Tim Hortons Acquisition By Burger King: Strategic Implications
Tim Hortons: Overview
Tim Horton’s announced last year that they have joined with Burger King to form the 3rd largest quick service restaurant company in the world.
1- What corporate strategy (ies) does this represent for Tim Horton’s?
2- Complete a S.W.O.T. analysis for Tim Horton’s.
3- From Michael Porter’s five generic competitive strategies which do you think would best describe Tim Horton’s? Please give some reasoning behind your choice.
4- If you were the V-P of Human Resources for Tim Horton’s what would some of the impacts be upon your H.R. plans?
Tim Hortons Corporate Strategy
Tim Hortons is a Canadian Multinational fast casual restaurant that is recognised for its doughnuts and coffee. It is the largest quick service restaurant in Canada. Rapid global expansion was the prime corporate strategy of Tim Hortons behind its merger with Burger King. The deal would make them the world’s 3rd largest quick service restaurant provider. Tim Hortons would benefit from the huge brand recognisation and lean processes of Burger King across the globe and the company has assured to make Tim Hortons an iconic global brand
SWOT Analysis for Tim Hortons
|
Strength |
Weaknesses |
|
Strong market share of around 27% in Canadian Fast food industry. Huge brand reputation and occupied first position on the list of emotional attachments as compared to McDonalds and Starbucks. Financial Stability. Makes regular investment on their stores |
Offers comparatively high product prices. Weak strategies that did not support global expansion. In ability to meet changing trends |
|
Opportunities |
Threats |
|
Growing demand for innovative products and services. Customer inclination for healthier options. Opportunities presented by developing economies. Acquisition by Burger King |
High Competition faced from McDonalds and Starbucks Unstable U.S. economy which is directly effecting customers buying power Rapidly changing preferences of customers. High pressure exerted by investors. |
Michael Porter’s five generic competitive strategies that describe Tim Hortons
Michael Porter has identified five generic competitive strategies that comprise of various ways by which organisations can compete in today’s dynamic market place namely; low-cost provider strategy, broad differentiation strategy, best-cost provider strategy, market niche strategy based on lower cost and market niche strategy based on differentiation.
Low-cost provider strategy describes Tim Hortons wherein their prime goal is to provide their product and services at a low cost that their competitors cannot match. Their acquisition by Burger King will enable them provide their products and services to a broad range of customers globally. Currently Tim Hortons has their complete focus on rapid global expansion and this strategy will help them achieve desired strategic goals.
Impact on Tim Hortons HR plans
Tim Hortons acquisition by Burger King will force them to make a number of changes in their HR plans. Burger King is known world as a company that offers cost advantage over competitors. They are owned by 3G capital that is an investment firm with profit being their prime goal. Burger King is recognised for its cost saving strategies that enable them offer lowest prices to customers. Tim Hortons already has declared mass layoffs from their corporate office. It will affect hundreds of employees which also include pregnant women and employees who were loyal since years4.
Tim Hortons will have to redefine their HR plans so that it align with their new strategic objectives and fits into Burger Kings culture. Changes in HR plans would include planning considerable changes in recruitment and selection process, redefining executive management structure, organisational structure and culture , having a well-defined change management plan and effective leadership to handle resistance to change.
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Ansoff, H. I., (2007) Strategic Management. Hampshire: Palgrave Macmillan.
Armstrong, M., (2011) Armstrong’s Handbook of Strategic Human Resource Management. London: Kogan Page Publishers.
CBC News, (2015) Tim Hortons layoffs: Long-time employees escorted out the door. [Online]
Available at: https://www.cbc.ca/news/business/tim-hortons-layoffs-long-time-employees-escorted-out-the-door-1.2934853
[Accessed 2015].
Owram, K., (2014) Burger King will turn Tim Hortons into ‘iconic global brand,’ Miles Nadal says. [Online]
Available at: https://business.financialpost.com/2014/08/30/burger-king-will-turn-tim-hortons-into-iconic-global-brand-miles-nadal-says/
[Accessed 2015].
Shaw, H., (2015) Tim Hortons Inc confirms scores of head office layoffs. [Online]
Available at: https://business.financialpost.com/2015/01/27/tim-hortons-inc-confirms-head-office-layoffs/
[Accessed 2015].