Tim Hortons Strategic Analysis

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Date Submitted: 09/16/2012 05:44 PM

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Tim Horton’s opened its first restaurant in Hamilton, Ontario in 1964. Broadly, Tim Horton’s competes in the quick service restaurant industry, but their niche traditionally has been the sale of coffee and baked goods. Their growth strategy has been through the concentration of new locations, including recently branching out into the US markets.

SWOT Analysis

Tim Horton’s strengths:

* Strong customer loyalty

* Over 40% of Tim Horton’s customers visit four times a week or more

* 8 out of 10 cups of coffees are purchased from a Tim Horton’s location

* 41% market share of Canadian quick service restaurant industry

* Iconic brand recognition in Canada

* Strong community support

* Supports programs such as TimBits Hockey

* Raised $9.9 million dollars for Tim Horton Children’s Foundation Camp Day

* Successful marketing campaigns and launch of new products

* Marketing success in the “Roll Up the Rim” campaign

* Introduction of specialty coffees and fruit smoothies

* Percentage increase in revenue from 2010 to 2011 greater than McDonald’s and Starbucks

* 12.48% revenue increase between 2010 and 2011 whereas only 12.17% for McDonald’s and 9.35% for Starbucks respectfully

Tim Horton’s weaknesses:

* Stock price isn’t increasing as quickly as competitors

* Earnings Per Share (EPS) is lower than competitors

* Brand not well recognized outside of Canada

* Beginning of 2012, out of 4,014 restaurants, only 719 were outside of Canada (714 - United States and 5 - Gulf Cooperation Council)

* Although revenue is increasing faster than competition, operating income is increasing at slower rate

Opportunities available to Tim Horton’s:

* Increase number of locations in the United States in targeted market areas

* PESTE Element = Economic

* Introduce organic or fair trade coffee options, or healthier food offerings

* PESTE Element =...