1. Tim Horton’s: The Challenge of Expansion
By Guxim Lohja
Central Michigan University
Off-Campus Program
MSA 601 – Organizational Dynamics and Human Behavior
Tim Horton’s: The challenge of expansion
When visiting Canada whether for business or pleasure, one never fails to notice and experience
Tim Hortons. It is“the fourth largest publicly-traded quick service restaurant chain in North
America based on market capitalism and the largest in Canada” (Tim Hortons, 2011). Despite the
global economic crisis, Tim Hortons has been doing well and has ambitions to expand south,
seeing U.S. as prime growth opportunity. This expansion has its own challenges, for even though
Tim Hortons is a brand name in Canada, it has to fight for recognition in USA against similar
businesses such as Starbucks and Dunkin Donuts that are part of the U.S. culture.
The Tim Horton’s chain was founded in 1964 in Hamilton, Ontario. The chain's focus on top
quality, always fresh product, value, great service and community leadership has allowed it to
grow into the largest quick service restaurant chain in Canada specializing in always fresh
coffee, baked goods and home-style lunches.
The chain's biggest drawing card remains its legendary Tim Horton’s coffee. The special blend
is also available in cans, as are Tim Horton’s hot chocolate and English Toffee and French
Vanilla cappuccinos, so guests can also enjoy these great tasting products at home.
In addition to its regular stand-alone restaurants, Tim Horton’s locations can also be found in
shopping malls, highway outlets, universities and hospitals, providing prominent visibility for the
chain. Most standard Tim Horton’s locations offer 24-hour drive-thru service, catering to
consumers on the go. Combo unit locations, which house both a Tim Horton’s and Wendy's,
offer guests the convenience of both restaurants under one roof.
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2. Tim Horton’s: The Challenge of Expansion
By Guxim Lohja
Central Michigan University
Off-Campus Program
MSA 601 – Organizational Dynamics and Human Behavior
In 1995, Tim Horton’s merged with Wendy's International, Inc., giving new focus and impetus
to the expansion of the Tim Horton’s concept in the United States. Tim Horton’s locations can
presently be found in Michigan, Maine, Connecticut, Ohio, West Virginia, Kentucky,
Pennsylvania, Rhode Island, Massachusetts and New York, with responsible expansion
continuing in these core markets. The Canadian operation is 95% franchise owned and operated,
and plans in the U.S. call for the same key strategy to be implemented as expansion progresses.
Tim Horton’s has been expanding in the North Eastern United States where it serves a
population of 70 million people double that of Canada (Eric Lam Oct. 26, 2011. Financial Post
Trading Desk “U.S. expansion key to Tim Horton’s growth”.
In March 2006, Tim Horton’s completed an initial public offering of the company and was fully
spun off as a separate company as of September 29, 2006. Tim Horton’s trades on the NYSE and
TSX (THI).
The challenge for Tim Horton’s in the U.S. expansion is how to translate its runaway appeal to
the U.S. consumers. This expansion has faced fierce resistance by other food service giants such
as Dunkin Donuts, which has contributed to the company closing down 36 locations, mostly in
the New England region (Tilak, 2011).
Tim Horton’s culture and structural organization
Organizational culture refers to “the dominant ways of doing things in an organization” (Mills,
Helms Mills, Forshaw, Bratton, 2007, 571). Culture is viewed from many different perspectives
and is affected by many things within an organization.
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3. Tim Horton’s: The Challenge of Expansion
By Guxim Lohja
Central Michigan University
Off-Campus Program
MSA 601 – Organizational Dynamics and Human Behavior
Tim Horton’s culture is imposed by the leadership. The mission statement is “to deliver superior
quality products and services for our customers and communities through leadership” (Tim
Hortons, 2011). Trevor Witty illustrates his correlation with Tim Horton’s mission statement: “I
think that the experience I've had here at Tim Hortons starts by having a great boss. My
Restaurant Owner has instilled training and confidence within me” (Tim Hortons, 2011).
Through observations, Trevor Witty’s statement is true. Employees were not heavily monitored
and managers were not heavily troubled by their superior staff. In some occasions managers
broke up conversations between the younger staff but overall, their performance was strong
(Personal Observation, November 2011). According to Mills, organizational structure is “the
formal patterns of work relationships that coordinate organizational activities according to
strategy, technology and environment” (et al. Mills, 2007, 455). Tim Horton’s has established
itself as one of Canada’s largest food services with over three thousand stores nationwide (Tim
Horton’s, 2011); they achieved their success by operating structurally by function. Their
executive team at head office ranges from Executive Chairman, President and Chief Executive
Officer to Chief Operations Officer, Canada (Tim Horton’s, 2011). Departments such as
Distribution, Finance and Taxation, Information Technology, Marketing are just some of the
subdivisions that compose Tim Horton’s (Tim Horton’s, 2011).
Translating and maintaining Tim Horton’s culture in the U.S. market
Mintzberg introduces four dimensions that influence the structure of Tim Horton’s, “Developing
the notion of volatility and uncertainty, Mintzberg identifies four distinct dimensions of
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4. Tim Horton’s: The Challenge of Expansion
By Guxim Lohja
Central Michigan University
Off-Campus Program
MSA 601 – Organizational Dynamics and Human Behavior
organizational environments that influence the type of structure most appropriate to a particular
situation: (1) stability, (2) complexity, (3) market diversity, and (4) hostility” (et al. Mills, 2007,
475). Tim Horton’s has proven to have a stable environmental structure. In the past they have
made minor changes as oppose to constant changes; these changes include the payment system
and the slight expansion of menu and locations. In a time when Starbucks is closing 600 stores in
the U.S. Tim Horton’s is pushing its expansion fueled by cheap real estate and cash money that
comes from its successful business practice (Tice, 2010).
Tim Horton’s Corporation is a complex organization. There are many environmental factors as
mentioned above that Tim Horton’s has to adhere to in order to satisfy their environmental and
customer needs. It has renamed its shops as Tim Horton’s Café & Bake Shop, thus taking its
brand name beyond the doughnut shop concept (Tice, 2010).
According to the Tim Horton website, “Tim Horton’s has 3,871 system wide restaurants,
including 3,225 in Canada and 645 in the United States” (Tim Horton’s, 2011). The wide range
of locations is a large contribution to the markets diversity of customers that consume their
products; these products mainly consisting of coffee, doughnuts, sandwiches, and soup. The U.S.
expansion is moving in an upscale direction by promoting items such as pomegranate-cheese
Danish rather than simple donuts names (Tice, 2010).
Tim Horton’s has a hostile environment of competition especially because it is placed in the
quick service restaurant industry category. These restaurant owners compete with many factors
according to the Tim Horton’s website, some being competition with “international, regional,
and local organizations, primarily through the quality, variety, and value perception of food
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5. Tim Horton’s: The Challenge of Expansion
By Guxim Lohja
Central Michigan University
Off-Campus Program
MSA 601 – Organizational Dynamics and Human Behavior
products offered” (Tim Horton’s, 2011). The chain is using its rebrand strategy as a way to avoid
frontal clashes with other local powerhouses such as Dunkin Donuts (Tice, 2010).
Another contributing factor to the U.S. expansion strategy is the values, beliefs and slogans that
are embedded in Tim Horton’s organizational culture. Tim Hortons values the advancement and
growth within individual firms, satisfying guests, finding new opportunities, being fair and
ethical to all workers, and being a strong team in which communication is integral (Tim Hortons,
2011). These values are seen in the actual work setting of Tim Hortons. Guests are generally
satisfied when they leave and workers are typically treated fairly and have strong communication
between team members (Personal Observation, November 2011). Tim Hortons’ beliefs are that
they have the best quality products, customer satisfaction rates and teamwork (Tim Hortons,
2011). In 2010, 97% of Tim Horton’s employees were proud to work for the company (Tim
Hortons, 2011). The employees themselves truly believe that they have the best of all the above
factors and that they use teamwork to achieve their combined goals. Slogans are “phrases that are
developed to give customers and employees a particular view of the organization” (Cormack,
2008). The popular slogan that Tim Hortons uses is “Always Fresh, Always There” (Cormack,
2008). The “Always Fresh” slogan implies that their products are top quality (Cormack, 2008).
The “Always There” implies that they are reliable and a part of our everyday lives (Cormack,
2008). “Always Fresh” is posted everywhere in Tim Horton’s which gives the customer the
impression that anything that they purchase will be guaranteed fresh.
To get the American customers used to its products and name, Tim Horton’s has used its proven
successful strategy in teaming up with local brands such as Cold Stone creamery in stores in 10
states (Tice, 2010).
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6. Tim Horton’s: The Challenge of Expansion
By Guxim Lohja
Central Michigan University
Off-Campus Program
MSA 601 – Organizational Dynamics and Human Behavior
.
Conclusion
Tim Horton’s continues to rapidly grow locally and internationally. The introduction of Tim
Hortons into the United States shows that their firm is expanding and creating a bigger name for
themselves not only in Canada but worldwide. With the expansion come new challenges and
opportunities. The biggest challenge to Tim Horton’s or any other organization is to maintain its
values and translate them to different environments created as a result of the organizational
growth outside its native boundaries.
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7. Tim Horton’s: The Challenge of Expansion
By Guxim Lohja
Central Michigan University
Off-Campus Program
MSA 601 – Organizational Dynamics and Human Behavior
References
Barry, Jessica & Manji, Yasmin (2010). “I‟ll Have a Double-Double, Please” The Role of Tim
Horton‟s in the Making of the Canadian Identity. Strathy Undergraduate Working Papers
on Canadian English, Vol. 8. Retrieved from:
http://www.queensu.ca/strathy/publications/volume8/Barry-Manji-WP8.pdf
Cormack, Patricia (2008). „True Stories‟ of Canada: Tim Hortons and the Branding of a
National Identity. Cultural Sociology. Retrieved
from:http://cus.sagepub.com/content/2/3/369
Mills, A. J., Helms, Mills, J.C., Forshaw, C., & Bratton, J (2007). Organizational Behavior in a
Global Context. University of Toronto Press. Inc.
Tice, Carol (2010). Tim Horton‟s Aggressive U.S. Expansion: Fueled by Cheap Real Estate
Posted on March 15, 2010 on CBS Interactive Inc.
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8. Tim Horton’s: The Challenge of Expansion
By Guxim Lohja
Central Michigan University
Off-Campus Program
MSA 601 – Organizational Dynamics and Human Behavior
Tilak, S. John (2011). May 16 2011. Tim Horton‟s sees U.S. as prime growth opportunity.
Posted on May 16, 2011 on www.reutersreprints.com
Tim Horton’s (2011). Corporate Profile. Retrieved from:
http://www.timhortons.com/ca/en/about/profile.html
Tim Hortons (2011). Home Page. Retrieved from: http://www.timhortons.com/ca/en/index.html
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