Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting

When 3G Capital bought Burger King from TPG, Bain Capital and Goldman in 2010, the fastfood chain was losing momentum. By 2014, the business was back in growth mode but the Burger King brand was still lacking lustre and it was unclear if the celebrity-heavy ad campaign would work. Could new CEO Daniel Schwartz and his team make the brand cool again - on the cheap? Drawing on data from a brand audit, the challenge is to (i) define the brand's identity and choose among five positioning ideas; (ii) allocate expenses between television, digital and PR, and brand and restaurant redesign. For the digital and PR components, for example, students have to evaluate eight mock-ups created by Burger King's agency, and come up with their own ideas for Burger King to evaluate. Please visit the https://cases.insead.edu/burger-king/ dedicated case website to access supplementary material.

Authors :: Pierre Chandon, Laura Heely, Fernando Machado

Topics :: Sales & Marketing

Tags :: Budgeting, Design, Entrepreneurial finance, Health, Public relations, Social platforms, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting" written by Pierre Chandon, Laura Heely, Fernando Machado includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Burger King facing as an external strategic factors. Some of the topics covered in Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting case study are - Strategic Management Strategies, Budgeting, Design, Entrepreneurial finance, Health, Public relations, Social platforms and Sales & Marketing.

Some of the macro environment factors that can be used to understand the Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting casestudy better are - – talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, supply chains are disrupted by pandemic , increasing energy prices, increasing transportation and logistics costs, etc

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Introduction to SWOT Analysis of Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Burger King, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Burger King operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting can be done for the following purposes –
1. Strategic planning using facts provided in Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting case study
2. Improving business portfolio management of Burger King
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Burger King

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Strengths Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Burger King in Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting Harvard Business Review case study are -

Effective Research and Development (R&D)

– Burger King has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High brand equity

– Burger King has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Burger King to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Digital Transformation in Sales & Marketing segment

- digital transformation varies from industry to industry. For Burger King digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Burger King has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Innovation driven organization

– Burger King is one of the most innovative firm in sector. Manager in Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Superior customer experience

– The customer experience strategy of Burger King in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Operational resilience

– The operational resilience strategy in the Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Highly skilled collaborators

– Burger King has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Training and development

– Burger King has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Ability to lead change in Sales & Marketing field

– Burger King is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Burger King in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Cross disciplinary teams

– Horizontal connected teams at the Burger King are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Strong track record of project management

– Burger King is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Ability to recruit top talent

– Burger King is one of the leading recruiters in the industry. Managers in the Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

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Weaknesses Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting are -

Workers concerns about automation

– As automation is fast increasing in the segment, Burger King needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Burger King has relatively successful track record of launching new products.

Slow decision making process

– As mentioned earlier in the report, Burger King has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Burger King even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Burger King supply chain. Even after few cautionary changes mentioned in the HBR case study - Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Burger King vulnerable to further global disruptions in South East Asia.

Slow to strategic competitive environment developments

– As Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting HBR case study mentions - Burger King takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

Need for greater diversity

– Burger King has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Aligning sales with marketing

– It come across in the case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting can leverage the sales team experience to cultivate customer relationships as Burger King is planning to shift buying processes online.

Interest costs

– Compare to the competition, Burger King has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting, is just above the industry average. Burger King needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Low market penetration in new markets

– Outside its home market of Burger King, firm in the HBR case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring

– The stress on hiring functional specialists at Burger King has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

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Opportunities Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities highlighted in the Harvard Business Review case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Burger King can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Burger King to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Loyalty marketing

– Burger King has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Burger King can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Leveraging digital technologies

– Burger King can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Learning at scale

– Online learning technologies has now opened space for Burger King to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Developing new processes and practices

– Burger King can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Manufacturing automation

– Burger King can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Better consumer reach

– The expansion of the 5G network will help Burger King to increase its market reach. Burger King will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Buying journey improvements

– Burger King can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Creating value in data economy

– The success of analytics program of Burger King has opened avenues for new revenue streams for the organization in the industry. This can help Burger King to build a more holistic ecosystem as suggested in the Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting case study. Burger King can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Burger King can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Using analytics as competitive advantage

– Burger King has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Burger King to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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Threats Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting are -

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Burger King in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Burger King can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting .

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Burger King will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Technology acceleration in Forth Industrial Revolution

– Burger King has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Burger King needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Easy access to finance

– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Burger King can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Consumer confidence and its impact on Burger King demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting, Burger King may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .

Shortening product life cycle

– it is one of the major threat that Burger King is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Burger King business can come under increasing regulations regarding data privacy, data security, etc.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Burger King.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Burger King in the Sales & Marketing sector and impact the bottomline of the organization.

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Weighted SWOT Analysis of Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Can 3G Capital Make Burger King Cool Again? Brand Building Under Zero-Based Budgeting is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Burger King needs to make to build a sustainable competitive advantage.

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