The International Expansion of Tim Hortons

Description

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.

Teaching objectives

• 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

• Internationalization.

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.

Additional information

Teachers notes are available for teachers only. Please contact HEC Montreal Case Centre.