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 competitive strategies and intensive growth strategies can lead to significant competitive advantage and growth in global business, despite the competitive issues noted in the Five Forces analysis of Burger King. The company’s generic strategy supports its competitive advantages based on cost, pricing, and food and beverage characteristics. On the other hand, an increasing market share is the main thrust of Burger King’s intensive growth strategies.
Burger King’s generic competitive strategy represents the company’s current and potential competitive advantages. 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 these generic competitive strategies correspond to the business strengths enumerated in the SWOT analysis of Burger King. Thus, the company’s strategies determine its capabilities for approaching growth opportunities in the foodservice market.
Burger King’s Generic Competitive Strategies (Porter’s Model)
Burger King uses two generic strategies for competitive advantage: cost leadership and differentiation. The company’s primary generic competitive strategy is cost leadership. According to Michael Porter’s model, this generic competitive strategy involves minimizing costs, which can lead to low prices. Burger King’s operations management 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 can offer its food and beverages at lower and more competitive prices.
Burger King also uses differentiation as its secondary generic strategy for competitive advantage. Based on Porter’s model, this generic competitive strategy requires creating unique characteristics to differentiate the foodservice business from other firms. Burger King applies this generic competitive strategy through the grilling of burger patties. Also, slogans, such as “Have It Your Way,” “Be Your Way,” and “You Rule,” represent the fast-food company’s differentiation in terms of offering flexible options to its customers. A strategic objective based on this generic competitive strategy is to differentiate the business while considering the external factors identified in the PESTEL/PESTLE analysis of Burger King, to attract new customers, especially in markets where major competitors are already established.
Burger King’s Intensive Growth Strategies (Ansoff Matrix)
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 fast-food 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. However, this growth strategy pushes for aggressiveness against Burger King’s competitors, including McDonald’s, Wendy’s, and Subway, as well as Dunkin’, Starbucks, and other foodservice firms. A strategic objective connected to this intensive growth strategy is to expand the company’s franchise network. Burger King’s generic competitive strategy of differentiation 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, the foodservice company 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 the quick-service restaurant chain by attracting new customers in new markets based on low prices. Thus, this strategic objective emphasizes low prices and corresponding pricing strategies in Burger King’s marketing mix (4Ps), which is supported through cost leadership as a generic competitive 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 or menu items. Burger King only minimally implements this intensive strategy. For example, the company introduces new products at a slow rate. Most of these products remain on the menu for years. A strategic objective linked to this intensive strategy is to use product innovation to grow the business and satisfy the goals of Burger King’s mission statement and vision statement. This intensive growth strategy supports Burger King’s generic competitive strategy of differentiation through new products that are unique compared to those of competing firms.
References
- Burger King – Menu and Online Ordering.
- Jukka, T. (2023). Does business strategy and management control system fit determine performance? International Journal of Productivity and Performance Management, 72(3), 659-678.
- López, D., & Oliver, M. (2023). Integrating innovation into business strategy: Perspectives from innovation managers. Sustainability, 15(8), 6503.
- 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.