Situational Analysis for Dunkin Donuts

 Buyers of Dunkin Donuts have plethora of choices. There is stiff competition given by companies like Starbucks and MacDonald. Along with that there are new entrants in the market. Naturally the company has to keep the price competitive and have to provide high quality to attract customers. 

Bargaining Power of Suppliers

Suppliers have comparatively low bargaining power in this industry. They need to supply quality ingredients as per the client’s expectations. Some large companies like Continental Mills, Rich Products Corp and Dean Food are part of the procurement process of Dunkin.

Internal Environment of the Firm

Firm Structure

The Dunkin Donuts restaurants are spread across the world as franchises. The owner. The chain of restaurants operate separately in each location but are committed to deliver the same goods and services and the same taste of food as is the hall mark of Dunkin Donuts. It is on franchise basis that the firm operates in almost twelve thousand locations in thirty-six countries.

Firm Culture

Dunkin Donuts operates 24x7 and gives high value to the customer satisfaction. It is strict with its franchises in terms of serving quality. It has been alleged that Dunkin Donuts has the most number of legal proceedings against its franchises who failed to adhere to its norms and guidelines. The management expects agile administration and quality food and service served to the customer to keep its good fame intact. The foods are mainly served as take away and are especially favorable as snacks. It is a way to serve nutrition to the fast-paced livelihood of the people, especially in America. Hence the franchises are especially favourable among the working mass.

According to Glassdoor review, there is constant pressure to serve the customer right and on time, the culture of the firm may be stressful for an employee while it is refreshing and assuring for the customer who pays the buck. Serving the people on time and with precision requires high levels of energy; hence at the service levels Dunkin employs young people who need ready money to make their livelihood from.

Firm Resources

The resources of Dunkin Donuts mainly come from America. Fresh coffee-beans, milk, cheese, butter, vegetables, meat, chicken and ham all comprises the raw materials for the preparation of food at Dunkin Donuts. The franchises need monetary investment and to serve the customer, great labour force is required. The young millennia generation mainly forms the human resource of the company. The business also requires logistics, both local and international to make the business commodities available to the franchises. It also requires good storage system.

As we summarize our findings, SWOT Analysis of Dunkin Donuts is outlined.

Strengths

Dunkin which has a strong geographical presence is a well-known and highly recognizable brand all over the world. Dunkin’s customers are loyal to the products it offer. The company tagline “America runs on Dunkin” aptly describes it.

Dunkin is convenient to have due to its strategically located stores which are mainly situated near to the railway stations, airports etc.

Dunkin is known for its excellent supply chain. Dunkin has the model of centralized manufacturing. Dunkin Donuts have broad market coverage and are known for their manufacturing competence. The franchise structure is well developed to reach out to the customers.

Weaknesses

There is a poor relationship between the company and its franchises. In 2010, the company had legal battle with fifteen of its franchisees .Dunkin is also facing difficulty to expand the business domestically in US (Pratap,2018) . The rising cost of manufacturing of the products is also one of its weakness which it needs to sail through.

Opportunities

There are number of emerging economies where Dunkin has the plan to expand its business. If Dunkin continues with its expansion policies the company is certainly going to have material benefit. Dunkin is targeting the health segment. It is coming up with low calories products. Soon they will be reaping the benefits of providing healthy snacks to the customers.

The lifestyle trends of global customer snacking more between shifts of work and depending on takeaways are the opportunities for Dunkin donuts to grow on its business. The new USP of shifting its focus on coffee has helped the company to gain on the millennial customer base.

Threats

Companies like Starbucks and Krispy Kreme are giving stiff competition to Dunkin. Competitions from local brands are also affecting the business. The shelf life of bakery products is quite less. The bottom line of the business is affected. The cost of raw materials and logistics are high and thus require attention. Added to all these are the costs of rising labour while on the other hand the stiff competition compels to keep the products at a range of competitive pricing giving the best qualities that can be served.

SWOT diagram:

Conclusion

Concluding from the situational analysis, we can apprehend that the business prospects of Dunkin Donuts are huge. Though already it is doing steady business in 12000 franchises over 36 countries, it has room for further improvement (Dunkin Brands: 2017, Annual Reports). It can impart training and mentoring for the franchises instead of being too stern with legal suits. Reward and recognition of the franchise staffs can go a long way in inculcating the sense of responsibilities further. Since competition is high in both internal and external markets, it is imperative that the company finds out innovative ways of snacking with quality products at low cost.

Answer to the Questions of Case Study

Answer of Question 1

When a company like Dunkin Donuts change its product or rather the brand product to other products, there is problem of losing the old customer base. The Donuts focus has been shifted to coffee. So there needs to be acquired new customer through the branding of coffee who may be different from those who bought the Donuts. It is however wise that Dunkin has not given up on Donuts totally. This way it will be easier for the company to retain new customer while keeping back the old loyal customers who liked the Donuts (Bhasin and Singh, 2018).

In the marketing strategy, Dunkin should canvass for coffee along with the Donuts. This will bring it success in terms of retaining both old customer base and gaining the new customer. Creating the strategy of Marketing Mix where coffee goes with Donuts perhaps with some concessions or with other specialities will be highly appreciated by the customer, more so because coffee and donuts are but complementary products that one may like to have together.

Answer 2

Dunkin Donuts sells mainly donuts with coffee and also serve other light foods. On the other hand Starbucks concentrate on beverage. Dunkin Donuts is more competitive in pricing and gives value to the food offered while Starbucks catches the youth segment and provides them with refreshing ambience of the coffee house where they can chill themselves.

As a marketing personnel I would brand Dunkin Donuts more for the value it offers for food and target the segment of middle class people who would like to have good snacks along with their coffee at a reasonable price. Surely this segment is huge and if targeted properly will be a source of good revenue for the company.

Answer 3

Both Dunkin Donuts and Starbuck engage in customer loyalty programmes and have method of rewarding their loyal customers. But customers tend to switch between companies whatever loyalty bonus they may accrue. The best innovative way to hold customers, other than the loyalty program is to increase the branding (Deventhal, 2019). By providing the coffee and Donuts to sports star at play-fields or promoting the product through some brand ambassador, the company can increase the face-value of the product. Another innovative way is to provide health conscious foods with the coffee cup and promote it for its health value. In fact competing with the competitor for enhancing customer loyalty is really a tough game and the company has to be very vigilant and active to maintain the customer loyalty (VRIO Analysis - Starbucks and Dunkin Donuts, 2016). Small programmes like wishing the customer on his or her birthday with some free gifts are the kind of spending and innovation that the company may think of doing.

References

Company history and background, retrieved from dunkindonuts.com

Meat consumption and the environment: Study calls for eating less meat, 2012, June28, Huffington Post

Zuckerbrot, T. 2014, Fast Food can be waist friendly, Fox News.

Dunkin Brands (2017); Annual Report.

Wahlen, J.Baginski, S. & Bradshaw, M 2014.Financialn reporting, financial analysis and

valuation, USA; Nelson Education

Delventhal, S. (2019, March 26). Starbucks vs. Dunkin': Which Coffee and Snack Chain Is Better? Retrieved April 16, 2019, from ps://www.investopedia.com/articles/markets/120215/starbucks-vs-dunkin-donuts-comparing-business-models.asp

VRIO Analysis - Starbucks and Dunkin Donuts. (2016, September). Retrieved April 16, 2019, from https://sites.google.com/site/starbucksanddunkindonuts/business-strategy/vrio-analysis

Pratap, A. (2018, November 15). Dunkin Donuts SWOT Analysis. Retrieved April 16, 2019, from https://notesmatic.com/2017/07/dunkin-donuts-swot-analysis/

Lake, L. (n.d.). Here Is Important Information for Conducting a Situation Analysis. Retrieved April 16, 2019, from https://www.thebalancesmb.com/purpose-and-elements-of-a-situational-analysis-2295754

KOTLER: Marketing management_p4. (2019). Place of publication not identified: PEARSON EDUCATION Limited.

Bhasin, H. & Singh, Z. (2018, March 03). Marketing Strategy of Dunkin donuts - Dunkin donuts Marketing Strategy. Retrieved April 16, 2019, from https://www.marketing91.com/marketing-strategy-of-dunkin-donut