Similarities between Competitors and the Implications for Location Strategies

Although Burger King and McDonald's are widely recognized as direct competitors, there may be enough differences in customer profiles between the two chains to recommend or justify divergent location strategies. In this regard, the authors use ordinary least-squares (OLS) regression to test whether site and trade-area criteria can explain individual store sales and if such criteria are consistent for both chains. This research shows that there are situations where locational factors may have directionally different effects on store sales of the two chains. While Burger King generally experienced higher sales in denser urban areas with higher proportions of minorities, McDonald's experienced higher sales in suburban areas adjacent to freeways.