Identify new changes to enhance operational efficiency.

Contents

• Executive Summary3
• Introduction3
• Identifying new changes to enhance operational efficiency4
• Recommendation for the changes4
• Implementation plan 5
• Applying managerial concepts to the major changes6
1. 6
2. 7
3. 9
• Conclusion9
• References10

Executive Summary
Tim Horton’s (THI) is a well-know Canadian restaurant chain and has a steady growth in Canadian market over decades. In recent years THI management has conducted several changes in order to stay competitive in the market. In 2004, Tim Horton’s and Burger King were merged and controlled by a Brazilian private equity owner, 3G Capital.
As 3G Capital is famous on cost cutting and mass layoffs, plus the prime paid for the acquisition, the substantial new debt and the conflict of corporate strategies put extremely high pressure on Tim Horton’s (Luckhadt, 2014). On the other hand, Tim Horton’s has been clean on its financial record and focused on its social responsibility and sustainability.
Facing with the pressures, can Tim Horton’s successfully identify its new challenges and make corresponding changes to remain wining in the high competition today?
This paper focused on the challenges Tim Horton’s are facing today, the recommendations and implementation plan for the changes we identified. Based on the evidence we collected from different resources, this paper also introduced relevant change management concepts to support the recommendations and analysis. In the conclusion, the paper showed that THI today is facing severe new challenges. In order to compete with its competitors such as McDonald’s and Starbucks, THI has to conduct a series of business changes to facilitate its international expansion and new business focus.
Introduction
Businesses nationwide are making more concerted efforts to be corporate responsible and sustainable. THI has been successful in its sustainable branding and reputation. Some people think that THI’s takeover is a bad deal for Canadians because of two different business patterns and cultures. The potential massive job loss, corporate tax losses and higher prices will threaten consumers and employees and hinder the corporate continually growing.
Most importantly, 3G Capital plans to grow Tim Horton’s globally using the same model it has used at Burger King: massive opening and short-term financial performance focus. Compared to THI’s long-term social responsibility and sustainability, THI has to make significant changes in its fundamental strategy and expansion plans to meet both 3G Capital and the market demands.

• Identifying the major changes
1) New business focus
THI has been successful in its sustainable product loyalty over decades and has a steady cash income and market growth. It paid adequate attention to its community and society, so it won the best reputation in Canadian market. However, Burger King focused on its cost cutting, zero based budgeting to maximize its short-term financial performance regardless its business sustainability. Looking at its historical revenues, while its corporate revenue fell to $1.1 billion last year from $2.3 billion in 2011, its net profits increased to $234 million from $88 million (KIRBY., SORENSEN., & FRISCOLANTI. 2014). The significant conflict in corporate strategy will lead THI going through a change in corporate strategy.
2) International expansion
THI aimed to expand its business into global market through the merger. Its U.S. expansion didn’t achieve its desired result. Tim Horton’s has a clean balance sheet and healthy growing trend, but it has less international expansion experience than Burger King does. However, Burger King had already owed $3 billion in debt and then it borrowed another $9.5 billion in debt financing (KIRBY., SORENSEN., & FRISCOLANTI. 2014). The sharply increased debt ratio would bring some bank constraints to THI’s plan if it failed to bring enough cash to cover the business needs. More importantly, THI’s healthy cash flow would be squeezed out of the business for the high borrowing cost in a long run.
• Recommendation for the changes
Tim Hortons- Responsible for implementation plan for global expansion change
Tim Hortons should use an organizational development approach when implementing expansion. Organizational development approach have the right characteristics to support the expansion in todays environment. There should be a thorough plan of vision and goals, resources, contingency plan and criteria to properly evaluate it. THI has a clear vision which “is to be the quality leader in everything we do” (Tim Hortons, 2015). THI is owned by Burgerking which has a lot of international businesses all over the world. The businesses aren’t doing well and are in debt for at least 3 billion. It will not be wise to just copy the Burgerking business strategy. THI should have their own strategy and the top management and board should be committed to the new strategies and policy. Top management should support develop the right values.
Implementation Plan- THI should expand to India and China because of the large population and growing middle class. Substantial research should be made to understand the demographic, geographic and culture of the community. THI joins the market with the help of Burger king. Since Burgerking is already international they have the knowledge of the tax system, lifestyle, habit and preference of the community. THI should join the existing fast foods Burger king has in India and China. This will reduce the cost of operation, time, and start up fee. The implementation plan will take two to three years to see effective results.
1-6 month
Activities
-Assign a group leader
-Let leader form their team or help leader make a team (at least one of each: accounting, management, marketing, IT, lawyer). Assign one Burger king management in the team as a consultant
-Have a meeting and brainstorm about gathering intel and which way would be cheapest and most efficient.
-Select Questions. Make it multiple choice about beverage and food preference.
-Tax and Governmental experts license Tim Hortons to be a business in their country
-Operate the business as usual
Resources
-Money and Top management support
-Employees who want to make a difference
-Customers to do the surveys
-Incentives for customers to do survey
-Tax experts and Government experts
-Set timed objectives. Track revenues and expenses.
Risk
-Top management might deem it to costly
-Employees want a stable life
-No customers have the time or want to give the time
-Business certification is rejected
Contingencies
-Find alternative ways to make it more cost friendly. It is India and China meaning that their operating expenses will be significantly reduced because of currency exchanges. Make deals with vendors
-Employees want a stable life. THI should offer bonuses and contract for employees to take the plunge and support THI. Cash benefits is not an efficient incentive. People are motivated about making a change or loving the job or more vacation hours for their passion or monthly appreciation.
-If customers don’t have the time, hire a third party business that specializes in surveys and intel gathering. This will reduce time and cost.
-Business certification is rejected, THI should re-apply or lobby the government.
6-12month
Activities
-Gather team and evaluate progress using the criteria and objectives
-Make group decisions in each department and use gathered intel
-Make new products and re-adjust menu
-Market the new products and have customers pick which new food and beverage is best
-Improve IT security to protect customer, vendor, and the business information. -IT specialist to code and encrypt and follow all US policies in regards to proper IT business policies even though its a different country to better secure the network.
-Communicate changes to staff
Resources
-Continual support of top management
-Bakers, bakeries, and ingredients
-knowledge and a way to best communicate with the target demographic for marketing.
-Prizes for incentives
-New software’s and hardware’s
Risk
-Gathered intel is insufficient and is small. It cannot help make proper education decision.
-Community is to broad. Some people have no internet or cable.
-Not enough customers buying new items to make a clear decision
-IT specialist being to costly and is being threaded by accounting to reduce cost. IT reduces budget and can’t complete project.
Contingencies
-If information is too small it is unsafe to make decisions. Time is more important than money. Spend more on information gathering to assess the situation and make a proper decision
-Make deals and events about the new products to spread Tim Horton brand and increase customers.
-IT security is important to specially protect information and be protected from law suits
1 year-3 year
Activities
-Hire a consultant for the company improve efficiency and operation
-Meeting with consultant to talk about plans and re-evaluation of progress
-Meet strategies and plan for re-implementation
-Communicate changes to staff
Resources
-Continual support of top management
-Expert consultant knowledgeable with international fast food chain
-Motivated employees looking to change the business
-Customers
Risk
-Lack of interest of customers or employees
-Government intervention
-Community boycott
-Culture shock
Contingencies
-The two fast food chain increases customer interest
-Make connections with people in political power
-Make connections with people in the community
Criteria is a measurement to make educated decisions by evaluating the progress of a project. THI should use Time, Security, and Cost.
Time: Set timed objectives to make sure of progress
Security: To remain private and protect customer, business, and vendor privacy and confidentiality.
Cost: To understand the budget and make decision base of it.