Comparison of Business Models: Starbucks and Tim Hortons

The assignment analyzes the executive strategy of Starbucks and Tim Hortons, two leading coffee industry players. It compares their business models, focusing on distribution, licensing, marketing strategies, place of distribution, and pricing. The results show that while both companies have strengths, Starbucks' model is more organized and advanced, contributing to its global success.

Running head: EXECUTIVE STRATEGY
Executive strategy
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2EXECUTIVE STRATEGY
The essay consists of a comparison between the business models of Starbucks and
Tim Hortons, the leading coffee industries of Canada. The comparison has been done on
many fields like the marketing strategy of both the companies, the acceptability of both the
companies, the promotional strategies of both the companies. Both Starbucks and Tim
Hortons are good in different spheres.
Both the companies specialize in the food and coffee service industry. While
comparing both the companies firstly in the field of distribution, it can be said that Starbucks
has undoubtedly more and much wide range of distributors and they lay their focus more on
the distribution of fresh food. On the other hand Tim Horton concentrates more on their
beverages as well as foods like bread, dry foods and pastries. This is the first and foremost
difference between them. Their distribution is different and the ways they are distributed are
different (Voigt, Buliga & Michl, 2017).
The second difference is the license and the partnerships. In this context it can be
mentioned that Starbucks uses a lot of licenses and partnerships whereas Tim Hortons relies
much on the third party distributors and warehouses. Starbucks is better in this field. This is
the reason they are globally spread and they have stores in many parts of the world.
The third difference is that both the companies have different marketing strategies.
They do the marketing in a different way. Starbucks prefers the technological applications
such as for the iphone where a customer can use their mobile phone in order to make their

3EXECUTIVE STRATEGY
purchases and it is also connected to the loyalty card that there in Starbucks. Apart from this
the company uses the social media forum like facebook and online shopping to market their
products. This enables the customers to have authentic conversation with the brand. Tim
Hortons does not do their marketing so strongly in the social media. This is where the
marketing strategy of both the companies differs (Pastoll et al., 2014).
The other difference between the two is their place of distribution. Tim Hortons
concentrates their distribution more in the eastern Canada. On the other hand Starbucks
majorly focuses on the urban areas. In most parts of Canada Tim Hortons occupied a major
position but in the global world Starbucks has occupied a good position and it is more famous
in the entire world (Richelieu & Korai, 2014).
The pricing strategy of both the companies is different. Tim Horton can be afforded
by the people of all the classes (Richelieu & Korai, 2014). It is said that it can be afforded by
everyone, from hockey moms to the workers who works in the construction sites. Everybody
would be comfortable in ordering in Tim Horton. Starbucks can be labeled under high-rated
coffee shops. The price is not convenient for all. They are not kept in convenient store.
By analyzing all the executive business models of both the companies this can be
mentioned that both the companies have excelled but the business model of Starbucks is more
organized and advanced. This is the reason even getting launched after few years of Tim
Starbucks made more name in the entire world and made the brand more popular.

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References
Gassmann, O., Frankenberger, K., & Csik, M. (2016). Innovation Strategy: From new
Products to Business Model Innovation. In Business Innovation: Das St. Galler
Modell (pp. 81-104). Springer Gabler, Wiesbaden.
Pastoll, C., Rochwerg, T., Vlaar, B., & Compeau, D. (2014). Starbucks canada: the mobile
payments decision.
Richelieu, A., & Korai, B. (2014). The consumption experience of Tim Hortons’ coffee
fans. Qualitative Market Research: An International Journal, 17(3), 192-208.
Voigt, K. I., Buliga, O., & Michl, K. (2017). Globalizing Coffee Culture: The Case of
Starbucks. In Business Model Pioneers(pp. 41-53). Springer, Cham.