Burger King Porter's Five Forces Analysis

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The Porter’s 5 Forces, developed by Michael Porter, is a tool used to determine the external factors that influence a business’ performance and is comprised of: 1. Level of Rivalry 2. Availability of substitute products 3. Threat of new entrants 4. Power of Supplier 5. Power of Buyer (customer) Level of Rivalry: Looks at all the competitors and if they’re not doing so well, there is an opportunity for profit on behalf of the company as well as gaining competitive advantage over them. On the other hand, if the competitor is succeeding it can impose a threat to the business and specific strategies will have to be put in place to overcome difficulties. Availability of substitute products: Refers to the same brand having different products which…show more content…
On the other hand, these new entrants face a cost disadvantage because they are relatively new to the economy and don’t have enough experience to scan the market and seek the opportunities quick enough. Threat of new entrants is a considerable issue in Burger King’s business and must be dealt with and brought up on the daily occurrences of the business. • Level of Rivalry: (strong in McDonalds®) McDonald’s®, like any other business faces rivalry and is an element that is significantly important as an external factor influencing the business and requires a certain amount of time to be worked on and studies to have competitive advantage over competition. The fast food industry, like mentioned before, is hugely packed with old and brand new business that have invested and invest more and more everyday on marketing and building their brand to stand out. In South Africa, McDonald’s® is extremely famous, however, brands like KFC®, Steers® and Wimpy® seem to be more high up there than McDonald’s® because of the amount of marketing they have done non-digitally and digital platform. Therefore, this is a strong element for McDonald’s® and should be kept…show more content…
Because of the low switching costs, present in every fast food restaurant, consumers can easily move from business to business with no costs and because they often are not consumer brand loyal and therefore feel that they can move between the brands. It is expensive and has taken McDonald’s® many years to build a brand as strong as it is and therefore puts the business at a competitive advantage amongst the others. McDonald’s® has a name and an image in at least 90% of the population of the world and therefore makes it easy for consumers to choose. We are not fooled; we know that McDonald’s® food will taste the same whether it is in America, in South Africa or in China. They might have a couple of differences in the menu but at the end of the day, the burgers and their special sauce will taste exactly the same and that’s what makes McDonald’s® so huge in the fast food industry. Based on this, threat of new entrants for McDonald’s® is a factor they must consider however it is of moderate issue and other elements do come before

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