Strategic Brand Improvement for Tim Horton for Global Competitiveness

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StrategicBrand Improvement for Tim Horton for Global Competitiveness andProfitability


TheCanadian Tim Hortons Inc. (TH) has gained popularity and achieved alarge-scale status through the effectivemarket, customer services,and production strategies, thereby becoming the leadingcoffeeand doughnutseller in the country. Despite the presence of strong brands such asStarbucksand Wendy’s,Tim Hortons has maintained its leadership for long. One strategy usedis an expansionto new markets by the establishmentof numerous stores and kiosks in the country,leaving its competitors behind in both performance and productivity.The company has great responsibilities to remain strong in themarket,andthis has necessitated its strategies over the years. However, recentstudies have established that the company needs a newstrategy as expansion has poseda threatto both its existence and sustainability. In achievement of effectivestrategy, this study hasinvestigated Tim Hortons’s strengthsand weaknesses both internally and externally. The most viablestrategy outlined is a reviewof the menu and its brands. However, if this fails, further researchis recommended to achieve the most viable contingency plan.

Keywords:Tim Hortons, Internal, External, Analysis, competitive advantage,financial performance, alternatives, SWOT, PESTLE, CanadianFranchise.


TimHorton Inc. fast food chain was founded in Hamilton, Ontario in 1964by both Tim Horton and Jim Charade as stores for selling coffee andburger. Horton was a popular hockey player in the period between 1960and early 1970s while his co-founderwas an investor (TimHortons Inc, 2013).However, the ownership of the chain stores shifted to Ron Joyce afterthe death of Tim Horton in 1974. Since then, the company grew toreacha multimillion-dollar business level by 1990s (Orr,2013).The firm marked tremendous growth and expansion in the period between1992 and 1995, with marketpresence in about 3,600 locations in Canada and other US towns(Broadway,2014).Also,it engaged in merger deals with Wendy’s fast food business in 1995in attempts to dominate in coffee, pastry,and fast food industry (Broadway,2014).According to Researchand Market Report(2014),the company’s growth and profitability occurred through improvementof menus and penetrating international markets. Consequently, thecompany improved with a growth rate of more than 40 percent between2008 and 2012 (Researchand Market, 2014).However, in the following years, the business began to facecompetition from new and old business operating in the same lineincluding McDonald`s, Starbucks and Dunkin`,leading to the significantdecline inthe company’s shares to an unsatisfactorylevel. Thisnecessitated a strategy for expansion not onlyfor survival but dominance in the USas well.

Company’sCurrent Strategy

TimHorton’s strategy for competitive advantage and profitability hasbeen to expand into new markets in US, Canada, and internationally(CanadaNewswire, October 2015).In addition to the need for eliminating its rivals in the industry,the restaurant strategy is greatly influenced by the increasedconsumption of coffee in Canada and the US in the past ten years.“Canada:Food and Drink Report” (2017)explains that more than 63 percent of Canadian use coffee daily whilea significant proportion usesit occasionally. A report by PRNewswire US (2014) confirms this by revealing that onaverage, Canadians takes about 2-3 cups of coffee every day. Thisreveals that unlike the old times when coffee was only for breakfast,average Canadians nowadays take coffee even during the day at work,out in the park, military activities, and in public institutions. Asa result,the market for coffee has increased.

TimHorton`sobjective is to provide services and products of superior quality toits customers and community they operate through leadership andinnovations. Also,it aims at becoming the leader in the industry that fast foodrestaurant operates (CanadaNewswire. (2014).To achieve this objective, Tim Hortons have focused ontheprovisionof premium coffee and fresh baked goods. Moreover, the prices forthese products are kept lower than those of the rivals to beattractive even to new customers (Tim Hortons Inc, 2013).Nonetheless, despite these efforts, the rival’s businesses havegained popularity and significantly reduced Tim Hortons market shares

Althoughthis strategy worked as supported by increased company’s presencein many US towns and several merger deals with firms such as coldstone and burger king, the last ten years are marked by growthchallenges as it rivals become strong in the market.Before, the restaurant had 41 percent of the shares in the quickservice sector and about 78 percent of the coffee services in Canada(RestaurantsIndustry Profile: Canada, 2015). Thesemarketshares have reduced due to the growth and expansion of itsrivalbusiness. Also, although Tim Hortons menu hasbeen offering good products atlow prices, Research and Market (2014) acknowledge that it doesnot donot offer enough options beyond coffee and burger. On the other hand,its rivals particularly Starbucks and MacDonald have a widerange of choices for their customer. Thisconfirms why the restaurant requires an effective strategy forprofitability and sustainability.

Thebest strategy to achieve the desired objectives would require beingimplementedin business level. The reason for this is that it might be easy toinduce changes within the organization than manipulate the market.For example, there are several options achievable withinorganizational levels such as adjusting prices, increasing thechoices on the menu, and improving the services provision tocustomers. Consequently, such changes can have significant impactson business resilience and continuity, profitability, and growth.


Currently,Tim Horton fast service restaurant is leading other businesses inCanada including MacDonald’s and Starbucks. The company hasfocused on a variety of products at relatively lower prices toattract customers. More importantly, its strategy of expanding in newlocal and international markets has pavedthe way forits success. Although this expansion was well calculated and about$664 million spent, the company is yet to recover (CanadaNewswire, October 2015).In fact, some business research teams have reported that Tim Hortonis about to retreat for it cannot open more stores in Canada (Canada:Food &amp Drink Report, 2017). Thisrepresentsa significant threat to the chain store the same time its competitorscontinue to gain advantages. Also,Tim Horne hasfailed to provide attractive varieties as McDonalds and Starbuckshave included in their menu in the past years (PRNewswire, January 2017). Tim Horton, therefore, requiresreviewingboth its menu and pricing as a way of developing sustainablestrategies for a competitiveadvantage over the rivals and profitability.

ExternalAnalysisDefinition,Structure, and Trend

Therestaurantindustry in Canada comprises of hotels, fast food joints and thoseproviding coffee and doughnuts such as Tim Hortons. In the recentyears, this industry has faced growth lag as well as the closingof firms such as Mark Liberman`s AQ Restaurant(RestaurantsIndustry Profile: Canada, 2015).Also, this industry featured by many influential companies andtherefore increased competition. Evidently, companies such asWendy’s, Starbucks, and McDonald have developedestablishing their presencewidely not only inCanada but also in other states. Luckily, no company hasestablished a monopolyin the industry(PRNewswire, 2014),but in consequence, the growth rate of each company operating in thisindustry ischallenged.The reason tor this is that every company is trying to increase itsmarket shares. Also,Canadian industry is fragmented and requires low start-upcapital (Maze,2014).Thismakes it easy for new entrants to operate and this means there isasignificantthreat to Tim Hortons.

TheCanadian consumer population exhibits different tastes,particularly when choosing between vegan and ethnic food choices. For this reason, a company’s products can have many substitutes,as well as increased opportunities for new firms to enter the market(Orr,2013).Thisexplains the reason for the current challenges facing Tim Horton dueto its menu’s lack of variety options for the customers. Worse,other businesses such as groceries in Canada pose threats to therestaurantindustry,while the Americans perception of food is changing (Researchand Market, 2014).Specifically, the latest trend observable in the Canadian populationis a beliefin home cooking rather than eating out in a restaurant. Consequently,demand for products like doughnuts and coffee have declined whilethat of vegetables and the uncookedmeal has increased. Finally, the trending online groceries andeateries or dinners integration with large mall or supermarket havereduced demand for the products provided by Tim Hortons and othersimilar businesses.

TheMacro-environment (PESTEL)

Themacro-environment of Canadian restaurant industry comprises ofsignificant political, economic, social and technological factorsthat dictatehow businesses such as Tim Hortons operates. These factors arereviewed below with a specialfocus on their influence onTim Horton`scompany.

Political/legal.The way businesses such as Tim Hortons and Starbucks produce and selltheir products have become subject to high quality and safetyrequirements. Specifically, they are expected to comply with qualitystandards and other applicable laws in the foodindustry (Canada:Food &amp Drink Report, 2017).In coffee business, firms focus on selling fair trade coffee as a wayof differentiation their products from those of their competitors.For instance, Tim Hortons use coffee beans that are 100 percent FairTrade Certifies to preserve the quality, safety, and enjoyment of itscustomers (Maze,2014).Also,operating in restaurant industry requires compliance with taxation,employment, and environmental regulations, all of which they tend tobe favorable to Canadian businesses.

Economicfactors. There before, the restaurant industry maintained consistent growthin the Canadianmarket (Maze,2014).In the recent years, however, this growth has been reduced byeconomic fluctuations, income, and cost of things such as coffeebeans. Specifically, the downturn of 2008-2012 saw the industrystruggle through high inflation, interests and exchange rates(Canada:Food &amp Drink Report, 2017 Research and Market, 2014).Luckily, the current trend in a coffeesegment of the industry is growing both in local and internationalmarkets. This growth, however, hasattracted high competition while the price of coffee beans keepshiking.

Socialfactors. The greatest concern in the restaurantindustry is conformity to the social systems,and this enables a business to gain a goodreputation and perfect image. Specifically, operating in thisindustry requires businesses to pay attention to religion, cultureand consumer behaviors (Researchand Market, 2014).The current social trend in the industry is health,and most people seek fresh drinks such as juice, tea or coffee. Thisexplainswhy Tim Hortons focus on providing fresh drinks and doughnuts as awayof respecting social profile.

Technology.Modern businesses are never complete without technological factors.In this industry, there is invention particularly in designs ofcoffee machines and other equipment. The reason for this is thatsome beverages require high technology to maintain freshness andsafety (Maze,2014).Also,these should improve efficiency, competitiveness, and strategyimplementation (Researchand Market, 2014).A business should consider utilizing technology to strengthenbarriers to entry or their competitive advantages, achieve corporateresponsibilities and facilitate effective communications

Environmentalfactors.In the past two decades, the environments for making and servingcoffee have changed as many businessesprefer more clean and aesthetic surroundings. As for Tim Hortons,enabling an environmentfor the customer is a guided by policies of recycling, greenstructures,and waste reduction (Orr,2013).For McDonald`s,the green logo symbolizes its commitment to environmental protection,conservation,and sustainability (Researchand Market, 2014).In consequence, customers are attracted to pleasant environmentswhile operation costs are kept low.

IndustryEnvironments (Porters Five Forces)

Thesituation in the Canadian fast restaurant industry ischaracterizedby strict competition between several businesses, the entry andsuccess of new firms, and both buyers’ and suppliers’ bargainingpower.

Rivalry.There exists rivalry from service restaurants with key players beingMcDonald`s,Wendy’s Tim Horton, Starbucks, and Coffee Time (Researchand Market, 2014).Although Tim Horton has been the leader inthe market, other firms such as MacDonald have gained competitivepressure through the provisionof breakfast and coffee products. Also,McDonald`srecently have focused ontheprovisionof superior quality coffee,and snacks for almost same price as Tim Horton (Broadway,2014).On another dimension, Other young firms such as Country Style andCoffee time have been copying the leader’s strategies in thepromotionof their brand,and this haseffectively gained themmany customers. Despite their efforts to imitate the strategies, Tim Horton remainsthe leader with the greatest proportion of market shares.

Easeof entry.As mentioned earlier, entry of new firms in the Canadian restaurantis easy particularly due to less capital required, politicalatmosphere and flexibility of consumer tastes (Broadway,2014).However, even if it is easy to enter the market, the competition isstiff,and the marketmay control itself particularly because it is not easy to achievehigh-profitmargins with the currentnumber of players in the industry.

Substitutestrengths.In a general case, the strengths of substitute companies such asgroceries and malls that have been offering fast restaurant servicesor alternatives to coffee and doughnut arelow due to the organic nature of these products.

Supplierstrength.Tim Horton`sbargaining power is high due to the high number of suppliers ofcoffee beans. Also,it has connected with coffee farmers in SouthAmerica as a way of getting quality coffee beans for their customer(Maze,2014).For these reasons, the company can change its suppliers freely.

Buyers’power.In the restaurantindustry, the buyers have more power than the suppliers since thereare many firms selling similar products (Maze,2014).Thisexplains why the prices for coffee and other products have remainedrelatively low and almost uniform in all companies. Instead, allthese companies tend to acquire many customers through brandimprovement, menu expansion,and quality.


Themarket in which Tim Hortons operate issaturatedin two different ways. First, it shares the marketwith other coffee and doughnutcompanies such as Starbucks Corporation, Dunkin’Brands Group, Inc., Wendy’s, McDonalds’s, and Grouped`Alimentation MTY Inc. According to a reportpublished in Forbes magazine, Tim Hortons has 75 percent of shares,double the shares McDonald`shas in coffee market and about 70 percent shares of baked products inCanada (Maze,2014).Thismakes Tim Horton have the largest dominion in the market, yet Canadais the largest market for Starbucks.

Althoughcustomers may want to shift from one company like Tim Hortons, toanother like Starbucks, it is difficult because Tim Hortons iswell established.Also,Tim Horton has many outlets than other firms,and these enablethe company to hold themarket stronglyfor coffee thereby preventing the influentialestablishment of other companies. For this reason, customers wouldrequire a strong reason to change their coffee supplier. Such reasonmay be a reductionin prices of breakfast item since Tim Hortons’s are relativelyhigher.

Throughcost reduction, firms such as McCafe can penetrate areas Tim Hortonshas majority shares easily. Another factor that anenable other firms to gain larger marked than Tim Hortons isdiversity reflected on their menus. Evidently, McDonald hasgained a significantproportion of market shares in the last decade through this strategy. However, some incidences such as the closureof its Russian stores and low performance in Chinacaused by the previous China Meat Scandal have significantly reducedits shares in Canada. Consequently, Tim Hortons has gained moreshares leading to its market leadership status.

Theother way market is saturated can be observed through numerous thefirm has opened leading to competition within stores. For instance,Tim Hortons has 4,700 coffee and doughnut shops across Canada (Maze,2014).Althoughsuch numberof stores has helped the company establish influence in the market,they compete against each other,and this can increase the cost of operation, thereby giving otherfirms to do well.

TheForces Driving the Industry Change

Thefirm’s ability to grow in the industry depends on its ability toadaptto external forces such a technology, social structures, and fairtrade trend. For instance, firm’s ability to adaptto new coffee makers in the preparationof coffee can increase its efficiency in resource use and improvecustomer services. Also,innovations such use of mobile phones and website to engage and reachmore customers is important. In this case, a business may change itsaspects to enable the useof technology in serving the customers. The social structures suchas busy lifestylecan induce changes in the industry and firms towards growth andexpansion. Particularly, people who are always active may lack timefor making coffee at home and instead opt to grab a coffee from astore as they drive to work. Other drivers include customer loyalty,timely delivery of orders and need for quality.

TheKey Success Factors

Inthe restaurantindustry, there isawiderange of factors that determine the success of a company. For the TimHortons, these factors include their location, brand reputation,costs, customer services and market shares. For instance, Tim Hortonstargets larger population and geographic coverage through theestablishmentof many storesand selling its products atlow prices. Also,its brand is trusted by customers as a symbol of quality regardingproducts and customer service.


Theindustry in which Tim Hortons operates ishighly saturatedsince the entry into the marked is not challenged. More importantly,other factors suchas political, environment, social, andtechnologyarefavorableand attractiveto potential investors. There are, however, significant factors forgrowthand expansionsincludingtechnology and friendly communities. Furthermore, specific businessstrategies such as location, pricing,and brand differentiation are the key factors to outstandingperformance and growth in the industry. However, under the criticalanalysis of the industry, Tim Hortons needto rethink its strategies. Before the discussion on recommendedstrategies, understanding the internal forces within the business isessential.

CompanyAnalysisMission,Vision,and Objectives

Thevision and mission’s statements are highlyinfluential tools in TimHortons’s operations and practices as they act as the drivers forcompany’s change and growth. Tim Horton’s mission is to deliverthe best quality of services and products to its customers and guestthrough innovation, partnership,and leadership (Petrycki, 2015). It reveals the company’sconnective approach to its commitment totheprovisionof superior quality products.

TheVision of Tim Horton is to be the leader in all things it does. Thisincludes leadership in the local and global market, in the creationof customer satisfaction, and cooperate responsibility projects(Philp, 2014). More importantly, this statement reveals what TimHorton is,and its intentions(Hitt, 2017), andthis help keep the management, employees,and partners focused on the goals. Both themissionand vision statement reveals the company’s objective which is toprovide the competitive services at the best prices.

TheBusiness Model

TimHorton’s business model is unique and focuses on important levelsof real estate control and vertical integration. These two elementsof the business fromitsstrengths, advantages,and opportunities for success (Hitt, 2017). Also,they facilitate generation of benefits and value for its investors. According to Jung and Ha-Brookshire (2017), the model is about 99percent franchised leaving only a small number of corporately- runstores that they use for training its employees. Nonetheless,activities are integrated to enable the required growth andrelationship of mutual growth.

Resourcesand Capabilities

Financial.Tim Hortons has plenty of resources it needs for growth and expansionboth in local and global markets. The reason for this is that it hasa largeamountof capital and assets accumulated since its foundation in 1964. In2014, the company was estimated to have independent brands with about23billion systems in its restaurants in 100 countries worldwide (PRNewswire, 2014). More importantly, its acquisition by the Burger KingWorldwide which is part of Restaurant Brand Internationalincreases its financial capabilities in acquiring market leadership.

Valuechain analysis.Inthe past few decades, Tim Hortons Inc.hasestablished many stores in Canada and some parts of the US as amarketstrategy. The expansion has beencomplementedby the openingof distribution centers for that supplythe restaurants with dry, refrigerated and frozen products. By 2014,Tim Hortons had five distribution centers in Calgary, Kingston,Debert, Guelph, and Langley (Richelieu &amp Korai, 2014). Moreover,the company suppliesthese products to third-party distributors,an approach that helped serve the widely-distributed restaurantstores. Finally, Tim Hortons have coffee plants in Rochester andHamilton both for coffee roasting and quality assortment and one inOakville that isusedas a facility for fondant and manufacturing

Operationalanalysis.TimHortons operates everywhere in Canada as both full-servicerestaurants as well as kiosks located in places such as airports,hospitals, convenient stores, offices,and colleges. This strategy enables it to serve many its customerslocated in different places. Also,the company’s prices are competitive when compared to those of somecompetitors. For instance, the stores sell coffee at $1.29 whileStarbucks sell theirs at $2 per cup (Maze,2014).Moreover,the stores’ strategic locations make them easy to find.Evidently, these stores holdmore than 70 percent of market shares in the coffee industry.

Thefirm’s Brand has been another indicator of competency as itrepresents both quality and customers’ loyalty. Since about 51years ago, the company’s operations havebeen facilitatedby its adoption of technology and innovativeness in both coffeeproduction and service delivery (Maze,2014).Consequently, it has become part of the Canadian communities asdemonstrated in its campaign activities for customer reward andChildren’s Foundation programs. Particularly, these programs havecreated a strong link between Canadian communities and the brand(Orr,2013).Finally, the company employs and train skilled employees who arecareful in treating its customers, marketing of the brand, and in thepreparationof the products.


TimHortons’ competitive advantage originatesfrom several factors. These include the well-knownbrand name that distinguishesits products from those of rivals, and strongcustomer preferences (Broadway,2014).Second,its prices are the lowest when in comparison with those of rivals andthis has helped its entry into new markets in Canada and the US.Finally, the store’s strategic locations add advantages to thebusiness. In this case, it requires less marketing and advertising ofits stores.

StrategicAnalysis of Tim HortonsSWOTanalysis

Strengths.The main strength factors for the firm are affordable prices, thedensityof its stores, the iconic brand, and diversity of products listedonthe menu(Canada:Food &amp Drink Report, 2017).Also,the company is financiallystrongwitha 6.2 percent growth per annum in the past five years andonrevenue of $737 (CanadaNewswire, 2014).The business model particularly vertical integration of itssupply chain enables efficiency in service delivery.

Weaknesses.The main weakness is the low-costproducts and sometimes lack of different flavorsof their products. The other weakness is their numerous andconcentrated leading to self-cannibalismand profit reduction (CanadaNewswire, 2014). Consequently, long-termgrowth and expansion of the company arereduced.Finally, the fast food they serve isconsideredas not healthy especially in need for reducing diseases such asdiabetes and hypertension.

Opportunities.Tim Hortons can focus on filling the gaps that are sourcesof its weaknesses and slowed growth. For instance, the company canfocus in relocating its stores to reduce congestions. The company canalso review its menu to include different items of different flavors.Such strategy can increase customer satisfaction and willingness tobuy. The other opportunities areto expand into new markets in the US to achieve more market shares(Hitt,2017).Lastly, the company can engage in social mediamarketing and use of technology to reach more customers.

Threats.The greatest threat facing Tim Hortons is the competitionthat is stiffening each day. This result from lack of barrier to themarket. The company should,therefore,focus on addressing competition from both the competitors and smallcoffee shops. The other threat is pricing issues as some of itscompetitors such as McCafe are willing to lower their prices furtherto win. TH Unfortunately for Tim Hortons, cost reduction may reduceits profit below the pleasant levels.

StrategicIssues to Address

Basedon the SWOT analysis, Tim Hortons Inc. needsto address various issues including competition, price issues, avarietyof the menu, and the needfor expansion top new markets. Also,the firm should improve its brand through extended customer services,sustainable business practices,and corporate social responsibilities


TimHortons Inc should lay down strategies to address the issuesmentioned aboveas well as increase management practices and profitability. The firststep would be through Corporate social responsibility. Although thefirmhas the Tim Horton’s for Children Foundation (1974) Program thathasbeen instrumental in its giving back to the society and branddevelopment, it requires improvingby focusing onother segments of CSR such as environmental protection campaigns andHumanitarian services (TimHortons, 2014).Consequently, it will increase its popularity and engage manycustomers on the way.

Second,practicing sustainable management in all its stores. These can beachievedby using eco-friendly cups, sustainable coffee processing, wastereduction, and reduction of energy consumption. Finally, the companyshould focus on food safety and promote balanced diet through itsmenu offerings.

Also,the company should develop and maintain a corporate culture.Normally, the management, employees and team members achieve thisthrough the practice of best values and principles. Consequently,corporate culture promotes sustainable practices as well as therelationshipwith the customers and community at large (Hitt,2017).In this case, Tim Horton’s should work to ensure the employeesportray the best of behaviors when serving the customers orinteracting among themselves. According to Hitt(2017), thebest way of achieving this is by setting the values and principles,ethics and philosophies, policies, training requirements andoperation practices. Consequently, the employees will develop goodwork spirit and character that works for all while at the same timepromoting competitive advantage. Also,these will be handled down to new employees thereby inducing thesustainability of the business.

TimHortons need to ensure its company iswell structuredfor the best leadership formation and styles. The corporate sectioncomprising of managers, department leaders, ‘and executive officersis responsible for decision making, planning,and other sensitive matters. In this case, having the best corporateleadership will promote the restaurants activities throughdecision-makingprocesses. Also,Influential leadership ensures employees are motivated and guided byincreased performance, productivity,and profitability.

Finally,achieving all the above implementation of strategies requires properemployees training, policy structuring, the inclusionof reward and promotion guidelines, and collection of the bestpractices. These ensurestrategies and any necessary changes afterthatareimplementedsuccessfully.

Conclusionand recommendationCurrentStrategy and Issues

Currently,Tim Horton’s strategy for competitive advantage and profitabilityhas been expansion into new markets by opening numerous stores andkiosks in different institutions. Thishas been effective especially in grabbing markets shares in Canadasand other regions in the US. However, concentrated stores have posedthe problem of self-cannibalism that increases the cost and reducethe profit. For this reason, the company needsto look for other alternatives and implement the best.

AlternativesEvaluation Criteria

Infinding the best solution, the company should seek to increase itscompetitive advantage, increase the buyers will to spend, promotescustomers’ health lifestyle, and the brand development. Moreimportantly, the strategy should be cost effective, compatible withcompany’s practices, and profitable eventually. Focusing on thesefactors will help Tim Hortons utilize its strengths and capabilitiesin achieving the financial and marketing goals.

Theoptions available for the company are a pricereduction, review of its menu and entry into the new markets. Thepricereduction will help the company win more customers and increasedmarket shares. However, this option will reduce its profitability yetit is resource exhaustive (Petrycki,2015).Of importance to note is thatpricereduction may not change be a factorto the loyal customers of the brand. In fact, it may make them thinkthe qualityis compromised to achieve the new ratings. Reviewing the items TimHortons Inc. offers onthe menu is important in two different ways. First, it will helpinclude different flavors of coffee (e.g. black,white, and strawberry). Second, it will help the firm to offerhealthier foods such as non-fatty snacks. Consequently, customerswill be ready to pay for more of the products, while at the same timeattracting new customers. Also,it will promote a healthier society,and this can increase customers’ satisfaction and loyalty to thebrand. Such benefits of menu review will increase not only acompetitiveadvantage but also profit and revenue generation. Finally, entry intonew markets has demonstrated effective for the past one decade.However, it had its shortcomings for it is an expensive approach andrequires training of employees. Also, entering new markets can havechallenges especially in foreign countries.

Inthis case, menu review is the only can be the best strategy for TimHortons Inc.toimplement. Apart from being easy to achieve, it may not have asignificantcost or consume muchtime. The cost likely to occur will be in buying and preparation ofthe additional items on the list. Instead, it will only involveextended training of the employees on how to serve the additionalitems. Also, it is a short-term implementation strategy therefore nottime-consuming.The implementation of this step willinvolvethe management atthe decision-making level particularly on pricing and diet schedulesand the employees.

Alternatively,or incasethis menu review strategy fails,the firm can turn to the cost reduction strategy. Tim Horton Inc.can,therefore,review its prices regardingthose of other restaurants to get the lowest they can offer to theircustomers. Normally, customers are attracted by low prices especiallywhen the quality isnot compromised.By using this strategy, Tim Horton will gain new customers while atthe same time maintaining the old markets. Consequently, sales willincrease to the company’s desired level, a timewhen Tim Horton Inc. can now adjust the prices for maximum profit. Itis likely it will have acquired significant market shares as wellcustomer’s loyalty tothe brand. However, although cost reduction can help gain morecustomers, it may cost the company the customers who are loyal to thebrand. The reason for this is that it can be difficult to convincecustomers that low prices wereachievedwithout quality reduction. Therefore, the company should be carefulto ensure it maintains its customers who do not mind high prices butquality.


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