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A. Preface
Headquartered in Canton, Massachusetts, Dunkin’ Brands (Dunkin’) sells hot and cold
coffee and baked goods, as well as hard-serve ice cream, using a near-100 percent franchised
business model. With 11,300 Dunkin’ Donuts restaurants in 40 states and 32 foreign countries,
and 7,500 Baskin-Robbins restaurants in 43 states and 46 foreign countries, Dunkin’ is one of the
world’s largest franchisors of quick-service (QSR). All but 36 Dunkin’ Donuts and Baskin-Robbins
are franchisee-owned. In the last few years, more and more customers are coming into Dunkin’
restaurants and spending more and more money when they are there. About 70 percent of all
Dunkin’ stores have a drive thru, which caters in a hurry. Dunkin’ is a speed leader among QSR,
Dunkin’ recently launched a loyalty and rewards program that enable the company to
collect data from customers to determine their habits. For example, if you normally visit Dunkin’
Donuts in the morning, the firm may soon send you offers to purchase some donuts in the
afternoon or evening. Companies increasingly are using business analytic to make strategic
decisions. Major rival firms in the coffee retailing business include Starbucks, Krispy Kreme
Doughnuts, and Tim Hortons. Dunkin’ especially caters to the on-the-go consumer looking for a
quick coffee and breakfast. One potential weakness for Dunkin’ is that the firm does not offer
Coffee price rose 50 percent in 2014 due to drought conditions in South America,
especially since Brazil endured its worst drought in decades. The 2014 coffee harvest in Brazil
was the lowest in three years. To take up the slack, Columbia, the world’s number-two Arabica
grower, was increasing production, but Columbia only produce about one quarter as much coffee
as Brazil.
with seven franchise groups to open 51 new restaurants in Virginia and West Virginia over the
next several year. Of the seven groups, only one is a new franchisee while the rest are existing
franchisees/franchise groups. For Q1 of 2015, the company’s revenues increased 8.1 percent
year-over-year to $185.9 million, driven partly by revenue from the Dunkin’ K-Cup pack licensing
B. Corporate History
Independently in the 1940s, Bill Rosenberg founded the first Dunkin’ Donut restaurant,
and Burt Baskin and Irv Robbins each founded a chain of ice cream shops that eventually
combines to form Baskin-Robbins. Baskin-Robbins and Dunkin’ Donuts were acquired by Allied
Domecq in 1973 and 1989, respectively, and renamed Dunkin’ Brand, Inc. in 2004. Allies was
acquired in 2005 by Pernod Ricard, who soon sold the firm to Bain Capital Partners, LLC, The
Carlyle Group, and Thomas H. Lee Partners, L.P. In 2011, Dunkin’ Brands became listed on the
Bill Rosenberg opened his first restaurant, Kettle Donuts, in 1948, in Quincy,
Massachusetts. The name changed to Dunkin’ Donuts in 1950. Rosenberg sold franchisees to the
others as early as 1955. The 100th restaurant opened in 1963, the 1,000th in 1979, and the 3,000th
in the 1992. In 1996, bagels were introduced to the Dunkin’ Donuts menu and breakfast
In 2013, Dunkin’ Donuts received the No. 1 ranking for customer loyalty in the coffee
category by Brand Keys for eight years running, and was rated by CREST in December 2013 as
coffee, number-one donut category, and number-one in bagel and muffin category.
The following year, Dunkin’ Donuts reentered the United Kingdom, 20 years after it exited
the country, with its first store opening in Harrow, London. In Canada, Dunkin’ Donuts has lost a
substantial percent of its market share in recent years, and now has only five restaurants, all in
Quebec, Dunkin Canadian decline is largely due to rival donut firm Tim Hortons.
B.2 Baskin-Robbins
In 1945, brothers-in-law Burt Baskin and Irv Robbins owned different ice cream parlors,
Burton’s Ice Cream and Snowbird Ice Cream, both in Glendale, California. The separate
companies merged in 1953 and the number of ice cream flavors increased to 31. That year,
Baskin-Robbins hired Carson-Roberts Advertising who recommended typeface. In the 1970s, the
company went international, opening stores in Japan, Saudi Arabic, Korea, and Australia. Baskin-
Robbins was the first company to introduce ice cream cakes to the public, and the first to offer
both hand scooped and Soft Serve ice cream. In some places, such as Malaysia, Baskin-Robbins
gives 31 percent off their hand-packed ice cream on the 31st of a month.
Today, Baskin-Robbins is the world’s largest chain ice cream specialty shops serving
premium ice cream, specialty-frozen desserts, and beverages to more than 300 million customers
annually. In 2014, the company was named the top U.S. ice cream and frozen dessert franchise
by Entrepreneur magazine.
reference for organizational decisions, strategic goal setting and behaviors that respect all of our
stakeholders. Corporate Social Responsibility is also a way to formalize our tradition of doing
what's right for our consumers, franchisees, employees and the communities we serve.
D. Vision Statement
franchisees, employees, communities, business partners, and the interests of our planet.
E. Priorities
Our People: From our employees and franchisees to the farmers who grow our coffee, we believe
in treating everyone with respect and fairness so they are empowered to reach their goals.
Our Guests: We are passionate about offering our guests delicious products they will enjoy,
giving them plenty of menu options, and providing accurate nutrition information so they can
Our Neighborhoods: We are dedicated to serving the basic needs of our local communities –
from providing food for the hungry and support for children’s health and wellness, to ensuring
materials we use, to the way we construct and operate our stores, we are committed to adopting
franchisees, business partners, and above all, the importance of the planet.
This case study aimed to solve issues of Dunkin’ Donuts regarding the four different
1. How can Dunkin’ Donuts solve the problem about labor shortage?
2. How can Dunkin’ Donuts help guests in making decisions about their dietary preferences?
4. How can Dunkin’ Donuts continuously improve its product that would benefit the planet?
OBJECTIVE OF THE PROBLEM
2. To help our guests make informed decisions about their dining experience.
3. To help support causes that make a difference in the neighborhoods where employees
4. To further improve the products offered that would give a positive environmental impact.
A. Opportunities
International Expansion: In its year-end 2014 earnings release, management spoke of its intent
to focus its expansion efforts in Europe, The Middle East, and China. With roughly 19,000 total
locations, and an expectation to expand to more than 30,000, these markets will soon be
saturated by locations. But beyond these regions, there are a multitude of emerging economies
that could provide growth opportunities for Dunkin Brands. And, if the company continues
expanding its base on the West coast of the U.S., and generates stronger volumes from its present
locations in the Midwest, the top line would certainly see a material increase.
Menu Diversification: The Company has more than just entertained the idea of breaking into
lunch and dinner day-parts over the past few years. Dunkin has added new sandwiches and drink
options to its menu to meet this growing demand. But to go even farther, the company has a
significant opportunity in the health craze that has swept the nation recently. Therefore, we
would keep an eye on low-calorie items, and generally health-conscious choices going forward.
B. Threats
Strong Competition: Dunkin Brands may have a strong presence in Northeastern United States,
but elsewhere it is not always the dominant breakfast force on the market. Companies like
Starbucks (SBUX) and Krispy Kreme (KKD) have been worthy adversaries in the battle for quick-
service dominance in the breakfast day-part. And now, competition from local coffee shops and
bakeries has grown, as well, with cultural changes in some urban areas resulting in an unfavorable
view for large restaurant chains. All the while, Restaurant Brands (QSR), the operator of Burger
King, recently made the move to acquire Tim Horton’s, the Canadian coffee distributor. Under
the wing of the burger chain, we may soon witness another attempt by the company to crack
Raw Material Costs: Coffee and other commodities are subject to substantial price fluctuations
and potential shortages. While there haven’t been particularly noteworthy price changes
recently (prices have actually declined over the last 3 months), we have seen the negative effects
that coffee shortages have had in the past. If commodity prices rise again, which is likely,
franchisees could witness reduced sales due to lower consumer demand stemming from higher
retail prices. Too, interruptions in the supply chain have the potential to magnify any potential
A Competitive Profile Matrix (CPM) can be used to compare one company to another across a
range of factors critical to success and is another strategic tool which can be useful in helping the
organization define their strategy. The total score for a given company shows how competitive that
Critical Success Factor Weight Rating Weighted Rating Weighted Rating Weighted
Score Score Score
Starbucks Corporation received a score of 3.85, while Dunkin Donuts received the second
highest total of 3.03 and Krispy Kreme coming in last with a total score of 1.73. Thus, Dunkin’
Donuts is stronger in the marketplace relative to Krispy Kreme. With a score differential of 1.3,
The External Factor Evaluation (EFE) Matrix is an analytical technique related to the SWOT
Analysis. EFE Matrix evaluates external position of the organization or its strategic intents.
Score
Opportunities
The donut store industry is estimated to be $11.6 billion and continuing to 0.10 4 0.40
grow
Through 2017, IBIS World projects industry revenue to accelerate to an 0.08 3 0.24
annualized rate of 3.8 percent to $13.9 billion
The number of industry locations is also projected to grow, at an annualized 0.07 4 0.28
rate of 2.7 percent to 20,653 by 2017
Coffee and other beverages account for 35 percent of total sales in donut 0.06 3 0.18
stores and will continue to be important to the sector.
Consumers are searching for healthier foods: IBIS expects healthy eating 0.05 1 0.05
index to rise 2.6% from 2015-2019
International expansion is anticipated to be the largest source of revenue and 0.05 3 0.15
profit growth for major players over the five years to 2021
International expansion to the Middle East, and China with 30,000 market 0.04 2 0.08
expected to be saturated in these location
Disposable income is expected to grow at a rate 2.5% over the next five years 0.02 1 0.02
The average consumer spent about 5.2% of their annual expenditure on food 0.02 2 0.02
and beverages consumed outside the home
Breakfast sandwich sales have increased 408% annually from 2007-2012 in 0.03 2 0.06
the fastfood industry
Threats 0.00
Healthy eating index is expected to increase to 66.9% in 2017 as consumers 0.09 2 0.18
diets progressively improve
The world price of coffee is projected to increase at an annualize rate of 1.1% 0.06 2 0.12
per year over the next five years
Droughts in Brazil are expected to cause harvest of popular Robusta and 0.05 2 0.10
Arabica coffee beans to drop by almost 10% over the next year
Worldwide consumption has shifted towards more expensive, premium blend 0.03 1 0.03
of coffee, which has caused the average price of coffee to rise to 200-300
cents per pound
The increase of local coffee shops in the area. Many people prefer to support 0.02 2 0.04
local business.
Environment agencies are encouraging more people to consume less meat, 0.02 2 0.04
which means investing more money in Research and Development
Starbucks is going to be offering home and coffee delivery in select markets in 0.08 1 0.08
late 2015 through post mates
Cultural changes in urban areas resulting in an unfavorable view for large 0.03 2 0.06
restaurant chains
Reduced sales due to lower consumer demand and steaming from higher 0.04 2 0.08
retail price 0.9% higher according to Investopedia
From the table above, the total weighted score of 2.27 is below the average of 2.5. This
indicates that the firm’s strategies are not capitalizing on opportunities or avoiding external
threats.
Dunkin’ Donuts Internal Strengths and Weaknesses
A. Strengths
Brand Recognition: With its strong geographic coverage, legendary variety of more than 1,000
doughnut products, and strong loyalty by the average Joe, Dunkin Donuts is one of the most
recognizable quick-service restaurants in the world. The company’s tag line “America runs on
Dunkin” reminds us of the loyalty that its customers possess for its pastries, bagels, muffins, and
coffee. It was this loyalty that thwarted an attempt by Canadian based Tim Horton’s to expand
its American market share in 2010. Meanwhile, DNKN’s Baskin-Robbins brand is one of the most
notable ice-cream parlors in the world. Its trademarked 31 flavors helped it grow in the 1940s
and 50s, and the company now has roots in many of the largest economic markets in the world.
valuable during breakfast hours. Many of its various locations offer drive-up service and others
are located strategically in and around airports, train stations, and travel ports that generally
necessitate fast service. The advance that the company anticipates in China and the Middle East
over the coming years will likely stem from the company’s growing position in these geographies.
But to weigh the value of this characteristic, one would need to look no further than the
increasing same-store sales figures for the company over the past year. Despite an unappealing
operating environment, it was still able to raise comps in the December term by 1.4%. This missed
expectations, but Dunkin still managed to perform better than some of its industry competitors.
B. Weaknesses
Poor Franchisee Relationships: In order to grow a franchised business, the franchisor must be
able to attract new ownership to manage its locations. The franchisor should offer a proven
business plan and support the needs of those that operate its storefronts. That said, Dunkin
Brands has a significant history of lawsuits with its franchisees. In 2010 alone, the company
experienced legal battles with 15 separate owners. And while those that have opened franchises
over the course of the company’s history have been able to fatten their wallets, this history of
bad relationships could be enough to deter potential investors from entering the DNKN family,
particularly when noting the bevy of successful franchises in a similar price range.
Domestic Expansion: Opportunities present in the emerging economies of the world are
intriguing for Dunkin’ Brands. However, maintained expansion within the United States may not
be as easy to come by over the long term. The current layout of restaurants suggests there is
little room for the company to grow in the Northeast, where the majority of its sales come from.
Too, when delving into the company’s geographic sales breakdown, sales volume significantly
drops off in the Midwest, and that could make it difficult to find franchisees willing to take a
that Dunkin Brands possess, and Opportunities & Threats that the company faces because of
SWOT analysis provides key insights into both internal and external factors that can
impact the performance of an organization. It can help the management of the organization to
optimize performance, look for new opportunities, manage competition, maximize return on
resources employed, and minimization of various business and policy making risks.
Strengths are the firm's capabilities and resources that it can use to design, develop, and
capabilities that are required but at present the organization doesn't have. Leaders have to be
certain if the weakness is present because of lack of strategic planning or as a result of strategic
choice.
Opportunities are potential areas where the firm can identify potential for - growth,
Threats are factors that can be potential dangers to the firm's business models because
2. Convenience Relationship
2. Domestic Expansion
thru. (S2,O2)
(S1,T1) (W2,S1)
Advantages and Disadvantages of SWOT Matrix
SWOT Matrix is a matching tool that is to generate feasible alternative strategies, not to
Although the SWOT matrix is widely used in strategic planning, the analysis does have
some limitations. First, SWOT does not show how to achieve competitive advantage. Second, it
is a static assessment. Third, it may lead the firm to overemphasize a single internal or external
factor in formulating strategies. The ability to link the external strengths and weaknesses of an
organization or its particular element with its external opportunities and threats is the key
analysis.
The critical disadvantage of using SWOT analysis is its limitation due to its tendency to
produce ambiguous and subjective information. This analytical tool cannot be used on its own
because it does not define the strategic implication of the identified strengths, weaknesses,
It is important to remember that SWOT analysis is not an actual strategic process. Instead,
it is an analytical tool used for generalized internal and external situational analysis, especially a
tool for facilitating critical and reflective thinking and brainstorming or exchanging ideas among
decision makers.
Financial Position (FP) Stability Position (SP)
Dunkin’ Brands is a franchise of quick service restaurants, selling hot and cold coffee,
baked goods and ice cream from more than 18,000 outlets worldwide. Dunkin’ Donuts fast
selling products include their range of burgers and iced teas/coffees, so they are listed in the star
category. Cash cows include the donuts which are popular but are less bought compared to the
star category. The problem child above is the question mark category which includes wraps and
other shakes which are on the verge of being extinct and generate less revenue. Last the dog
category includes the products which were bought to market but didn’t do well and hence
became extinct.
Rapid market growth and a strong competitive position put Dunkin’ Brands in an excellent
strategic position. For Dunkin’ Brands, continued concentration on current markets (market
strategy. Since Dunkin’ is too heavily committed to coffee and desserts, then related
diversification may reduce the risks associated with a narrow product line. They can take risks
1. How can Dunkin’ Donuts solve the problem about labor shortage?
on variety of markets. They should build quicker throughput and improve service.
If they can simplify their system, it will be better for their employees. They will like
working at Dunkin’ more than they already do and they can retain people in a very
2. How can Dunkin’ Donuts help guests in making decisions about their dietary preferences?
regulations and dietary preferences. DDSMART is a food that meet at least one of
the following criteria: 25% fewer calories or 25% less sugar, saturated fat or
sodium than comparable products on the menu. Make DDSMART as part of the
menu which will provide with great-tasting, quality products that meet certain
nutrition guidelines, including thresholds for calories, saturated fat, sodium, and
sugar.
The guests can find nutrition information, such as calorie, sugar and fat content
for each menu item, and obtain ingredient statements and information about
with organizations that support firefighters, public safety officers and troops at
Fulfilling critical hunger in the community through partnerships with local food
4. How can Dunkin’ Donuts continuously improve its product that would benefit the planet?
corporate facilities.
Sustainable Packaging
Dunkin’ Brands should create a reusable mug program for hot and iced beverages.
They should encourage their customers to bring their own mug to receive a
ANALYSIS
If Dunkin will streamline the menu, they can build quicker throughput and improve
service. They can reduce cost, attract more customers through nimble response,
drive higher revenue and compete effectively. If they can simplify their system, it
will be better especially for their employees. They will like working at Dunkin’
more than they already do and they can retain people in a very tough labor
market.
If Dunkin hire a diverse workforce, it will bring different and important
perspectives to our business. It will also build creativity. Diverse groups tend to
make better decisions and generate more innovative ideas. It could greatly
2. To help our guests make informed decisions about their dining experience.
guests with food sensitivities, allergies and dietary restrictions. It can help them in
making decisions that will address their diet, health and allergen concerns.
website where guests can obtain nutrition information, it will help in achieving
quicker throughput.
3. To help support causes that make a difference in the neighborhoods where employees
If Dunkin accept Safety for Our Neighborhood, it will provide a better place for
If Dunkin accept Food for Our Hungry, it will provide simple moments of joy to
sick and hungry kids because it will alleviate their hunger. As DNKN is in the food
business industry, it will not incur much cost if DD is going to partner with other
If Dunkin implement energy efficiency measures, it will reduce utility costs and it
will help in reducing carbon footprints and do their share in protecting the
environment.
If Dunkin decide to promote a reusable mug program for its packaging, it will help
The purpose of analysis is to assess what should Dunkin Brands choose between the
alternatives given on each of the four priorities. In achieving the objectives, it is necessary to
understand some factors that might affect the decision that should be taken. The group findings
are as follows:
To achieve this objective, DNKN should know the factors that could affect the unity
of their employees. If they streamline their menu to utilized their employees more
efficiently, who are then able to provide customers with faster and more accurate
service, and of course maximize profits for franchise owners. And if they hire a
diverse workforce, it will add immeasurable value to the team and help drive the
brand forward. It will also encourage more applicants from diverse community as
To attain this, DNKN culinary, consumer insights and marketing teams should work
together to identify the latest lifestyle trends and food and beverage innovations.
If they offer better-for-you choices, it will not show transparency as you are
guiding them by going ahead without knowing what specific dietary restrictions
the food items and nutrition information, it would be beneficial for both parties
as you are not going to ask already the cashier the nutrition content of the menu.
3. To help support causes that make a difference in the neighborhoods where employees
provide financial support to local non-profit group who are feeding the hungry,
caring for sick children and ensuring the safety of others. This will improve DNKN
community relations.
4. To further improve the products offered that would give a positive environmental
impact.
To achieve this objective, DNKN should discern first what environmental ways
measures, globally, it will reduce the damage that we’re doing to our planet and
our dependence on fossil fuels that are becoming increasingly limited in supply. It
will also reduce utility costs that is becoming increasingly important as energy
costs rise. If DNKN choose to implement the reusable mug program, it will just give
a minimal impact on our planet as some of the consumers will forget to bring their
own mug if they came from important occasions and it will be a hassle for them.
Recommendations
1. How can Dunkin’ Donuts solve the problem about labor shortage?
Between the two alternatives given to resolve this problem, it will be better to
from the ability to win top talent to improving customer relations to harvesting
more qualified leaders which in-turn lead to better decision making. Ultimately,
all these wins bring a competitive advantage and rich returns. A diverse workforce
is a symbol of robust and inclusive culture. Potential hires want to feel that they’d
be welcomed if they accepted an offer. And they want to feel like there is a path
forward for growth. The diverse they become, the greater talent pool they will
attract. And once they have a diverse team in place, they’ll reap the rewards. Thus,
2. How can Dunkin’ Donuts help guests in making decisions about their dietary preferences?
as customers are now aware of how different ingredients affect their health. They
are avoiding foods that can cause harm to their bodies as well as the environment.
DNKN must take action and provide more transparency in the nutrition labels on
their products. They must be transparent about the menu items nutrition
information by making a website that contains the nutrition labels of menu items.
In that way, they are achieving transparency at the same time it will make quicker
throughput because customers will not consume more time in ordering their food
around the globe, and their franchisees value the role they can play in
where its franchisees, potential investors, and loyal customers can give donations
Our Neighborhood and Food for Our Hungry. Performing these two alternatives
4. How can Dunkin’ Donuts continuously improve its product that would benefit the planet?
They should turn off menu boards, televisions, café lights and display case lights
every night across all facilities. Replace the fluorescent lighting in the offices with
more efficient LED lighting. Upgrade to ENERGY STAR certified vending machines.
In this way, we can reduce energy consumption. Therefore, it will save our natural
resources and cut down on pollution. Apart from saving energy means saving
money.