2.

0 Michael Porters Five Forces Framework ( Burger King)

FIVE FORCES DETAIL IMPACT

Rivalry among competitors Strong force Negative

Threat of potential entry Moderate force Negative

Bargaining power of suppliers Weak force Positive

Bargaining power of buyers Strong force Negative

Threat of substitutes Moderate force Negative

The Porter's Five Forces model is a simplified yet effective method for evaluating the
competitiveness of a business market and determining the potential profitability of the
strategies used. The model is beneficial since strategies can be adjusted accordingly after
understanding the forces in an environment or industry that can affect profitability.
For example, the business owner could take fair advantage of a strong position or
improve a weak one and avoid taking wrong steps in the future. External influences have an
effect on Burger King's business. The Porter's Five Forces analysis model takes into account
the variables that have the most impact on the business. The Five Forces' intensities on
Burger King in the quick service/fast food restaurant industry are as follows:
In terms of rivalry among competitors, Burger King is one of the top competitors in
the quick service and fast-food restaurant market across the globe. Burger King directly
competes against large companies such as McDonald's, KFC, A&W, Marrybrown, and Texas
Chicken. Famous competing brands like McDonald’s and KFC have a larger market share
and value in comparison to Burger King. According to The Wealth Record 2021,
McDonald’s net worth is $170 billion and KFC’s net worth is $20 billion. Compared to its
biggest competitors the net worth of Burger King is only $7.5 billion (Muriuki, 2021). Since
there are so many competitors competing for the same revenue, the competitive rivalry has
become one of the challenging aspects of the fast-food industry. All of this definitely has a
strong force and negative impact as Burger King needs to work on all the possible aspects to
be able to beat their competitors. In order, to gain a higher market share, they must work on
their services and products, innovation sector, advertisement, prices, and target market.

When it comes to threat of potential entry, new entrants can have an impact on the
performance level of Burger King based on their business capital. For example roadside
burger stalls, such as Ramly Burger Stall in Kuala Lumpur serves some of the cheapest yet
the tastiest burgers in KL. These stalls start off their business with a low capital yet attract
customers with the pricing and quality of the burger while surviving in the market. It’s worth
mentioning that there are several new entrants to the market such as 4 fingers Crispy
Chicken, Carl’s Jr which can be a possible threat to burger king as they have global exposure.
At the same time new entrants face moderate cost disadvantage as well-known businesses
like Burger King has already set a price range that is acceptable among the customers and
setting a price higher can turn out to be risky even though their starting capital is low. So,
basically to reach the level of Burger King they might have to face some losses along the way
in terms of finances in the early stages. As a result such businesses have a moderate force and
a negative impact on Burger King as there is a high possibility of losing potential customers
yet those businesses might be struggling at the same time in terms of the capital.
The bargaining power of suppliers have a weak force and a positive impact on Burger
King. There are a lot of suppliers that strive to supply products to businesses like Burger
King. There is a massive supply of raw materials and ingredients in this regard. The suppliers'
impact on Burger King and other fast-food restaurant businesses is limited under these
circumstances. Moreover, these products are fairly standardized, have little differentiation,
and have low switching costs, making it easier for Burger King to switch between suppliers.
The bargaining power of buyers in the fast-food industry has a strong force on a
global scale due to the availability of alternatives options. Likewise, Burger King faces the
same issue being in the market with potentially good competitors such as McDonald's, KFC,
A&W, Marrybrown, and Texas Chicken. The targeted market or customer base of Burger
King got so many options other than them. Mostly, customers are price-based due to the low
income and living standards, so Burger King needs to set their prices accordingly while
keeping their competitors in mind. This negatively impacts the business.
The threat of substitutes in globalization has made it possible to adapt food and cruise
to other regions. The substitutes in the fast-food industry, including home cooking and fine
dining restaurants, compete against the products served by Burger King. Their products tend
to be more satisfactory to the customers looking at the cost, quality, taste, and such. For
example, Killer Gourmet Burgers (KGB) in Bangsar offer a lot of items on their menu along
with gourmet burgers with homemade beef, chicken, and vegetarian patties. This been said,
they can't beat Burger King in terms of price as their prices are a bit higher compared to
Burger King. It is also important to know that unlike Burger King, its main competitors
McDonald's and KFC have rice options on their menu as it is a big part of the Asian diet.
However, Burger King is the few businesses that use Coca-Cola, which is a popular brand
among most people compared to Pepsi or other fizzy drinks. Since there are more negative
points to this aspect, the threat of substitutes is moderate, and the impact it has on Burger
King is surely negative.