Tim Hortons Business Essay

1208 words - 5 pages

Products:
The product line includes premium coffee, espresso-based hot and cold flavoured speciality cappuccinos, lattes, specialty teas, home-style soups, fresh sandwiches, and fresh baked goods. The company also sells products such as coffee packets, Christmas hampers and coffee machines through its franchise chain and online. Customers have increased demand for more ethnic cuisines including Asian, Latin American and Middle Eastern. In 2011, several “specialty bagels” introduced to cater more to the ethnic tastes of the customers, For catering health conscious customers, Tim Hortons has introduced low fat muffins, low fat bagels and Yogurt & Berries to the menu. In the U.S. the ...view middle of the document...

About 60 per cent of customers who purchase coffee buy another menu item as well, McDonald’s research has found.

Geographic scope
As of March 31st, Tim Hortons had 4,288 system-wide fast-food restaurants, including 3,453 in Canada, 808 in the United States and 27 in the Gulf Co-operation Council (i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates). Plans for 2013 include the same aggressive growth targeting up to 180 restaurants growth in Canada and 90 in the U.S. with up to $300 million Capital Expenditure for restaurant expansion and improvements. THI believes there is a market for development of at least 4000 locations in Canada. But rivals aren’t standing still. Starbucks, with about 1,200 cafés in Canada, is set to open 150 in 2013, many of them within outlets of popular U.S. discounter Target Corp., which starts its highly-anticipated store rollout next month. Starbucks has got a boost from its new Blonde Roast, which is a milder brew that many compare to Tim Hortons’ coffee.

Competition and Market Share
Due to the significant brand presence in Canada, Tim Hortons has 41% of the quick service sector
in Canada, and 77% of the quick service coffee market in Canada (Tim Hortons: 2011 Annual Report). Traditional competitors for Tim Hortons in the in the coffee business are Starbucks, Tmothy’s and Second Cup. Since the introduction of McDonald’s McCafé in 2011, the toughest challenge of all comes from global juggernaut McDonald’s Corp touting an updated McCafé store ambiance, improved drinks and free week-long promotions. The efforts are forcing rivals to shave prices as well, bruising their profits, but the initiatives are showing signs of bolstering the burger purveyor’s position in the coffee sweepstakes: McDonald’s Canadian share of the roughly $3.3-billion out-of-home coffee market has more than doubled to 10.3 per cent in just four years, according to its data. Starbucks Canada is betting heavily on its Blonde Roast, which already accounts for about 20 per cent of its brewed coffee sales, it said. The brew is important to the chain because 60 per cent of Canadians prefer a lighter roast coffee, its research found. Subway, for its part, has launched Starbucks-owned Seattle Best Coffee, along with breakfast fare. The reason for the jockeying for customers is evident: Coffee is the single top item that is being purchased in restaurants, NPD says. As a result, restaurateurs from McDonald’s to Subway and Starbucks Canada are beefing up their breakfast menus to lure more people to their cafés. About 60 per cent of customers who purchase coffee buy another menu item as well, McDonald’s...

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