Tim Hortons and Southwest Airlines

Tim Hortons and Southwest Airlines

Tim Hortons

Executive Summary

Tim Hortons is a food industry player seeking to expand into international markets. This need is motivated by the increasing competition and desire to increase sales. The merger with Burger King offers an opportunity for expansion and yet requires financial resources. To carry out this strategy, the player needs to seek out low-cost penetration strategies. A review of the markets is necessary for product development. The strategy should be rolled out in phases to allow for constant review.

Introduction

Tim Hortons, a food industry player, seeks to improve its performance through various strategies. These include acquisition, mergers, menu adjustment, and adoption of new market trends. The company’s expansion into the international market is critical for better performance. The opportunity to merge with other players, such as Burger King, offers a greater advantage in the new markets. However, it is critical to seek resources to facilitate the expansion.

Situation Analysis

Currently, Tim Hortons is facing increased competition as the other players offer a variety of food items as breakfast substitutes. Its competition from renowned players such as Starbucks and Mcdonald’s creates a necessity for expansion into new markets. However, the process of expansion is daunting due to the needed financial and human resources. The company’s current menu items need reviewing to increase their uniqueness and maintain authenticity. As the process of expansion looms, the company’s managers are debating on the adoption of newer trends, such as food trucks, that promise a reduction of costs.

SWOT Analysis

Strengths ·       Customer loyalty ·       Rapid expansion through franchises	Weaknesses ·       Loss of authentic food menus ·       Lack of sufficient financial resources for expansion
Opportunities ·       Entry into new markets through mergers ·       Utilizing food trucks as a low-cost penetration strategy ·       Changing consumer needs and tastes	Threats ·       Increased competition

Strategy Formulation

The company’s strategy should incorporate cost-reduction techniques such as food trucks in new markets. The merger with Burger King is an excellent opportunity for reaching out to new clients in the new markets. The company should study these markets to provide products that match their needs. The marketing procedures should also match each segment’s accessibility to promote increased sales.

Strategy Implementation

Tim Hortons should create new brands for the new markets and adopt low-cost penetration strategies such as food trucks to implement this strategy. A market analysis is critical to developing products and services that add value to these markets. Most importantly, carrying out and implementing the strategy in phases is important. This approach will allow the company to assess its performance and seek improvement strategies before rolling out the following phases.

Closing

Tim Hortons has an opportunity to expand through a merger with Burger King. However, this expansion requires financial resources. To implement the expansion strategy, it is important to carry out the process in phases. In addition, low-cost strategies for market penetration should be adopted. Marketing the products aggressively after analyzing the new markets is important for successful entry.

Southwest Airlines

Executive Summary

Southwest Airlines is facing the challenge of retaining the low-cost structure model. The operation costs are increasing due to high salaries. More players in the sector are increasing competition. To retain its position in the market, the carrier has to venture into new markets and purchase additional aircraft using debt. It should also hold decisions that effectively manage operation costs. These should enable the carrier to offer low fares and still make profits due to the high volumes of travelers.

Introduction

Southwest Airlines is an American carrier that operates using a low-cost structure model. The simple nature of Southwest Airlines’ services has enabled the maximization of the aircraft and convenience to travelers. However, the competition in the airline industry is growing stiffer, raising the need for restructuring and identifying new growth opportunities while dealing with the current increasing costs of operation.

Situation Analysis

Southwest Airlines has a significantly low turnover among employees and high productivity. This is because of the devoted and human-oriented leadership that the carrier’s management exhibits. The commitment of employees is evident in the lack of industrial actions that usually disrupt service. Unfortunately, the carrier has the highest salaries, increasing its operating costs when it seeks to expand into new markets beyond the American borders. As new entrants join the industry, competition is heightening, significantly increasing the need for new competitive advantages.

SWOT Analysis

Strengths ·       Absence of hubs- short turnaround time ·       Low debt-to-equity ratio ·       Low employee turnover ·       High employee productivity	Weaknesses ·       Rising operating costs ·       High labor costs
Opportunities ·       Venturing into markets outside the USA ·       The airTran acquisition provides potentially new markets	Threats ·       Stiff competition from low-fare carriers ·       New entrants due to deregulation ·       Congestion at airports leads to a longer turnaround

Strategy Formulation

Southwest Airlines’ main challenge is maintaining low operation costs and profitable retention of clients. Therefore, the main strategies should consider the low-cost structure model and increasing the economies of scale. The high volume of passengers will increase the company’s profitability and enable the provision of affordable fares.

Strategy Implementation

The carrier needs to venture into new markets beyond the US to implement the strategy. This move should expand its economies of scale. At the same time, the company should hold any decisions that are likely to increase the cost of operation, such as hiring or salary increments. Due to its low debt-equity ratio, the carrier can access credit to purchase aircraft to service the new markets.

Closing

Southwest Airlines is a well-known carrier that offers low fares. It has been performing well due to its low structure and simple model. The increasing number of players in the market is a threat to its current position. Maintaining the low structure model and utilizing its attractive attribute as a debtor to purchase additional aircraft is important.

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Week_14_Final_Case_Studies

For this assignment you will be completing two case studies (see attached):

1 – Tim Hortons

2 – Southwest Airlines

You should prepare each case as follows:

Executive Summary (6-7 sentences) Tim Hortons

Paragraph 1: Intro

Paragraph 2: Situation Analysis

Paragraph 3: SWOT Analysis

Paragraph 4: Strategy Formulation (How would you formulate a response to the issue presented?)

Paragraph 5: Strategy Implementation

Paragraph 6: Closing

You should prepare each case as follows:

Executive Summary (6-7 sentences) Southwest Airlines

Paragraph 1: Intro

Paragraph 2: Situation Analysis

Paragraph 3: SWOT Analysis

Paragraph 4: Strategy Formulation (How would you formulate a response to the issue presented?)

Paragraph 5: Strategy Implementation

Paragraph 6: Closing