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Two of the biggest competitors in Canada’s quick-service (QSR) coffee retail sector are Tim Hortons and...

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General Management

Two of the biggest competitors in Canada’s quick-service (QSR)coffee retail sector are Tim Hortons and McDonalds.

For this assignment you will complete a review of the both TimHortons and McDonalds in the Canadian coffee market. Please be sureto examine all elements of their loyalty program, including digitaland instore application/execution, as well as their productoffering, pricing strategy and ethical practices to understand howthey drive market share in the competitive QSR coffee market.

What sourcing considerations do you think these retailers haveemployed to increase their competitive strength in the market.Provide examples of any ethical practices they have employed andhow they are communicating that to consumers

Answer & Explanation Solved by verified expert
4.0 Ratings (720 Votes)
Key Economic VariablesIndustry Tim Hortons competes in theFullService Restaurants industry as defined by NAICS 722110 andincludes key competitor McDonalds FullSerive Restaurants 2012This report will focus on the North American segment Industrysize FullService restaurant industry has revenues of 76 billionand 822 billion in Canada and the US respectively Datamonitor2012 Industry concentration Highly fragmented 70 ofestablishments are independent Shields 2008 Industry lifecycleGrowth stage Although the market is showing signs of saturationnew locations are continuously being opened Market is growing at arate of 31 per year and is anticipated to be worth 88 billionin Canada and 936 billion in the US by 2016 Datamonitor 2012The industry is experiencing moderate growth This industry growswhether or not the overall economy is growing The US market ismuch larger than the Canadian market and represents much greaterpotential for industry competitors as well as Tim Hortons As theindustry is highly fragmented and still growing industry membersmust increase their competitiveness as growth will attract newentrantsExternal Analysis Politicallegal Nutritionlabeling is becoming more prevalent in major US cities however inCanada a bill calling for improvements in restaurant labeling wasdefeated in 2007 Beck 2012 Economic factors Entire foodservice industry continues to grow even in poor economic conditionDiPietro 2011 Historical oversupply of coffee has driven downthe price of this input Argenti 2004 Social increasing obesityrates especially in the US is sparking debate among policymakers and social interest groups Burton 2009 There is analltime high level of distrust against corporations Argenti2004 Legal and regulatory issues are much more prevalent in theUnited States however industry members and Tim Hortons mustmonitor progress or changes in Canada Industry members can expectto perform well financially even in harsh economic climates Withincreasing obesity rates and public distrust of corporationsindustry members must establish trust and good will among consumerswith expanded CSR and public relations initiativesPorters 5 ForcesBargaining power of buyers ModerateStrongThere is a lack of switch costs within a given price range andchoice is dependant on consumers taste which can change dailyThere is a high price elasticity of demand as industry offeringsare not essentials Datamonitor 2012 Consumers are small andnumerousBargaining power of suppliersModerateStrong Keeping costs down is important for industrymembers and maintaining reliable relationships with suppliers ofquality goods is important for success Supplier inputs areessential Suppliers are large and few Datamonitor 2012Threat of new entry Fierce High reliance onfranchising for distribution of industry members reduces entrycosts This industry does not require a large capital outlayreflected by high fragmentation and is    See Answer
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