ETOP ANALYSIS- BURGER KING

Political Factors Affecting Burger King’s Business

Political conditions are determinants of business performance. This part of the
PESTEL/PESTLE analysis identifies governmental influence on firms’ remote or
macro-environment. In Burger King’s case, the following are the main political
external factors:
1. Governmental support for globalization (opportunity)
2. Political stability in major markets (opportunity)
3. Governmental support for e-commerce (opportunity)
Governments continually support globalization. Burger King can take
advantage of this condition through global expansion. Also, the external factor
of political stability helps reduce challenges to the company’s growth and
expansion. In addition, Burger King can improve its e-commerce capabilities. In
this part of the PESTEL/PESTLE analysis, the external factors present significant
opportunities for Burger King to grow and expand internationally.
Economic Factors Important to Burger King
Economic conditions directly affect Burger King’s remote or macro-
environment. This part of the PESTEL/PESTLE analysis outlines the economic
changes and trends that influence business performance. The following are the
main economic external factors that affect Burger King:
1. Expanding international trade agreements (opportunity)
2. Economic stability of the U.S. (opportunity)
3. High economic growth in developing markets (opportunity)
As countries implement more and expanded international trade agreements,
Burger King can grow through global supply chain enhancements. Also, U.S.
economic stability enables the company to gradually grow in the country. In
relation, Burger King has the opportunity to rapidly expand in developing
economies. These conditions show that, in the political dimension of the
PESTEL/PESTLE analysis model, Burger King must focus on external factors that
present opportunities for growth and expansion, especially in developing
economies.
Social/Sociocultural Factors Influencing Burger King’s Business Environment
Burger King must always account for sociocultural influences in its
remote/macro-environment. The social trends and changes and their effects
on consumers and employees are considered in this part of the PESTEL/PESTLE
analysis. The main sociocultural external factors affecting Burger King are as
follows:
1. Increasing consumer diversity (opportunity)
2. Higher health consciousness (threat & opportunity)
3. Increasing support for animal rights (threat & opportunity)
The increasing population diversity presents the opportunity for Burger King to
innovate its products to attract consumers of various backgrounds. Higher
health consciousness threatens demand for Burger King’s products, which are
sometimes criticized as unhealthful. However, the company has the
opportunity to improve the healthfulness of its products. Animal rights
advocacy continues to attract attention, threatening the main products of
Burger King. Still, the firm can implement new supply chain policies to address
concerns on animal rights and welfare. This part of the PESTEL/PESTLE analysis
points to Burger King’s opportunities to improve despite the threats linked to
sociocultural external factors.
Technological Factors in Burger King’s Business
Burger King’s business partly relies on technologies. In this dimension of the
PESTEL/PESTLE analysis, technologies and related trends are considered in
terms of their influence on the remote or macro-environment of the firm. The
following are the major technological factors affecting Burger King:
1. Higher availability of automation technologies (opportunity)
2. Higher popularity of mobile technologies (opportunity)
3. Low R&D activity in the quick service restaurant industry (opportunity)
More automation technologies are now available for businesses. Burger King
can apply these technologies to improve operational efficiency. Also, the
company can tap mobile users to gain a bigger market share. Relative to the
low R&D activity in the fast food restaurant industry, Burger King has the
opportunity to boost its R&D investments to improve performance. In this part
of the PESTEL/PESTLE analysis, Burger King has major opportunities for
performance improvements based on technological external factors.
Ecological/Environmental Factors
The environment can impose limits to Burger King’s business. This dimension
of the PESTEL/PESTLE analysis covers the impact of ecological conditions on
firms’ remote or macro-environment. In the case of Burger King, the following
are the most notable ecological external factors:
1. Climate change (threat)
2. Emphasis on business sustainability (opportunity)
3. Increasing popularity of low-carbon lifestyles (opportunity)
Climate change threatens to reduce the stability of Burger King’s supply chain.
However, the company has the opportunity to improve its sustainability status.
Also, Burger King has the opportunity to improve efficiency to attract
consumers who advocate low-carbon lifestyles. The ecological external factors
in this dimension of the PESTEL/PESTLE analysis indicate that Burger King can
realistically work on sustainability and efficiency.
Legal Factors
Burger King must comply with legal requirements. The effects of legal systems
on firms and their remote or macro-environment are considered in this part of
the PESTEL/PESTLE analysis. The major legal external factors influencing Burger
King are as follows:
1. Import and export regulation (opportunity)
2. Environmental protection laws (opportunity)
3. GMO regulation (threat)
Burger King has the opportunity to grow based on import and export
regulations that support new international trade agreements. Also, the
company can enhance its sustainability performance to exceed expectations
and requirements based on environmental protection laws. However, GMO
regulations, especially in Europe, limit the performance of Burger King,
considering the widespread availability of GMO ingredients used in the
industry. This dimension of the PESTEL/PESTLE analysis emphasizes growth and
sustainability based on legal external factors.
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 King’s
opportunities are as follows:
1. Diversification/product mix widening
2. Market development
3. 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 McDonald’s. In this part of the SWOT analysis,
Burger King’s 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:
1. Aggressive competition
2. Imitation
3. Healthy lifestyles trend
Burger King faces the threat of aggressive competition, considering other firms
like McDonald’s and Wendy’s. The company’s 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 King’s 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.