Document title: Operations Management Group project

Project name: Retail Location Analysis

Version: 1.0
Issue date: 4/30/2017

Cover
Page
a. Executive Summary (1 page) Brief summary of findings & recommendations.
b. Introduction Brief description of the organization, Nature of its products and
services,
Environment (threats and opportunities) in the industry for improvement and/or
changes.
c. Problem Definition Define major OM problem area; Identify the causes;
Reasons for
changes; Analysis of the problem
d. Model Design & Development Define and justify the proper qualitative/
quantitative
tool used; Data collection/creation, if necessary; Define decision variables & model
parameters; Assumptions; Detailed modeling; Final model; Strengths & weaknesses
of
your model.
e. Solution Analysis Solve the model using proper computer software and/or
proper
analysis; Interpret the solution outcomes/results;
f. Recommendations Recommend a set of solutions to management; Justify how
your
recommendations would improve the current OM situations; Make suggestion on
how the

MAHESH & TEAM 1

Tim Hortons Location Analysis

Document title: Operations Management Group project
Project name: Retail Location Analysis
Version: 1.0
Issue date: 4/30/2017
set of recommendations should be implemented; Briefly mention about the
challenges the
organization may face in implementing them.
g. Conclusions Brief statement about the challenges and difficulties you had in
conducting the project, about what you have learned throughout the course of the
project.
h. References (if any)
i. Appendices (e.g. tables, figures, computer printouts, if any)

Executive Summary:
We are in the Age of the Customer. To survive and prosper, firms must embrace
customer intimacy online and offline as a core competence. No doubt, many
firms will continue to fly blind when it comes to understanding customer behaviors
in their venues. A few will survive, but many will likely hit a brick wall. The smart
money, however, will be on the firms that embrace customer centricity and
technologies like location analysis that make it possible.
Warehousing has been a part of civilization for thousands of years. Warehousing is
the function of storing goods between the time they are produced and the time they
are needed. In practice, goods are sent to storage points close to the market and
are issued to consumers from these points easily and in small amounts when
needed. Although warehousing was initially a means of storing foodstuffs, today it is
a broad and complex issue. For example, there are more than 300,000 large
warehouses and 2.5 million employees in the United States alone. The cost of
American warehousing is more than 5 percent of the gross national product. A
warehouse is a distribution factory. The warehousing functions far exceed the mere
provision of a building to protect the stored goods from the elements. Furthermore,
any warehouse is a complex, constantly evolving center, which must be able to
cope with a myriad of expansions and expectations and must do so cost effectively.
Adequate space, customer service, favorable traffic connections with suppliers and
key markets, easy freeway access, proximity to trains and airports and a qualified
work forcethese are only some of the factors that a warehousing study must

MAHESH & TEAM 2

Tim Hortons Location Analysis

Document title: Operations Management Group project
Project name: Retail Location Analysis
Version: 1.0
Issue date: 4/30/2017
evaluate. To succeed in certain demand areas, organizations must have a
warehouse presence. Naturally, capital investment, operating expenses, and
customer service are all affected by decisions regarding site and structure. Thus,
storage should be considered as a resource. Investments in storage facilities should
be identified through an initial study and must be followed by a feasibility analysis.
The location of warehousing must be studied carefully prior to undertaking the other
complex issues inherent in a storage study.
This report has been prepared with a specific purpose in mind. It outlines the history
and current scenario of the Coca-Cola Company globally and locally.

The report contains a brief introduction of Coca Cola Company and Coca-Cola India
and a detailed view of the tasks, which have been undertaken to analyze the
aspects of Coca. We have also given a brief description of Trends and Forces that
are affecting Coca-Cola Company globally.

The main objective of this project report is to analyze and study in efficient way the
current position of Coca- Cola Company. The study also aims to perform various
analysis that are related to location

analysis of Coca-Cola Company & find out several factors effecting the growth of
Coca-Cola. Another objective of the study was to perform Competitive analysis
between Coca-Cola and its competitors.

Introduction:
Tim Hortons, headquartered in Ontario, Canada, is a restaurant chain in Canada and
the U.S. Its
major products include premium coffee, flavored cappuccinos, specialty teas, soups,
sandwiches, wraps,
baked goods and donuts.
Tim Hortons has 4014 outlets, 99.6% of which are franchised. It achieved revenue of
$2,8521
million and net profit of $382 million for the financial year of 2011.
Tim Hortons has surpassed MacDonalds as Canadas largest food service operator
with nearly
twice as many Canadian outlets as McDonald's. In 2010, Tim Hortons owned 3,148
restaurants in Canada. (Tim Hortons: Story).

MAHESH & TEAM 3

Tim Hortons Location Analysis

Document title: Operations Management Group project
Project name: Retail Location Analysis
Version: 1.0
Issue date: 4/30/2017
Company Goals

Tim Hortons aims to offer superior quality products and services for its customers
and communities
through leadership, innovation and partnerships. This is reflected in their vision
statement, which sets the
companys overall goal as: to be the quality leader in everything they do (Tim
Hortons: Fresh cup of coffee).
Brief History
In 1964 Tim Horton established the food chain that bears his name. While Tim
Horton was a well-respected defenseman for the Toronto Maple Leafs, the NHL was
not yet paying todays mega-salaries.
To insure an income after his playing days ended, he opened a donut shop. In 1967,
one of its restaurant
operators, Ron Joyce became a partner within the company. After Tim Hortons
death in 1974, Joyce
became the sole owner by acquiring all the shares in the company for $1million.
Joyce aggressively
expanded the number of stores, opening the 500 th in 1991.
In the early 1990s, Tim Hortons built a partnership with Wendys International
(Wendys: Story).
This relationship allowed the two companies to develop real estate together. More
importantly, they

agreed to open several restaurant sites that combined Wendys and Tim Hortons
restaurants under
the same roof (Tim Hortons: Story). According to Wendys, their shared mission-to
deliver quality food,
value and unparalleled service to customers has been the key to their success.
(Wendys: Story).
Tim Hortons, was acquired by Wendys in 1995. This made Joyce the largest
shareholder in
Wendys. In 2006, Tim Hortons was spun off as a separate company through an IPO
on the NYSE, and is
now publicly traded under the name Tim Hortons Inc. In 2009, Tim Hortons reached
an agreement with
Cold Stone Creamery (the ice cream restaurant), Kahala Corp, to co-brand up-to 100
stores in the U.S.
This project was later successfully rolled out.
International Expansion
During the 1970s Tim Hortons expanded along the border areas of the U.S., during
the 1990s the firm
began expanding more aggressively, acquiring former locations of other fast food
chains. Tim Hortons has over
600 stores in the U.S. and plans to open more than 300 in the next 3 years (Tim
Hortons: 2011 Annual Report).

MAHESH & TEAM 4

Tim Hortons Location Analysis

Document title: Operations Management Group project
Project name: Retail Location Analysis
Version: 1.0
Issue date: 4/30/2017
In 2007, Tim Hortons reached an agreement with SPAR Ireland to open Tim Hortons
coffee and
donut self-serve kiosks in its franchised locations nationwide in Ireland. These kiosks
are independently
managed by SPAR retailers (Tim Hortons: Story).
The year 2010 was a critical for Tim Hortons because the company announced its
first concrete
plans for accelerated international expansion. In 2011Tim Hortons signed a Master
License Agreement
with Apparel Group of Dubai for the opening of 120 stores over five years in certain
markets within the
Gulf Cooperation Council (GCC) region (The Canadian Press, 2011).

Opportunities
Innovation: Tim Hortons is already testing new ways to stay competitive.
These include K-Cup home coffee prodicts, new coffee blends, mobile payments,
and express lines for improved service.
Brunch and Brinner: All-day breakfast options are growing in popularity,
and with many 24-hour locations, Tim Hortons could benefit from a steady traffic of
people seeking breakfast later in the day.
Healthier options: Though Tim Hortons is best known for its coffee and
donuts, many of its lunch options are healthier than those of competing fast-food
establishments. More marketing emphasis on healthy offerings and a little
improvement in the nutritional makeup of its soups and baked goods offerings could
go a long way in making customers opt for Tims over McDonalds.
Threats
Competition: This is a crowded market! The number of Tims restaurants in
Canada has jumped over 12% in past five years, though customer traffic has only
increased 1%-2%. McDonalds is remodeling many of its Canadian outlets. Tim
Hortons was scheduled to have nearly 10% of 3,300 restaurants refurbished at end
of 2013, but this is both fewer in absolute terms and a slower pace than McDonalds
Canada. Starbucks has been gaining ground, using a Canada-only brew called
True North and singing the praises of maple with a new Maple Macchiato.
Hard times: Lingering effects of a slow economic recovery mean fewer
consumers eating outside the home. Operating income has been under pressure,
and now Tim Hortons has to rely on lower prices to stay competitive, cutting into
profits.

MAHESH & TEAM 5

Tim Hortons Location Analysis

Document title: Operations Management Group project
Project name: Retail Location Analysis
Version: 1.0
Issue date: 4/30/2017
Investor pressure: Highfields Capital Management (which owns 4% of
shares) and Scout Capital Management (owns 5% of shares) oppose the
expansion in America as returns have been lower than anticipated and the highly
competitive U.S. fast-food market is just about saturated.

Problem Definition:
Location analysis is an important decision and should not be taken lightly. The
physical location of business functions is an important part in the supply chain
strategy of any company. Location should be defined by strategy, not only in foreign
but also in domestic locations. According to studies conducted by the SBA, poor
location is among the chief causes of all business failures. Simply finding the
cheapest site is typically a recipe for disaster.i The Foreign Direct Investment Survey
2002 indicated that out of 191 respondents, nearly 80 percent of the respondents
plan to expand overseas to both developing and developed countries.ii Reasons why
companies are investing outside their home countries include: improved market
access reduced operating costs sources of raw materials consolidated
operations development of new product lines improved productivity develop
new technologies improved labor force access reduce risk Traditional
approaches emphasize quantitative data of cost-based variables like land costs,
transport costs, exchange rates, taxes etc. Due to changes in the global business
environment such as the rise of regional trading blocs and changes in the
production systems and technology etc, new trends in manufacturing location
analysis are evolving. Regional trading blocs like NAFTA, ASEAN, etc., creates
incentives for companies to have manufacturing presence in those regions to take
advantage of free trade and avoid regulatory barriers if you are currently exporting
to that bloc. For example, a JIT production environment needs a reliable
transportation infrastructure and a close proximity to supplier outlets. Quality of life
for employees is becoming an important factor as well, particularly for knowledge
based industries such as telecommunications, computers, entertainment, and
biotechnology that are a part of the New Economy. Companies that compete on
innovation are finding that certain locations are more advantageous than others in
maintaining their strategy.iii When conducting a location analysis companies
frequently use investment or merchant banks, accounting firms, investment
promotion agencies, economic development agencies, specialized site selection
firms and general management consulting firms. While engaging these specialized
resources may be helpful, it is still the responsibility of the firm to make location
decisions. Factors affecting the choice of location For almost all sizable corporations,
the evaluation of proposed business site includes a systematic consideration of its
cost and benefits relative to the alternatives. Companies thinking about the capital
appropriations requested for the site, typically include a raft of figures and
qualitative considerations. As much as can be quantified is construction or

MAHESH & TEAM 6

Tim Hortons Location Analysis

Document title: Operations Management Group project
Project name: Retail Location Analysis
Version: 1.0
Issue date: 4/30/2017
purchase/renovation costs, equipment costs, labor and fringe benefit costs, tax
systems, exchange rates, working capital requirements such as inventories,
materials, and accounts receivable, freight in and freight out expenses. Even after
these have been taken into account, the direct financial differences between
qualifying sites may be insignificant, which means that intangible or qualitative
factors may sway the final decision. Often what makes the location decision
uncomfortable is not the final steps of evaluation, but rather the beginning steps of
the process to locate the potential site. A site selection checklist is a useful device.
It suggests many factors which could have a bearing on the location decision.

The following list is limited to early stages of the location search, when a suitable
site is identified.

MAHESH & TEAM 7

Tim Hortons Location Analysis

Document title: Operations Management Group project
Project name: Retail Location Analysis
Version: 1.0
Issue date: 4/30/2017

Location Analysis
For an effective and efficient supply chain, location decisions for a facility may be the
most critical and most difficult decisions. Facility location decisions are fixed and

MAHESH & TEAM 8

Tim Hortons Location Analysis

Document title: Operations Management Group project
Project name: Retail Location Analysis
Version: 1.0
Issue date: 4/30/2017
difficult to change even in the intermediate term.
Change in customer demands, transportation cost or component prices will not change
the location of a facility. Inefficient locations for facilities can result in excess costs
incurred throughout the lifetime of the facilities.
Long-term Planning
Long term conditions for which a facility will operate will be subject to considerable
uncertainty at the time of decision proposals. Recognizing the inherent uncertainty
associated with future conditions is important
Several factors that influence location positioning include the location of raw materials,
proximity to the market, climate, and culture. Models for evaluating whether a location is
best for an organization consist of cost-profit analysis for locations, the center of gravity
model, the transportation model, and factor rating.

The main considerations in choosing a site are land, transportation, zoning, and many
others. When identifying a site, it is important to consider to see if the company plans to
grow at this location. If so, the firm must consider whether location is suitable for
expansion. There are many decisions that go into choosing exactly where a firm will
establish its operations.

Problem Statement:
Retail location analysis is an important part in site selection of a retail store. A
trade area of a retail store is the geographical area from which it draws most of its
customers and within which its market penetration is the highest(Ghosh and
McLafferty, 1987). Retail location analysis also helps to determine the focus areas
for marketing promotional activities, highlights geographic weaknesses in the
customer base and projecting future growth and expansion of the retail services
(Berman and Evans, 2001).

Solution Analysis:
Recommendations:

MAHESH & TEAM 9

Tim Hortons Location Analysis