Restaurant Brand International Analysis

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Restaurant Brand International Analysis.

Company Description and Current Business Assessment

RBI is one of the world’s biggest quick service restaurant that has approximately more than $27 billion sales system worldwide, having more than a total of 23000 restaurants located in over 100 countries and the United States. RBI was as a result of a merger between Burger Kings and Tim Horton. It has grown fast due to the already established market base by these two QSR’s. The merger has also acquired Popeye chicken and its franchisees that operate their brands independent from each other providing services to their customers (Resturant Brand International, 2016).

RBI believes in supportive change on the communities and their commitment to acting responsibly towards the world around them. It emphasizes the importance of having an environment that has a real perception of the company; this allows it to create a good picture to the community. The sustainability framework dictates RBI’s mission statement. The core values include food values, responsible sourcing, best people, communities and the environment. The primary focus of RBI corporate social responsibility is enhancing sustainability and creating high brand image and picture to the entire market. RBI aims in strengthening the relationship between their brands and their customers to allow the workers understand the primary intent and purpose of the organization. The mission statement focuses on the sustainability of the business; the corporation can also have a mission that states enhancing sustainability and reaching out the world with quality fast food that has greater nutritional value (Resturant Brand International, 2016).

RBI stakeholders include the company shareholders, employees, suppliers, and finally customers. All these are regarded as stakeholders because they are important in running the corporation. They are all included in the successful running of activities in the quick service restaurants under the Restaurant Brand International. These stakeholders are interested in running the company which the community relies on its members to be employed and get monthly salaries. The customers also depend on the fast food offered in both of the brands. The suppliers who rely on the contracts from RBI to supply the necessary raw foodstuffs in the food chains organizations to allow production and finally the shareholders who are considered the largest stakeholders are directly affected by the performance of the organization at large thus their involvement is of significance. These people have a positive grip in the running of the enterprise (Resturant Brand International, 2016).

RBI through its value of best people it has been able to balance their stakes their competing stakes due to the presence of stakeholders that share the same value as the organization. Their employees, suppliers, customers and shareholders had allowed the growth of the organization positively and helped in reducing the external factors that create a hard time in balancing stakes of the team (Resturant Brand International, 2016).

External Environmental Analysis.

It’s evident that every business must have external factors that affect its smooth running. RBI is not left out, and due to its vast market coverage, there are a lot of problems that affect it as a business. Amongst the external variables include: Competition, the fast food industry has many players in it both local and international brands. Government harsh policies legislated with the aim of protecting citizens and its economy can pose a threat to the expansion of the business. Socio-economic factors that include cultural, technological, social preferences or economic such as inflation, taxation or supply of raw materials (Elearn, 2008).

PESTEL analysis framework is normally used by the marketing team to conduct an analysis of the marketing macro-environment factors that influence the business. RBI has also its shares of external variables that affects its effective running of day to day activities. Analysis of its values and policies, shows that RBI the following forces; political factors which include political stability of a country. A good example is that it can be difficult for RBI Inc. to decide and open a franchise in either Syria or Iran due to the regular occurrence of conflicts. Economic factors like growth of the economy, high interest rates on loans, currency exchange rates due to RBI’s wide geographical coverage, inflation and disposable income of their customers the on affordability of products to customers. Social factors which include the distribution of their consumers, the rate at which the population grows and their demand and attitudes of consumers towards their products. Technological factors which shows the ability to grow with the growing technology including the means of advertising and sensitizing the organizations products and policies, how the distribution of goods and services will be conducted and also production of the goods and services. Environmental factors, this includes how they are able to get their raw materials within a short period of time, their waste management policies to help reduce the legislation imposed by the governments and finally legal factors which include health and safety laws, advertising standards, consumer rights and laws, equal opportunities, product are labelling and safety of their products. The above PESTEL factors have enabled RBI to employ strategies that allow them to surpass the macro and micro environmental factors and increase its growth as a company and quality provision of services. RBI has been able to operate in now more than 100 countries which makes it evident that the external factors are only making the organization strategist think out of the box to allow the company expand (SJSU Research Guides , 2017 ).

Competition enables a business to show its strength. Porter forces include the suppliers’ powers, buyers power, threats from entry of new players, threat of substitute products and rivalry among competitors and sellers. These effects allow the business to project its strengths. Suppliers can have a grip on the firm if not kept in check, few vendors who produce unique products that are exceptionally of high quality can give them the power to drive the business by detecting prices, thus need of RBI to have many suppliers. Buyers also can have the power of driving down prices of a commodity or a service in a business depending on their number. They can switch the value of a product to that of someone else’s business. Rivalry competition is the number of competitors that do the same business as RBI Inc.

Major competitors include Starbucks, McDonalds, Dunkin’s Donuts who also have the same venture and have stayed long enough in the market and also created a strong brand name. Although competition paves way for more innovation still if their competitors make quality products they can the snatch their customers. Threat of substitution, apart from their products of burgers, donuts, coffee and other fast food like fries. Example of emerging substitute products like pizzas, pies, muffins franchises can substitute the products of RBI. Also threat of new entries these are a result of the of cost of starting the same venture is cheap in terms of time and money, weak economies of scale in place that affect new businesses, no protection of RBI essential recipes. If these thing are not in place, then new venture pose a threat to the thriving of the firm (Elearn, 2008).

SWOT analysis.

Many companies that grow and the already established business conduct a regular SWOT analysis. It is a section of the general planning process where financial and operational goals are set for the coming years. Strategies for accomplishing this goal take place after the research. It came to attention that RBI has the following strengths, weakness, opportunities and threats that affect in its running (Elearn, 2008).

Strengths.

Efficient measure: RBI being a merger between Burger King and Tim Horton. These two businesses that have a strong market base and an extended period of operation making them stronger because there is no need for RBI to sell itself. The only focus is to venture new markets and expand the business where it is not currently position.

Brand loyalty: customers loyal to Tim Horton and Burger King still get their products from these franchises. RBI still reaps the market benefits of both Tim Hortons and Burger King.

Franchise have strong market force. Burger King only is present in 79 countries with 13000 company owned outlets and franchises. Also, Tim Hortons has its significant share being the most popular fast food outlet in Canada covering the entire market with less competition and also some outlets in Europe and the Gulf countries.

Less capital intensive: an example is Burger King whose 90% of its stores are franchisee-owned which makes RBI focus on making strategic development goals.

Weaknesses.

Health consciousness: The curiosity of customer and their need to know the contents or rather the contents of their food has started dictating what is to be served I the menus. A good example is Burger King decline of top lines speaks volumes on this trend in considering high calorie and fat content in the food also Tim Horton’s allegation that their coffee is inorganic and it does not share the source of its green beans.

Opportunities.

Marketing: RBI could result to increase in brand awareness to help reduce competition from their primary competitors, this will lead to the expansion of the merger into more locations and expand the consumer base.

Menu diversification: the two business can share ideas on how to diversify their menus and attract the untapped market base of customers all over the world. Also, venture in healthy conscious fast foods that have new flavors and little fat additives.

Innovations: this includes new ways of reaching customers including mobile payments, after sale services and deliveries, blends of drinks, free gifts and hampers to allow an increase in the brand awareness.

Threats

Competition: venturing into this business of fast food has made RBI on toes because of the presence of globally established competitors such as McDonald’s, KFC, Dominos, subways, Dunkin’s Donuts, Starbucks and other local eating joints in the countries and cities they wish to venture.

Price in the raw materials: most of the products sold to customers of this business are farm produce, and with the changing trend in global warming has resulted in the price increase in of raw materials and sometimes low quality produce this affects the brand’s products.

Current Business-level Strategy Assessment.

RBI’s core competencies are based on satisfying the needs of their customer. Since that the principal purpose of a business is to help in supporting the customers demand with emerging times. Customers are important stakeholders in any business. For a business to get its revenue, it relies on customers to purchase its products. RBIs plans on customer and customer relations should be able to have employees who offer exceptional services to the customers; the customers should be able to feel like part of the organization when served. RBI’s core values of food are to ensure that their brands reflect choices from their guests while they tirelessly work on new product innovation to meets customers need of the changing lifestyles. Value chain activities that take place are in their core values of responsible sourcing. Their commitment to commodities that are used to give out final products to their customers shows their concern on the VCAs.They have a code of business conduct which is built on respect, fairness and business ethics and governed by regulatory compliance being a minimum standard of doing things. RBI supports their current strategies by ensuring that the inputs are quality so is the output this enables it to build a strong impression to its consumers. It is also a requirement for resources to be checked for their quality and purity. Since RBI requires labor and the inputs that will be used in production their take on this is by supporting. For example, in work, they ensure that their employees are trained and share same values as the company and also the sources from the suppliers. RBI still is competent, and its main competencies include its high market base from the brands that are under it. Burger King and Tim Horton’s are globally recognized brands with popular services and products. Expansion of RBI can be quite easy since of the already established market and reputation (Venkatraman & Ramanujam, 1986).

Market / Competitive Landscape Assessment.

Competition in a business environment is healthy since it allows the growth and expansion of business and innovation of new products. Competition upscale the businesses. The main RBI competitors include McDonald’s, Starbucks, Compass Group, Yum Brunds Inc., Chiptole Mexican Grill Inc., Yum China Holdings, Darden Restaurants Inc., Panera Bread and Dunkin’s Brands Group. These competitors are one the most known owners of QSRs globally. They have their market share and faithful customers who only get products from their franchise outlets. RBI has these competitors breathing at their backs, and it has to come up with new strategies to stay ahead of the competition. The competitive rivalry has porter’s forces around it, but the conditions in aggressive competition include the rate of industry growth and concentration of market. How is the fast food industry growing and where is the market concentrated? It makes the various fast food companies venture in same places, for example, New York city has different franchises belong to RBI competitors. Thus the best products and services attract a fair share of the market. Also, diversification of services by the competitors, the competitors are willing to offer different services part from fast foods. Economies of scale and the fixed cost of allocation in value addition also affects the competition. The organizations behave in a way that they make the consumers get attracted to their services and commodities. Some change their menu contents with unique daily recipes, free gifts, and entertainment in the franchises. These behaviors attract customers since they are impressed by the little things offered by the business. They increase their popularity by word of worth through customer to customer. This process is fast since the changing need of the market, technology and movement of people from one place to another that result in changing habits and marketing trends. Generally speaking, RBI is not moving as fast as it is expected because of its comfort in the existing brands thus giving the opportunities for its competitors. These competitors pose, and a high level threat of taking away the market base existing under RBI international thus need to be vigilant in demand and provision of quality products and services (Hoffman, 2000).

Company Identity Analysis.

RBI is a business that is full of potential and untapped resources. Its ability to acquire brands that are fully established in their native countries make it strong. Their continuous growth in prices of stocks shows how RBI is running well and high profits are realized. Its recent moves to acquire Popeye makes it an exceptionally diversified business compared to its competitors who don’t have a well-established and focused market. The only issues that are affecting and challenging RBI are the presence of a company that offers substitute products, e.g., Dominos, KFC, and other QSR outlets pose a threat to RBI. The consumers see an alternative to the burgers, coffees, tea, etc. Also, their expansion to other nations has not been that easy due to the new market they are facing and still trying to learn their preferences or choices of the products. RBI strength also lies in its high values of community involvement and acquiring their product from farmers directly. It is a clear strategy of getting their raw materials at affordable prices and strategy of solidifying the relationship with the locals. RBI should be only focused on becoming RBI, a unique brand that offers healthy fast food due to recent changes in health patterns and people susceptible to food-related illnesses. They should also be transparent on their recipe content to remove doubt by the customers on the health benefits of their products (Venkatraman & Ramanujam, 1986).

Proposed Strategic Tactics.

Red oceans are where business outperform their competitors by having a substantial share of service in demand and supply of commodities. The crowded the market the little the growth of business and profits. When RBI follows the following red ocean strategies by exploiting the existing demand, they are to give the best of their services and products to persuade consumers to stick with them. They can also compete in existing market because of their strong image and brand. They will be able to get customers due to their existing reputation and track record of quality products and services. And also the value-cost trade-off by creating a reasonable value of their goods at a lower cost compared to the competitions which are pricing high (Mauborgne & Renee, 2015).

The vision should state that primary aim is to build a home for everybody by having healthy and nutritional fast foods and giving people the test of the best recipes that leaves an eternity impression of RBI fast food. Also to create a global fast food brand that has no boundaries in satisfying its customer’s needs (Mauborgne & Renee, 2015).

To realize these visions and mission then RBI should fully utilize its human resources by educating them and exposing them to understand the market. The workers will then be able to come up with recipes that are exceptionally desirable by their consumers. They also have to identify specific niches in the market; this can be possible by conducting a market analysis on their products and recipes. They also enhance by monitoring their production strategies having health professionals who will be tasked with the role of checking the sanitary conditions of food preparation and quality assurance assessment of raw materials before production of these products to solidify their trust with their customers (Mauborgne & Renee, 2015).

Future Strategic Considerations.

Blue ocean strategy is mainly used to engage in one-on-one competition in search of a sustainable profit growth. In this type of plan, the business is venturing into a new market where users can have no information or don’t use the product of that particular product. The best way will to first focus on non-customers. These are the people, who don’t know about your products, they are the best target since they swayed by the advertisements, and the marketing strategies of sensitization. The RBI has shown this evident by being able to penetrate in the Gulf areas and came out successful. Positioning themselves strategically in a central place where there are possible market gaps where people require fast foods. An example is in a city center where people are busy, and fast food is the only option for them, and also creating and capturing the new demand. Creating a high, demand is possible by the provision of the goods and services are of high quality. The best thing about blue ocean strategy is that they can help create a new market venture of a place that has not been yet realized and also establishing a brand where there is none. Compared to red ocean strategy, this approach gets no competition, and it can set its prices comfortably without adjusting anything due to the absence of rivals who can try render the effort futile (Mauborgne & Renee, 2015).

In conclusion, RBI can turn out to be very successful multi-national owners of restaurants if they take the criticisms positively in a productive way. The SWOT analysis conducted has shown that there are more opportunities compared to strength and weakness and in PESTEL forces, they have to adjust to them since these are changing times and change is inevitable to all business, so they appear to be on a higher ground compared to the if competitors.

 

References

Elearn. (2008). Business Environment:Management Extra. Routledge.

Hoffman, A. J. (2000). Competitive Environmental Strategy: A Guide To The Changing Business Landscape. Island Press.

Mauborgne, W., & Renee, C. K. (2015). https://www.blueoceanstrategy.com/tools/red-ocean-vs-blue-ocean-strategy/. Retrieved from Blue Ocean Strategy: https://www.blueoceanstrategy.com/tools/red-ocean-vs-blue-ocean-strategy/

Resturant Brand International. (2016). About Us:2016 Sustainability Framework. Retrieved from Resturant Brand International: http://www.rbi.com/About-Us

SJSU Research Guides . (2017 , April 18). School of Management: PESTEL Analysis. Retrieved from SJSU Research Guides : http://libguides.sjsu.edu/c.php?g=230268&p=1528006

Venkatraman, N., & Ramanujam, V. (1986). Measurement of Business Performance in Strategy Research: A Comparison of Approaches. Academy of Management, 11(4), 801-814. Retrieved from http://amr.aom.org/content/11/4/801.full