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Case Analysis on Burger King
versus McDonald’s
Group Members

QUESTION # 1
Carry out a TOWS Analysis for both Burger King and McDonalds
McDonalds
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TOWS Matrix:
A/ S-O STRATEGIES
Introducing new menus with nutritious ingredients (S1,S2,S3,S4,S8,O1)
Expanding to new markets by Acquisition and Mergers
...

Using Brand name to increase charitable work and create “ Green” campaign (
S8,O1,O3)
• Focusing on Plan to win to attract customers and gain more profit
(S2,S3,S5,S7,S8,O4,O6)
• Providing news products with low cost and diverse tastes (S3,S5,S8,O2,O4,O6)
• B/ S-T STRATEGIES
• Using plan and brands name and many popular brands to attract more customers
...

(S9, T3)
• Providing new products focus on healthy foods to gain more customers and create
new image of fast food good for health
...
( W1, O4, O5)
• Increasing differentiation by applying new healthy menu to
match with customer demand about healthy food and diverse
tastes which can attract more customer segment ( W4, O1, O6)
• D/ W-T STRATEGIES
• Minimizing the uses of Trans fat in all menu of McDonald’s ( W2
,W5, W8, O1)
• Transferring the uses of HCFC-22 into HFC which avoid damage
to ozone layer (T3
...
( T1, W3)

SWOT Analysis
Strengths

Weaknesses



The most recognized brand



Negative publicity



Strong global presence



Unhealthy food menu



McDonald’s Plan to Win



High employee turnover



Strong financial performance and position



Low differentiation



Operating in many diverse cultures



Legal action



Offering many popular brands



Use of HCFC-22



Success in target very young children



Lacking breakfast menu



Low-cost leader



Social trend



Good socially responsible and community oriented



Convenient

Threats

Opportunities



Competition



Increasing demand for healthier food



Healthy issue



Growth of the fast food industry



Law issue



Globalization



Saturated in fast-food industry



Low cost menu is preferred by larger number of customers



Economic recession



Appearance of freebies and discounts



Diverse tastes and needs of customers

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A/ Strengths:
McDonalds brand is the most recognized brand in fast food industry and have large market
share which have more than 34,000 outlets, serving 70 million consumers every day in 121
countries
...

“McDonalds Plan to Win” focuses on people, products, place, price and promotion
...

Strong financial performance and position, revenue in 2013 reach $28
...

McDonalds operate in many diverse cultures where is the tastes in food are extremely
different than US
...
Thus, ability to adapt to local tastes and standardized quality products
are McDonald’s strengths
McDonald’s offers only most popular brands as their com in its restaurants, such as: Coca
Cola, Dannon Yogurt, Heinz ketchup and others
...

Value based pricing and large number of loyal customer
Good socially responsible and community oriented firm
...
They provide products which comply with the
upgraded health standards deemed necessary by the USDA and provide the customers about
nutrition facts
...
For example Yum!Brands, Wendy’s or Burger King
...

Healthy issue: The amount of obesity cases in Americans is increase significantly;
people nowadays become more conscious of eating healthy food
...
People tend to choose other restaurant rather than
having meals in McDonald
...
Those lawsuits are cost so much time and money of McDonald and if
McDonald refuses to change, more and more lawsuits will probably come
...

Economic recession: The Company’s revenue streams are diversified, but
depending on the length of this recession, they will inevitably be negatively
impacted by trickledown effect
...
McDonald’s is sued for many time by offering
unhealthy food to their customers and using lots of marketing aim at
children, especially young age kids
...
McDonald’s has given lots of affords to bring
healthier fast food to customers, however, their menu still contain
unhealthy meals and drinks that provides more calories than nutrition
...
McDonald’s has low paid and skilled job, which
result in high turnover of their employees with 150% of turnover rate,
even their top managers, consequently, it increases cost of training and
overall cost of McDonald
...

• Legal action McDonalds’s food contain huge amount of Trans which is fat
and beef oil which has bad effects on customer’s health and cause cancer
...

• Uses of HCFC-22
...
McDonald uses HCFC-22 to
make polystyrene that affect the ozone layer
• Lacking of breakfast menu
• Social Trend
...


• D/ Opportunities:
• Increasing demand for healthier food
...

Change of human lifestyle; people consume more fast food products
...

• Globalization, expansion in other countries McDonalds has more than
31,000 restaurants serving in almost 120 countries
...
China and India are 2 of the most
potential market in the world so that it’s a good opportunity for
McDonald’s to expand their brand at these 2 markets
...
This is a potential market segment which can
bring huge profit to McDonald’s
...
As a result, they want new menu and service in order to
satisfy them
...


Burger King

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Burger King
Strengths
1
...
Burger King serves a lot of burgers that is typically not available in other
fast food restaurant
...
Product differentiation with large size
...
Growth model not very capital intensive
...
Strong brand equity in fast food
...
High fat and high calorie food not good for health conscious people
• 2
...
Burger King does not advertise their products like their competitors
• 4
...


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Opportunity
1
...
Open new branches and outlets
...
Advertise more
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Product improvement, tailoring it as per tastes of people
around the world
...
Threat from other eating joints/restaurants
• 2
...

• 3
...
Huge popular brand name and high brand loyalty

1
...
Burger King serves a lot of burgers that is typically not available in other fast food

2
...

3
...
Product differentiation with large size
...
Lesser international appeal
...
Growth model not very capital intensive
...
Strong brand equity in fast food
...
Introduce home delivery

2
...

(S-1 O-4& 3)
3
...


4
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1
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Health concerns among general public
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Food costs are rising higher than standard inflation

QUESTION # 2 Construct a CPM
McDonald's

Burger King

Critical Competitive Factors

Weight

Rating

Score

Rating

Score

Product Quality

0
...
6

3

0
...
15

4

0
...
15

Safety

0
...
36

3

0
...
08

4

0
...
32

Value based on Pricing
...
12

4

0
...
36

Innovation and Process Technologies

0
...
3

3

0
...
1

4

0
...
2

Market Share

0
...
4

3

0
...
08

4

0
...
32

Total

1

3
...
76

QUESTION # 3
Develop SPACE Matrix for both organizations
• McDonalds
•
• The Strategic Position and Action Evaluation (SPACE) Matrix
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• The SPACE matrix is broken down to four quadrants where each
quadrant suggests a different type of a nature of a strategy:
• Aggressive
• Conservative
• Defensive
• Competitive

• The SPACE Matrix analysis functions upon 2 internal and 2 External
Strategic dimensions
...
The external factor affect to the
company also quite high
...


3

Rate of inflation

-3

Leverage

4

Demand Changes

-3

liquidity

4

Price Elasticity of demand

-1

Working Capital

3

Competitive pressure

-3

Risk involved

4

Ease Of exist

1

Barriers to entry new markets

-3

Cash Flow

3

Price range of completive products

-2

Average

3
...
5

Y-axis

0
...
5

X-axis

0
...


5

Rate of inflation

-3

Leverage

3

Demand Changes

-2

liquidity

4

Price Elasticity of demand

-1

Working Capital

5

Competitive pressure

-4

Risk involved

3

Ease Of exist

2

Barriers to entry new markets

-3

Cash Flow

3

Price range of completive products

-3

Average

4
...
75

Y-axis

3
...
5

Average

4
...
5

SPACE Matrix shows that Burger King
should aggressively

THANK YOU



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