Now take a look at this product development strategy. Proactive or Reactive?
This is neither a proactive or reactive strategy for product development, this is a Brazilian Capital Firm trying to save money by cutting costs and saving on tax dollars spent, while utilizing Burger King’s Capital and market-share to acquire Tim Hortons and cut the profit margin to a much higher and respectable than 25%. 3G capital is the owner of Burger King (70+ %), rest split by shareholders and private equity firms, and is known for drastically cutting expenses to the limit of spending $15/month on office expenses per employee, forbidding corporate travel, and buying American companies to see a profit by minimizing costs. CEO Shultz of Burger King states “its not really”, REALLY should not be in that sentence as a CEO releasing a public notice concerning. What he means is that it may be the driving reason but not the only reason stating that it will allow for growth, which it will by expanding internationally only to a 1/5 ratio to Canadian profits. This move will save the company 7% , Canada @ 20, Florida @ 27, saving them 139 million dollars a year! This is a reactive strategy to increase profits, both companies have released statements saying they do not plan to change anything concering products/service
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I believe it to be proactive because the companies are looking towards the future of where they want to see themselves because of this merge. As apposed to reactive, I have not heard a lot of great things from consumers on either side of the boarder, I believe this merge will create quite a struggle for 3G, lets hope they don’t need to cut jobs like they did with Heinz.
Reactive! They are reacting to what the public wants, keeping both restaurants separate instead of combining products.
i feel like this is positive because they trying to expended and create better revenue. This will help with making sure they don’t start in the declining stage and stay in the mutuality stage. and the customers are over reacting because they are keeping the 2 company septet.
Reactive, Burger King taking over, lets Burger King to get into the Canadian market as Tim Horton is popular here. The merge would increase popularity and profitability in the Canadian market.
I agree that it is reactive, they are trying to increase profits and make Tim Hortons an international brand, and have agreed that the products and services of both brands will be staying the same. Hopefully Tim Hortons has a good strategy and knows who their target market is going to be in the USA because people in the USA may be happy with what they’ve got ( as Nikki had said in class).
This is definitely reactive strategy. Tim Horton’s is slowly being backed into a corner by American franchises True they aren’t as costly but as people are getting richer by the minute they seemingly prefer more expensive treats. So Tim Horton’s is basically taking a rearguard action. They are taking a defensive action. Economic times are on a down so they are getting behind a big name to ensure they won’t have any financial worries. True, a lot of Canadians won’t agree with an American firm buying them over but sometimes to survive, one must even take help from the enemy.
Thanks for your comment Darryl. Yes, Tim Hortons can grow much more quickly with this move.
Reactive strategy. The net income of Tim Hortons started decreasing in 2013 in comparison to previous years. This move of being merged with Burger King can prevent the possibility of further revenue decrease. Moreover, it will definitely bring Tim Hortons to higher revenue with help of American market, even if part of Canadian marker reduces.
The companies are reporting strong sales so it looks like both of them have benefited. I dont think Canadians mind as long as the look, and feel of the company doesn’t change much. Are you a TH coffee drinker?
Yes, I’m a TH drinker. And as for me, there is no reason to refuse from their product as long as it has the same quality.
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