Business, Management

Burger King PESTEL/PESTLE Analysis & Recommendations

Updated on Updated on by Daniel Kissinger
Burger King PESTLE PESTEL analysis, political economic sociocultural technological ecological legal external factors restaurant case study
A Burger King restaurant in Moscow in 2010. This PESTEL/PESTLE analysis of Burger King shows external factors highlighting growth and expansion, technological innovation, product improvement, and foodservice business sustainability. (Photo: Public Domain)

Burger King strives to be 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 issues raised in this 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. These factors come with opportunities and threats that shape the growth of the restaurant chain.

Political Factors Affecting Burger King

Political conditions can affect fast-food business. This PESTLE analysis identifies governmental influence on firms’ remote or macro-environment. In Burger King’s case, the following are relevant political factors:

  1. Governmental support for international business (opportunity)
  2. Political stability in major foodservice markets (opportunity)
  3. Governmental support for e-commerce (opportunity)

Many governments support international business. Burger King can take advantage of this condition through further global expansion. Also, the external factor of political stability helps reduce challenges to the company’s growth and expansion in major foodservice markets. 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 PESTLE analysis outlines the economic changes and trends that influence business performance. The following are economic factors that affect Burger King:

  1. Reforms in international trade agreements (opportunity & threat)
  2. Economic stability of major markets (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, which is an economic opportunity in this PESTLE analysis. However, reforms in existing international trade agreements can threaten the company’s operations in some foodservice markets. Also, the economic stability of major markets enables the quick-service restaurant chain to grow. Moreover, Burger King has the opportunity to rapidly grow in developing economies.

The economic conditions in this PESTEL analysis show that 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, Subway, and Wendy’s, as well as coffeehouse chains, like Starbucks, influence the success rate of these strategies regarding what this PESTEL analysis of Burger King identifies as opportunities for fast-food restaurant business growth.

Social Factors in Burger King’s Business Environment

Burger King accounts 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. Some of the social 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 and improve its menu to attract consumers of various backgrounds. Higher health consciousness threatens demand for Burger King’s food and beverage products, which are sometimes criticized as unhealthful. However, with the social factors in this PESTEL analysis, the company has the opportunity to improve the healthfulness of its food and drinks. Animal rights advocacy continues to attract attention, threatening demand for the company’s food products. Still, the quick-service restaurant chain can implement new supply chain policies to address concerns on animal rights and welfare. These external factors affect consumer decisions and the bargaining power of buyers examined in the Five Forces analysis of Burger King. This part of the PESTEL analysis points to foodservice business growth opportunities despite the threats linked to external factors in the social environment. The strategic alignment of Burger King’s work culture (business culture) with the sociocultural factors in this PESTLE analysis contributes to effectiveness in gaining customers and improving sales revenues.

Technological Factors in Burger King’s Business

Burger King’s business operations rely on technology. In this PESTEL analysis, technologies and related trends are considered in terms of their influence on the remote or macro-environment of the foodservice firm. The following are technological factors affecting Burger King:

  1. Higher availability of automation technologies (opportunity)
  2. Higher popularity of mobile technologies for online orders (opportunity)
  3. Low R&D activity in the quick-service restaurant industry (opportunity)

More automation technologies are now available for restaurant businesses. Burger King can apply these technologies to improve operational efficiency. Also, the technological factors in this PESTEL analysis show that 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 business performance. This PESTLE analysis of Burger King indicates major technological opportunities for performance improvements based on external factors. These improvements can increase process cost-effectiveness and 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.

Ecological/Environmental Factors

The natural environment can impose limits on Burger King’s business. This PESTEL analysis covers the impact of ecological conditions on the remote or macro-environment of foodservice business. In the case of Burger King, the following are notable ecological factors:

  1. Climate change (threat)
  2. Emphasis on foodservice 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 fast-food 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 external factors in this dimension of the PESTLE analysis guide Burger King’s corporate social responsibility (CSR) and ESG strategy for business efficiency, sustainability, and effective stakeholder management.

Legal Factors

Burger King complies with legal requirements. The effects of legal systems on foodservice firms and their remote or macro-environment are considered in this part of the PESTEL analysis. Some of the legal factors influencing Burger King are as follows:

  1. Import and export regulation (opportunity)
  2. Environmental protection laws (opportunity)
  3. GMO regulation affecting regional foodservice markets (threat)

Burger King has the opportunity to grow based on import and export regulations that support new international trade agreements. Also, this PESTLE analysis shows that 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 external factors.

Recommendations – Burger King PESTLE/PESTEL Analysis

This PESTEL/PESTLE analysis of Burger King raises various issues, not all of which can be realistically addressed. Still, the company can implement solutions to take advantage of opportunities and protect the business against the threats discussed in this PESTEL analysis. For example, Burger King’s marketing mix (4P) can develop strategies and tactics that include the priorities recommended as follows. With regard to the remote or macro-environment of the fast-food restaurant industry, it is recommended that Burger King prioritize the following concerns:

  1. Growth and expansion, especially in developing markets
  2. E-commerce and mobile transactions
  3. Food and beverage product improvement for health-conscious consumers
  4. Foodservice business sustainability

These recommendations match the opportunities and threats detailed in this PESTEL analysis of the quick-service restaurant chain. 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 foodservice company’s core competencies with 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.

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