Tim Hortons: Bringing Canada’s Iconic Coffee to China

In February 2019, Tim Hortons, Canada’s iconic coffee franchise, opened its first coffee shop in China in Shanghai, thereby extending its international footprint to China. To accomplish this entry, Restaurant Brands International (RBI), the parent company of Tim Hortons, formed a joint venture (JV) Tim Hortons (China) Holdings Co., Ltd. (Tims China) with Cartesian Capital, a private equity fund that had operated in China for more than twenty years. As the minority owner, RBI granted Tims China the master franchise rights, covering the use of trademarks, core products, store management procedures, and so on. Cartesian Capital, on the other hand, held majority ownership and would manage the strategy and daily operation of the joint enterprise. A veteran of Cartesian Capital was dispatched to the JV to be its chief executive officer. The fast-growing coffee market in China presented enormous opportunities, but Tim Hortons was a latecomer compared with foreign brands like Starbucks and numerous local coffee providers. In this situation, how should he best position and expand Tim Hortons in the new market?

This case is suitable for a 90-minute class on international business, international management, and global strategy at the undergraduate and graduate levels. It can also be used for executive development programs that cover the topics of international entry and expansion. Depending on the angle of analysis, the case fits particularly well with the following courses:<ul><li>International business (entry mode choice)</li><li>International alliance (alliance motives, franchising, and JVs)</li><li>Global strategy (internationalization motives, and foreign entry and expansion)</li></ul><br>This case aims to deliver essential knowledge on foreign market entry and expansion, decisions that are critical in the process of international expansion. To deliver this learning goal, the case documents the entry of a foreign coffee brand (famous in its native Canada) into a tea-drinking country. It also provides details of the market conditions of the host country, the entry mode adopted, and the rationale on the part of both partners. Working through the case and assignment questions will enable students to do the following:<ul><li>Explore the key drivers for a firm to pursue international expansion.</li><li>Analyze the market conditions of emerging economies.</li><li>Understand the two entry modes and their comparative pros and cons.</li><li>Practice decision-making skills in formulating an expansion strategy in foreign markets.</li></ul>

• Foreign market entry
• International franchising
• Foreign market expansion
• Emerging market