BUS8320 - Tim Hortons: Analyzing the Global Business Environment

This report provides a comprehensive analysis of Tim Hortons' potential expansion into the Australian market. It includes a SWOT analysis, Porter's Five Forces analysis, and a PESTEL analysis of Australia's market environment. The report examines the opportunities and challenges Tim Hortons ...Read More

Running head: GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
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1GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
Executive summary
Tim Hortons Inc is planning to expand in the Australian market through the establishment of a
subsidiary. Therefore, the organization has undertaken a feasibility study in order to perceive the
present prospects of the organizational growth in the concerned market. The report enumerates
the different pros and cons that might be faced by the organization while making an expansion in
the respective market structure. It will be helping the business in undertaking the necessary steps
for mitigating the different risks that might be faced by the business while undertaking the
expansion. The purpose of the report is thereby to focus on the study of the micro and macro
environmental factors that might influence the growth of the organization in the Australian
markets.

2GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
Table of Contents
1. Introduction..................................................................................................................................3
2. Industry analysis..........................................................................................................................3
2.1 SWOT analysis of the business’s prospects while operating in Australia.............................4
2.2 Porter’s five force analysis....................................................................................................5
3. Business environment of the country........................................................................................11
3.1 PESTEL of Australia’s market environment.......................................................................11
Conclusion.....................................................................................................................................16
References......................................................................................................................................18

3GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
1. Introduction
The organization, Tim Hortons Inc., is a multinational fast food restaurant,
headquartered in Canada. The organization specializes in manufacturing coffee and donuts as per
the preferences of the customers. The different aspects that influenced the continuous growth of
the organization is dependent on the quality of the products and the services as per the demands.
The organization has expanded to some nine countries around the globe with an enhanced
revenue of US $3.00 billion, recorded in the year 2016. The organization is recently aiming to
expand its business in Australia through an establishment of a subsidiary (Timhortons., 2018).
The different prospects of the organizational growth and the risks that might be faced by the
organization while undertaking the expansion is being discussed as a part of the report. The
purpose of undertaking the discussion is based on the identification of the external and internal
environments in which the organization will be undertaking its functions. On the other hand, the
identification of the national prospects as per the market entry mode will be helping the business
in formulating strategies for the growth of the business.
2. Industry analysis
The industry analysis will be aiming at undertaking the present prospects of the growth of
the organization while operating in the Australian markets. The competition and the expectation
of the customers of the business will be identified through an analysis of the industrial
environment and the manner in which it affects the processes of the business.

4GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
2.1 SWOT analysis of the business’s prospects while operating in Australia
The SWOT of the organization, Tim Hortons Inc, will be helping to identify the
different internal factors that help in maintaining a suitable performance as per the objectives of
the business.
Strengths
 Largest quick service restaurant chain
 Adherence to the Canadian culture
 Proper consumer relationship services
 Recognized brand name
 Proper quality management unit
Weaknesses
 Lesser brand recognition due to lack of
proper digital marketing statutes
 Smaller presence in the US markets
 Fierce competition in the operating
markets
 Disputes in the supplier relations
Opportunities
 Expansion in the international markets
 Expansion in the line of products
 Enhancement in the supply chain
Threats
 Global economic recession
 Existing competitors and the threat of
new entrants in the market
 Saturation in the existing markets
The different strengths and weaknesses that are enumerated through the SWOT of the
industry will e helping the same in bringing forth improvements in the processes. It will be
helping the organization in maintaining a continuous improvement structure in the functioning of
the same as per the demand of the customers. Suitable Consumer relationship services that are

5GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
offered by the organization will be helping to maintain the loyalty of the consumers as per the
objectives of the business. On the other hand, the suitable quality management team of the
organization will be helping the same in maintaining the standard of the products and the
services that are offered by the business. It will be helping the business in making its expansion
in the Australian markets. The disputes in the supplier relations will be affecting the smooth
functioning of the enterprise through the interrupted supply of the raw materials. Lesser brand
recognition is characterized through the lack of digital marketing operations that are planned by
the business. The new entrants have enhanced the market competition and thereby the
competitive advantage of the organization against the other existing firms will be acting as a
means of sustenance for the enterprise. Diverse issues that might be faced by the organization in
the Australian market is based on the lower lines of product that is offered by the business. On
the other hand, the saturation of the market is affected through the lower range of products that
are offered by the enterprise.
2.2 Porter’s five force analysis
The Porter’s five- force analysis of the organization will be helping to identify different
market related factors that adds on to the growth and expansion of the business, Tim Hortons.
The diverse factors and risks that might be faced by the organization while operating in the
Australian markets are being enumerated in this section of the analysis.

6GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
Intensity of existing rivalry
 The large industry size will be helping
the organization to grow in the
Australian markets as there are diverse
scopes of expansion.
 There are relatively low amount of
existing competitors of Tim Hortons in
Australia. It will be helping the
organization in undertaking the
uninterrupted growth and expansion
process of the same (Hang & Wang,
2012).
 The transparency in the government
regulations and the open trade policies
that are imposed by the legislation has
helped in maintaining the different
levels of change in the systems of the
business while operating in the
Australian markets (Reilly & Scott,

7GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
2014).
 Large storage costs and rental
payments might affect the smooth
functioning of the business.
Bargaining power of the suppliers  The large number of substitute inputs
in the market will be helping the
organization to negotiate with the
suppliers to reduce the costs of the
different raw materials that is required
by the organization for undertaking the
smooth functioning of the processes.
On the other hand, the larger amount of
substitute inputs has created a high
competition for the suppliers in the
Australian markets. It will be helping
the organization, Tim Hortons to bring
in changes in the processes of the
business operations (Barraket &
Furneaux, 2012).
 Higher Diversity in the distribution
channels will be helping the
organization to undertake the proper
functioning of the distribution and the

8GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
marketing strategies.
Threat of substitutes  The existence of substitutes of the
products that are offered by the
organization, Tim Hortons is high in
the Australian markets. It has posed a
threat to the product offering of the
organization and thereby maintain the
competitive advantage of the same
while operating as per the objectives of
the business (Schleimer & Pedersen,
2013). Product differentiation in the
different stages will be helping the
organization in proposing a better
quality product over the substitutes. It
will be helping the organization in
balancing the competitive advantage of
the business over the other substitutes
that are available in the market.
Bargaining power of the customers  The limited information on the
preferences of the buyers will be
affecting the organizational decisions of
making proficient designing of the
product offerings. On the other hand,

9GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
the special customizations that are
expected by the buyers might not be
met by the organization due to lack of
proper survey of the likeness of the
buyers. It will be affecting the goodwill
of the organization relating to the lower
levels of customer satisfaction.
 The large number of customers will be
helping the organization in enhancing
the customer base of the business while
operating in the Australian markets.
 The pricing strategy that is being
implemented by the organization might
affect the buying behavior of the
customers (Barraket & Furneaux,
2012). The availability of substitutes in
the market and the comparatively lower
price of the substitutes might attract the
attention of the customers over the
concerned organization’s offerings. On
the other hand, the customer negotiate
on paying the acclaimed price based on
the quality of the product offering and

10GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
the utility that is derived from the
product. Therefore, the value that is
proposed by the organization through
the introduction of the product must be
convincing the customers to enhance
their buying scale.
Threat of new competitors  The advancement in the technologies
that are undertaken by the existing
competitors of the concerned company
might affect the proper functioning of
the systems of the business while
operating in the Australian markets
(Schleimer & Pedersen, 2013). The
implementation of the relevant
technologies will be helping the
business in making its progress as per
the expectations of the customers. On
the other hand, the implementation of
the advanced technologies will be
helping the business in gaining a
competitive advantage in the Australian
markets.
 The different geographic factors help in

11GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
limiting the competition in the market.
Identifying the demand of the
customers and the manner in which
their demand is characterized by their
employability and lifestyle will be
helping the organization in identifying
the prospects of growth while operating
in the Australian markets.
 The issue of patents helps in reducing
the competition that is faced by the
organization while operating in the
Australian markets (von Briel &
Recker, 2017). Therefore, the
concerned organization must take steps
to limit the competition that is faced by
the same through the existing
competitors and the new entrants by
issuing patents of the different product
offerings of the business.

12GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
3. Business environment of the country
3.1 PESTEL of Australia’s market environment
Political  The open market policy of the
Australian market will be helping the
organization in establishing their
subsidiaries without any disputes. The
expansion of the business will be
supported through the proper
functioning of the systems of the
business while operating in the
diversified market structure.
 The equity in the taxation rates that are
imposed by the Australian government
will be helping in the development and
expansion of the business.
 The employees in the Australian
markets will be holding a
common law contract of employment.
The contract will be subjected to the
Australian government’s regulations,
which will be characterizing the

13GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
different aspects of the bond between
the employer and the employees
(Barraket & Furneaux, 2012).
 Australia enjoys political stability,
which will be helping in the
development of the organization while
operating in the respective markets.
 Lenience in the trading laws will be
helping to ensure the proper
functioning of the business while
operating in the Australian markets
(Rodríguez-Ferradas & Alfaro-Tanco,
2016).
Economic  The economic stability and the
continuous growth of the Australian
markets will be helping the
organization in developing and
expanding (De Anca & Vega, 2016).
On the other hand, the economic
position of the nation relied greatly on
the trade practices for its growth in the
GDP. Therefore, the scope of

14GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
undertaking internal and external trade
functions is enhanced.
 The open investment policy of the
nation will be helping the organization
in maintaining the steady growth and
expansion of the business (Achleitner et
al., 2012). The policy will also be
helping the organization, Tim Hortons
Inc, to extend their deliverables to a
wide range of customers. It will also be
helping the business in making its
expansion while operating in the
Australian markets.
Social  The decline in the population growth
over the years has helped Australia in
maintaining a steady rise in the lifestyle
of the people due to higher scopes of
employability (Wheelen et al. 2017).
Australia experienced an increase in the
population in the year 2009 by 2.1%,
which deliberately decreased and ended
up to 1.4% in year 2016 (Singh, 2012).
It has helped the nation in making

15GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
progression as per the employability
and an enhanced lifestyle is concerned.
The decline in the population growth
and the enhanced lifestyle of the people
will be providing the organization with
a scope of offering their products at a
reasonable rate, which is approachable.
 The consumers in Australia are
optimistic and hold a long term view of
the investments that are made by the
same (Wiesner & Millett, 2012). It
will be helping the organization in
bringing forth changes in the processes
as per the preferences of the customers
through an analysis of their relative
buying behaviors.
 The volatility of the Australian dollars
has affected the national economical
standards, which might be affecting the
proceedings of the organization while
expanding in the respective nation (Adl
et al., 2013).
 The diversity in the cultures that are

16GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
residing in Australia might affect the
decision making phase of the
organization while operating in the
relative markets (Pavelsky et al., 2014).
On the other hand, the product planning
process that is undertaken by the
business is based on the identification
of the preferences of the Australian
customers.
Technological  The different technological
advancements that are undertaken by
the existing competitors in the
Australian market pose a threat for the
concerned organization while
expanding its subsidiaries (Yuan,
2013). The imposition of proper
communication channels through which
the supply chain of the organization can
be enhanced might help the business in
maintaining their strategies in the
international levels. The higher rate of
technological change might challenge
the processes that are undertaken by the

17GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
business while operating in the
international markets.
Environmental
 The application of systematic
environmental management approach that
is relevant with ISO 14001, the
international standards. The proper
functioning of the organization will be
governed by the Environmental
Sustainability Policy, which will be
emphasizing on the green approach
(Gunningham & Sinclair, 2017).
Therefore, the organization must undertake
a systematic review of the activities as per
the green approach and thereby undertake
steps to monitor and optimize the processes
as per the regulations of the government.
 Waste management is again an important
concern for the organization as the
Australian government imposed National
Waste Policy (Gunningham & Sinclair,
2017). The waste management systems of
the organization will be emphasizing on the
minimization of the wastes that are created
by the same while undertaking the
processes (Yuan, 2013). On the other hand,

18GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
the treatment of the harmful wastes is again
a concern for the organization while
operating in the Australian markets.
Legal  The open trade policy and the equity of
taxation will be helping in enhancing
the options of offshore trading. On the
other hand, the open investment policy
of the Australian government and the
manner in which the transparency of
trade operations are undertaken assisted
in ensuring the expansion of the
businesses in the Australian market.
The concerned company will thereby
proficiently prosper based on the
lenience in Australian trade legislation
(Görener, Toker & Ulucay, 2012).
Expansion of the organization is
characterized by the proper functioning
of the operations as per the objectives.
Equity in the imposition of tax tariffs
has helped in the growth of the
organization while operating in the

19GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
Australian markets.
Conclusion
Therefore, from the above analysis it can be stated that the expansion of the organization,
Tim Hortons, through the establishment of subsidiary in Australia will be effective through the
openness of the Australian legislation to offshore trading. On the other hand, the transparency of
the operations and the government regulations will be helping the organization in successfully
establishing the same in the Australian markets. The enhancement in the lifestyle of the people
and the employability of the same will be helping to widen the scope for the organization to
uphold a large consumer base. The different analytical tools that were utilized during the
discussion has helped in perceiving the proficiency of the organization to flourish in the
Australian markets through a proper assessment of the consumer preferences.

20GLOBAL BUSINESS ENVIRONMENT ANALAYSIS OF TIM HORTONS
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