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Essay: Burger King PESTEL analysis

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  • Subject area(s): Business essays
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  • Published: November 10, 2021*
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  • Words: 1,920 (approx)
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  • Tags: PESTEL analysis examples
  • Burger King PESTEL analysis
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Burger King is a global fast food restaurant which comes from America. The chain was founded in 1953 in Florida. David Edgerton and James McLamore were the owners of big fast food industry. The first original name of global industry was Insta-Burger King. Until year 2011, Burger King opened 12,400 outlets. They were located in 73 countries including New Zealand. In 21s century there is now opened 15,000 restaurants across 100 countries. Since its opening the menu for the Burger King has evolved from French fries, milkshakes, soft drinks, sodas burgers and desserts to more upgraded and larger set of products like Whopper sandwich. Between 2002 and 2010, Burger King directed huge products that carried large quantities of unhealthy fats. After 2010 Burger King change their male oriented menu to more modest menu items with packing and product reformulations (The Free Encyclopedia, 2012). Burger Kings franchise is one of the ways of expanding their activity. Burger King is a franchisor who giving precisely procedures and rules for other franchisee to follow. To reach volume growth Burger King connected itself with multinational expansion for a huge saturated market place. The Burger King is situated on second place next to McDonald’s related to size and number of stores. Their brand name is the most recognized brands in the world which sets them apart from their competitors. Burgers Kings is still growing brand. More food menu choices help them to be modest in the market and maintain the customer it has. The main menu Burger King has is French Fries, burgers, chicken and fish sandwiches, breakfast items, onions rings, soft drinks, salads.

Pestle analysis

Pestle analysis is based on examines the macro (external) business environment forces facing a firm in 6 mains zones, Political factors, Economic factors, Social (Sociocultural) factors, Technological factor, Logical factors and Environmental factors. Proper understanding of these factors lets the organisation to indicate areas of business capabilities in combination with proper understanding of the firm’s strengths, and also possible fears to the business in combination with an appropriate understanding of the company’s weaknesses. In marketing, before a tactical plan it is central to conduct a situational analysis. For effective strategic planning, the analysis of external issues it is the fundamental step before examining interior strengths and weaknesses of the business by SWOT analysis. The PESTEL form is part of that and should be recurrent every 6 month (minimum) to recognise changes in the external environment. Organisations that effectively monitor and reply to changes in the macro-environment are able to see differences from the competition and generate a modest advantage.

Impact of political factors on Burger King

Issue of political factors includes political policy and stability of government, trade, fiscal and taxation policies. It is also potential changes to legislation. It says about global influences too.

In Burger King’s company the main political factors are support globalization, e-commerce by government and political stability in main marketplaces. The external issue of political stability helps decrease challenges to the company’s expansion and growth. Political factors can have a big impact on profitability and business. It affects industry in a few critical areas. A business trying to grow abroad may encounter political barriers. International trade and collaborations can help businesses develop and expand overseas. Businesses may find difficulties to grow in countries where the governmental environment is unfriendly. In countries where there is lack of political stability can also give consequences in economic instability what can result in lack of income. Asian countries have a very low record in terms of ‘Red tape’- (series of complicated tasks that seems unnecessary but that a government or organisation requires you to do in order to get or do something). Political environment is very important in Asia, Burger King is trying to develop in Asian countries. The company had a thin existence in the Indian subcontinent but now Burger King is planning to enlarge after partnership with an Indian firm. Also, the Burger King can increase e-commerce abilities. The overall factors constitute significant chances for development and growth of Burger king on an international scale.

Economic factors affecting Burger King company

Economic factors have a major impact on how an organisation does business and how commercial they are. Factors include – interest rates, exchange rates, economic growth, inflation, not reusable income of consumers and businesses.

In Burger King’s case, the following factors are affecting the company the most:

1. Growing international trade agreements

2. High economic expand in developing companies

3. Economic stability of the USA

Food taxation, interest rates and consumption expenditure touch the options and prospects offered in the food industry. Despite the slowdown in sales, fast food is a opportuneness and a necessity for many people. Burger King’s profits and revenue are posh by economic features. Through the international supply chain improvements, Burger King has opportunity to grow. Also, America’s economic stability allows the company to rapidly grow in the country. Burger King should concentrate on external factors that shows opportunities for growth and expansion, particularly in developing economies.

Sociological/ Sociocultural issues influencing Burger King business environment

In the background of business sociocultural issues have central character. Changing social scenarios and trends in specific country can disturb business and their profitability. In the 21s century there is huge level of using digital technology and internet. These people are using smartphones for shopping, ordering food, reviewing loads of different industries for food quality and service. Society and culture both have important impact on how companies are growing and developing, it is why Burger King is concentrating on the use of technology and internet. It helps for quicker growth and consumer convenience. A high number of people are now found on social media. They are following favourite brands on Facebook, Twitter or Instagram. It works both ways, because most of brand are found on social media too. Companies should not have the same strategies in different cultures if they want expand. Burger King is using the same strategy. Burger King is using proper strategy to match local expectations and to equal the native demands. New Zealand has many dissimilar nationalities with different culture, norms and values. Burger King should know the food condition for each ethnic group. For example most of people from Hindu group are vegetarian, so they will need products that does not comprise of animal fat, eggs, or meat.

The following are the major factors affecting Burger King:

1. Developed health awareness

2. Growing support for animal rights (threat)

3. Increasing customer diversity

The Burger King products are sometimes criticized as unhealthy, because of the higher health consciousness hence it threatens Burger King’s demand. Animal right support is threatening the products of Burger King. The company might implement new source chain policies to discourse concerns on animal rights and well-being. Burger King has opportunities to improve despite the risks associated with socio-cultural external factors.

Technological factors in Burger King’s business

The following are the main technological factors touching Burger King’s:

1. Higher accessibility of automation technologies

2. Greater popularity of mobile technologies

3. Low Research and Development activity in the fast food service

Companies interested in faster growth and higher income are investing in technology. Technology is helping businesses in marketing, sales and human resources. The industries are investing in the use of sales and marketing. Recently, the fast growing companies started investing in technology and digitization. Technology is a new way of producing and distributing goods and services, also is a new way communicating with target markets. Technology is helping fast food industries and not only them to be more popular, to reach the largest customer audience. However, technology is not only limited in social media. Firms start to invest in artificial intelligence to touch their customers and offer them more personalized experiences. In these days technology is changing world of marketing. No brand can growth and develop without technology which is key to growth. Burger King can apply automation technologies to improve business efficiency. Burger King has major opportunities to invest in Research and Development (R&D). The fast food industry can tap a larger market share too. Burger King is using their website to provide allergy notices, calorie information or promotions. With technology advancing, it helps food industries reach consumers in easier and modern methods. Social media have also online groceries which deliver fast fresh products to customers. The fast food industry has big chances for performance improvements founded on technological external factors.

Impact of Environmental factors on Burger King

In the 21st century environmental factors have acquired an increased value. Most brands start to invest in sustainability, which is a serious problem these days. It is for creating higher value not just for saving money or for marketing. Many restaurants are facing obdurate pressure from customers and environmental companies to make changes to waste and have more fuel efficient vehicles. This is the need of the time and also a better method to associate with the futuristic who appreciate the businesses that value environment and community. Burger King is investing in sustainability and Corporate Social Responsibility (CSR- the concept that businesses at the stage of building strategy take into account social interests and environmental protection as well as relations with various stakeholder groups).

Burger King is well know from serving great quality food, the industry is also known as a great employer that cares for their employees’ wellbeing. Despite Burger King being a fast food restaurant it tries to remain healthy, offering nutritious information connected to the food it serves to its consumers. The fast food industry is focusing on food innovation. Innovation is not just food but invests in and cares for their people too. Burger King is also investing in sustainability it has taken essential steps to addressing the environmental contests. Also, Burger King has the opportunity to improve competence to invite customers who believer low carbon lifestyles.

Legal Factors

In these days the legal and regulatory authorities have gain an essential place in the business. The fast food businesses are also under increased compression from legal and regulatory issues. The main legal factors of Burger King are as follows:

1. Import and export

2. GMO rules

3. Environmental protection laws

Import and export are supporting new international trade agreements, it is giving opportunity to Burger King to grow based on this regulations. GMO rules restrict the performance of Burger King (especially in Europe), seeing the widespread accessibility of GMO ingredients used in the company. Burger king went over requirements and expectations based on environmental protection laws, they can improve on sustainability performance. Burger King faced various cases in his history, for example case based to protect animal rights, or related to his being in the Middle East. Burger was also involved in trademark lawsuits in US The analysis highlights development and sustainability founded on legal external issues.

In conclusion

The Burger King industry is seeing a large shift due to consumer awareness. Fast food chains, such as Burger King, are expanding overseas as sales in eastern countries have been slowing down. For Burger King it is a huge goal to build a point of differentiation that will make Burger King different from all other fast food industries, because their competitors are adapting almost the same policies that Burger King is adapting. It is clear, now more than ever, how much say customers have in the development of the food industry.

10.8.2018

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