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Tim Horton

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Tim Hortons Inc.
Business History
Tim Hortons Inc. is mostly referred to as Tim Hortons Café and Bake Shop. It is the largest fast food service in Canada. It also has some restaurants in the USA and the Persian Gulf region. The Business has its headquarters in Hamilton, Ontario, Canada. The company was founded in 1964, by a hockey player by the name of Tim Horton and Jim Charade. It first operated in Hamilton. The company has undergone various changes in leadership since 1964. For example, Tim Horton partnered with Ron Joyce in 1967. He took over in 1974 when Horton died. Joyce expanded Tim Hortons such that by 2002, it had overtaken McDonalds as the largest fast food service in Canada. Initially, Tim Hortons only served two products; coffee and doughnuts. The company has however grown and now sells a variety of fast foods including muffins, cakes, pies, croissants, cookies, soups and chili. Some of the restaurants also serve sandwiches. The company merged with Wendy’s in 1995, expanding its business operations largely to the United States. (timhortons.com) According to the newswire, the company’s goals as of 2010 included increasing the same-store growth sales by at least 3% in Canada and 2% in the USA. The also had a goal of opening more stores, at least 130 in Canada. (newswire.ca). Their overall goal is to offer superior quality products and services for its customers and communities through leadership, innovation and partnership. The company is currently run by Paul D house who is the chairman and Mark Caira who is both president and CEO.
Production
Tim Hortons offers a variety of fast foods. It is mainly known for its coffee and doughnuts. It also sells cakes, croissants and cookies in most of the restaurants across the country. The Tim Hortons restaurant chain does not target any specific group of people, there is something for everyone; children-cookies and donuts, teens-sugary products and caffeine, young adults-coffee and sandwiches, older adults-coffee, meals and attractive deals and the elderly-nice meals and good deals. Anyone on the go is a potential customer for Tim Hortons. Regarding supply and demand for their main product, coffee, it is worthwhile to note that its demand is inelastic. This is because coffee is a hot beverage which does not cost much for consumers. For them to remain competitive, they buy the coffee from producers at extremely low prices at price it lowly so that consumers are able to afford. This makes their coffee ‘always fresh’ yet still at an affordable price. The products offered by Tim Hortons are usually at various stages of production. The primary stage is when the coffee is grown, weeded and harvested by famers. They then sell it in bulk to the restaurant owners The brewing and processing is at the secondary stage of production, and is the main thing that happens at the restaurants. At this stage, the coffee may have value added to it or come with additional things such as cream and coffee. The workers at Tim Hortons offer their services at a tertiary stage. We see clearly that Tim Hortons has all three stages of production for its products. Tim Hortons is basically a price maker. For coffee, the main prices are; $1.40 for a small coffee cup, $1.60 for a medium coffee cup, $1.80 for a large coffee cup and $1.80 for an extra-large coffee cup. They are able to price their food stuff this low mainly because they are a large firm and are able to get most supplies cheaply and in bulk. Fixed costs for Tim Hortons are salaries, rent, insurance and franchise fee costs. The variable costs include labour and coffee beans. As of June 2014, Tim Hortons had a gross profit margin of 26.06%, slightly higher than in March 2014 where the profit margin was 23.99% (ycharts.com)
Competition
The company’s strongest competitor is the McDonald. This can be clearly seen by the fact that in the USA, McDonald’s has more stores than Tim Hortons. Another competitor is Starbucks in The US. Their main competitive advantage is that they are loyal to the Canadians. Their brand is therefore reputable as “Canada’s Favorite Coffee” (Tim Hortons, 2013). It has the largest market share in Canada. The company is also able to advertise very cheaply and hence maintain low prices for all its foodstuffs. Tim Hortons also maintains customer relations and finds out what consumers really want, sometimes being innovative to bring new products.
Summary
Tim Hortons is a largely Canadian business, and their success can be highly attributed to the Canadians. Their main reason for success lies in the fact that their coffee is always fresh. Coffee is the main product for Tim Hortons and offering it in the highest quality possible makes Tim Hortons successful. Another strength is in the fact that they listen to their consumers to serve foods that the consumer really wants. One of their major weaknesses is the fact that the brand is not as competitive in the US as it is in Canada. Another weakness is that their advertisements are less than captivating. There are also a few complains about their customer services. All in all, Tim Hortons is a powerful brand with aims to expand its market.s

Work Cited
The Story of Tim Hortons retrieved from www.timhortons.com/ca/en/about/the-story-of-tim-hortons.php
Tim Hortons 2010 and four-year strategic plan objectives and restaurant development goals as previously disclosed. (March 8 2010) retrieved from www.newswire.ca/en/story/702613/tim-hortons-2010-and-four-year-strategic-plan-objectives-and-restaurant-development-goals-as-previously-disclosed.
Tim Hortons (THI) retrieved from ycharts.com/companies/THI/gross_profit_margin

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