King Tims Business - Case Study Example

Business Report for King Tims Table of Contents Executive Summary 3 Introduction 4 King Tims’ External Environment: SWOT Analysis 4 Internal Priority Areas by Department 5 Customer Service 5 Marketing 6 Human Resources 8 Information Technology (IT) 9 Restaurant Manager 11 Recommendations and Conclusion 12 Appendix: SWOT Analysis 13 References 14 Executive Summary The UK hospitality industry has been characterised by intense competition among industry players. Several factors have been responsible for the intensified competition, the main one being globalisation, a phenomenon that has freed up the local market to multinational corporations (MNCs). MNCs are usually larger and have more financial, human and other resources that give them the upper hand over local players. In order to cope with the rivalry, many firms in the hospitality industry are finding it prudent to merge into one company. Mergers enable individual firms to combine their competitive advantages in order to gain more competitiveness. It is against this backdrop that Burger King and Tim Hortons, two major restaurants in the UK, combined forces to form into King Tims. The new firm’s vision is to become the leading group of restaurants in Europe. This report is prepared for King Tims board of directors and explains what the company must do to attain its vision. The basis of the report is the findings of a desktop study of the two constituent companies. The report recognises that even as they address their priority areas, managers must work as a team under the stewardship of the General Manager if the firms vision is to be achieved. Introduction Following the merger between Burger King and Tim Hortons to form King Tims, the Board of Directors of the new company has directed that a business report be prepared. The purpose of the report is to provide the roadmap for global leadership in the fast food restaurant industry. In order to attain its ambitious vision, the new company must address a number priority areas. The report is based on the various models of organisational culture and analysis of the external environment and the findings of a desktop research on the company. The major sources of information were the business reports of the two constituent companies and academic sources. The priority areas were informed by the recommendations of the various departmental managers – customer service, marketing, human resources, Information Technology and store. The realisation of the new company’s vision will largely depend on how well each manager addresses the key priority areas in their department. King Tims’ External Environment: SWOT Analysis Several internal as well as external issues will influence the operations of King Tims, hence the capacity of the business to accomplish its vision. The external factors are especially important given that they are beyond the control of the company (Spicer, 2011). There several models for analysing the external environment of the company. A SWOT analysis of the company (table attached in the appendix) revealed a number of opportunities for and threats to King Tims. The former include opportunities for market penetration, development of new products and international expansion. The latter include allegations of tax inversion, pressure from investors to deliver results and the loss of corporate culture. Given the hurdles associated with entering new markets, King Tims’ most appropriate opportunity for growth is market penetration, a strategy in which the company will seek to sell more of its products to its existing customers and the customers of its competitors. Internal Priority Areas by Department Customer Service In the face of growing competition, excellent customer care is mandatory for King Tims if the company is to be competitive. To this end, the Customer Service Manager has proposed a raft of measures. First, all the employees of the company should receive training in customer care. The emphasis here is on all employees, not just those in the customer care department. The rationale behind this proposal is that customer care is more effective if it is embedded in the culture of a company, than if it were left only to the customer care department (Keinngham, et al., 2006). Thus, the training program will seek to get every employee of the company to see oneself first and foremost as a customer care agent. Secondly, the company must develop a strong culture of corporate social responsibility, especially in the area of charitable giving. King Tims recognises the role of charitable giving in promoting and sustaining the many charitable initiatives. King Tims does not operate in a vacuum; every branch of the company operates in a particular community. The various communities support the company by buying their products and providing labour, without which the company cannot operate. Therefore, King Tims has the moral responsibility to give back to the communities that support it. Well-managed corporate social responsibility will give the company a human face as a result of which more people will identify with the company(Elmuti, et al., 2009). However, this function would be better performed by the sales and marketing department. Third, King Tims should maintain separate social media profiles for the two constituent companies, especially in the short run. Over the years, the respective customers of Burger King and Tim Hortons have developed loyalty to these brands. At the same time, they have grown to expect consistency in the quality of the products of each company. In order to make the transition as least disruptive as possible (Hudson, 2008), the social media platforms through which the respective customers have interacted with their company should be maintained in the short run. Later, after the King Tims brand has established itself, common profiles may be adopted. Closely related to the above recommendation, King Tims should put in place a customer loyalty scheme for Burger King. The new Board of Directors agrees that Burger King is a less popular brand than Tim Hortons. Abolishing the two existing brands and promoting the new King Tims right from the onset would be too; a gradual shift is more prudent. Consequently, a loyalty scheme for Burger King will enable the brand to catch up with its counterpart. Finally, the Customer Care Manager proposed that customer feedback be managed separately for each brand. This way, it will possible to identify the strengths and weaknesses of each brand and act accordingly. The information obtained from the dual system of handling feedback will inform the decision on what brand to invest in more based on customer preferences (Fan & Ku, 2010). Marketing In order to keep the two constituent brands, and the King Tims brand in the longer term, visible to the consumer and increase sales revenue, the Marketing Manager proposed a number of measures. First, the company should create a new website that incorporates both brands. This will one effective way of sending out the message to the customer that Burger King and Tim Hortons are now one brand. In developing the new website, the management should invest in it to make it user-friendly and interactive (Piercy, et al., 1997). The idea is to make a customers visit to the website a delightful experience so they will visit time and again. In addition, the company should consider selling its products online on the website. Secondly, the company should run a new advertising campaign. Advertising will help the new company promote its visibility to the consumers (Levy, 2012). The message contained in the advertisements should be consistent and underscore the joining of the forces of two leading brands. The message should make a realistic promise of products of superior and better service. At the same time, it is important that the consumer be assured that the continued enjoyment of the two brands. Alongside the advertising campaign, the company should embark on a sales promotion at all branches to bolster sales under the new merger. Third, King Tims should develop a strategy to capitalise on local eating habits. The rationale behind this recommendation is that different communities have different eating habits (Kim, et al., 2010). For instance, the eating habits of a campus community are different from those of young professionals working in an office block. For instance, while the former’s eating habits may be influenced by the need to save money on their needs, the latter may value snacks given their busy schedules; they may want something they can eat while on the move or at work. Thus, a branch serving a campus community may concentrate on providing low-cost meals. Ultimately, this area will call for intensive localised research to understand the prevailing eating habits in a given community (Valos, et al., 2010). Finally, the company should be on the look-out for opportunities to sponsor local events in order to increase brand awareness and visibility (Jamison, 2003). While this point is similar to the on made on corporate social responsibility under the customer care department, the difference is on the emphasis: in the earlier case, the emphasis is to present the company as caring for the local communities. Here, the emphasis is on creating brand awareness. The two, however, are not mutually exclusive, but complement each other. For instance, it is from the customer feedback obtained by the customer care department that the sales and marketing department will know what the community holds dear and, therefore, what the company should sponsor. Human Resources Introducing and successfully implementing change in an organisation is always a difficult task. Much of the difficulty comes from within, not outside the organisation (Spicer, 2011). The employees of an organisation are known to largely influence the success of failure of a change program, depending on whether or not they embrace or resist the change. In the case of King Tims, the risk of employee resistance is especially real and high. Many of the employees are likely to fear for the security of their jobs given the restructuring process that must necessarily follow the merger. It is on the basis of these truths that the HR Manager proposed that a transition team be set up to facilitate the transition. Among other things, the team should ensure that layoffs, if necessary, are kept to a minimum. The team will also devise a smooth mechanism for employee exchange within the company. Until their coming together, Burger King and Tim Hortons had their different ways of doing things. For instance, while every Burger King employee worked under the watch of a supervisor, Tim Hortons believed in empowering its employees to be discipline and capable of meeting the needs of the customer such that they could work without supervision. Given the organisational culture differences, the two cultures will need to be merged. In so doing, the best aspects of each culture will be picked (Saunders, et al., 2009). Fortunately, the task of merging the cultures will be made easy by the fact that, going by their values, there are insignificant differences between the two cultures. For instance, both believe in creating value for the customer and shareholders and conducting business with high integrity. The HR Manager has also recommended that the companys management improves the way it relates to its employees. For a long time, employers viewed employees primarily as a source of labour – just one of the four traditional factors of production (Wickramasinghe & Karunaratne, 2009). Apart from the senior management, there was little interaction between the employer and their employees. In recent decades, this view has largely changed (Wickramasinghe &Karunaratne, 2009). Increasingly, HR and other managers see employees as a crucial resource and the backbone of the organisation. It easy employees who implement managerial decisions and carry out the day-to-day operations of the organisation; without them the organisation cannot run. Consequently, the HR Manager recommends that all managers go out of their way to foster good relations with their subordinates. The benefits of doing so are many. For instance, employees will free to share information and ideas with their managers for the improvement of the company. Alongside improving relations, the HR Manager has also recommended that the company creates opportunities for its employees to grow in their careers and give them incentives to pursue those opportunities. In so doing, the company will develop a pool of highly skilled labour. Information Technology (IT) In this age of fierce competition, managers need real-time information they can use for purposes of decision-making (Anderson & Sims, 1990). In the case of King Tims, the Restaurant Manager may need information on the average number of customers that visit the store during the lunch hour. They can use that figure together with the average time it takes an employee to serve one customer to arrive at the optimal number of staff to have during the peak lunch hour. An information management system is at the heart of real-time data-based decision-making. The system has tools for collecting data, processing the data and presenting the processed information in a manner that is useful for the purposes of decision-making. It is against this background that the IT Manager has proposed an upgrade of core administrative information systems. The IT Manager has also proposed that IT be an integral part of the new organisational culture. In other words, King Tims should use information technology and related technologies to deliver quality services to its customers. For this to happen, every aspect of the business will be automated – from the purchase of supplies, to the placing of an order and paying for it by a customer. The IT Manager believes that IT holds the key to making King Tims the excellent service provider that the company seeks to be. However, before the new automated system can be deployed throughout the company, all employees will be trained in basic computing skills(El-Gayar, 1997). A majority of the employees are expected to possess a reasonable level of proficiency in the use of the computer, but nothing is to be left to chance. In order to improve transparency in the company’s procurement procedure, the IT Manager proposes that the company deploys a centralised ordering system that will then be deployed to the various restaurants. Besides ensuring transparency in the procurement process, the new system is also expected to enhance efficiency and reduce the time spent on obtaining supplies (Norris-Tirrell, 2011). The system will be linked to those of suppliers such that whenever a particular supply falls below a defined limit, the information is relayed to the supplier in real-time so they can replenish the supply. As the company lacks the human resource capacity to deploy the system, the project will be outsourced to a reputable service provider of unquestionable integrity. Finally, in order for the company to better interact with its customers, the IT Manager proposes the hiring of a dedicated social media officer who will run all the social media profiles of the company (Munar, 2012). In addition, the officer will be in charge of managing the company’s email portfolio to ensure that any customer queries via email are responded to promptly. The Manager has also proposed that the company creates mobile applications through which customers can interact with the company, but this proposal could be considered in the longer term. Restaurant Manager The Restaurant Manager has proposed that Tim Horton’s menu be incorporated into Burger King’s menu. The Manager argues that the former’s menu is richer than Burger Kings. However, the introduction of Tim Hortons foods into Burger Kings should be done incrementally, not in one sweep. In fact, after the first trial, the rest of the process will be determined by the tastes and preferences of Burger Kings customers(Parsa, et al., 2011). In the event that they like the menu, the rest of it will be introduced. Otherwise, each constituent company will retain its menu. The Manager recommends that the new company invests in increased employee benefits. The HR department better handles this proposal, although the input of the Restaurant Manager will remain critical. The Restaurant Manager argues that the employee benefits schemes pursued by the two constituent companies are inadequate going by industry standards. The result has been high employee turnover rate occasioned by the flight of their employees to firms perceived to offer better employee benefits. Even though the Managers argument is not backed by statistics, the importance of employee benefits in employee retention cannot be disputed (Weathington & Jones, 2006). The Restaurant Manager has also proposed joint catering services and customer loyalty cards. The idea of joint catering services is a promising one: the combining of forces of the high-quality chefs of both companies is likely to raising the bar of the catering business (Parsa, et al., 2011). However, the operational details will first have to be put in place. Though the idea of joint customer loyalty cards is a good one, it will have to be preceded by the rebranding of all the two companies’ restaurant. This way, the company will avoid the potentially embarrassing situation where the names at the top of the restaurant door and on the customer’s card are different. Again, proper logistics will help prevent such an anomaly. Recommendations and Conclusion The realisation of the new company’s vision will largely depend on how well each manager addresses the key priority areas in their department. Overall, the priority areas are well-defined except that the Marketing Manager did not touch the matter of rebranding the restaurants. In the corporate world, rebranding is a natural consequence of a merger – the new company’s name, logo and slogan must appear on the company’s buildings and vehicles among other assets (Reich, 2002). In addressing these priority areas, the company must guard against the tendency of each manager acting in isolation without regard to what the other managers are doing. The companys General Manager must at all times keep all his managers awake to the common goal: to make King Tims the leading group of restaurants in Europe. In order to keep the company focused on the goal, part of the mandate of the transition team proposed by the HR Manager should be to monitor the implementation of the departmental priority areas. The team should constitute representatives of all the departments. The team should report on a regular basis to the General Manager, who will take appropriate remedial measures. However, the priority areas are expected to change over time. The management ought to be flexible enough to address priorities as they evolve. Appendix: SWOT Analysis Strengths Good financial performance Two iconic brands Weaknesses Scattered marketing campaign Two different corporate cultures Opportunities Market penetration Product development International expansion Threats Tax inversion backlash Pressure by investors to deliver results Loss of corporate culture References Anderson, A. & Sims, R., 1990. Managing for quality: Getting the right management framework for information technology. 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