces Analysis model
explores the influence of customers on firms. The main external factors that lead to
the strong bargaining power of Burger Kings customers are as follows:
Low switching costs (strong force)

High substitute availability (strong force)

Moderate presence of consumer organizations (moderate force)

The low switching costs correspond to the ease of transferring from Burger King to
other companies. This condition empowers customers to make decisions that
directly affect Burger Kings business. In addition, there are many substitutes to
Burger Kings products, thereby giving consumers more choices. The presence of
consumer organizations, such as Consumers Union and Better Business Bureau,
further increases the bargaining power of buyers. Burger King must consider
customers demands as one of its main business concerns, as indicated in this
aspect of the Five Forces analysis.
Bargaining Power of Burger Kings Suppliers (Weak Force)
Suppliers affect the quick service restaurant industry environment through variables
like pricing and supply control. The impact of suppliers on firms like Burger King is
considered in this aspect of the Five Forces analysis. The following are the major
external factors that create the weak bargaining power of Burger Kings suppliers:
High number of suppliers (weak force)

High overall supply (weak force)

Low forward integration (weak force)

There are many suppliers that compete to provide their products to firms like Burger
King. In relation, there is an abundance of supply of raw materials and ingredients.
These conditions limit the influence of suppliers on Burger King and other fast food
restaurant firms. Also, most suppliers in this industry have low forward integration,
which corresponds to their degree of control on the distribution and sale of their
products to companies like Burger King. Based on this aspect of the Five Forces
analysis, suppliers bargaining power is the least of Burger Kings concerns.
Threat of Substitution or Substitutes to Burger King (Strong Force)
Substitutes technically compete against Burger Kings products. This aspect of the
Five Forces Analysis model determines the influence of substitution in the fast food
restaurant industry environment. In Burger Kings case, the following are the main
external factors that contribute to the strong threat of substitution:
Low switching costs (strong force)

High availability of substitutes (strong force)

Satisfactory performance of substitutes (strong force)

Customers can easily transfer from Burger King to substitutes (low switching costs).
In addition, there are many substitutes to choose from, including fine dining
restaurants and home cooking. These conditions strengthen the threat of
substitution against Burger King. Also, most of these substitutes are satisfactory in
terms of taste, cost, quality, and other criteria. This aspect of the Five Forces
analysis indicates that substitutes significantly affect Burger Kings business.
Threat of New Entrants or New Entry (Moderate Force)
New entrants can disrupt the performance of Burger King. The effects of new entry
on the fast food restaurant industry environment are examined in this aspect of the
Five Forces analysis. The external factors that lead to the moderate threat of new
entrants against Burger King are as follows:
Low switching costs (strong force)

Moderate cost disadvantage (moderate force)

Moderate cost of doing business (moderate force)

Again, the low switching costs indicate that it is easy for consumers to transfer from
Burger King to new firms (new entrants). However, new entrants face moderate cost
disadvantage because large firms like Burger King benefit from economies of scale
that many new firms do not have. Also, the moderate cost of doing business could
pose a financial challenge to new entrants. Based on this aspect of the Five Forces
analysis, the threat of new entrants is a considerable issue in Burger Kings
business.

1.2.2. Competitor analysis

1.3. Burger king analysis :

1.1.1. SWOT Analysis:
Burger Kings ability to keep its position as one of the biggest
players in the quick service/fast food restaurant industry is partly
based on the business strategic balance shown in this SWOT
analysis. The SWOT analysis model examines the strengths,
weaknesses, opportunities and threats most significant to the
firm. As a food service business, Burger King must use its
strengths to compete against giants like McDonalds. In addition,
the company must consider the threats and risks linked to the
global fast food restaurant market. It is expectable that Burger
King will remain one of the major players in this market.
Burger Kings Strengths (Internal Strategic Factors)
Burger Kings strengths are based on the companys business
capabilities. This part of the SWOT analysis determines the
internal strategic factors that create business capacity for
continued development. Burger Kings main strengths are as
follows:
 Strong brand image
High market penetration
Moderate differentiation of products
Burger King has one of the strongest brands in the industry. This
condition makes it easier for the company to open new
restaurants and introduce new products. Higher market
penetration is a strength based on the large number of Burger
King restaurants across the globe. Also, Burger Kings moderate
differentiation (e.g., grilled burgers) is a strength that allows the
company to ensure uniqueness of some of its products. In this
part of the SWOT analysis, Burger Kings strengths are mainly
based on branding and market penetration.
Burger Kings Weaknesses (Internal Strategic Factors)
Burger Kings weaknesses are linked to its business model and
general strategic approaches. The internal strategic factors that
reduce or limit the firms effectiveness are identified in this part of
the SWOT analysis. The following are Burger Kings main
weaknesses:
Easily imitable business
Limited product mix
Low control on franchise model
Even though Burger King has moderate differentiation, one of its
weaknesses is that its business model and products are easily
imitated. For example, other firms could offer similar grilled
burgers. Also, Burger Kings limited product mix is a weakness
because it prevents the company from attracting customers
looking for more options. In addition, even though Burger King
grew internationally through franchising, the franchising model is
a weakness because it limits corporate control on franchisees
approaches to management. In this part of the SWOT analysis,
the limited product mix is the weakness that Burger King can
most easily address.
Opportunities for Burger King (External Strategic Factors)
The opportunities for Burger King present options for business
growth and development. This part of the SWOT analysis shows
the external strategic factors that the firm can use to improve its
performance. Burger Kings opportunities are as follows:
Diversification/product mix widening
Market development
Service quality improvement
Burger King has the opportunity to widen its product mix by
adding new product lines to attract more customers. Also, the
company could establish new businesses or subsidiaries as part of
market development to gain more revenues while reducing the
effects of market risks. In addition, Burger King has the
opportunity to increase service quality as a way of differentiating
its business from competitors like McDonalds. In this part of the
SWOT analysis, Burger Kings opportunities require new
strategies, especially for diversification and market development.
Threats Facing Burger King (External Strategic Factors)
The threats against Burger King emphasize market conditions.
The external strategic factors that limit or reduce business
performance are shown in this part of the SWOT analysis. The
following are the main threats against Burger King:
Aggressive competition
Imitation
Healthy lifestyles trend
Burger King faces the threat of aggressive competition,
considering other firms like McDonalds and Wendys. The
companys business model is also imitable, leading to the threat
of imitation by new entrants. In addition, the healthy lifestyles
trend is a threat because Burger Kings products are criticized as
unhealthy. In this part of the SWOT analysis, Burger King can
easily address the threats of aggressive competition and the
healthy lifestyles trend.
Burger Kings SWOT Analysis Recommendations
Burger Kings current focus is on market penetration, with a
considerable degree of product innovation. However, based on
this SWOT analysis, the company needs to adjust some of its
strategies to maintain competitiveness. Burger King can
implement the following recommended strategic adjustments to
address some of its most significant concerns:
Diversify/widen product mix to address current product mix
limits
Increase service quality
Improve products to address the healthy lifestyles trend

1.1.2. Competitive strength assessment

1.1.3. Burger King strategic issues and problems
2. Financial position of the company & industry
averages
3. The identification and evaluation of past and present
mission, strategic objectives, and strategies adopted
by the company.
4. Strategic options and its evaluation.
5. Selection of the best strategy.
6. Identification of positive and negative outcomes of
the recommended strategy.
7. Strategy preparation and implementation
8. Monitoring, evaluating and controlling the results of
the recommended strategies.