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.
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.
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.
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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 |
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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 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.
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.
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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, 2014). · Large storage costs and rental payments might affect the smooth functioning of the business. |
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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 marketing strategies. |
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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. |
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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, 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 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. |
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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 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. |
PESTEL of Australia’s market environment
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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 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). |
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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 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. |
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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 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 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. |
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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 business while operating in the international markets. |
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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, the treatment of the harmful wastes is again a concern for the organization while operating in the Australian markets. |
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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 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
References
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Barraket, J., & Furneaux, C. (2012). Social innovation and social enterprise: Evidence from Australia. In Challenge social innovation (pp. 215-237). Springer, Berlin, Heidelberg.
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Reilly, M., & Scott, P. S. (2014). Subsidiary driven innovation within shifting MNC structures: Identifying new challenges and research directions. Technovation, 34(3), 190-202.
Rodríguez-Ferradas, M. I., & Alfaro-Tanco, J. A. (2016). Open innovation in automotive SMEs suppliers: an opportunity for new product development. Universia Business Review, (50).
Schleimer, S. C., & Pedersen, T. (2013). The driving forces of subsidiary absorptive capacity. Journal of Management Studies, 50(4), 646-672.
Singh, P. K. (2012). Management of Business Processes Can Help an Organization Achieve Competitive Advantage. International Management Review, 8(2).
Timhortons. (2018). Tim Hortons. Retrieved from https://www.timhortons.com/ca/en/index.php
von Briel, F., & Recker, J. C. (2017). Lessons from a failed implementation of an online open innovation community in an innovative organization. MIS Quarterly Executive, 16(1), 35-46.
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