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Porters Five Forces Analysis of Tim Hortons

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by

Will Fisher

on 4 January 2013

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Transcript of Porters Five Forces Analysis of Tim Hortons

Porter's Five Forces
Analysis of Tim Hortons Bargaining Power of Buyers Bargaining Power of Suppliers Threat of Substitutes Overall Analysis -Number of buyers is very high therefore lower power

-Somewhat standardized products, but have a 20-minute fresh guarantee, lower power

-Switching costs are low for buyer, raise power

-Products not bought in large volume, lower power

-Little threat of backward integration with a market cap of 7.62 billion dollars, lower power

Overall power of buyers: low -Product is not unique, lower power

-Very many suppliers of necessary products, lower power

-Cost of switching suppliers is low, lower power

-Lots of other sources to sell to except for Tim Hortons, raises power

-Supplier-Buyer contracts, lowers power

-Little threat of forward integration due to Tim Hortons market cap of 7.62 billion, whereas coffee farms have an average cap around 250 million dollars

-Overall power of suppliers: low -Price of substitutes is more expensive, lowers threat

-Quality of substitutes is lower, lowers threat

-Accessibility is equal, raises threat

-Switching costs are extremely low, raises threat

-Substitutes are passed growth stage and declining due to health aspects, lowers threat

-Overall threat of substitutes is low Power of Buyers- low
Power of Suppliers- low
Threat of New Entrants- high
Threat of Substitutes- low
Inter-firm Rivalry- high Inter-firm Rivalry -Many large business competitors, raises inter-firm rivalry

-Minor product variation, raises inter-firm rivalry

-Low switching costs, raises inter-firm rivalry

-Greatly varying costs between firms, lowers inter-firm rivalry

-Product not bought in large volumes, lowers inter-firm rivalry

-Very few exit barriers, lowers inter-firm rivalry

-Overall inter-firm rivalry is high Threat of New Entrants -Relatively large economies of scale due to distribution and contracts, lowers threat

-Capital requirements are low, increases threat

-Easy access to poor distribution channels, raises threat slightly

-Currently in growth stage, raises threat

-Competitive retaliation is low, raises threat

-Little government regulations, raises threat

-Overall threat of new entrants is high Works Cited"2011 Tim Hortons Sustainability & Responsibility Report." 2011 Tim Hortons Sustainability & Responsibility Report. N.p., n.d. Web. 22 Nov. 2012."5 Year Performance Consolidated." Tim Hortons. N.p., n.d. Web. 22 Nov. 2012."Automatic Coffee Makers." Automatic Coffee Makers. N.p., n.d. Web. 22 Nov. 2012."Businessweek." Bloomberg Business Week. N.p., n.d. Web. 22 Nov. 2012."A Coffee Farming Partnership for Youth | Tim Hortons Coffee Partnership." A Coffee Farming Partnership for Youth | Tim Hortons Coffee Partnership. N.p., n.d. Web. 22 Nov. 2012."Coffee Shop Industry - A Strategic Analysis." Coffee Shop Industry - A Strategic Analysis. N.p., n.d. Web. 23 Nov. 2012."Economics | Tim Hortons Coffee Partnership." Economics | Tim Hortons Coffee Partnership. N.p., n.d. Web. 22 Nov. 2012."Investor FAQs." Tim Hortons -. N.p., n.d. Web. 22 Nov. 2012.Larson, Ryan C. "Starbucks a Strategic Analysis." Coe.brown.edu. N.p., 17 Apr. 2008. Web. 23 Nov. 2012."Posts Tagged âTim Hortonsâ." Macleansca Tim Hortons Tag. N.p., n.d. Web. 22 Nov. 2012."Sustainable Coffee, Sustainable Planet | Tim Hortons Coffee Partnership." Sustainable Coffee, Sustainable Planet | Tim Hortons Coffee Partnership. N.p., n.d. Web. 22 Nov. 2012."THI: Summary for Tim Hortons Inc. Common Shares - Yahoo! Canada Finance." Yahoo! Canada Finance. N.p., n.d. Web. 22 Nov. 2012."Tim Hortons - Fundamentals." Tim Hortons - Fundamentals. N.p., n.d. Web. 22 Nov. 2012.
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