Burger King is currently one of the largest hamburger chains in the world, but even with several success stories, the company has its fair share of failures and antagonism.
So, if you need an in-depth analysis of Burger King’s strengths, weaknesses, opportunities, and threats, keep reading!
What is Burger King’s SWOT Analysis In 2022?
Burger King’s SWOT analysis highlights the company’s strengths in attaining a global presence and a strong brand image in 2022. However, it also highlights that the company has several weaknesses, such as relying heavily on the franchising model. Additionally, the SWOT analysis presents Burger King’s opportunities to expand to new markets amidst regulations and aggressive competition threats.
Read on to learn more about Burger King’s strengths, weaknesses, opportunities, and threats!
What are the Strengths of Burger King?
In the SWOT analysis of Burger King, the strengths represent the company’s business capabilities.
They highlight internal strategic factors that enhance its business capacity, outputs, and development.
Burger King’s strengths include the following:
- Global expansions
- Strong brand image
- Strong leadership
- Franchising model
- Wide variety of product offerings
- Innovative offerings
1. Global Expansions
Burger King’s global presence has become the company’s predominant strength.
The firm has maintained a global expansion strategy that increases the company’s footprints throughout the world.
Currently, the company operates more than 18,700 restaurant locations in over 100 countries within and outside the United States.
As a result of the worldwide expansion, the company is recognized as one of the largest food chains in the world, serving over 10 million customers every day.
2. Strong Brand Image
Burger King’s strong brand image also enhances its ability to realize its long-term goals.
The company has invested heavily in conducting strategic marketing campaigns with bold and innovative ads through different media platforms.
Due to intense marketing efforts, Burger King was branded Marketer of the Year in 2017 by the Cannes Lions International Festival of Creativity.
As a result of these marketing strategies, the company has become popular among the masses, which helps to attract corporate recognition and build brand reputation.
3. Strong Leadership
Among Burger King’s major strengths is that the company is under solid leadership led by Denial Schwartz, the company’s CEO.
Schwartz has transformed its culture and has led to different management strategies that aim to build the company beyond its limits.
Burger King’s effective management strategies help the company rejuvenate and keep up with different trends within the market.
4. Strong Franchising Model
Burger King’s franchising business model also strengthens its ability to grow profits and increase its revenue.
Approximately 90% of the company’s locations are run and operated by franchisees, making it easier for the parent company to expand to newer markets.
The franchising model generates revenue through an individual franchising fee of $50,000 and royalties from monthly sales.
5. Wide Variety of Product Offerings
Burger King offers its customers a wide variety of regional and international food items.
As such, the company satisfies the needs of a traveler who might be skeptical of trying new food items.
This fast-food restaurant is widely known for its extensive range of food items.
From bacon-studded buns to grilled burgers, plant-based Whoppers, poutine-covered fries, taro-filled pies, and beverages, nothing is off the table.
6. Innovative Offerings
Burger King always appeals to its customers by offering unique foods. The firm strategizes to reinvent and rejuvenate itself with highly innovative menu items to attract more customers to its restaurants.
For instance, in 2019, the company introduced the Impossible Whopper, a plant-based sandwich that attracted new customers and enabled the company to beat its 2nd quarter profit expectations.
What are the Weaknesses of Burger King?
In Burger King’s SWOT analysis, the weaknesses reveal internal strategic factors that limit or reduce the full potential of the company’s business operations.
Burger King’s weaknesses include the following:
- Franchising business model
- Over-dependence in the US market
- Controversies and negative publicity
- Misleading ads
- Lack of stability
1. Franchising Business Model
The most predominant weakness of Burger King is its franchising business model.
Even though the franchises increase the parent company’s profits and revenues, rapid franchising weakens the sustainability of the original model.
Depending entirely on franchising as the primary revenue stream may subject the parent company to conflicts with the franchise owners, affecting the company’s cohesiveness.
Like Subway’s management had issues with franchise owners, Burger King might experience challenges managing the long chain of franchises.
2. Over-Dependence in the US Market
Although Burger King has a substantial presence outside the United States, the company is over-dependent on the US market, with approximately 44% of the company’s restaurants based in the US.
Consequently, the heavy dependence in the US market exposes a large percentage of the company’s revenue stream to challenges that might arise within the US market.
3. Controversies and Negative Publicity
Burger King has been affected by several controversies that create negative publicity among the masses.
For instance, claims of Burger King feeding its customers’ horsemeat and offering non-vegan Whoppers to vegans deeply eroded customers’ trust in its product offerings.
4. Misleading Ads
Misleading ads by Burger King have further affected the company’s reputation.
For instance, Burger King was recently called upon for implying that the company’s Whopper is vegan-suitable, even though it’s prepared with egg-based mayonnaise.
In current times, where people are health conscious, misleading ads on the products’ ingredients erode customers’ trust.
5. Lack of Stability
Throughout Burger King’s existence, the company has been under the leadership of more than 20 CEOs and different owners.
Due to this lack of stability, the continuity of the company’s business operations is disrupted any time the company’s leadership changes.
However, under its recent owners and new leadership, Burger King has managed to soar its stock value.
What are the Opportunities of Burger King?
Burger King’s opportunities present the company’s pathways for growth and development.
This section on the company’s SWOT analysis provides external strategic factors that the company can utilize to improve its performance.
Burger King’s opportunities include the following:
- Increase more plant-based options
- Diversify its portfolio
- Expand in emerging economies
- Strengthen the market presence
- Increased ventures in-home delivery and tech usage
1. Increase More Plant-Based Options
In a recent financial year, Burger King’s revenue increased by almost 30% after launching the Impossible Whopper, which is considered a healthier sandwich.
Therefore, to attract more customers and increase its revenue, the company can exploit the increased demand for healthier foods and invent more plant-based options for customers.
2. Diversify its Portfolio
Burger King can diversify its business portfolio instead of focusing on the restaurant business.
Rather, the company can strategize to run and operate grocery stores instead of relying primarily on its restaurants to distribute plant-based Whoppers.
3. Expand in Emerging Economies
Since Burger King is majorly concentrated in the United States, the company has significant opportunities in emerging markets.
Furthermore, due to Burger King’s presence in countries outside the US, the company will have a relatively more straightforward time getting into new and foreign markets.
Although Burger King’s operations in some regions such as New Zealand were unfruitful, there are still major opportunities for growth in new locations.
4. Strengthen the Market Presence
Having a strong market presence within the operating locations ensures that customers can access the restaurant instead of going to other restaurants.
Burger King understands the importance of having a solid market presence and has imposed strategies that aim to establish more restaurants.
5. Increased Ventures In-Home Delivery and Tech Usage
With more consumers relying on technology and changing their purchasing patterns, Burger King can take advantage of these trends and deliver accordingly.
The increased usage of tech provides Burger King with the opportunity to engage with its client base efficiently and bring further efficiencies to the company’s product offerings.
What are the Threats of Burger King?
Burger King’s threats within the fast-food industry include all external forces and factors that may hinder the company’s progress.
Burger King’s threats include the following:
- Stiff competition
- Increased emphasis on healthy eating
- Environmental issues
- Prices of raw materials
- Strict regulations
1. Stiff Competition
With several fast-food restaurants operating both locally and internationally, Burger King is engaged in fierce ‘Burger Wars’ that put the company’s profitability, market share, and sustainability on the line.
2. Increased Emphasis on Healthy Eating
There has been an increase in the number of health-conscious consumers, yet Burger King’s products have been viewed as unhealthy.
Therefore, restaurants offering healthier food options are likely to convert several customers away from Burger King.
3. Environmental Issues
Since the issue of animal products causing climate change has been on the rise, the existence of Burger King may attract controversial claims by environmental activists.
4. Prices of Raw Materials
The increase in Burger King’s raw material prices threatens the company’s operating model.
Generally, the ever-increasing demand for food production exerts pressure on farming systems, resulting in higher prices of food.
Therefore, Burger King has to devise new production methodologies that advocate sustainability as a primary driving factor.
5. Strict Regulations
The changing regulatory environment for Burger King brings forth uncertainty to the company’s business model.
Burger King, just like other fast-food restaurants, remains at the mercy of politicians, lawmakers, and policymakers in different geographical locations.
This situation poses a risk since any change in law or regulation may affect the company’s profitability.
Burger King’s SWOT analysis highlights all success factors such as the company’s franchising business model and strong brand image and factors that may limit the company’s growth and development.