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Competitive Advantage and Business Success: McDonalds and Burger King Report

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Updated: Jul 22nd, 2021

Introduction

Business organizations compete to secure a large share of the market (Hoskisson, 2008). Each organization tries to offer something different from its competitors to maximize customer satisfaction and gain competitive advantage. This report lists two companies that deal in hamburgers. The companies to be compared for differentiation are McDonalds and Burger King.

McDonalds

McDonalds is known to be the largest hamburger supplying company in the world. Based in the United States, McDonalds is a multinational that operates in about 120 countries worldwide and serves about 70 million customers daily. The company has had competitive advantage over most of its competitors and has gone on to secure a large share of the market. In terms of quality, McDonalds produces hamburgers that are of high quality compared to those of most competitors.

The company values quality and embraces a wide variety of fast foods that are available in many outlets across the world. Differentiation is a strategy that is applied by the company in its production of quality hamburgers. The company ensures that it has knowledge regarding the culture and preferences of a given people before opening any store in order to offer differentiated products that are acceptable among the people (Hill & Jones, 2013).

Prices for McDonalds’ products are highly competitive. The company aims at becoming the cost leader, thus it offers foods at low costs that are hardly matched by its competitors. This is a strength that gives McDonalds the most competitive advantage. To do this, the company ensures that the costs of operations are at the lowest level possible. It also ensures that the supply chains are effective and efficient (Hill & Jones, 2013).

McDonalds has embraced a branding strategy that is dynamic since the trends in the market are changing each day. For instance, the branding is now happening via a WI-Fi look. Its brand is mostly targeted at young people since they buy fast foods more than any other group (Hoskisson, 2008).

The branding is also aimed at building the brand image and expanding the company’s market. Finally, top quality services are offered by McDonalds’ employees. McDonalds has introduced IT systems in its outlets to improve the quality of services. This ensures customer satisfaction and competitive advantage.

Burger King

Burger King is an American based multinational that supplies hamburger fast foods in about 73 countries across the world. Despite experiencing financial difficulties earlier during its operations, the company was able to bounce back and is currently operating globally. The company offers quality hamburgers. However, its foods are not of the same high quality as those of McDonalds (Nilsson & Rapp, 2004).

In addition, Burger King does not have a wide variety of foods compared to McDonalds; hence it loses part of its competitive edge. Foods are offered at a low price strategy that attracts most customers at Burger King. Fast foods are bought mostly by the younger generation. This group will always go for cheap foods since most of them do not have a stable income. This gives Burger King competitive advantage.

The branding strategy for Burger King is targeted at the younger generation just like that of McDonalds. However, the quality of branding is lower compared to McDonalds. This is another factor that makes Burger King lose some competitive advantage to McDonalds.

Quality and fast services are offered at Burger King. It is important to note that the services offered in most fast food hotels and the menus available are almost similar. However, McDonalds leads Burger King in terms of IT, thus McDonalds is ahead in terms of competitive advantage (Nilsson& Rapp, 2004).

Conclusion

Most fast food hotels offer foods and services that are almost similar. The prices are low and the target customers are also the same. Therefore, any company in the fast food industry has to do things differently from the others for it to win competitive advantage. This is what has given McDonalds its competitive position over other fast food chains.

References

Hill, C. W. L., & Jones, G. R. (2013). Strategic management theory. Mason, OH: South-Western Cengage Learning.

Hoskisson, R. E., (2008). Competing for advantage. Mason, OH: Thomson/South-Western.

Nilsson, F., & Rapp, B. (2004). Understanding competitive advantage: The importance of strategic congruence and integrated control. Berlin: Springer.

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IvyPanda. "Competitive Advantage and Business Success: McDonalds and Burger King." July 22, 2021. https://ivypanda.com/essays/competitive-advantage-and-business-success-mcdonalds-and-burger-king/.

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IvyPanda. 2021. "Competitive Advantage and Business Success: McDonalds and Burger King." July 22, 2021. https://ivypanda.com/essays/competitive-advantage-and-business-success-mcdonalds-and-burger-king/.

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IvyPanda. (2021) 'Competitive Advantage and Business Success: McDonalds and Burger King'. 22 July.

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