Case study summary, or write--up of Tim Hortons Bringing Canada's Iconic Coffee to China

IVEY Publishing W25260 TIM HORTONS: BRINGING CANADA'S ICONIC COFFEE TO CHINA Dr. Lucas Liang Wang wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Westem University, London, Ontario, Canada, N6G ON1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveypublishing.ca. Our goal is to publish materials of the highest quality, submit any errata to publishcases@ivey.ca. Copyright @ 2021, Ivey Business School Foundation Version: 2022-02-09 On February 26, 2019, the first Tim Hortons coffee shop in China was opened on the ground floor of an office building near the People's Square, one of the busiest business districts in Shanghai. This new coffee shop marked the entry of Tim Hortons-the number-one coffee franchise and a national icon of Canada-into a new foreign country (see Exhibit 1). To chart the entry and the following operation of the coffee brand, the parent company of Tim Hortons, Restaurant Brands International (RBI), teamed up with Cartesian Capital Group (Cartesian Capital), a private fund, in a joint venture, Tim Hortons (China) Holdings Co., Ltd. (Tims China). Yongchen Lu, the chief executive officer (CEO) of Tims China and a graduate of the master of business administration program (MBA) from Tuck Business School at Dartmouth College in the United States, also attended the event. The opening of the first shop was certainly celebratory, but Lu knew better than anyone that greater challenges would lie ahead. Although the coffee market in China had been projected to soar in the next few decades, Tim Hortons was an apparent latecomer relative to other foreign brands like Starbucks and countless indigenous providers. As a later entrant, how could Tim Hortons best position itself and expand in this rapidly growing market? TIM HORTONS: CANADA'S ICONIC COFFEE CHAIN The first Tim Hortons shop opened in Hamilton, Ontario, Canada, in 1964, serving freshly ground coffee and two types of doughnuts-the Dutchie and the Apple Fritter. The founder, Tim Horton, was a legendary hockey player in the National Hockey League and branded the store with his name to appeal to consumers. Ron Joyce assumed sole ownership of the fledgling coffee brand after buying out the Horton family in 1974; the chain had around forty shops then. Through aggressive franchising, Joyce subsequently turned Tim Hortons into a nation-wide coffee chain in Canada. Tim Hortons coffee shops were present in bus stations, airports, shopping malls, gas stations, and community centres in cities and rural areas stretching far into the north of the country. It eventually surpassed Mcdonald's Corporation (Mcdonald's) and became Canada's largest quick-service chain per systemwide revenues in 2002. This document is authorized for use only by khyatesh Chavan (khyatesh@gmail.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies