Updated: Oct 23rd, 2024

Tim Hortons Inc. After Effects of COVID-19 Case Study

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Table of Contents

Introduction
Business Environment
Business Structure
Problem Identification
Business Response
Recommendations
Conclusion
References

Introduction

It is common for companies to compete, implement new strategies, set more effective goals, and try to expand their client base to win the market. However, in some situations, external circumstances may severely interfere with this process and make it more challenging for organizations to maintain their image, profit, and competitive advantages. For example, one such sudden circumstance that appeared recently is the COVID-19 pandemic. It had numerous negative impacts on various markets, and the quick service restaurant segment was no exception.

Business Environment

First of all, it is essential to give an accurate description of the business environment in which the company in question operates. Overall, Tim Hortons is a fast-food restaurant company, and its two primary competitors are McDonald’s and Burger King. Consequently, these three fast-food chains operate in the quick service restaurant segment – a rather competitive market that aims at providing its target customers with efficient and prompt service, food, and drinks. While many people enjoy the positive aspects of getting a fast-food meal, generally, such restaurants’ target consumers are the youth (especially students), low-income people, individuals on their way to work, and parents. During the pandemic, many fast-food restaurants, including Tim Hortons, McDonald’s, and Burger King, had to limit their delivery, take-out, and drive-thru services. As for the new things, Tim Hortons plans on launching “two next-generation restaurants fit for the future” (Coley, 2022, para. 1). What is more, the company upgraded its menu and enhanced its mobile application with new features.

Business Structure

Further, it is necessary to focus on the business structure of the Canadian fast-food restaurant chain. In 2008, Tim Hortons decided to change its strategy: “the new structure, the President and CEO is responsible for operational leadership and day-to-day running of the business, strategic development in collaboration with the Executive Chairman and strategy implementation” (Tim Hortons, 2008, p. 1). Presently, the company has about 100,000 workers and 1,500 franchisees (Sagan, 2020, para. 13). From 2018 to 2021, its annual revenues were 3.29, 3.34, 2.81, and 3.34 billion dollars (Lock, 2022). The company’s profit was 1.3 billion in 2020 and 1.6 billion in 2021 (“Tim Hortons financials,” 2022). Some of Tim Hortons’ leaders are José E. Cil (CEO), Axel Schwan (President in Canada, U.S., and Latin America), Matthew Dunnigan (chief financial officer), and Hope Bagozzi (chief marketing officer) (“Tim Hortons CEO and key executive team,” n.d.). Finally, the company has some recent sustainability initiatives (Vitello, 2020). For example, napkins are now made with recycled fiber, and wrappers are paper-based.

Problem Identification

Evidently, COVID-19 still impacts Tim Hortons’ site selection, capacity planning, managing operations, and employee motivation. First, when it comes to site selection, for several months, the company had to keep its sitting areas closed for visitors (Sagan, 2020). As for the capacity planning, it was not allowed to seat people nearby and exceed the permitted number of guests. Management of operations was also disrupted, including failed deliveries and affected supply chains and the need to address new responsibilities such as wearing masks and disinfecting surfaces. Finally, the coronavirus threat influenced workers’ motivation to work because they were afraid of getting sick, losing their job, forgetting about new duties, and facing other issues. While many of these problems disappeared when the restrictions were weakened, some still remain.

Business Response

The company adopted various measures to address the issues identified above. Thus, according to Lewis (2020), Tim Hortons paused its sustainability initiative aimed at accepting reusable cups, introduced additional measures to keep social distance, considered making employees wear reusable masks, and ensured constant sanitizing. Further, the company connected with experts, stating that it is “regularly taking advice on health and safety from public health officials” (Tim Hortons, n.d., para. 5). It is possible to suggest that almost all these steps are quite successful and common in addressing the spread of the disease. As for the unsuccessful ones, one may indicate that the promotion of wearing reusable masks may not be a good option for stopping the disease because some workers may forget to wash them after each shift.

Recommendations

Overall, there are three recommendations for Tim Hortons to make in order to ensure that their operational processes are managed successfully, employees stay motivated, and the company remains competitive. First, it is of vital importance to focus on employees. Research does not indicate how Tim Hortons addressed the needs of workers during these troubled times. McDonald’s shows an example that it is possible to introduce a new bonus and reward system and ensure them that their job positions are secured (Carouthers, 2021). Second, it would be beneficial to encourage customers to visit and order during ‘unpopular hours’ when there are few other guests. This can reduce the workload and allow for more efficient operations management. Third, clients should be informed not only about sanitation measures but all other interventions, including those aimed at workers. When customers see how proactive and caring the company is, its competitiveness will rise in their eyes.

Conclusion

To draw a conclusion, one may say that it is essential to make the company focus more on its employees because they are the heart of Tim Hortons’ success. This is the primary change that needs to be introduced. Overall, it seems that the fast-food restaurant chain managed these uneasy times quite effectively. While it had to stop some of its sustainability initiatives, they will be back soon, and Tim Hortons’ revenue is also growing steadily. However, if I were the leader or operations manager, I would consider a proper advertising strategy to inform our clients about all introduced initiatives and implement effective employee training programs to show that the company cares about them.