- What are the key economic factors about the industry?
Tim Horton’s Company enjoys a large consumer base in Canada. Due to the popular culture of fast foods in North America, the industry has realized large profit margins over the years. Despite the fact that the company enjoys a large consumer base in the cities of Canada, the company continues to face some economic factors that might alter its success in the future. First of all, it is important to understand that coffee is one of the best-selling good in the company. However, the company continues to face competition from other established fast-food industries both within and without Canada. For example Tim Horton’s continues to face a huge competition from Macdonald’s that produces the same kind of goods to both the Canadian and the US market. This competition means that Horton’s Inc. has to employ various economic strategies to make sure that the company favorably competes with companies such as Macdonald’s. Some of the economic initiatives that Horton’s Company has considered over the years have been the reduction of its pricing. However, this is an option that has proven unworkable especially in Canada. This is because the pricing of goods such as coffee, sugar, wheat, and oil has risen over the years. This has created a situation whereby the cost of production is higher thereby forcing Horton’s Inc. to maintain its current pricing for its goods.
- Where is the company in its life cycle?
The Horton’s company is still in the growth stage of its life cycle. The company continues to wrestle with various challenges in the market and would therefore not be considered as being an established business enterprise (Diebold & Rudebusch, 1999, p.23). The company has continued to increase its profit margins over the years meaning that the company is still growing. Despite the fact that the company has a place in the Canadian market and loyal customers, it is important not to disregard the competition that this company faces in the Canadian market, in the company’s quest to stabilize and maintain its market share in the fast-food industry.
- What are the key success factors, trends, and challenges for this industry?
The Horton’s company has realized key success factors and trends in the Canadian market. According of SEDAR web site, this company has successfully controls about 75 percent of the consumer market in terms of coffee and other baked delicacies. However, maintaining this market share requires more innovation and entrepreneurship to make sure that the company keeps up with consumer tastes and preferences that change over time.
- How does your company compare with respect to these factors?
Maintaining competitiveness is the greatest challenge that this company experiences. Other established companies such as MacDonald’s enjoy economies of scale and other market advantages that might shrink the consumer base for Tim Horton’s company in the future. Despite these challenges, the competition is manageable. Therefore, Horton’s company can be able to deal with this competition through effective management and accounting considerations.
- What notable accounting considerations are there for companies in this industry?
Some of the most important accounting considerations that should be put in place include the access of cheaper commodities such as wheat and sugar that is important in the production process of this company.
- What particular legal or regulatory matters are of concern?
Some of the legal concerns that characterize this company are the fact that some of the companies competing with Horton’s company might be using uncompetitive business practices to remain in the market (Cantrell, 2009, p.54). This would include the presence of lowly paid employees in some of the fast-food companies which remarkably reduces the cost of production for many companies in the fast-food industry.
- What social or environmental matters are of concern?
Some of the social and environmental concerns arising from this company and the fast-food industry are the fact that fast-foods have been linked to cases of obesity and other ailments arising with low-quality foods. Therefore, there is a need for Tim Horton’s Company to consider production of products that are mindful of consumer health such as products with low cholesterol.
References
Cantrell, R. L. (2009). Outpacing the competition: patent-based business strategy. Hoboken, N.J.: Wiley.
Diebold, F. X., & Rudebusch, G. D. (1999). Business cycles: durations, dynamics, and forecasting. Princeton, N.J.: Princeton University Press.
Hoffman, A. J. (2000). Competitive environmental strategy: a guide to the changing business landscape. Washington, D.C.: Island Press.
The SEDAR Web Site / Bienvenue au Site Web SEDAR (2013). Retrieved July 15, 2013, from http://sedar.com/CheckCode.do;jsessionid=0000BZTdV-y1U6ar_tcq-c6EtRJ:17lkkjui4
