Team 3 - Project Charter - Tim Hortons Hong Kong Market Expansion

Project Charter

Hong Kong Market Expansion

Managing International Projects – SCS2236-028 November 22, 2016

Team 3 Amanda Heydorn (Nairobi, Kenya)

Neda Bayat (Hong Kong, China) Putheary Tek (Amsterdam, Netherlands)

Shanna Pritchard (Toronto, Canada)

Project Charter – Hong Kong Market Expansion November 22, 2016

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Table of Contents 1. Project Description .......................................................................................................................... 3

2. Problem Statement .......................................................................................................................... 3

3. High Level Objectives and Goals ...................................................................................................... 3

4. Project Scope ................................................................................................................................... 4

4.1 In Scope ......................................................................................................................... 4

4.2 Out of Scope.................................................................................................................. 4

5. Key Milestones .............................................................................................................................. 4-5

6. Assumptions, Constraints and Dependencies ................................................................................. 5

6.1 Assumptions .................................................................................................................. 5

6.2 Constraints .................................................................................................................... 5

6.3 Dependencies ............................................................................................................... 5

7. Risk Assessment and Management Plan Overview ......................................................................... 6

7.1 Risk Assessment ............................................................................................................ 6

7.2 Probability Impact Matrix ............................................................................................. 6

7.3 Risk Management Plan ................................................................................................. 6

8. Anticipated Hard and Soft Benefits ................................................................................................. 7

8.1 Hard Benefits ................................................................................................................ 7

8.2 Soft Benefits .................................................................................................................. 7

9. Estimated Costs ............................................................................................................................... 7

9.1 Total Project Costs ........................................................................................................ 7

9.2 Cost Breakdown per Store ............................................................................................ 7

10. Stakeholders .................................................................................................................................... 8

10.1 Internal Stakeholders .................................................................................................. 8

10.2 External Stakeholders ................................................................................................. 8


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Project Name: Tim Hortons® Hong Kong Market Expansion Start Date: January 3, 2017 End Date: December 31, 2017 Project Sponsor: Elias Diaz Sese, President of Tim Hortons® Project Manager: Shanna Pritchard Project Team: Amanda Heydorn, Neda Bayat, Putheary Tek Project Budget: $4.5 million USD, plus 10% contingency

1. Project Description Expansion of Tim Hortons® into the Asian market with Hong Kong being identified as the key city to introduce the Tim Hortons® brand to the Chinese population. Feasibility studies and consumer engagement have indicated that the fast-paced and metropolitan lifestyle in Hong Kong is the ideal market to launch Tim Hortons® and can fulfill the niche of quick, delicious and fresh foods and beverages at competitive prices.

2. Problem Statement By bringing Tim Hortons® to Hong Kong, there is a market and profitable earnings as a mid-level coffee and bakery chain with competitive price points below Starbucks® and Pacific Coffee®. Tim Hortons® offers a uniquely Canadian cultural aspect and flavours, which will lend to the success of Tim Hortons® in Hong Kong and the Asian market. The expansion of Tim Hortons® into Hong Kong is a natural evolution of relations. With approximately 500,000 people of Hong Kong descent living in Canada and about 300,000 Canadians living in Hong Kong, a strong, bilateral relationship exists between Canada and Hong Kong. The presence Tim Hortons® in Hong Kong will engage the Chinese consumer and market, which will create demand for further expansion within China and the Asian market and franchise opportunities

3. High Level Goals and Objectives - To identify key locations to open 3 corporate retails stores in Hong Kong, opening dates of

December 2017. - Sales targets in Hong Kong of $100,000 USD for December 2017 (soft opening). - Sales targets in Hong Kong of $2 million USD for 2018 (calendar year). - Brand increase net promoter score of 2%. - Employee satisfaction survey scores (quarterly) of +4 or higher (scale of +5 (very good) to 0

(unsatisfied)) to ensure employee retention and protection of company investment. - Social engagement of the Tim Hortons® in Hong Kong on Facebook, Instagram and Twitter of

10% or more. - Roll up the Rim™ contest launch in December 2017 to coincide with soft opening of

corporate stores in Hong Kong.


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4. Project Scope (In Scope and Out of Scope) 4.1 In Scope

- Property locations secured and purchased or leased in key identified areas - Construction of 3 corporate store locations to be in full operation by January 1, 2018, with

soft openings in December 2017 - Procurement and logistics of supply chain, ingredient sourcing and materials - Market, brand management and public relations in Hong Kong - Human resources and training of local staff - Legal and customs - Financial and contract management - Project pass-over to regional management and store managers by January 1, 2018

4.2 Out of Scope - Management of stores once in operation - Design of retail store space, design is predetermined by corporate head office - Brand creation and approval; any new products and redesign will be created by the creative

team in corporate head office to ensure consistency with the Tim Hortons® global brand - Recruitment of regional management team and store managers, corporate head office will

lead recruitment, orientation and training processes - Future franchising opportunities

5. Key Milestones

January 2017 - Locations of 3 corporate stores identified and secured - Bids for local contractors released for construction of stores - Media releases prepared and circulated

February 2017 - Local contractors selected and contracts awarded - Cultural and regional sensitivities studies completed by

marketing and PR team with findings incorporated into project plans

March 2017 - Construction contracts finalized - Construction schedule and SOW confirmed and construction

to commence - Ground breaking ceremony with press coverage

May 2017 - Local vendors identified and RFQ’s and RFP’s accepted for procurement and supply chain management

June 2017 - Proposal and quotes awarded for procurement and supply chain, contracts finalized

September 2017 - Recruitment process begins for stores (front and back of house)

- Store managers positions awarded and contracts finalized


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5. Key Milestones Continued November 2017 - Construction of stores completed, punch lists completed and

quality confirmed - Government regulatory, food and safety inspections

completed - Promotional campaigns launch - Training of staff completed

December 2017 - Soft opening of stores in Hong Kong January 2018 - Completed project handover to operational/regional

management and store managers

6. Assumptions, Constraints and Dependencies 6.1 Assumptions

- Current coffee chain market in Hong Kong allows for the introduction and success of the Canadian based brand Tim Hortons®.

- Tim Hortons® will be a competitive brand with Starbucks® and Pacific Coffee®, both which are currently in operation in Hong Kong.

- Availability and interest of future franchise opportunities in the Chinese market and surrounding countries.

- Desirable key locations for establishment of 3 corporate stores. - Local vendors will be able to offer necessary supplies for operation of stores (food and

beverage supplies and ingredients). - Promotional activities, such as Roll up the Rim™ will generate excitement and interest in Tim

Hortons® from the Hong Kong public. 6.2 Constraints

- Timely importation of materials, equipment and supplies of Tim Hortons® branded items (bags, boxes, paper liners, cups, lids and napkins).

- Construction to be completed to corporate specifications of stores and operational. - $4.5 million USD budget to complete construction and supply corporate stores.

6.3 Dependencies - Availability of key locations to open corporate stores in Hong Kong, in areas of high

marketability value and visibility. - Consumer and cultural embracement of Tim Hortons® and the Tim Hortons® brand. - Tim Hortons® will need to be priced competitively to compete with Starbucks® and Pacific

Coffee®, with pricing at the mid-range market level. - Supplier dependencies to source local ingredients that stay true to the Tim Hortons® brand

and taste of food and coffee. - Brokerage company that is able to facilitate the ease of importation of Tim Hortons®

branded supplies to the stores in a timely and effective manner.


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7. Risk Assessment and Management Plan Overview 7.1 Risk Assessment Sources of risk will be identified and assessed using the PESTEL (Political, Economical, Sociocultural, Technological, Environmental and Legal) framework and will take into consideration the Project Scope and Work Breakdown Structure (WBS). 7.2 Probability Impact Matrix Each risk will be assessed and prioritized according to the probability impact matrix below (Figure 1). Probability is the percentage of likelihood of a risk occurring. Impact is the effect a risk will have on the project’s financial costs, and/or schedule, and/or project task; expressed as a percentage.

IMPACT

Trivial (less than

10%)

Minor (10-25%)

Moderate (25-50%)

Major (50-75%)

Extreme (75-100%)

PRO

BABI

LITY

Very unlikely (less than 10%)

<1 >1 and up to

2.5 >2.5 and up to

5 >6.25 and up

to 7.5 >7.5 and up to

10

Unlikely (10-25%)

>1 and up to 2.5

>5 and up to 6.25

>10 and up to 12.5

>12.5 and up to 18.75

>18.75 and up to 25

Possible (25-50%)

>2.5 and up to 5

>10 and up to 12.5

>18.75 and up to 25

>25 and up to 37.5

>37.5 and up to 50

Likely (50-75%)

>6.25 and up to 7.5

>12.5 and up to 18.75

>25 and up to 37.5

>50 and up to 56.25

>56.25 and up to 75

Very Likely (75-100%)

>7.5 and up to 10

>18.75 and up to 25

>37.5 and up to 50

>56.25 and up to 75

>75 and up to 100

COLOUR LEGEND low risk medium risk high risk

Figure 1: Probability-Impact Matrix

7.3 Risk Management Plan Initial risks identified will be profiled in the Risk Plan. Risk identification, assessment and management will be done iteratively as the project progresses. New risks, as they arise through the evolution of the project will be profiled in a Risk Form for review, approval and eventual addition to the Risk Plan.


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8. Anticipated Hard and Soft Benefits 8.1 Hard Benefits

- New sales generated in the Hong Kong market with a sales target of $2 million USD for 2018. - Hong Kong real estate acquisitions, valued at $225,000 USD per location (total real estate

value of $675,000 USD) - Trained and experienced staff, capable of transferring to other locations and transitioning

into eventual corporate roles, valued at $10,000 USD per location (total value of $30,000 USD).

- Partnerships formed with key local producers and suppliers, with purchases from local providers to be targeted at $20,000 USD.

8.2 Soft Benefits - Brand awareness in the Chinese market, focus groups intended to increase brand awareness

by 50%. - Studies of cultural and regional preferences and marketing feedback used to determine

beneficial product selection and product availability of regional specialties. - Marketing campaign targeted towards the Chinese demographic, customer and employee

survey results to meet or exceed expectations. - Employee retention with provisions of benefits and continuous training and education,

providing future opportunities for employees to become future corporate leaders, store managers and franchisees.

- Increased brand awareness through social media channels, such as; Facebook, Twitter and Instagram.

9. Estimated Costs 9.1 Total Project Cost: $4,251,000 USD 9.2 Cost Breakdown per Store (3 Stores in Total)

Item Cost Per Store (USD) Total Cost (USD) Location (Real Estate) $225,000 $675,000 Site Development & Design (Construction)

$480,000 $1,440,000

Equipment $500,000 $1,500,000 Training $10,000 $30,000 Professional & Licensing Fees $50,000 $150,000 Insurance $22,000 $66,000 Marketing $80,000 $240,000 Initial Supplies and Consumables Procurement

$50,000 $150,000

Total $1,417,000 $4,251,000


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10. Stakeholders 10.1 Internal Stakeholders

Organization Name Role Restaurants Brand International

Alex Behring Chairman

Restaurants Brand International

Daniel Schwartz CEO

Tim Hortons® Corporate Head Office

Elias Diaz Sese President of Tim Hortons® Project Sponsor

Tim Hortons® Corporate Head Office

Marcus Chu CFO Project Funder

Investors and Shareholders Sarah Hardmann Chairperson of Board Project Funders

Regional Management Team April Johnson Regional Management Representative

Tim Hortons® Design Team Laurel Smith Corporate Store Design *Restaurants Brand International is Tim Hortons® parent organization.

10.2 External Stakeholders

Organization Name Role Law Firm n/a Contracts and legal advice Government of China n/a Permits and inspections Municipal Government of Hong Kong

n/a Local permits and inspections

Commercial Real Estate Agency n/a Securing and purchasing/leasing of property

Construction/Contractors Trade and Supplies

n/a Construction of stores, supply of equipment and consumables

Customers n/a Consumers Customs Broker n/a Facilitation of importation of

goods

Team 3 - Project Charter - Tim Hortons Hong Kong Market Expansion

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