A Strategic Analysis for Tim Hortons

A Strategic Analysis for Tim Hortons Presently, Tim Hortons is regarded as the leading publicly traded restaurant chain in Canada. Not only is it Canada’s leading quick-service restaurant brand but also the fourth largest publicly traded restaurant chain in North America based on market capitalization. They have the number one market share in breakfast and snacking day parts and a solid number two share in the lunch day part in Canada (1). However, Tim Hortons needs to pay more attention towards their growth and development into U.S. and other markets worldwide in order to become a true spearhead in their industry. Moreover, they can lessen the risks related with expansion by engaging in partnerships with other successful firms. Analysis/Rationale Although, as mentioned above, Tim Hortons is possibly the leading publicly traded restaurant chain in Canada, it enjoys its success due to its inhabitation of a much smaller market in comparison to markets in U.S., India, and China. To be the best of the lot, Tim Horto ns cannot exclusively depend on a single market. In this day and age, there are solid opportunities for them to become the world’s best, through new emerging markets with high probability for huge profits. There are increasing trends of coffee drinkers in China and India, two countries with enormous fondness for Western style drinks and meals and Tim Horton’s expansion in those countries will play to their advantage. That is the main reason why McDonalds, the equivalent quick service restaurant industry to Tim Hortons, is earning massive profits from both China and India. Entering into partnerships also ensures that the firms are able to share the risks of failure; thereby reducing their burden. Thus, the partnership of Tim Hortons with Kahala Corp is a great idea, since it links together both Tim Hortons and the Cold Stone Creamery concepts stores in U.S. In this situation, with the benefit of sharing risks of failure; in Kahala Corp, Tim Hortons have a partner who ha s enough knowledge about the U.S market, and how it works. Similarly, Tim Hortons need to ensure that they engage in further partnerships with other firms with the purpose of offering fresh and innovative Tim Hortons products that consumers are able to purchase outside of Tim Hortons stores. This move will evolve their brand image and their competitors will feel increased competitive pressure. Even with the motivation to expand globally, financing will be a tough challenge for Tim Hortons. Financial investments and cash are vital components needed to develop their brand image in other countries; however these investments can also turn out to be extremely risky. For that reason, engaging in partnerships will reduce their financial load and the overall risk. It is also very crucial for Tim Hortons to find vastly reputable and ethical firms to be linked with, since their image will be tied with those firms. Integrated Strategy The expansion of Tim Hortons should happen gradually with a ccuracy and precision. Since they already have a solid market share and leadership position in Canada, they need to form reasonable objectives and not have an enormous anticipation during the course of their global development. The strategy which Tim Hortons needs to follow when entering into China and India is broad differentiation strategy, due to the massive population. Majority of population in these two countries consist of people with low income; though it also holds a growing middle class. Attracting a wide range of customers and buyers would prove much more profitable for Tim Hortons instead of simply appealing to a niche market. So far, this approach has been effective for them in Canada, and it may as well assist them in foreign markets. However, substantial research of their prospective customers’ values, lifestyles and beverage preference must be completed before Tim Hortons enters into these new markets. In order to satisfy majority of the consumers in foreign ma rkets, items offered such as coffee, baked goods, other hot beverages, and meal items need to be redesigned according to consumers’ needs and fondness in the region/country they are living in. For instance, Tim Hortons should stock wide variety of teas and additional milk beverages in India, since majority of the people like to drink tea and other milk based beverages in that country. Moreover, not stocking up on breakfast items will lessen costs, since there isn’t a breakfast eating routine in India. Most people just drink tea there in the morning. Thus, this reduction in costs due to the lack of breakfast items in stock can be shifted to other areas.