The International Expansion of Tim Hortons: Abstract
Tim Hortons built a successful business in Canada by creating a vertically integrated company working with small-scale franchisees and incorporating its “Canadian identity” in its marketing strategy. The company’s internationalization efforts were much less fruitful, however, with 80% of outlets located in Canada, and just 18% in the United States. In 2014, 3G Capital – a Brazilian-American private-equity firm – acquired Tim Hortons with plans to speed up the company’s internationalization process. The new owner’s attempts to implement cost-cutting measures were quickly met with strong resistance from both franchisees and Canadian consumers and, in 2019, it faced two major challenges: at home, it had to restore the confidence of franchisees and consumers and, abroad, it faced stiff competition from chains that enjoyed a significant head start in new international markets. On top of everything else, it appeared that Tim Hortons’s business model might not lend itself to internationalization.
- Identify key components that can prevent a business model that is successful in a domestic market from being easily internationalized.
- Understand how a multinational’s position is conditioned by multimarket competition.
- When competitors are simultaneously present in several countries, competitive responses are more complex.
Main themes covered
Concepts and theories related to the case
- Key elements defining a business model
- The interrelationship between the elements of a business model
- Difficulties inherent to internationalizing some elements of a business model
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