Letter of Transmittal
Tim Hortons launched in United Arab Emirates in December 2011, and they have been vastly successful ever since. Nonetheless, this report proposes a business growth strategy that Tim Hortons may implement in order to increase its market share for the sake of matching its competitors’ progress and sustain its growth strategy in the region.
Tim Hortons has built a prominent vivid image since its establishment in the UAE. However, it is time for it to grow in order to meet the fierce competition it faces, especially in its field. This objective can be met easily considering the fact that there are many opportunities to grow such as opening a branch in an uncharted area. Moreover, Tim Hortons offers a limited variety
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of drinks which it can widen by introducing extravagant new flavors in order such that to attract more customers with different tastes. Preparing and writing this report enlightened me on the real business decisions making methodology. I would like to thank you, Dr. Ali, for granting me this beneficial opportunity to experience a real life practical example and tackle it to identify solutions with the aid I have earned during my years of studies at the American University of Sharjah. This paper helped me establish the connections between my knowledge in the field of Accounting and practical life applications. Table of Contents Contents Executive Summary 4 Introduction 5 SWOT Analysis 6 Costs, Benefits, Opportunities and Risks 8 Advantages 9 Disadvantages 9 Recommendations 10 Conclusion 10 References 12 Executive Summary Tim Hortons Company, a fast food restaurant, is one of the leading companies in the UAE.
The restaurant offers the best tastes in drinks and sandwiches in the region. However, it is faced by a great deal of competition from the ever growing UAE hotels, restaurant and hospitality centers. In this regard, the Tim Hortons has to develop interventions and strategies to ensure that it manipulates the overgrowing UAE food and tourism industry. Numerous social, economic and legal hurdles including legislations and laws of the land are among many challenges that the company has to handle. Even then, the company has established a strong brand and has always produced quality and variety products. This report analyses the company, its strengths, weakness, opportunities and threats while offering recommendations on how to ensure that the company productivity and market share …show more content…
increase. Tim Hortons in the UAE Introduction This report seeks to provide an extensive analysis of Tim Hortons Corporation in the UAE. The report comprises of a detailed analysis of the cost, benefits, opportunities, risks, problems as well as the advantages facing the firm in the present day. Precisely, the report will be intended for the organizations team of management, with its intention being that of providing them with an executional plan for dealing with the organization’s current issues as they affect the firm’s industry competitiveness. Tim Hortons is a fast food restaurant initially from Canada. The restaurant's main offerings are espresso and doughnuts. Tim Hortons offers great assortment of taste by offering premium espresso, cappuccinos, and crisply cut sandwiches. The restaurant has been facilitated by its ability to offer numerous mixed varieties from its menus. In the UAE, however, the firm has not been able to live-up to this status probably because the UAE is a new target market for the restaurant (Tim Hortons, 2015). For that reason, Tim Hortons’ UAE product line is very limited; a factor that tends to undermine its competitiveness in this industry. The scope of this problem is demonstrated by the fact that the restaurant does not satisfy all its clients’ needs since the low variety enables the firm to meet the needs of a very small section of the target market. The information used in this analysis was collected from secondary sources, including Tim Hortons’ reports, news articles and other publications. For that matter, the paper assumes an explorative approach in order to define the problem in detail and also provide a wide range of suggestions that can renew the management’s growth objectives. SWOT Analysis Strengths • Quality products, Sandwiches • Wide variety of food products • Strong brand image Weaknesses • Narrow drinks product line. • The firm’s outlets are not large enough • High operation expenses Opportunities • Presence of wide consumer base due to tourism • Unfavorable climate in the UAE to produce agricultural products Threats • High competition • Economic recessions • Changing consumer tastes and preferences • Regulations from the government and other consumer bodies Strengths Tim Horton’s sandwiches are among the best in the UAE market (Tim Horton, 2015). This has enabled the firm to rival most of its competitors since most consumers in the region are already taking advantage of this chance. Moreover, the sandwiches come in various varieties, which provide customers with a multiple options, thus serving different consumer needs. Lastly, Tim Horton is an international brand, a factor that enables it to gain acceptance from many various consumer groups. Weaknesses Despite the wide variety of food products, Tim Horton’s drinks product is very narrow, comprising only coffee products. This is a weakness for the firm since it limits its ability to serve different consumer needs and preferences. Besides, the restaurants’ most outlets within the UAE region are small, which limits their capacity to take in a large number of customers. Lastly, the firm is also faced with high operating expenses, which stem especially from high labor costs (International Markets Bureau, 2009). Opportunities The UAE region is one of the world’s largest tourist attraction centers. This is a great opportunity for firms in the hospitality sector, which include food service joints such as Tim Horton. Furthermore, the UAE, due to unfavorable weather patterns cannot produce adequate food products to meet the nation’s food demands. This provides a great opportunity for firms such as Tim Horton since they rely on imported materials, from Canada, to make their foods (International Markets Bureau, 2009). Threats Expansion for Tim Horton in the UAE is limited due to high completion from other international competitors such as Starbucks. In addition, the firm may be forced to restructure its menus often times because of changing consumer tastes and preferences. For example, the current shift to health conscious consumption could become a major blow for the firm in the future. On the same line, consumer groups and regulatory bodies are also a threat for Tim Horton especially through their campaigns that are tailored at sensitizing consumers of the dangers of consuming fast foods (Webster, 2015). Costs, Benefits, Opportunities and Risks Tim Hortons faces such costs as paying employee salaries, acquiring operating licenses as well as production and marketing expenses. Nonetheless, there are benefits associated with Tim Horton’s operations in the region. For example, factors such as economic recessions that create pressures on consumer’s buying powers could be resolved by the fast food industry (International Markets Bureau, 2009). This is true since these joints may offer cheap alternatives to foods offered in major hotel establishments. Studies indicate that the UAE is one of the most growths potential areas for Canadian based food entrepreneurs. This is true considering that the UAE is one of the largest tourist commercial destinations in the world today. Most food products that are consumed in the UAE region are imported because climatic conditions make it hard for locals to produce their own crops. Meat and sugar confectionaries are some of the Canadian-based foods that are in high demand in the UAE region (International Markets Bureau, 2009). Source: (World Travel Tourism Council, 2014) Besides these opportunities for Tim Hortons to exploit, operating the business in the UAE region does also face a number of risks.
Slowly, regulators are beginning to hit on fast food restaurants due to the negative health impacts they are having on residents. In fact, there are a number of authorities such as the clinical nutrition department, which is conducting awareness campaigns that are tailored to enable consumers to make health choices especially regarding the kind of food they eat (Webster, 2015). This is a risk for the firm because there is even a possibility that regulators could institute legislations regarding food nutritional requirements. Furthermore, customers may also decide to change their consuming habits, a feat that could affect direct the Tim Hortons’
sales. Advantages One of the main advantages facing Tim Hortons is the quality of their menu, especially sandwiches (Tim Hortons, 2015). Through the guidance of the restaurant’s management which is part of the firm’s key competences; Tim Hortons has succeeded to become the most favored sandwich joint across the UAE. To illustrate, the Hortons’ sandwich superiority is the fact that the firm has five separate sandwich varieties from which the product’s enthusiasts can choose. Each of the five varieties is made of unique and fresh ingredients, making them the favorite for many consumers who enjoy eating sandwiches (International Markets Bureau, 2009). Disadvantages Despite having such a unique brand in its products portfolio, the restaurant does suffer a number of problems. Key among these problems is the lack of a wide product variety in its drinks assortment. This is a problem to the firm since it limits its ability to serve different as well as changing customer preferences and needs. Furthermore, this problem is also a limitation to Tim Hortons’ competitiveness because it makes the restaurant lose customers to competitors, especially during times that the consumers are shifting to substitute drinks. Competition is also a big problem for Tim Hortons in the UAE, with key competitors comprising fast food joints, quick service restaurants; petrol station based food service points as well as other facilities serving snacks and beverages across the target region. Besides, competition from international brands such as Starbucks, Caribou, and Paul does also prove challenging to Tom Hortons competitive strategy in some way. In fact, a report by International Markets Bureau (2009) illustrates that there are approximately 11,000 restaurants in the UAE area with growth rate approximated at 500 new restaurants per year. Recommendations 1. Product Diversification Product diversification is one of the main ways through which Tim Hortons could solve its both problems. The strategy will entail adding new products; especially drink varieties to the restaurant’s current menu. For example, the firm can consider developing cocktails that are sold under the restaurants brand. This proposed solution would not only increase the variety available to consumers, but it will also be a brand differentiation for Tim Hortons. Furthermore, the restaurant can also consider partnering with some selected soft and health drink companies through distribution arrangements. 2. Licenses and Franchises Tim Hortons can also resolve its problems by using license and franchise agreements. Here, the cause of action would be to create a license and franchise program that will enable the restaurant to expand its presence as well as its product portfolio within the target market. Ultimately, this strategy will solve the firm’s current problems in that it will expand the restaurant’s market share in the UAE besides promoting the diversification strategy. Conclusion In sum, Tim Hortons is a firm that has several advantages and a substantial number of problems within its operating environment. It is true that by exploiting its advantages, Tim Hortons will enhance its competitiveness; however, it is also paramount for the restaurant to deal with the problem of low product diversification and high competition. The report recommends that the restaurant managers employ diversification as well as licensing and franchising strategies to deal with this problem.
Ferrell, O. C. (2008). “New Belgium Brewing Company(A)” in Ferrell, O. C., and Hartline, Michael D., Marketing Strategy, Fourth Edition, Mason, Ohio: Thompson Southwestern Publishing, pp. 463-470.
A positive to expanding to Canada is that Canadian shoppers are similar to American shoppers, ideally making this a good target market for growth (Fiorletta, 2015). In an interview regarding expansion in Canada, CO-CEO Walter Rob said, “Our efforts in Canada are part of the effort to grow.” “We think the opportunity for fresh, healthy foods is larger now that it’s ever been”. “And we intend to grow as fast as we have ever grown — 40 new stores next year, 42-44 for the following year.” “That’s 10% square footage growth on top of 15 million square feet of retail we already have.” “People have said maybe we should stop our growth.” “I said, no, we are not going to do that because our strategy is working.” “There’s no reason to stop.” “There’s every reason to keep going.” (Vieira,
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Looking into a brief history of how the Tim Hortons franchise became what it is today, Tim Horton opened his first restaurant in 1964 in Hamilton Ontario. Tim Hortons had the focus to sell top quality, always fresh product with great value and service. This first store started off with only coffee and two types of doughnuts, Apple Fritter and Dutchie. In 1967, Tim Horton joined with Ron Joyce becoming full partners of the newly formed company. After Horton’s tragic death in 1974, his wife sold her husband’s share of the company which had now expanded into 30 restaurants, to co-owner Ron Joyce for one million dollars. She quickly regretted the decision and tried to overturn afterward, but was unsuccessful in doing so. As of today Ron Joyce has taken the small coffee and doughnut restaurant and transformed it into a multibillion dollar franchise, made up of 4304 ...
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