You have been asked by the President of Tim Hortons Inc.’s (TMI) (Click here to review the TMI Case Study) to provide some consulting (advisory) service. Tim Hortons is considering opening its line of restaurants in China and is looking for a feasibility study that will include macroeconomic analysis and estimates of market potentials for THI products.There is a strong interest from investors in Hong Kong because there are a large number of Canadians in that country. Hong Kong, a former British colony, operates as an autonomous state but it is part of China. Opening THI restaurants in China can be considered as a two-stage process: (1) first open in Hong Kong and then (2) move into China.  Hot on the heels of the success (or perhaps trying to show you can improve upon a less-than-satisfying performance) of your first foray into the assessment of macroeconomic conditions of a country (i.e., your research essay), you have decided to join forces with three of your peers to take it to the next level. You have formed a small consulting company and are bidding on a major project with a major client – Tim Horton’s Incorporated (THI).THI has issued a challenge asking for recommendations on whether they should or should not strengthen their investment in one of the fastest growing economies of the world: the People’s Republic of China (China). Your team will consider the macroeconomic environment of China and its trends, and then examine the feasibility of establishing a formal presence for Tim Hortons within the boundaries of China. If you recommend that THI should enter this market, then you must also list the various steps that it should take to ensure its success.   Should you recommend that the market is not suitable, then you must present a strong argument as to why.As a further twist, your team will have some competition. Other teams will be given the same opportunity to prepare their recommendations on the same project using the same case study as a starting point, so you need to find a way to find, select, and package your information that will be the most engaging, creative, and persuasive. THI will hire the most convincing group to help them in the broader project.Some questions to think about as you approach your research are:Should you use Purchasing Power Parity (PPP) to get an idea of the buying power of the Chinese consumers?How about the exchange, inflation, and interest rate? How do they have any bearing on your analysis?How about the unemployment rate in China – how does it affect your analysis?What are the expected price and income elasticities of demand for THI products in China?Do you think that THI should modify its menu for the Chinese market? If so, elaborate on this.Starbucks, McDonald’s, and many other Western fast food chains are already in China. How these will affect THI’s growth and success?Work constructively and collaboratively in a small group to produce an engaging and informative package.     QUESTION - Is it going to be easy to find skilled persons to work at THI?

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Asked Sep 19, 2019
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You have been asked by the President of Tim Hortons Inc.’s (TMI) (Click here to review the TMI Case Study) to provide some consulting (advisory) service. Tim Hortons is considering opening its line of restaurants in China and is looking for a feasibility study that will include macroeconomic analysis and estimates of market potentials for THI products.

There is a strong interest from investors in Hong Kong because there are a large number of Canadians in that country. Hong Kong, a former British colony, operates as an autonomous state but it is part of China. Opening THI restaurants in China can be considered as a two-stage process: (1) first open in Hong Kong and then (2) move into China.  

Hot on the heels of the success (or perhaps trying to show you can improve upon a less-than-satisfying performance) of your first foray into the assessment of macroeconomic conditions of a country (i.e., your research essay), you have decided to join forces with three of your peers to take it to the next level. You have formed a small consulting company and are bidding on a major project with a major client – Tim Horton’s Incorporated (THI).

THI has issued a challenge asking for recommendations on whether they should or should not strengthen their investment in one of the fastest growing economies of the world: the People’s Republic of China (China). Your team will consider the macroeconomic environment of China and its trends, and then examine the feasibility of establishing a formal presence for Tim Hortons within the boundaries of China. If you recommend that THI should enter this market, then you must also list the various steps that it should take to ensure its success.   Should you recommend that the market is not suitable, then you must present a strong argument as to why.

As a further twist, your team will have some competition. Other teams will be given the same opportunity to prepare their recommendations on the same project using the same case study as a starting point, so you need to find a way to find, select, and package your information that will be the most engaging, creative, and persuasive. THI will hire the most convincing group to help them in the broader project.

Some questions to think about as you approach your research are:

  • Should you use Purchasing Power Parity (PPP) to get an idea of the buying power of the Chinese consumers?
  • How about the exchange, inflation, and interest rate? How do they have any bearing on your analysis?
  • How about the unemployment rate in China – how does it affect your analysis?
  • What are the expected price and income elasticities of demand for THI products in China?
  • Do you think that THI should modify its menu for the Chinese market? If so, elaborate on this.
  • Starbucks, McDonald’s, and many other Western fast food chains are already in China. How these will affect THI’s growth and success?
  • Work constructively and collaboratively in a small group to produce an engaging and informative package.

 

 

 

 

 

QUESTION - Is it going to be easy to find skilled persons to work at THI?

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Expert Answer

Step 1

Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If you want remaining sub-parts to be solved, then please resubmit the whole question and specify those sub-parts you want us to solve.

Answer 1: Purchasing power parity refers to an economics index which tells about the value of the same basket of good in different countries. PPP is also a great indicator of the economy's position and helps in decisions regarding investing in an economy or not. From the recent data, it can be concluded that China is the world largest economy with a GDP of $27.3 trillion which is greater than the GDP of USA.

Step 2

Answer 2: Exchange rate, interest rate, and inflation rate are connected to each other. Any change in the variables will lead to a change in the GDP of China. For example an increase in inflation due to shocks in the economy will tend to reduce real interest rate. thus due to decline in real interest rate, individuals will demand...

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