Tim Hortons Business Analysis

Tim Hortons is a Canadian fast-food company that owns a chain of fast-food restaurants that serve coffee, doughnuts and other fast food items. The multinational company, founded in 1964, has stores serving markets in North America and Europe. Tim Hortons competes in a highly fragmented and competitive market. It is a company that dominates the Canadian market and seeks sustainable growth in the markets it operates in globally. Tim Hortons has a strong brand that competes with global giants in the fast-food industry and has managed to hold up an impressive competitive advantage through the years.

5C Analysis

1. Company: Tim Hortons offers primarily groceries, but has diversified into multiple other product categories. Tim Hortons has been in operation for over 56 years, and for many people in Canada, the Tim Hortons name is synonymous with fast food stores that offer coffee and doughnuts to its customers. Tim Hortons seeks to improve its presence in both domestic and global markets, as well as strengthen its online presence.

2. Collaborators: Tim Hortons sources its world-famous coffee from suppliers in coffee-producing regions such as Brazil, Colombia, Guatemala and Honduras with 3400 farmers. The company also manages a full internal staff of over 100,000 globally. Tim Hortons has also had store partnerships with companies such as Wendy’s and Cold Stone Creamery which saw them share store space with these retailers.

3. Customers: Tim Horton’s customers are primarily based in Canada and the U.S., but serve customers from around the globe. In 2014, the company held a traffic market share of 47% in the Canadian market. Tim Hortons customers expect convenience, value, and quality service.

4. Competitors: Tim Horton’s primary competitors are Starbucks, McDonald’s, and Dunkin’ Donuts all of which compete for Tim Horton’s spot as Canada’s largest fast-food chain. Starbucks had over 23, 305 stores in 2014 globally, and benefits from a good brand presence globally and a wide variety of its coffee products. McDonald’s has a larger number of stores than any of the competitors and a much broader global presence with over 35, 000 stores, but is not a market leader in the breakfast category that Tim Hortons dominates in the Canadian market. Duskin’ Donuts can be considered to be the least threatening of the competitors that Tim Hortons has in Canada as it largely exited the country in the early 2000s, leaving only but a few locations in Canada.

5. Climate: With shopping trends heading towards online shopping, Tim Hortons is working to expand its presence in online retail and diversify into other product offerings in its stores. The increased use of online to purchase breakfast fast food by customers pressures Tim Horton’s to be an early adopter of new technologies.

S.W.O.T Analysis

Strength

1. Tim Hortons is Canada’s biggest fast-food company with over 4500 outlets in its founding country, Canada, and 800 in the United States of America.

2. In 2014, the company was acquired by global fast-food company Burger King through a deal signed with Brazilian venture capital 1, allowing it to also become a big global player in the fast-food industry.

3. Tom Hortons enjoys a great presence in its market enjoying about 27% market share in the Canadian market.

4. The workforce of the company is well over 100,000 globally.

Weakness

1. Tim Hortons does not appeal to the health-conscious market that is growing in its markets.

2. Tim Hortons does not have a strong global presence.

Opportunities

1. Tim Hortons has the opportunity to venture into new markets in places like Europe and Asia.

2. The company has the opportunity to leverage its brand power to capture a larger market share.

3. The company also has the opportunity to venture into serving the evening snack market that buys quick food in the evening, mostly consisting of younger consumers.

Threats

1. Tim Hortons is threatened by strong market competitors that have a much stronger international presence and broader menu offerings.

2. Another threat that the company faces is the growth of a health-conscious consumer segment.

Strategy Formulation

The issue that Tim Hortons is facing is the challenge of tough competition in domestic and international markets.

In order to formulate a strategy in response to the issue that is faced by the company, it is important for one to consider both the internal and external environments in which the business operates. Once the company has analysed these environments, it should then align all of its efforts and decisions with the overall goal(s) that it has set out to achieve; in this case, to achieve sustainable growth. It can be drawn from the case study that in order for Tim Hortons to be able to overcome its challenge of tough competition domestically and internationally it has to consider its competition and the resources that it possesses. It is important to be able to align the goals of the organization of providing sustainable growth to its shareholders with its resources.

Strategy Implementation

In the application or implementation, of the strategy that the business decides on, it becomes vital for the management of Tim Hortons to put in place drivers that will assist the organization from top management down to the bottom-level employees to work towards achieving its goal of running a financially sustainable business. These drivers could be in the form of reward systems put in place for the achievement of goals, correct allocation of resources to problems, and management structures that are efficient in dealing with problems as they arise. In the case study, Tim Hortons set out to achieve goals that were based on financial growth, transitional investments and the opening of more store locations. In an effort to achieve these goals, it would very important for the company to break down the goals into smaller goals that can be tracked and evaluated in a shorter term.

Closing

Tim Hortons is a legacy business that has stood the test of time and is still relevant in its industry. It is a business that can be scaled to become a global competitor that enjoys great support with the application of the correct strategies and practices.

Works Cited

Reiger, F., Benade, J., & van Niewenhuizen, P. (2015). Strategic Management for Media Enterprises. . Cape Town: Edge Learning Media.