Current Event (Group I)- Tim Hortons Enters the Indian Market

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Title “Tim Hortons Enters the Indian Market” Link https://www.worldcoffeeportal.com/Latest/News/2022/August/Tim-Hortons-enters-the- Indian-market-with-two-stor Summary Tim Horton’s Inc. is a multinational coffeehouse and restaurant chain based in Toronto, which was founded by Canadian Hockey Player Tim Horton (1930-1974) and Jim Charade (1934-2009) in 1964 in Hamilton, Ontario. Tim Hortons, commonly nicknamed Tim’s and Timmi’s, serves coffee, sandwiches, donuts and other fast-food items. The first Tim Hortons restaurant was opened in North Bay, Ontario selling hamburgers following the first chain donut store opened named Tim Horton’s Donut. In 1967, Horton Partnered with Roy Joyce where he bought $1M share from the Horton’s family and became owner of 40 chain stores. The 500th store was opened in 1991. The chain of Tim Hortons started opening in the Asia Pacific region being the Philippines, the first country to open Tim Hortons in 2017, followed by 2019 by the Chinese market and 2020 by Thailand. The growing middle class of India and the appetite for the aspirational Western brand led India to become the 4th country to open a Tim Hortons chain in Southeast Asia in the year 2022 as a part of an exclusive agreement with AG Cafe. The premium coffee and cafe culture is gaining traction in India because of the growing number of young workers and middle-class people. Despite the hit by the pandemic, coffee chains have still gathered pace in India. The launch of the global cafe brand “Tim Hortons” is intended to change the younger demographic lifestyle and bring the best of the coffee experience to Indians. The opening of the Tim Hortons brand will lead to major Investment in India’s market, creating job opportunities, economic growth, and increasing hospitality growth.

In August 2022 two outlets of Tim Hortons were launched in the Indian market in the National Capital Region (NCR), with 22 stores altogether across India as of now. In January 2023, India Retailing reported that Tim Hortons would open up to 120 stores in India over a 36-month period. The coffee retail chain market in India is growing fast, the coffee and cafe market has been booming in the Indian market with several new chains coming up. Even though the Tim Hortons chain entered the Indian market much behind, Navin Gurnany views this as a positive factor as he thinks the Indian market can “learn from the experience from others.” Tim Hortons has lots of beneficial aspects towards the Indian market as it operates in a complex and dynamic environment that is characterized by regulatory changes, growing environmental activism, collective social trends, technological changes, and the evolving legal system. Tim Hortons would have used PESTEL analysis before entering the Indian market for developing strategies and long-term growth in the targeted market. Political Factor : Tim Hortons would have considered the political factors such as the political stability in India, how frequently the government policies changes, how well developed is the governance system, if the Indian market is into corruption or not, and the taxation policy of the Indian market as higher tax would affect the trades between countries. Economic Factors: As the growing population in India offers different opportunities, Tim Horton’s would have determined the economic factors of India like the labour market condition, inflation, interest rates and exchange rates of India. Social Factors: Culture plays an important role in global marketing; Tim Hortons was launched in New Delhi to Target certain consumer groups by increasing the need of the newly launched store. Tim Hortons would have studied the demographic characteristics of India for high growth potential. Technological Factors: Tim Hortons would have done research about India’s technological environment before launching the store in India to achieve business advantages, profitability, and efficiency. Social Media plays a vital role in today's marketing platform. Tim Hortons can improve its business in India by learning and understanding India’s market through this platform.

Environmental factors: Tim Hortons would have considered the environmental factors such as climate change, waste management, and launching eco-friendly products before stepping into the market. Legal factors: No business can enter a new market without studying the legal aspects and environment of the country. Tim Hortons would have studied and researched laws such as employee law, health and safety law, customers protection law, etc. Every business wants to run for the long-term and tends to focus on building a good and stable relationship for their growth. Any business wanting to enter in the market needs to study and understand every aspect such as political, legal, social, cultural, and environmental for long term growth and successful business. Additional Sources https://en.wikipedia.org/wiki/Tim_Hortons https://www.worldcoffeeportal.com/Latest/News/2022/March/Tim-Hortons-to-enter-the- Indian-market-in-2022 https://www.worldcoffeeportal.com/Latest/News/2022/August/Tim-Hortons-enters-the- Indian-market-with-two-stor https://www.indiaretailing.com/2023/09/18/tim-hortons-enters-bengaluru-launches-two- outlets-in-a-row/ https://news.abplive.com/lifestyle/canadian-coffee-chain-tim-hortons-intends-to-open-120- outlets-in-india-over-the-next-three-years-1564792 https://www.case48.com/pestel-analysis/13933-Tim-Hortons Connection with Module Chapter 4: Social and Cultural Environment In Chapter 4, it was mentioned how social and cultural factors are important for the success of a global market. In emerging markets such as India there are several areas within the country that have different cultures, international companies would need to do their research to be able to understand and appeal to different markets within the country. As mentioned in the chapter there are other aspects of culture and this ranges from an individual's

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identification which is not relevant towards their upbringing which in this case would be “coffee culture”. In Canada, Tim Horton’s is the largest coffee retailer, allowing consumers to pay a low-cost amount for efficient service to have coffee. In North America, coffee is standardized whereas in the U.S. they have their largest retailer which is Starbucks. Adapting a coffee culture to an emerging market can help economic growth and introduce a new lifestyle to those in the country. Marketing the company needs analysis before advertising because there are norms in Canada that those in India would likely not agree with. Adapting several products according to demand in the emerging market and as well as the language based on the geographical location are both cultural factors that can help grow the company. Diffusion theory is necessary for global marketing as it gives the company an idea of how well the company is succeeding. Understanding consumer needs leads to success like McDonald’s. India is a country, growing in size by the year and will surpass China in population. In the book, it mentions how water consumption has tripled in India, and this is no different for food. As the population grows demand for products increases. Tim Horton’s is entering the Indian market at the perfect time as the pandemic is not affecting exporting or importing as much and the growing demand is leading to consumers wanting to have diversity in their daily life. Adapting to consumer needs and keeping up with cultural trends leads to great success for a company. Chapter 5: The Political Legal and Regulatory Environment https://taxsummaries.pwc.com/india/corporate/taxes-on-corporate-income When they made the decision to invest in India one of the factors Tim Hortons would have looked at is political risk. This is important to make sure currently and, in the future, there will not be any social or political disputes or conflicts that will negatively affect the economy and the company’s ability to make a profit and succeed. In terms of political parties, it would be beneficial to see what party is in power. Then to see if any legislation they have announced that they are going to pursue implementing and if it would affect the business either positively or negatively or have no effect at all.

In terms of taxes, it is important for Tim Hortons to investigate tax policies and tax laws prior to the expansion into the global marketplace. As seen from the above link the corporate tax rate for foreign companies in India is 40% and could be slightly higher based on Tim Hortons recorded revenue. Also, we can see that domestic companies pay quite a substantially less amount of corporate tax than foreign companies. Tim Hortons could take from that information that the government has more incentives for domestic business and would have to take that into account when it comes to planning their expansion into the market. For the regulatory environment, firstly Tim Hortons would need to see which government regulatory bodies are in place that would affect the sector they are in. This would include for example the food inspection agency that is in place in India. They would need to familiarise themselves with the laws and regulations surrounding this. Another important regulation they would need to research would be employment law and policies. This would be important for example to ensure all workers are receiving at least the minimum compensation that is required as per the labour laws. Another topic that Tim Hortons would need to investigate would be the country's chance of Expropriation. This has to do with a country taking control of an industry and for the most part providing compensation. If the business model is long term stability and growth, then you would not want there to be a chance that your business could be taken over and at the chance of losing all your equity in the business. This also relates to nationalisation which is seen as legal and legitimate in terms of international law. Questions Related to the Module 1. What kind of influence would Hofstede’s cultural typology have when formulating a global marketing plan? Provide examples of the cultural dimensions in Canada versus India. 2. Utilizing the PESTEL analysis, which emerging country would you recommend as the next most suitable location for launching a North American fast-food company?

Current Event (Group I)- Tim Hortons Enters the Indian Market

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