Introduction: Business Environment
Tim Hortons is a global chain of fast-food restaurants with headquarters in Toronto, Canada. It offers coffee, donuts, and other fast food items, and with 4,846 locations across 14 countries as of 31 December 2018 in Canada, it was the biggest chain of quick-service restaurants. The company’s financial strategy is supported by two competencies: brand and management. The efficiency of operation reduces the cost through scale economies and vertical integration. It works on increasing the consumer’s knowledge to buy the goods by twisting the brand name: the company has a clearly defined organizational structure. This corporation uses vertical and structured channels to manage disputes between its various departments.
Starbucks, its biggest competitor, contends with excellent quality and a solid reputation. Starbucks uses a matrix organizational structure, which incorporates crossovers between several business areas. Tim Hortons is more committed to offering customers high-quality coffee and snacks at lower prices. However, its organizational structure is constantly changing to meet the needs of the current business environment and other internal and external factors. McDonald’s, which also provides quick and inexpensive meals comparable to other fast-food businesses such as Burger King and Subway, is Tim Hortons’ second rival. There is a divisional organizational structure at McDonald’s. The firm’s primary goal is to have organizational flexibility and autonomy to satisfy business demands across various corporate dimensions and marketplaces (Lewis, 2020). Global hierarchy, performance-based divisions, and function-based groupings comprise their organizational structure.
Since Tim Hortons first began serving customers, the restaurant business has undergone numerous changes throughout history. The novel coronavirus pandemic, however, had a detrimental effect on this industry, unlike most changes where the company had to decide the best course of action and when to make it. The management had to modify their standard operating procedure to keep things running. To minimize employee-consumer interactions and consumer-consumer associations, Tim Hortons’ changed its business model from traditional sit-down dining to the drive-thru, take-out, and delivery to their respective customers, thereby limiting the spread of the virus in the restaurant industry. Additionally, the staff takes temperature readings of the employees before the start of their shifts and arranges the dining tables so that they are two meters apart to ensure the social distance between the patrons.
Business Structures
The management structure at the company consists of a total of five tiers. The company’s CEO is also the executive chairperson and president of the business. A board of directors functions vertically beneath the chief executive officer—the corporate secretary and vice executive chairperson after the vertical line of operation after the CEO. The finance officers are placed after the vice executive, followed by the executive vice-chairman for supply chain and management. The chief operating officer is below the finance officer, the top marketing and brand manager. The employees had a good relationship with their superiors: they were consulted on issues about the company.
Over time, Tim Hortons’ annual revenues have been rising significantly. The company keeps on increasing year by year. In 2015, the payment was $2.96 billion, which had increased to $3.34 billion come 2019. This is because the Tim Hortons Company has achieved widespread success on a global scale and is a well-known brand (Harris & Bureau, 2020). Studies reveal that Tim Hortons outperformed its internationally renowned sister company, Burger King, in terms of profits in 2019. Additionally, the business franchised and ran 4932 restaurants worldwide, most of which were in the U.S. and Canada. The management of the company has started several charitable endeavors. The programs included partnerships with Tim Hortons for coffee, environmental stewardship, and children’s programs. These institutions demonstrate the company’s commitment to corporate social responsibility (CSR). These programs were developed in honor of Hortons’ founder, who was passionate about giving back to society by assisting the less fortunate. These CSR give economically disadvantaged youth opportunities, such as providing mental support for kids and teens while supporting their academic aspirations.
Problem Identification
This COVID-19 pandemic has been unprecedented for everyone, including businesses such as restaurants and fast-food chains. Tim Hortons, similar to any other, was severely affected during this time, from their operations process down to employee motivation. It has taken a toll on the firm. First, the coronavirus’s global spread caused Tim Hortons’ operational procedures to be influenced. Given the circumstances, raw material deliveries have stalled. This outbreak has seriously hampered transportation for both goods and people. Second, Canada’s restaurants and fast food businesses can only offer drive-thru service and takeaway since they are in a perpetual lockdown. Tim Hortons does not have difficulty choosing a location because their stores are practically everywhere and open to customers, notwithstanding lockdowns. Others found it simpler to purchase items and have their shopping delivered right away to their home because some of the branches are close to residential areas.
Their capacity planning and managing operations were both affected as well. At first, it was hard to determine the total resources needed to meet the demand for their products because they had not experienced this yet. No one has experienced it. In addition, same-store sales were already struggling even before the pandemic started. Tim Hortons decreased by 4.6% revenue in the fourth quarter of 2019, and when the quarantine hit Canada, the organization fell hard with a 30% same-store sales decline (Harris & Bureau, 2020). The store employees were highly affected during this time as the working hours were reduced.
Hence, their pay is lower than expected. There is so much happening outside of our control, and the employees have various emotions from frustration, disconnection, fear of losing a job, and low morale. These are becoming a problem at the firm and across other businesses from various sectors. Overly stressed and anxious employees may result in poor working behavior and disconnected employees. This may also result in a higher turnover rate, which will be a risk to the company’s reputation. Employees are also expecting some help from the company during this time.
Business Response
Tim Hortons started taking practical steps to stop the coronavirus pandemic from spreading. To reduce the number of patrons present, the restaurant was to drive through, take out, and deliver the ordered goods to its customers. To minimize the proximity of the customers, the restaurant also set the serving tables apart by two meters for the few customers who could not avoid eating in. Signs are placed on the tables to warn people not to sit or use them in cases where the tables cannot be moved more than two meters away. Additionally, the tabletops were cleaned after each use to remove any residual viruses and disinfect them.
The management of Tim Hortons also reacted by installing safety precautions in each satellite restaurant. At the front counters and the drive-through, the administration saw the installation of safety barriers (Cheong & Law, 2022). The shield guards against the coronavirus infection since asymptomatic patients may spread to the company’s clients and staff. The business also gave its workers thermometers so they could check their body temperatures before switching shifts. Any patrons walking into the restaurants had to have their temperature taken. This served as a way to identify infected cases which could be identified by their elevated temperature readings and prevent a widespread infection of both the staff and other clients.
Although, they were able to manage and create a contingency plan for this pandemic a few months after it hit Canada. It is still not a good time to relax and be complacent because it will take a little longer before everything returns to normal. Every step of the way will be difficult, especially when trying to drive that behavior back to pre-COVID-19. The company should be vigilant for upcoming events and progress regarding COVID-19.
Recommendations
Based on what I have researched and studied in this course, I highly recommend Tim Hortons’ to have a more precise process with strategic planning, operations design, initiative execution, and business intelligence. Tim Hortons should not implement something just because others are doing it; they should create research about it. In addition, they should check it first with their customers and ask for their opinions. This will make the customers feel more appreciated and welcomed.
For employees to stay motivated, they should always inspire in various ways. Nevertheless, when the employees think the company’s way is the only way or the highway leader, they usually are not motivated to look for solutions. One ought to involve their employees in improving business operations by asking them where they think improvements can be made. The firm should take note of the flaws that are emerging and the solutions offered. It should ensure its employees know their opinions matter, and it should be open to suggestions. In addition to accelerating a company’s business process improvement, showing employees that they add value to the small enterprise can help staffing management avoid stress by keeping employee turnover at a minimum.
As for the competitiveness in the market, they should be aware of all the details about their competitors. Things that happen both inside and outside the industry affect the business. They need to be mindful of their local economy, changing laws, and the national state of their industry. Staying updated with developments important to the business assists them in finding best practices. By regularly checking in on the condition of their industry, one can get ahead of the competition. Trends can inspire innovation, helping the business find new ways to improve its offerings and cut costs. In addition, they should have various CSR projects, which will benefit them, boost the name of their company and be considered part of their public relations strategy.
Conclusion
I want to implement various changes to ensure that recommendations are adequate for Tim Hortons. First is the margin for their products that the franchisees are complaining about. Increasing the price of commodities should not be shouldered by the franchisees and thus is a cost that Tim Hortons must bear. This is especially important to Tim Hortons as it aims to provide low-priced goods and therefore does not have the same margin of safety that other high-priced quick-service food outlets may have. Thus, the business must ensure that it mitigates commodity fluctuation risk by planning and buying futures agreements to be one step ahead of the change in commodity prices. However, the corporation must not just focus on improving its brand image but must also ensure its brand is protected. For example, if a customer gets food poisoning, this would ruin the brand Tim Hortons has spent so much time and money developing. Another issue that could seriously affect the brand is poor customer service. Thus, the company must ensure that it has thorough screening processes for franchisees and monitor them to ensure that they add to the brand image and not take away from it.
Secondly, Tim Hortons should maintain its base in the market by providing quality food at affordable prices. They are a fast-food chain. Hence, they should be offering cheap and fast meals for on-the-go people. Other factors that should be maintained or, better yet, improved are the following: the number and location of restaurants, the quality and speed of service, attractiveness of facilities, effectiveness of marketing and advertising campaigns, and pricing. If the business does not continue to offer superior and good-quality customer service for each of the above factors, its market share will decrease. Lastly, it would be best to propose a CSR project wherein they would help the other people who were severely affected by the pandemic, not only their employees and customers. This will surely be on the news on various television stations as this is a big thing. In addition, it would be best to do the sustainable project yearly or moving forward because many people support pro-environment or sustainable living brands.
References
Cheong, F., & Law, R. (2022). Will Macau’s restaurants survive or thrive after entering the o2o food delivery platform in the COVID-19 pandemic? International Journal of Environmental Research and Public Health, 19(9), 5100.
Erkmen, E., & Hancer, M. (2019). Building brand relationships for restaurants. International Journal of Contemporary Hospitality Management, 31(3), 1469–1487.
Harris, J. E., & Bureau, N. (2020). Geospatial analysis of the September 2020 Coronavirus Outbreak at the University of Wisconsin – Madison: Did a cluster of local bars play a critical role? Cambridge, Mass. National Bureau of Economic Research.
Lewis, M. (2020). Tim Hortons uniform may soon include masks, as drive-thrus and dining rooms get a pandemic makeover. Thestar.com.
Publications International, Ltd. (2020). The best of secret restaurant recipes. Publications International, Ltd.