Burger King strives to become the top player in the quick-service restaurant industry. To do so, the company must strategically address the main issues highlighted in this PESTEL/PESTLE analysis. The PESTEL analysis framework identifies the most significant factors in the firm’s remote or macro-environment. In Burger King’s case, these external factors include the influences of governmental and nongovernmental organizations, as well as trends or changes in technologies, among others. Effectiveness in addressing these issues raised in the PESTEL analysis helps optimize Burger King’s global business performance in the long-term.
Burger King’s long-term performance partly depends on the company’s success in strategically addressing the issues identified in this PESTEL/PESTLE analysis. The external factors in the remote or macro-environment of the fast-food restaurant industry are significant influences on Burger King’s global business. The realization of strategic goals based on Burger King’s mission statement and vision statement depends on the company’s ability to develop its business operations to match the market factors evaluated in this PESTLE analysis. Also, these goals must align the food-service company’s core competencies and the opportunities in the industry. The competencies noted in the SWOT analysis of Burger King can support strategies for addressing the industry and market trends considered in this PESTLE analysis.
Political Factors Affecting Burger King’s Business
Political conditions are determinants of business performance. This part of the PESTLE analysis identifies governmental influence on firms’ remote or macro-environment. In Burger King’s case, the following are the main political external factors:
- Governmental support for globalization (opportunity)
- Political stability in major markets (opportunity)
- 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 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 PESTLE analysis outlines the economic changes and trends that influence business performance. The following are the main economic external factors that affect Burger King:
- Expanding international trade agreements (opportunity)
- Economic stability of the U.S. (opportunity)
- 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. Moreover, Burger King has the opportunity to rapidly expand in developing economies. These conditions show that, in the political dimension of the PESTEL analysis model, Burger King must focus on external factors that present opportunities for growth and expansion, especially in developing economies. Burger King’s generic competitive strategy and intensive growth strategies are designed to improve the restaurant chain’s business performance based on such multinational expansion opportunities noted in this PESTEL analysis. However, competitors, such as McDonald’s and Wendy’s, as well as coffeehouse chains, like Starbucks, influence the success rate of these strategies regarding what this PESTEL analysis identifies as opportunities for fast-food restaurant business growth.
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 PESTLE analysis. The main sociocultural external factors affecting Burger King are as follows:
- Increasing consumer diversity (opportunity)
- Higher health consciousness (threat & opportunity)
- 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 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 operations rely on technology. In this dimension of the PESTEL 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:
- Higher availability of automation technologies (opportunity)
- Higher popularity of mobile technologies (opportunity)
- 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 PESTLE analysis, Burger King has major opportunities for performance improvements based on technological external factors. These improvements can increase process cost-effectiveness and the corresponding profit margins. Technological enhancements can be integrated into Burger King’s operations management to maximize business process performance and take advantage of the growth opportunities noted in this PESTLE analysis.
The environment can impose limits on Burger King’s business. This dimension of the PESTEL 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:
- Climate change (threat)
- Emphasis on business sustainability (opportunity)
- 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 PESTLE analysis indicate that Burger King can realistically work on sustainability and efficiency.
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 analysis. The major legal external factors influencing Burger King are as follows:
- Import and export regulation (opportunity)
- Environmental protection laws (opportunity)
- 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 PESTLE analysis emphasizes growth and sustainability based on legal external factors.
Burger King PESTLE/PESTEL Analysis – Recommendations
This PESTEL/PESTLE analysis of Burger King raises various issues, not all of which can be realistically addressed. With regard to the remote or macro-environment of the fast-food restaurant industry, Burger King must prioritize the following concerns:
- Growth and expansion, especially in developing markets
- E-commerce and mobile transactions
- Product improvement for health-conscious consumers
- Business sustainability
- Burger King – Diversity.
- Burger King – Food Quality.
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- Phan, S. (2021). The effect of PESTLE factors on development of e-commerce. International Journal of Data and Network Science, 5(1), 37-42.
- Restaurant Brands International Inc. – Form 10-K.
- U.S. Department of Agriculture – Economic Research Service – Food Service Industry Market Segments.