The Competition

Tim Hortons strongest competitor is Starbucks. In the Canadian market, there’s not much of a competition there, as Tim Hortons has “76 percent of the Canadian market for coffee and baked goods, based on customers served” (Retrieved from http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aVbau_WUTixk&refer=news_index  August 30, 2012).

While they may not have those kind of numbers to report in the U.S. market, they have had some success as of late, boasting an operating income that is 23 percent higher than the same period last year, and opening 7 new stores, bringing the total number of stores in the U.S. up to 721. (Retrieved from http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/tim-hortons-us-growth-slowly-panning-out/article4105700/ August 30, 2012).

One of Tim Hortons biggest competitive advantages is their price points. Compared to Starbucks drinks of the same size, Tim Hortons is much more affordable. Starbucks drink prices vary by location, but they are generally higher than Tim Hortons prices. Another competitive advantage is their simple menu. Some people get confused when trying to order at Starbucks when they’re not used to having to pick the type of roast of the bean, how many shots of espresso, what kind of milk, and sizes that aren’t the typical small, medium and large but tall, grande and venti. Tim Hortons menu is simple, which their customers appreciate.