Restaurant Tim Horton's case study

Globally, research analysts have predicted a Compound Annual Growth Rate growth of 4. 16% in the period 2018-2022. In the United States, the quick service restaurant industry has a market value that is valued at $180 in 2016 (Bala & Narayanan, 2016). The market is driven by the explosion of new menus and concepts more so within the limited service segment. The new concepts being introduced into the industry are inspired by street items, international cousins such as Korean barbeque, and the reintroduction of value and flavor added old favorites such as grilled cheese sandwiches and hot dogs. 0, a debt to equity ratio of 132. 9%, and a quick ratio of 0. The company experienced sales growth in both the United States and Canada although the set targets in both countries were not met.

The company's EPS rose from $2. 59 to $2. Their products include distinctive recipes for breakfast, lunch, and dinner. Items on the menu include egg-based sandwiches, humbuggers, muffins, salad, fresh fries, ice cream based desserts, and wraps. Beverages include milkshakes, soda, coffee, and fruit-based smoothies. The company launched McCafe in 2011 as an espresso-based beverage which was offered at a lower price than what other outlets were offering as a smart marketing strategy to compete with Starbucks. The company revenue increased by 3% and has experienced a growth of 0. The franchise reported sales recorded revenue of $6. 7 billion in 2013, a store sales growth of 3. 4% although it was a decline from the previous years. Bargaining power of suppliers The bargaining power of the suppliers also referred to as the market of inputs include the supply of labor, raw materials, components and services to the company (Ries & Trout, 2009).

The market of input can be a source of power over the restaurants, especially where there is a few or no substitute. Some of the potential factors that may influence the threat of substitute product and services include quality depreciation, buyers switching costs, the relative price performance of substitute, ease of substitution, and the availability of close substitute. Threats of new entrants The quick service restaurant industry is has shown prospects of yielding high returns thereby attracting new entrepreneurs. New entrants will result in decreased profitability (Dauglas, 2018). Tim Horton's should, therefore, focus on the factors which can have an impact on the threats of a new entrant into the industry. Such factors include the existence of barriers to entry such as patents and rights, total cost, brand equity, the economics of scale, product differentiation, and switching costs.

The Burger King also used a memorable campaign such as “we do it like you would do it” and “have it your way. ” Consistency Quick service restaurants should mainly focus on food consistency and uphold quality to attract and maintain customers. The National Restaurant Association indicated that 92. 2% of respondents agreed strongly that consistency should be a requirement even from one time visit to the next as they patronize quick service restaurants. Any quick service restaurant should offer the same service and products at their various locations to facilitate brand popularity. A low cost enables Quick service restaurants to make higher profits and compete fairly with its rivals. An example is ensuring minimum labor wages as a route phase for the quick service restaurant industry to build up profit margins.

Favorable brand/ image and a good reputation A favorable image and a good reputation are vital to building confidence to the customers. Tim Horton should, therefore, earn the trust and confidence of their customer base by maintaining its favorable image and a good reputation. (Thompson, Peteraf, Gamble, & Strickland, 2018). The two companies were to continue operating as separate organizations, and the franchise relationship would be managed separately. Strategic choices available for Tim Horton’s A off matrix for the strategic plan Tim Horton was still tasked with the continuation of implementing its strategic plan amid the interesting merger talks. Its newly developed product, crispy chicken sandwich resembled the McDonald’s, and the company required drastic changes and innovation efforts to target the dinner market by including more complex items.