The global fast food restaurant chain industry is rapidly changing, with varied experiences among the competing firms. Tim-Hortons is one of the fast food restaurant chains that has undergone dramatic changes since 2004. Given its international presence, the company has implemented several changes in strategic management to expand its market base as well as its product line. This paper discusses some of the changes that have occurred since the case study on Tim Hortons Restaurants by Hitt, Ireland, and Hoskisson (2006) and assesses the current situation of the company regarding strategic management changes.
Tim-Hortons Fast food restaurant is one of the leading companies that have maintained and advanced their global spread. The company has had several successful acquisitions that have not only enhanced its size but also fostered its product line. Also, the use of the franchise system in various countries has helped the quick-Service restaurant chain to grow at an escalating rate (Hitt, Ireland, & Hoskisson, 2006). Franchise system, backed by transnational strategy has helped the company to adapt to its local locations while remaining in coordination with the headquarters in Canada. Franchise strategy ensures that individuals joining the chain are highly competent and are capable of delivering quality services that Tim Hortons customers expect. Indeed, with the help of the head office, especially in design and infrastructural development, franchise owners have an easy way in ensuring standard service delivery with high-quality food to their customers (Hitt, Ireland, & Hoskisson, 2006).
Competition is one of the challenges that the quick service Tim Hortons has faced. However, the company has recently advanced its internal and external strengths to ensure it expands and retains its customers. For example, pricing is one of the internal competitive advantages that the restaurant chain has capitalized on against its competitors (Hitt, Ireland, & Hoskisson, 2006). Setting lower prices and maintain the highest quality and quantity of food has made the restaurant chain to survive competition from similar chains such as McDonalds and Starbucks. In other words, the company’s brand, its strategic position in Canada, and pricing capabilities are presented as major competitive advantages.
Another important developmental strategy for Tim Hortons was allowing foreign investors to venture into it. With the direct foreign investment, the company has been able to boost its capital base and expand to markets such as the US, which were initially difficult to penetrate (Wilkinson, 2014). Indeed, another strategy was cutting cost it improved operations and having foreign ownership has been great for Tim Hortons as well because Foreign direct investment creates new jobs, as investors build new companies in the target country, which creates new opportunities. The process has led to an increase in income and more buying power to the people, which in turn leads to an economic boost and a favorable external environment for Tim Hortons. Furthermore, updating its menu has been another great change that has seen the company develop further (Timhortons.com, 2017). For instance, the introduction of bagel and cream cheese have attracted more customers.
To sum up, the changes that Tim Hortons has implemented are fairly effective. However, more strategic changes should be put in place to ensure it competes fairly (Wilkinson, 2014). For example, while the company has concentrated on Canada and the US, perhaps more emphasis should be put on other countries with varied cultures such as Asia and the African continent. Additionally, involvement in mergers and acquisitions should as well focus on other states of the world and not only in North and South America. Also, a closer focus on the customer satisfaction than maximizing profits and minimizing costs would put the restaurant chain in a better competitive advantage since quality would be of great concern.