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Copyright!©!2017!Pearson!Education,!Inc.!1!Dunkin’ Brands Group Inc. – 2015 Forest R. David
- Case Abstract
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 11,000 Dunkin’ Donuts restaurants in 40 states and 32 foreign countries, and 7,300 Baskin- Robbins restaurants in 43 states and 46 foreign countries, Dunkin’ is one of the world’s largest franchisors of quick-service restaurants (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, wh ich caters to consumers in a hurry. Dunkin’ is a speed leader among QSR, even given increased ticket volume and menu complexity.B.Vision Statement !(actual) To be recognized as a company that responsibly serves our guests, franchisees, employees, communities, business partners, and the interests of our planet.(Proposed) Our vision is to be recognized as having the most responsible brands with unbeatable quality, affordability, and convenience in baked goods, coffee and ice cream specialty products.C.Mission Statement (proposed) Dunkin’ Brands aspires to be the leading company in the coffee, donut, and ice cream industries (3) by providing baked goods, coffee, and ice cream specialty products (2) to busy consumers (1) worldwide.We pride ourselves on offering superior quality, service, and convenience. (7) We are committed to responsibly serving (6) our customers, franchisees, employees (9), and communities, while focusing on a sustainable and green future. (8) We seek to be the leading quick service restaurant in our industries by keeping up with the latest technologies (4) and insight to grow sales (5).
1.Customers 2.Products or services 3.Markets 4.Technology 5.Concern for survival, growth, and profitability 6.Philosophy 7.Self-concept 8.Concern for public image 9.Concern for employees St rategic Management A Competitive Advantage Approach, Concepts and Cases, 1 6e Fred David, Forest David (Solutions Manual All Chapters, 100% Original Verified, A+ Grade) 1 / 4
Copyright!©!2017!Pearson!Education,!Inc.!2!D.External Audit Opportunities 1.There is a growing demand for catering services or home and office delivery.
2.Consumers are searching for healthier foods: IBIS expects the healthy eating index to rise 2.6% from 2015-2019.
3.Increasing demand for products to be sold in retail stores: 29% of coffee drinkers said they use a single-cup brewer to get their daily caffeine fix.
4.Breakfast sandwiches are the new burgers; breakfast sales at fast-food chains increased by 4.8% annually from 2007-2012.
5.Gluten free allergies are becoming more prominent in the US. About 20 million Americans have celiac disease and 30-50% of the population have gluten sensitivity.
6.Although the price of coffee has increased, the consumption will continue to slowly increase at an annualized rate of 1.3% in the next five years.
7.Lactose intolerant products are a major worldwide need. Two-thirds of the world's adu lt population have trouble digesting milk.
8.Due to the health benefits of tea, consumption is projected to rise at an annualized rate of 1.0% over the next five years.
9.Low interest rates to refinance outstanding debt or expand.
10.Disposable income in the US will grow at a rate of 2.5% over the next five years.Threats 1.Price of coffee is projected to increase by 1.5% each year for the next five years.
2.Starbucks is going to be offering home and office delivery in select markets in late 2015 through Postmates.
3.Consumers are searching for healthier foods: IBIS expects the healthy eating index to rise 2.6% from 2015-2019.
4.Tim Hortons has a gluten-free coconut macaroon.
5.About 40 million Americans are lactose intolerant. This also affects different ethnic and racial groups. Based on research, 90% of the Asian population is lactose intolerant.
6.Starbucks K-Cups sales increased 47% in 2013.
7.Restaurant Brands International purchased Tim Hortons and will most likely expand into the US.Canada also has a lower tax rate than Dunkin' Brands does in the US.
8.Krispy Kreme launches Hot light android app.
9.Starbucks has acquired Teavana Holdings.
10.Starbucks has a loyalty program where customers receive stars for buying products in stores and at grocery stores and other retail locations. 2 / 4
!Copyright!©!2017!Pearson!Education,!Inc.!!3!Competitive Profile Matrix
Dunkin’ Brands enjoys a distinct advantage over Starbucks on pricing but the firm is struggling mightily on its debt load with over $1.8 billion in long-term debt as of fiscal year end 2014. Dunkin’ is difficult to compare to rivals Starbucks and Krispy Kreme since Dunkin’ also offers Baskin-Robbins ice cream and Starbucks does not offer donuts at all. Nevertheless, Dunkin’ Brands clearly competes with Starbucks on the morning coffee business.EFE Matrix
Weight RatingScoreRatingScoreRatingScore
0.06 2 0.12 4 0.24 1 0.06
0.11 3 0.33 1 0.11 2 0.22
0.08 2 0.16 4 0.32 3 0.24
0.10 4 0.40 3 0.30 2 0.20
0.09 3 0.27 4 0.36 1 0.09
0.12 3 0.36 4 0.48 1 0.12
0.09 3 0.27 4 0.36 2 0.18
0.05 3 0.15 4 0.20 1 0.05
0.07 2 0.14 4 0.28 3 0.21
0.08 2 0.16 4 0.32 3 0.24
0.11 1 0.11 4 0.44 2 0.22
0.04 2 0.08 4 0.16 3 0.12
1.00 2.55 3.57 1.95
Store Locations Cus tomer Service Product Quality Debt Ratio Critical Success Factors Dunkin' Brands StarbucksKrispy Kreme Market Share Product Line Advertising Price Competitiveness Financial Position Cus tomer Loyalty Glo b a l Exp a n s io n Totals Employee Dedication OpportunitiesWeightRatingWeighted Score 1.There is a growing demand for catering services or home and office delivery.
0.07 1 0.07
2.Cons umers are s earching for healthier foods : IBIS expects the
healthy eating index to rise 2.6% from 2015-2019.
0.06 2 0.12
3.Increasing demand for products to be sold in retail stores: 29%
of coffee drinkers said they use a single-cup brewer to get their daily caffeine fix.
0.05 3 0.15
4.Breakfas t s andwiches are the new burgers ; breakfas t s ales at fast-food chains increased by 4.8% annually from 2007-2012.
0.05 3 0.15
5.Glu t e n fre e a lle rg ie s a re b e c o min g mo re p ro min e n t in t h e US.About 20 million Americans have celiac disease and 30-50% of the population have gluten sensitivity.
0.05 1 0.05
6.Although the price of coffee has increased, the consumption will continue to slowly increase at an annualized rate of 1.3% in the next five years.
0.05 2 0.10
7.Lactose intolerant products are a major worldwide need. Two- thirds of the world's adult population have trouble digesting milk.
0.05 1 0.05
8.Due to the health benefits of tea, consumption is projected to rise at an annualized rate of 1.0% over the next five years.
0.04 2 0.08
9.Low interes t rates to refinance outs tanding debt or expand.0.03 2 0.06 10.Disposable income in the US will grow at a rate of 2.5% over the next five years.
0.02 2 0.04 3 / 4
!Copyright!©!2017!Pearson!Education,!Inc.!!4!
Dunkin’ Brands is performing below average in addressing external issues with an EFE score of 1.73. Key areas to address are the threats posed by Tim Hortons moving further into the US market, competitors offering more lactose- free options on their menus, and the growing trend of healthier eating.
- Internal Audit
- For Dunkin’ Donuts, 60% of the company revenue is from coffee.
- Dunkin' Donuts has the #1 ranking for customer loyalty in the coffee category by Brand Keys for the
- Dunkin' Brands has an asset light business mode because 99.0% of their stores are franchised.
- American Customer Satisfaction Index rated Dunkin' Donuts the number one coffee brand in 2013.
- In the doughnut industry, Dunkin' Donuts has 56.4% market share.
- In the fiscal year of 2014, Dunkin' Brands recorded an operating margin of 45.3% compared to
- Dunkin' Donuts sells more than 1.7 billion cups of iced and hot coffee globally each year.
- Dunkin' Brands has a Nutrition Advisory Board to develop and reformulate products to meet the
- Over 65% of the Baskin-Robbins stores are located internationally and represent the majority of the
- Dunkin' Donuts has a perks loyalty program fostered through the Dunkin' Donuts App which has 5
Strengths
last 8 years.
Starbucks at 18.7%.
changing needs of the customers.
brand’s international sales.
million downloads.
ThreatsWeightRatingWeighted Score
- Price of coffee is projected to increase by 1.5% each year for the
next five years.
0.03 2 0.06
2.Starbucks is going to be offering home and office delivery in select markets in late 2015 through Postmates.
0.10 2 0.20
3.Cons umers are s earching for healthier foods : IBIS expects the
healthy eating index to rise 2.6% from 2015-2019.
0.06 2 0.12
4.Tim Hortons has a gluten-free coconut macaroon. 0.06 1 0.06 5.About 40 million Americans are lactose intolerant. This also affects different ethnic and racial groups. Based on research, 90% of the Asian population is lactose intolerant.
0.05 1 0.05
6.Starbucks K-Cups sales increased 47% in 2013. 0.05 2 0.10 7.Restaurant Brands International purchased Tim Hortons and will mo s t likely exp an d in to th e US Can ad a als o h as lo wer tax rate than Dunkin' Brands does in the US.
0.09 1 0.09
8.Krispy Kreme launches Hot light android app. 0.03 2 0.06 9.Starbucks has acquired Teavana Holdings.0.03 2 0.06 10.Starbucks has a loyalty program where customers receive stars for buying products in stores and at grocery stores and other retail locations.
0.03 2 0.06
TOTALS1.00 1.73
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