Restaurant Brands International (RBI) SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Accelerating franchise expansion across markets: As part of RBI’s development approach for their brands in the U.S., RBI has granted limited development rights in specific areas to franchisees in connection with area development agreements. As part of their international growth strategy for all of their brands, RBI has established master franchise and development agreements in a number of markets. For Burger King and Tim Hortons, RBI has also created strategic master franchise joint ventures in which they received a meaningful minority equity stake in each joint venture. They will continue to evaluate opportunities to accelerate international development of all three of their brands, including through the establishment of master franchises with exclusive development rights and joint ventures with new and existing franchisees.

2. Ever-growing global Quick-service restaurant (QSR) industry: As per RBI’s May 2019 Investor’s Presentation, the projected values of compounded annual growth rate (CAGR) for the time period calculated from 2018 to 2023 for the main food item (coffee, bakery, chicken and burger) of the quick food service industry is significantly high. For coffee, the net sales in QSR industry as on December 31, 2018 is $64 billion, which is subjected to increase with a CAGR of 5.9%, to become $85 billion by 2023. Similarly, for bakery, with a CAGR of 4.8%, sales are going to increase from $118 billion, as on 2018, to $149 billion by 2023. For sales of chicken amounting to $72 billion in 2018, with a CAGR of 6.2%, it is going to increase to $98 billion by 2023. And finally, for the most consumed fast food which is burger, with a CAGR of 4.9%, sales are going to increase from $204 billion, as of 2018, to $259 billion by 2023. Net sale of these four items combined is subjected to increase from $458 billion, as on 2018, to $591 billion by 2023. Hence RBI has a lot of growth opportunities in the global QSR industry as the demand for quick service food is on an increasing trend all over the world.

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Environmental issues impacting restaurant business: Currently, there is an increased focus by U.S., Canadian and international governmental authorities on environmental matters, which is likely to lead to new governmental initiatives, particularly in the area of climate change. As per RBI’s 2019 Annual Report, RBI deals with various laws concerning the handling, storage and disposal of hazardous materials and restaurant waste and the operation of restaurants in environmentally sensitive locations which generally do not have a material effect on RBI’s capital expenditures, financial condition, results of operations, or competitive position. Though RBI cannot predict the precise nature of these initiatives, still they can expect that these initiatives may impact their business both directly and indirectly. There are possibilities that government initiatives, or effect of changes in weather patterns, climate or water resources could have a direct impact on the operations of RBI’s brands in ways that they cannot predict.

2. Promoting sustainable forest management practices: Companies like RBI have a major role to play in promoting sustainable forest management practices and are followed within the industry. The global operations of such companies along with their complex supply chain make it essential that they take steps to eliminate deforestation causing actions. RBI has already made a commitment towards ending deforestation and sourcing materials responsibly. Its fiber-based packaging materials are procured from certified sustainable or recycled sources from 2020. The company also aims to have all the palm oil and palm kernel oil used in its branded products to be sourced from suppliers who can prove sustainable production methods.