Burger King’s success as one of the biggest fast food restaurant chains in the world is linked to its effectiveness in applying its generic strategy for competitive advantage. Burger King’s intensive growth strategies are also major contributors to the firm’s global growth. In this regard, the proper combination and implementation of generic and intensive strategies can lead to significant competitive advantage and growth in global business. Burger King’s generic strategy supports its competitive advantage based on cost, pricing, and product features. On the other hand, increasing market share is the main thrust of Burger King’s intensive growth strategies.
Burger King’s generic strategy represents the company’s current and potential competitive advantage. The intensive growth strategies are indicative of the company’s approach to continuing its global growth in the fast-food or quick-service restaurant industry. Also, competitive advantages developed through the generic strategies correspond to the business strengths enumerated in the SWOT analysis of Burger King. Thus, the company’s strategies determine the capabilities for approaching growth opportunities in the food service market.
Burger King’s Generic Competitive Strategies (Porter’s Model)
Burger King uses two generic strategies for competitive advantage: cost leadership and broad differentiation. The company’s primary generic competitive strategy is cost leadership. According to Michael Porter’s model, this generic strategy involves minimizing costs, which leads to low prices. Burger King applies cost leadership through standardization of processes to minimize costs based on economies of scale and error prevention. A strategic financial objective based on this generic competitive strategy is to reduce operating costs so that Burger King’s products could be offered at lower prices.
Burger King also uses broad differentiation as its secondary generic strategy for competitive advantage. Based on Porter’s model, this generic strategy requires creating unique characteristics to differentiate the business from other firms. Burger King applies this generic competitive strategy through the grilling of burger patties. Also, the former slogan, “Have It Your Way,” and current slogan, “Be Your Way,” represent Burger King’s broad differentiation in terms of offering flexible options to its customers. Free drink refills are also offered in many of Burger King’s restaurants. A strategic objective based on this generic competitive strategy is for Burger King to use such differentiation to attract new customers, especially in new markets where major competitors are already established.
Burger King’s Intensive Growth Strategies
Market Penetration. Burger King’s primary intensive growth strategy is market penetration. The goal of this intensive strategy is to grow revenues from existing customers or markets where the firm already has operations. For example, Burger King implements this intensive growth strategy by opening new restaurants in its current markets to get a bigger market share. A strategic objective connected to this intensive growth strategy is to expand Burger King’s franchise network. In relation, Burger King’s generic strategy also supports this intensive strategy by highlighting unique product features to penetrate markets and grow the business.
Market Development. Market development is Burger King’s secondary intensive growth strategy. To support business growth, this intensive strategy involves entering new markets or targeting new market segments. For example, Burger King implements this intensive growth strategy by opening new stores in overseas locations where it does not have operations. However, this strategy is only secondary or minor in Burger King’s business because the company already has operations in most markets around the world. A strategic objective for this intensive strategy is to grow Burger King by attracting new customers in new markets based on low prices. Thus, this strategic objective emphasizes low prices in Burger King’s pricing strategy, which is supported through the cost leadership generic strategy.
Product Development. Product development is the least significant of Burger King’s intensive growth strategies. This intensive strategy enables the company to grow through the introduction of new products. Burger King only minimally implements this intensive strategy. For example, the company introduces new products at a slow rate. Most of Burger King’s products remain on the menu for years. A strategic objective linked to this intensive strategy is to grow Burger King’s business through product innovation. This intensive growth strategy supports Burger King’s generic strategy of broad differentiation by highlighting new products that are unique compared to those of competing firms.
References
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- Restaurant Brands International Inc. – Brands.
- Restaurant Brands International Inc. – Form 10-K.
- U.S. Department of Agriculture – Economic Research Service – Food Service Industry Market Segments.