Introduction: Tim Hortons is currently the largest fast food restaurant chain in Canada that provides a variety of products that appeal to a broad range of consumer preferences at relatively low prices. It is the fourth largest publicly traded quick service restaurant chain in North America based on market capitalization. (pg3) The quick service restaurant industry is continuously growing and its competitive level has increased globally. Tim Hortons operates 4,546 franchised restaurants worldwide.
It has been profitable over the past 5 fiscal years and has maintained a steady net profit margin. Tim Horton has been able to adapt to changing lifestyle trends by introducing new product innovations. The following report will demonstrate a detailed outline of the internal and external factors within the quick service food industry. The data gathered will talk about the concerns within the company. There will be alternatives and recommendations in how they can implement brand awareness.
Analysis: Throughout the report the main that is evident within Tim Hortons’ internal and external analysis is brand awareness. The brand is popular only within the Canadian border but franchise locations outside of the Canadian border did not perform well leading to closing down stores. Growing their market existence and expanding brand awareness are key issues that need to be accessed. Since Tim Horton became the largest quick service restaurant chain in Canada, it has the opportunity to expand to the global market. Recently, they have merged with Burger King, one of McDonald’s top competitors.
Tim Hortons can benefit themselves by taking the opportunity to hit ambitious growth targets and international expansion, as Burger King’s global experience could help increase its brand reputation and sales. The analysis on page Porter Five Forces suggests that the industry is attractive with strong competitive forces. The company needs to pace up with its competitors and implement new strategies to maintain the level in which they currently stand. The quick service food industry has a high failure rate due to rivalry in the industry, therefore a company should always be watching out for competitive advantage.
If not, the company won’t be as successful. One important factor driving forces shows is that as demographic and consumer related trends change in the food industry, so does taste for consumer. This is where Tim Hortons should mainly focus and capitalize on, which will help succeed them into higher growth rate. Although the financial statements indicate the company is doing well based on their revenue, there are a lot of possibilities to distinguish themselves within the market leaders. Based on the competitive strength analysis, this demonstrates that there are many competitors in the quick service restaurant industry.
Although each company has their own distinguishing competitive advantages, the objective and competences for all are quite similar Tim Horton’s is obviously not as well off as their competitors. They need to improve their brand awareness globally, which would give them the opportunity to expand to more geographic locations. The key success factors indicates that pricing strategy is one of the key important factors in this industry. Tim Horton has continued to adjust their menu items to reasonable prices to meet consumer preferences, thereby making them remain competitive.
Without this strategy, by increasing prices, profits will decline and competitors in this industry will target Tim Horton consumers in an attempt to redirect them to their stores. Based on the financial analysis, the company revenue has increased. However, Tim Horton is making a portion of that in comparison to competitors’ revenue. By implementing a successful strategy to bring brand awareness, the firm will be able to produce more revenue. Consequently, there is potential to move quickly and efficiently to bring Tim Hortons’ iconic Canadian brand to a new global customer base.
The company has the ability to grow their competitive growth, but in order to do so, they must extend their reach further by more effective advertising methods. Based on the quantitative and qualitative assessment, Tim Hortons demonstrates strong business strategies that can help them grow as a company. Some of the business strategies include the merger with Burger King, the 3rd largest fast food restaurant around the world. Tim Hortons has the potential to endure their competitive growth; however, in order to accomplish that they would need to formulate a marketing strategy to remain competitive.
In section 2. 1, Tim Hortons demonstrates poor weighing in relations to brand awareness compared with its industry rivalries such as McDonald’s and Starbucks. The company must articulate a method of marketing plan outside of the Canadian border in order to continue being competitive within the industry, and represent its brand in the global market through its expansion. The final section of the internal analysis offers supportive factors for the issues that require managerial consideration. Below are the three alternatives that Tim Hortons should implement which will be covered in detail.
Alternatives Alternative 1: Use technology to improve strategic development The quick service industry has high level of competition and in order to attract global customers they should find new method to gain their attention. Tim Hortons should further advertise using different social platforms such as (Twitter, Facebook, Youtube Advertisement, Instagram). Everything now involves some sort of Social Media and this can really attract new customers. By having customer engagement through social platform this can benefit them as they get feedback in how they are doing in the industry.
Major companies such as Telus has been known to implement such strategies. This strategy will help Tim Hortons improve their sales and focus on word of mouth marketing. Another possible strategy to implement can be the use of mobile app as part of their customer loyalty program. Being connected with customers on their mobile device can help Tim Hortons be known and it makes it convenient to promote their weekly sales and specials. By introducing the app, customer would have to input their personal information. Given the data Tim Hortons can determine where the major sales are and can keep track of customer’s preferences.
The marketing scheme must concentrate on items and feature that are successful in attracting customers. PROS CONS • Broaden market share globally • Expanded Growth • Opportunity for more partnership. Have to invest in it, expensive • If the strategy does not work, then this will be an added cost • Hacking , would need strong security from preventing hacker Alternative 2: Re-engineering their menu Tim Horton’s should pay close attention to consumer’s preferences on their menu. As consumer related trends change so does taste.
They should implement more lunch and menu products so this gives consumer to drop by to grab something during their meal time. Many customers are focusing on catering to healthy meal option that are affordable . However, they should develop a new idea with packaging products, in ways they can increase the number of items purchased which generates revenue. Pros Cons • Customers will be attracted to Tim Hortons due to low cost in products • Aligned with its core competency • Takes time and money to bargain with suppliers • Research & Development is expensive • Will have to change menu worldwide which is added cost
Alternative 3: Restaurant Formats and Sizes Next alternative for the company to create brand awareness is through their reach through new restaurant arrangements and sizes. By having locations near popular visited area this should promote their brands. Areas such as the international airport, tourist locations, big offices, sports venues and hospitals can help extend it brand reach. Also they should consider changing the interior and exterior design, and implement new use of technology at their franchise. Having the customer feel welcoming is important criteria. This will increase the likely hood for customers to visit the restaurant back
