Tim Horton Inc.’s Case Analysis Sample Paper

Introduction

Tim Hortons struggled to successfully expand internationally since the brand and its products were synonymous with its Canadian identity and were less known globally. Consequently, it faced stiff competition internationally and domestically from such multinational brands as Dunkin’ Donuts, McDonald’s, and Starbucks. The major challenge with Tim Hortons is that although its robust integration with the Canadian identity contributed to its domestic success, it impeded its ability to expand and compete globally. This paper addresses menu innovation, inconsistent economic growth, acquisition by G3, and global reach as the critical strategic issues to be resolved.

Analysis of the Case Problems

Among the significant problems with Tim Hortons is that it had saturated the domestic market and developing an internal expansion strategy was necessary. The successful business struggled to penetrate the international market since the company had a strong Canadian identity (Hitt et al., 2019). Additionally, Tim Hortons’ brand and products were not widely known outside Canada, which further complicated their international expansion plans. According to do Nascimento et al. (2020), penetrating global markets is a challenging endeavor, especially for firms with a low brand and product awareness. Despite this challenge, Tim Hortons had to venture into the international market segment since it needed to improve its growth rates in the face of rising domestic competition.

Additionally, Tim Hortons was experiencing challenges in venturing into the international market due to low brand awareness. As a result, it was imperative for the organization to consider acquisition and vertical integration as strategic approaches to entering foreign markets and expanding its global reach. For instance, Tim Hortons had to agree to be acquired by 3G Capital, a Brazilian shareholder of the successful multinational fast-food chain, Burger King. According to Hitt et al. (2019), such strategic alliances are critical when an organization is considering international investment since it exposes the management to international experience. Therefore, the acquisition of Tim Hortons was a strategic decision that allowed the firm to leverage the global reputation of Burger King, which facilitated easier entry into the international market.

Further, Tim Hortons had to continually refresh its menu to reflect the evolving consumer tastes and create products that would be recognized by a global customer base. Notably, most of its products were less known beyond the Canadian borders and would experience challenges selling outside the country. Since Tim Hortons faced stiff competition internationally and domestically, it was imperative to reinvent its menu to enhance its competitiveness and capitalize on the changing consumer needs. For instance, there was a growing demand for non-wheat and gluten-free offerings, necessitating the firm to reinvent its menu and eliminate such dishes with declining demand.

Solutions to the Identified Case Problems

Tim Hortons had saturated the Canadian market and faced stiff competition on the domestic and international fronts. As a result, international expansion was a necessary strategic decision for the long-term growth of a firm. According to Ref et al. (2021), expanding internationally enables organizations to access new markets and a broader consumer base. Osano (2019) corroborates this view and posits that a company that has saturated the market experiences no customer growth. In this regard, it was imperative for Tim Hortons to explore new markets outside Canada and stay competitive. Therefore, venturing into multiple countries would promote the firm’s growth rate by accessing new markets and expanding its customer base.

Tim Hortons’ low brand awareness outside Canada resulted in low entry potential into the international markets. Switala et al. (2018) contend that brand awareness is a significant predictor of a successful global expansion. This implies that organizations with limited brand awareness experience challenges in their quest to expand globally and are compelled to utilize such other market entry strategies as vertical integration and acquisition by widely known brands. In this regard, the acquisition of Tim Hortons by Burger King was a strategic decision that facilitated the latter’s easier entry into the international markets. Notably, brand awareness is a fundamental consideration in customers’ purchase decisions and directly influences market performance (Hitt et al., 2019). This implies that consumers are more likely to buy a commodity from a brand they recognize than from a newly formed entity. Therefore, the acquisition of Tim Hortons by Burger was a strategic market entry strategy that allowed the firm to successfully venture into markets outside Canada.

Innovative menu designs and continuous refreshment are integral in staying competitive and enhancing an organization’s ability to satisfy customer needs. With increasing domestic and international competition, it was critical for Tim Hortons to progressively redesign its offerings to stay competitive. Hitt et al. (2019) contend that such internal innovations ensure that organization keeps the ever-evolving needs of the customers fulfilled. Moreover, continuous additions of new products on the menu allow restaurants to earn above-average returns, which is a critical consideration in an industry characterized by small margins (Hitt et al., 2019). Additionally, such innovations enabled Tim Hortons to start offering products that were known outside the Canadian borders, thereby enhancing its global entry. In this regard, menu innovation and refreshments were integral in facilitating international expansion and strengthening the domestic and global competitiveness of Tim Hortons.

Justification of the Solutions

In an increasingly competitive restaurant business, global expansion ranks among the most effective ways an organization can improve its growth and create new revenue streams. After exhausting growth opportunities in the domestic market, organizations pursue international expansion as a strategic decision to access new markets and increase revenues Ahi et al., 2017). For instance, Tim Hortons had saturated the Canadian market, and opportunities for expansion and revenue generation were diminishing.

Additionally, the acquisition of the organization by Burger King as an international expansion strategy was an effective global market entry approach due to the organization’s low brand awareness. Notably, the acquisition as Tim Hortons’ expansion strategy significantly reduced entry barriers into the markets where Burger King was already operating and benefited from the experience and perspectives of the acquiring entity (Islami et al., 2019). Additionally, the strategy eliminated such incidental costs as aggressive advertising to promote brand awareness.

Menu innovation and refreshment were an integral consideration for Tim Hortons to ensure that its products reflected the continuously changing consumer needs. Additionally, in the face of stiff domestic and international competition, it was critical for the organization to reinvent its menu to have a global appeal and mirror the evolving consumer dynamics. For instance, the behavioral and demographic changes in the North American population influenced their purchasing habits, particularly reducing their frequency of eating in restaurants. More specifically, there was a rising demand for non-wheat and gluten-free meals as the public became more inclined towards healthier food options.

Summary

Tim Hortons, a Canadian fast-service restaurant, had saturated the domestic market and was facing stiff competition from locally and internationally. It sought to expand its operations globally but faced challenges since it was a less known brand on the international scene. Besides, its product offerings were synonymous with Canada and would struggle selling outside the domestic market. Consequently, it was imperative for Tim Hortons to enhance its competitiveness and business growth through international expansion. The most effective expansion strategy was through the acquisition by Burger King since the firm had low brand awareness. Additionally, the organization had to reinvent its menu to have a global appeal and reflect the changing consumer demands.

Additional

As Tim Hortons continued to implement its strategic plan, there were other menu innovations that it should have considered to drive customer traffic to its outlets. For instance, the restaurant should have developed full-service products to cater for the aging and wealthier population whose demand for sit-down meals was growing. Additionally, Tim Hortons ought to have integrated gluten-free cuisines, non-wheat-based noodles and pasta, and healthier food options for children to cater for the growing demand for these market segments. As Tim Hortons considered geographical expansion, it should prioritize the U.S expansion then utilize the acquired global reputation to penetrate the Canadian domestic market. Additionally, the organization should not cede the European market despite the presence of its competitors. This implies that Tim Hortons should explore ways of differentiating itself from its rivals. In this regard, the company should not formulate a uniform positioning strategy but should customize its marketing, pricing, and menu to reflect the needs and characteristics of the markets. The partnership with Burger King would benefit Tim Hortons with the international experience and easier entry into those markets since the former was already operating there. Such emerging trends as food trucks provided avenues through which Tim Hortons could generate additional revenue, reach new markets, and promote brand awareness. In this regard, this was an alternative store format that the organization should recognize as long as the operators or franchisees did not violate the franchising stipulations. The shared trademark would make it easier for the franchisees to compete with other established brands that were already accessing such new markets as college campuses and universities through such innovative approaches. Tim Hortons’ partnership with Burger King would facilitate easier entry into the international market segment. However, that association alone would not be sufficient to create a competitive advantage for Tim Hortons on a global scale. For instance, the organization should consider glocalizing its menu offerings to ensure the products accommodate the preferences of the local market. This would help differentiate the company’s products and create a sustainable competitive edge over the competitors.

References

Ahi, A., Baronchelli, G., Kuivalainen, O., & Piantoni, M. (2017). International market entry: How do small and medium-sized enterprises make decisions? Journal of International Marketing, 25(1), 1-21. Web.

do Nascimento, R., Santos, K., Júnior, J., de Souza, D., & Paixão, A. (2020). The importance of the brand in the internationalization of exporting companies. International Journal for Innovation Education and Research, 8(5), 162-171. Web.

Hitt, M. A., Ireland, R. D., & Hoskission, R. E. (2019). Strategic management competitiveness & Globalization: Concepts and cases (12th ed). Cengage Publishing

Islami, X., Islami, V., Topuzovska Latkovikj, M., & Mulloli, E. (2019). Barriers hindering the entry of new firms to the competitive market and profitability of incumbents. Management, 24(2), 121-143. Web.

Osano, H. (2019). Global expansion of SMEs: Role of global market strategy for Kenyan SMEs. Journal of Innovation and Entrepreneurship, 8(13), 1-31. Web.

Ref, O., Feldman, N., Iyer, D., & Shapira, Z. (2021). Entry into new foreign markets: Performance feedback and opportunity costs. Journal of World Business, 56(6), 101258. Web.

Świtała, M., Gamrot, W., Reformat, B., & Bilińska-Reformat, K. (2018). The influence of brand awareness and brand image on brand equity – an empirical study of logistics service providers. Journal of Economics and Management, 33(3), 96-119. Web.

Nike Inc.’s Strategic Opportunities And Limitations

International expansion is the goal of many firms because selling goods worldwide and locating productions in multiple countries simultaneously is vital for competitive advantage in most markets. Companies that adjust their strategies need to evaluate their current conditions, place at the market niche, strengths, weaknesses, opportunities, and threats they might face. Various approaches to creating blueprints and managing growth through entering other countries’ markets are implemented and exercised by Fortune 500 businesses (Fortune, 2021). This paper aims to use Nike as a successful company’s example to study the international expansion strategy, explore it through SWOT analysis, and identify improvement opportunities.

International expansion strategy development and implementation require the executive team to analyze and evaluate opportunities and outcomes from several aspects. Indeed, they need to explore basic benefits to consider and understand if the corporate-level plan should be multi-domestic, global, or transnational (Hitt, Duane Ireland, & Hoskisson, 2017). Moreover, appropriate entry models should be selected from exporting, licensing, strategic alliances, acquisitions, or opening new subsidiaries (Hitt et al., 2017). Lastly, competitive outcomes such as improved performance or enhanced innovation are necessary to be determined for further risks evaluation and management (Hitt et al., 2017). Market analysis is also critical for clarifying the perspectives for a company’s expansion. Understanding how the logistics, production, selling operations and consumers’ expectations work at a given segment provides a basis for adjusting the existing strategies.

Nike is the apparel and sports footwear company that started its operations in the United States in the 1960s, expanded worldwide, and is now one of the most famous and trustworthy brands. Successful strategic decisions helped Nike enter different niches, develop efficient supply chains, create sustainable production, and implement online selling (Fortune, 2021). Furthermore, international expansion performed by the company addressed the growing demand for sports teams’ apparel and equipment, including sponsorship and participation at global events (Kim, 2020). Consequently, Nike became a well-known brand associated with high product quality, events, experiences, and a strong mission for promoting sports.

Nike is a global brand, and it keeps expanding its production and distribution to new countries by entering their markets. The approaches the company with a significant competitive advantage, such as the brand’s authority uses, are the manufacturing facilities’ establishment, acquisitions, and subsidiary opening (Hitt et al., 2017). Besides, the pandemic led Nike to enforce its online selling and shipping strategies, making the firm a nearly 50% increase in digital sales for one fiscal year with $5,5 billion in revenue (Fortune, 2021). SWOT analysis is the appropriate analysis tool for exploring how the company’s international expansion is performed.

Figure 1.Nike SWOT Analysis

Strengths

  • Manufacturing technologies for footwear production;
  • Brand’s authority and value among sports apparel and footwear companies;
  • Quality and variety of products;

Weaknesses

  • Labor regulations and conditions of countries of expansion;
  • Communication and policymaking with retailers;
  • Dependence on footwear market;

Opportunities

  • Well-built e-commerce distribution channel;
  • Addressing the critical human need to maintain health and look good;
  • Internal logistics and manufacturing improvement with the new locations’ integration;

Threats

  • High competitiveness in the industry;
  • Exchange rates and financial crises make products less affordable;
  • Difficulties with international shipping and trade regulations.

Nike’s strength is the continuously developing technologies for footwear production, which allow the company to create and distribute outstanding goods for sports and lifestyles. Then, it has authority and a loyal audience that supports the brand worldwide (Kim, 2020). Lastly, apparel and footwear have hundreds of variations and technologies for various occasions so that the company’s range of products maintains high revenues from year to year. Nike’s weaknesses related to the international expanse are the difficulties a company can experience with labor conditions regulation which might depend on the government and disrupt proper manufacturing and distribution (Standaert, 2021). Moreover, retailing communications might severely influence the pricing policies, yet Nike distributes the products indirectly and needs to achieve balance in the value-setting strategy. It is also crucial to consider that Nike still depends mainly on the footwear market, and the changes in consumers’ attitudes or perceptions about this type of product might disrupt the company.

Nike’s opportunity is the transnational nature of product distribution that allowed the brand to successfully implement e-commerce practices and build optimized worldwide shipping strategies. Nike also associates with a healthy lifestyle, sports, and good appearance – the trends of modern society which will support the demand for the company. Expanding to new countries is an opportunity to improve logistics and production. The current worldwide situation with the COVID-19 pandemic and political instability threatens Nike’s performance, distribution, and manufacturing (Standaert, 2021). Besides, the global footwear market has strong competitors like Adidas, Reebok, and Puma that also develop and integrate their innovations (Jiang, 2019). Lastly, the financial crises and unstable exchange rates put Nike at risk of becoming less affordable for millions of customers.

Based on the SWOT analysis of Nike’s expansion strategies, several suggestions can be made to exploit its strong points and mitigate the weak ones. For instance, strategic alliances might be established with retailer chains’ owners or responsible institutions in the new countries to decrease the risk of pricing-related difficulties (Hitt et al., 2017). Besides, licensing an innovative technology for footwear production can become a valuable step for enforcing Nike’s competitive advantage (Jiang, 2019). Lastly, the company can continue expanding its participation at events, collaborating with famous teams, and producing non-physical services to broaden the audience and increase its loyalty.

International expansion is a risky strategy, yet its outcomes can make a company a worldwide known and respected brand. Moreover, the current conditions of product distribution and e-commerce are the profound foundation for exploring other countries markets. Nike is an example of a successful international expansion, and its SWOT analysis revealed that although weaknesses and threats exist, the company still has options to enforce its positions.

References

Fortune. (2021). Nike

Hitt, M. A., Duane Ireland, R., & Hoskisson, R. E. (2017). Strategic management: Competitiveness & globalization: Concepts and cases (12th ed.). Cengage.

Jiang, W. (2019). Sustainable development of supply chain in the footwear industry–take Nike as the case. Asian Business Research, 4(3), 86.

Kim, M. (2020). How Phil Knight made Nike a leader in the sports industry: examining the success factors. Sport in Society, 23(9), 1512-1523.

Standaert, W. (2021). Product digitalization at Nike: The future is now. Journal of Information Technology Teaching Cases, 2043886920963286.

Farmer’s Market For A Diverse Community: Risk Factors

Introduction

There are several technology-related risks related to opening a farmer’s market. First, it is important to consider the security of the farmer’s market as a physical location. As a place where many products will be available for purchase, it is necessary to ensure proper protection against potential dangers. In the case of the open market, stalls and booths must be sufficient to secure the food from the elements. In a similar vein, theft, robberies, and potential customer misbehavior are all risks that must be taken into account (“Retail risk management: The top 6 threats,” 2020). All of the aforementioned issues can significantly diminish the budget and the supply of products. Given the limited amount of money and products available for this effort, minimizing losses should come as a priority. Additional spending on hiring security is therefore expected.

Managerial

In regards to management, the regulation of supply and demand, as well as transportation considerations can present risks to the venture. To ensure that all of the products available to the residents are high-quality and fresh, management must decide on appropriate amounts of products, as well as deliver them on schedule. Management also comes into prominence when communicating with suppliers. This risk must be mitigated in the initial stages of the project, as proper management ensures the smooth operation of the entire farmer’s market.

Commercial

Commercially, price setting and competition are important risk factors to consider. Companies working in the same market can diminish profit returns and impede the goal of the project. Similarly, a high price for fresh produce can prevent the target audiences from buying healthy foods, which is another risk. Commercial considerations and calculations regarding food prices must be made pre-emptively, shaping the available supply and attracting the intended audience.

External Risk Factors

Externally, government regulations and the presence of local legislation may become an issue. The project must abide by proper food regulation laws, and provide the necessary certification and qualification. All suppliers and cooperators must also be chosen following NYC regulations on handling, preparing, growing, and packaging food (Department of Agriculture and Markets, n.d.). Optimally, locally-grown sustainable options are preferred.

References

Department of Agriculture and Markets. (n.d.). Food safety. Agriculture and Markets.

Retail risk management: The top 6 threats. (2020). Buy Small Business Insurance Online | Insureon.

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