Strategy change on global fast food restaurant chain industry

Changes in the Global Fast Food Restaurant Chain Market

With a wide range of experiences among the competing enterprises, the global fast food restaurant chain market is changing quickly. Since 2004, Tim Horton’s has experienced significant modifications, making it one of the fast food restaurant franchises. The company has made a number of strategic management adjustments as a result of its global presence to increase both its market share and the scope of its product offering. The case study on Tim Hortons Restaurants by Hitt, Ireland, and Hoskisson (2006) discusses some of the changes that have taken place since then. This paper also evaluates the company’s current situation with regard to strategic management changes.

Expansion and Success of Tim Hortons

One of the top businesses that has kept and expanded its global reach is the fast food chain Tim Hortons. 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).

Competitive Advantage through Strategic Positioning

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.

Foreign Investment and Developmental Strategies

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.

Future Recommendations for Tim Hortons

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.

References

Hitt, M., Ireland, R. D., & Hoskisson, R. (2006). Strategic management: Concepts and cases. Cengage Learning.

Wilkinson, K. (2014). Tim Hortons lays out its five-year plan for growth. Retrieved April 27, 2017, from http://www.canadianbusiness.com/investing/live-updates-tim-hortons-investors-day/