Tim Hortons, internationalization strategy, France, Brazil, Morocco, strategic position, local responsiveness, PESTEL analysis, industry lifecycle, fast-food industry, coffee, licensing, franchise, subsidiary, market size, Porter's five forces
The Tim Hortons chain was established in 1964 and opened in Hamilton, Ontario. The first Tim Hortons restaurants offered only two products: coffee and donuts. Over the years, Tim Hortons has become Canada's largest national chain in the coffee and bakery market. Tim Hortons has more than 4600 stores nationwide and approximately 721 stores in major cities in the United States. There are some restaurants in Dubai, the United Kingdom, Kuwait, Spain, the Philippines and Oman. The company generates a turnover of approximately 682.4 million US $, this figure is down 8.3 million, 1.2% compared to last year.
The aim of this report is to evaluate Tim Hortons' internationalization capabilities in a country that represents a real opportunity for the company. A relevant implementation strategy will be proposed to integrate this new market.
[...] The size of its market is 67.12 million inhabitants, and the rate of urbanization is high since it is 79.98%. France is a rich country, the GDP per capita of France is very high, it is $ 38,476, moreover, according to the Big Mac index we can see that France is rising to the 9th place which means that the country has a rather high cost of living. The country's corruption is low (23/180), the inflation rate is also low (at + 1.9%). [...]
[...] The rate of urbanization is very high (86.17%). Brazil is far from being a rich country, the GDP per capita of Brazil is rather low, it is $ 9,821. Brazil is therefore ranked 69th in the ranking of countries according to their GDP per capita. However, according to the Big Mac index, the cost of living would be rather high since Brazil reached 6th place. There is a very strong corruption of the country (96/180), a creeping inflation (at + 4.05%), a sensitive country risk (Euler Hermes Assessment: B3) and a rather high commercial risk ("Doing Business 2018 Ranking": 109/190). [...]
[...] (2016) `Pourquoi investir dans la restauration rapide? (vidéo)' 2M [online] available from http://www.2m.ma/fr/programme/20161220-pourquoi-investir-dans-la-restauration-rapide/ [16 December 2018] 36) World Bank Group (2018) DOING BUSINESS 2019 [online] available from http://francais.doingbusiness.org/content/dam/doingBusiness/media/Annual-Reports/English/DB2019-report_web-version.pdf [16 December 2018] 37) Zagdoun, B. (2015) `INFORGRAPHIES. Burger King, Quick, McDonald's: le marché très déséquilibré de la restauration rapide en France' Francetvinfo [online] available from https://www.francetvinfo.fr/economie/entreprises/infographies-burger-king-quick-mcdonald-s-le-marche-tres-desequilibre-de-la-restauration-rapide-en-france_1106165.html [16 December 2018] Appendices Table Market Potential Assessment FRANCE BRAZIL MOROCCO MARKET SIZE Population 67,12 million 209,3 million 35,74 million Age structure 0-14 years: 18.53% (male 6,360,218/female 6,076,598) 15-24 years: 11.79% (male 4,045,901/female 3,864,395) 25-54 years: 37.78% (male 12,773,900/female 12,578,256) 55-64 years: 12.42% (male 4,020,507/female 4,315,407) 65 years and over: 19.48% (male 5,648,888/ female 7,422,091) 0-14 years: 22.33% (male 23,599,867/female 22,696,756) 15-24 years: 16.36% (male 17,212,048/female 16,721,295) 25-54 years: 43.86% (male 45,114,076/female 45,836,147) 55-64 years: 9.12% (male 8,931,065/female 9,974,723) 65 years and over: 8.33% (male 7,356,838/female 9,910,576) 0-14 years: 25.77% (male 4,450,360/female 4,308,955) 15-24 years: 17.04% (male 2,879,828/female 2,910,029) 25-54 years: 42.32% (male 6,956,186/female 7,428,129) 55-64 years: 8.13% (male 1,365,611/female 1,398,553) 65 years and over: 6.74% (male 1,034,188/female 1,254,816) Urbanization MARKET INTENSITY GDP per capita $38,476 $9,821 $3,007 BigMac index 4.68 US$ 5.1 US$ - Labour force 30,35 million 104.27 million 12,71 million Unemployment rate COMMERCIAL RISK "Doing Business 2018 Ranking" 32/190 109/190 60/190 POLITICAL RISK Corruption index 23/180 96/180 81/180 COUNTRY RISK Euler Hermes Assessment AA1 (Low risk) B3 (Sensitive risk) B1 (Low risk) CURRENCY RISK Inflation Rate Table Fast food and coffee demand FRANCE CANADA FAST FOOD Market size EUR 54 billion $68,4 billion (EUR 60,4 billion) Growth rate Market dynamics French people are paying more attention to what they eat and want to eat healthier. [...]
[...] Coffee in Canada is very important and almost a heritage. 2/3 of Canadian adults drink coffee every day. Canadians drink even more coffee than tap water coffees out of 10 are drunk at home and a Canadian drinks an average of 3.2 coffees a day. Market shares JDE: 30.10% LAVAZZA: 16.60% NESTLE: 9.70% MDD: 30.60% Others: 13% Keurig: 57% Tassimo: 22% Nespresso: 18% Table PESTEL Analysis for France FRANCE Political France is a developed country, politically France is a stable country, there is no war, no political crisis and no conflict, even if recently the country is facing some problems related to law and order. [...]
[...] There are 8.8 million French people living below the poverty line (set at 1026 euros per month). The French are more and more attentive to their diet and wants to eat healthier. Although the French people have a fairly high purchasing power, the cost of living is also very high, and the French are paying more attention to what they spend. Tim Hortons will have to offer products at a not too high price and offer good quality products to attract French customers. [...]
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