Executive Summary
Tim
Hortons is one of popular fast food restaurant chains that has specialization
in offering high quality coffee products and donuts. The organization decided
to have strong online presence and developed Twitter and Facebook page in order
to make sure significant brand awareness. However, the organization is also
focused on different community welfare activities and faces strong competition
from its existing rivals, such as KFC, McDonalds, and Starbucks. The
organization also tried to offer high quality customer service through integrating
advanced technological applications.
Overview of the Business
Tim
Hortons can be referred as one of the popular multinational fast food restaurant
chains based in Canada. The mission of the management of Tim Hortons is to
offer high quality coffee products as well as doughnuts. On the other hand, the
major goal of the organization is to contribute to the community involvement
practices to become one of the sustainable organizations within the global fast
food restaurant chain industry.
The
organization was established in Hamilton in the year 1964 by a hockey player.
However, the organization has attained huge popularity among the target customers
due to its offering of high quality fast food products, coffee products, and doughnuts.
Recently, the organization was acquired by Burger King in the year 2016 (Buist,
2003). The management of Tim Hortons used to follow a franchisee business model
and earned huge success as well as popularity. Apart from this, there are
different initiatives, such as community welfare involvement, online business
operation activities, unique sponsorship model have been practices by the
management of Tim Hortons.
In
terms of value proposition and positioning, the management of Tim Hortons used
to offer high quality, valuable, trendy, differentiated, and well-acknowledged
products at economic price level. The organizational management has expertly
implicated cost leadership strategy to offer high quality products at
cost-based economic price by reducing overall business operation cost. The
products or services of Tim Hortons are positioned as high quality but economic
priced products. According to such positioning statement, it can be identified
and stated that the target customers of the particular organization will
receive high quality but differentiated fast food products including high
quality coffee products as well as doughnuts at competitive price comparing to
other market players due to the adoption and execution of the cost leadership
business level strategy in business operation process.
Competitors Analysis
Tim
Hortons used to operate within the global fast food restaurant chain industry.
The organization is saturated as well as highly competitive due to the presence
of different leading rivals, such as McDonalds, KFC, Starbucks, Burger King,
Barista etc. Porter’s Five Force analysis (Teece, 2010) will be carried out below in order to find out and assess the competitive
forces, important success factors, and important driving factors of the
particular industry.
Porter’s Five Force Analysis
It
is an important external micro environmental strategic analytical tool, which
may help the management of Tim Hortons to determine the important competitive
factors for the business operation process of the organization.
Buyers’
Power
The
bargaining power of the consumers is quite high for the firms within the fast
food restaurant chain industry as the consumers have different options to
choose in case they are unhappy with the pricing or quality of the products of
a brand.
Suppliers’
Power
The
bargaining power of industry’s suppliers are quite low for the organizations
within the fast food restaurant chain industry as the organizations within the
industry can find cost effective as well as efficient supply chain networking
options due to availability of sufficient suppliers within the industry (West,
2015).
Degree
of Industry Rivalry
Degree
of industry rivalry is high for the organizations within the global fast food
restaurant chain industry due to presence of leading organizations within the
industry, such as McDonalds, KFC, Starbucks, Burger King, Tim Hortons etc
(Lamb, 2012). Most importantly, these organizations are constantly trying to
implement unique strategies in business operation process to be competitive.
New
Entrants’ Threat
Threat
of new organizations is quite low for the established existing industry players
due to high entry cost, high legal entry barriers, and lack of developed
stakeholder support. These difficulties will stop the new players to grab the
market shares of the existing players initially (Wong, 2010).
Substitutes’
Threat
Substitute’s
threat is quite high for the organizations within the global fast food
restaurant chain industry as the social demand for the high quality food
products is significantly increasing and these are the substitute products of
the fast food products (Naidoo, 2012).
It
is highly transparent from above assessment that bargaining power, degree of
industry rivalry and substitutes’ threats are high for Tim Hortons. On the
other hand, bargaining power of suppliers and threat of the new entrants are
low for Tim Hortons.
There
are different types of direct and indirect competitors of Tim Hortons, which
are trying to satisfy the needs of target customers. Starbucks and Barista can
be considered as the direct competitors of Tim Hortons as all of these three
organizations are operating within same industry with similar types of products
and services. Alternatively, McDonalds and KFC are the indirect competitors as
recently Tim Hortons has been acquired by Burger King (Boone, 2012).
McDonalds
has better competitive advantages among all the industry players in terms of
service delivery process. Recently, the organizational management of KFC has
faced several challenges regarding service delivery process. Therefore, it can
be stated that McDonalds is the major achiever for better service delivery and KFC
is highly criticized for inadequate service delivery.
Customer Service Strategy
Tim
Hortons always takes care of the needs and expectation level of the target
customers. Moreover, they also focus on high quality on line service delivery
process. Therefore, the organizational management of Tim Horton is highly
concerned with satisfactory customer service delivery process, which is
impressive.
The customer
service strategy of Tim Horton is highly documented on the popular online
social media networking platforms, such as Twitter and Facebook.
The
service culture and customer focus of Tim Hortons would be analyzed through
online customer feedback process. Moreover, the store executives can collect
feedback from the customers, who visit their stores. The organizational
executives as well as management are highly customer friendly as they always
take care of quality of food items and comfort level of the visiting customers.
The
organizational management highly focuses on community children welfare
activities apart from the quality control aspects. Apart from this, the
organizational leaders also have focused on giving reward to the regular
customers.
The
online presence of Tim Hortons significantly augments its service delivery
process as it has presence of Facebook and Twitter pages and the services or
products are regularly getting updated on the pages. The online community is satisfied with the quality of product and
service delivery process, but the community members need more sustainability in
the business operation process. The organizational management uses ICT and
advanced data management tool (Naidoo, 2010) to deliver
services to the customers and other clients. This is highly impressive. The
service will be significantly improved if the organizational management considers
aggressive turn-around timing, decentralization, and stakeholder integration in
the decision making and strategy implication process.
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