Burger King/Tim Hortons SWOT analysis

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SWOT Analysis for Burger King & Tim Horton’s

Burger King-Tim Horton’s Internal Factor Evaluation
Strengths
Weight
Rating
Weighted Score
Tim Horton's revenue
0.08
4
0.32
Tim Horton's same-store sales growth
0.09
4
0.36
Tim Horton's market shares in Canada (70% baked goods, 75% coffee) 0.09
4
0.36
Burger King size
0.05
3
0.15
Tim Horton's brand image
0.09
4
0.36
Burger King's brand recognition
0.04
3
0.12
Tim Horton's healthier options
0.07
3
0.21
Burger King's tax savings of 8.5% (moving headquarters to Canada) 0.05
3
0.15
Global presence (combined locations in 100+ countries)
0.06
3
0.18
Tim Horton's catering
0.02
3
0.06
Tim Horton's food/beverage quality
0.06
4
0.24

Weaknesses
Weight
Rating
Weighted Score
Burger King's brand image
0.12
1
0.12
Burger King's product line
0.06
2
0.12
Tim Horton's lack of brand recognition (outside of Canada)
0.10
1
0.10
Burger King's marketing/advertising
0.06
1
0.06
Tim Horton's streamlining products (negative public reaction) 0.01
2
0.02

Internal Analysis

When looking at the internal factors of Burger King (BK) and Tim Horton’s (TH), the largest weakness is Burger King’s poor brand image. BK has global brand recognition but the poor image could be challenging to overcome and could even negatively impact TH’s image. TH’s image has allowed them to gain 70% of the market share in baked goods and 75% in coffee within the industry in Canada. In addition to TH’s high quality coffee they have followed trends by adding healthier options over the years, making their product offering a strength in today’s market.  BK has not followed social trends, and instead has held out on the addition of healthier options and promoted their high calorie, high fat food. BK’s refusal to focus on healthier options is a weakness in today's environment and also a weakness going forward if they do not change. TH’s revenue growth, same-store sales growth and market share are a strength that can help stabilize BK’s slumping sales.  It also means that TH’s is doing something right - marketing, listening to customers, etc. Although TH’s has market share, brand recognition and image within Canada, its global brand recognition is slim to none. In addition to BK’s unhealthy product line, bad marketing and controversial advertising have negatively affected BK’s brand image. Thus, BK’s poor brand image could overpower TH’s image, making it difficult to successfully expand TH’s outside of Canada.

BK’s global presence (locations in over 100 countries) and size are an advantage for both TH and BK. TH can expand its products and brand without many of the costs associated with expansion and there is still room for BK to continue growing internationally. In addition, BK will move its headquarters from Miami to Canada, which will lower its tax rate from 35% to 26.5%.

Burger King-Tim Horton’s External Factor Evaluation
Opportunities
Weight
Rating
Weighted Score
Gain of market share in the breakfast industry
0.08
4
0.32
Expansion of Tim Horton's (outside of Canada)
0.08
4
0.32
Take market shares from McDonald's
0.07
3
0.21
Increased buying power (suppliers)
0.06
3
0.18
Expansion of healthier option (high quality image)
0.09
4
0.36
Technological advancements
0.01
3
0.03
Expansion of Tim Horton's loyalty card
0.01
3
0.03
Growth of fast-casual food industry
0.09
4
0.36

Threats
Weight
Rating
Weighted Score
Decline of sales in fast-food industry
0.09
1
0.09
Strong competitive environment
0.11
1
0.11
Buying power (consumers)
0.05
2
0.10
Low barriers to entry
0.03
2
0.06
Social responsibility (health food movement)
0.10
1
0.10
Inflation/Rising food cost
0.05
2
0.10
Increased minimum wage
0.01
2
0.02
Burger King's bad PR (social pressure)
0.07
1
0.07

External Analysis
Much of the threats that BK and TH face have to do with competition. The fast food and fast casual industries...
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