Tim Hortons Case

This strategic report is to analyze and study Tim Hortons Inc., a Canadian company formed in 1964, in Hamilton, Ontario. The company is the leader in the quick service food industry in Canada, as well as one of the most recognized brands in the nation. The company has finalized negotiations for the acquisition by G3 capital, an investment management firm. The chain restaurants operate in the quick service industry in multiple countries, with majority of the restaurant traffic occurring in North America. Tim Hortons most popular product is the premium blend coffee; additionally the store locations sell various coffee based drinks, baked goods, snacks, and sandwiches. There is rising competition in the quick service restaurant industry, as well

is a very well known brand in Canada, though outside the nation the restaurants are not up to par in consumer recognition. As outlined in Appendix[B], point 4.3, the company has the least global restaurant locations than all of its main competitors, as well as only 859 locations in the United States. Some analysts consider that Tim Hortons reached its saturation point in its domestic market, with 3,588 locations in 2013. This means that the company has limited growth opportunity if it decides to focus mainly on the Canadian market. The quick service restaurant chain has had trouble in the United States, having to close down underperforming locations (Appendix[B] point 2.3); additionally, the sales growth in the United States was only at 1.8 percent in the U.S. in 2013, much lower from the target growth of 3 to 5 percent. Brand presence as well as competitiveness are the biggest challenges for Tim Hortons in the United States. The company is also falling behind its main competitors in European presence, mainly McDonalds and

could consider in order to grow their future sales growth, eventually catching up to the competition. The company needs to refresh their U.S. plan to gain consumers in that area. Essentially a modification to the menu choices offered only in the States could be a starting point. Many Americans are patriots, but I think they would gravitate towards Tim Hortons restaurants if they offered menu items with an American edge to them. The negative aspect to this strategy would be the potential backfire from the Canadian consumer, who takes pride in the company being solely Canadian. The young adult generation is gaining purchasing power in North America (Appendix[A] 2d), and are also the main demographic segment that prefers to purchase snacks throughout the day. Appealing to the social trends of younger people is crucial in order to supplement the company’s future sales growth. With the generation being the most technologically adept and involved, Tim Hortons Inc. must utilize a social media campaign customized solely for the United States quick service restaurant market. Additionally, the company could benefit from the development of a smart-phone application that would utilize the convenience of paying with your mobile telephone, as well as keep track of the available loyalty rewards. Another alternative that could help Tim Hortons gain brand recognition in the United States could be branded mobile stores, such as coffee