Introduction
The food industry is a competitive industry with many players from the local and international market. The market has a steady market since food unlike other luxuries is a basic human need. Fast food players have dominated the market for years with firms like Dunkin’ Donuts existing since 1950. The company was formed by William Rosenberg who initially set up the company as a doughnut and baked foods shop in Quincy, Massachusetts. The company has expanded over the years and diversified its activities to include coffee sales in the local and global market.
The company has over 10,000 outlets and is situated in 32 countries in its bid to dominate the global market. Most of the outlets are located in the home market making it competitive in the local market to players like Starbucks who dominate the coffee industry. During the last year, the company announced its intentions to expand its market through rapid expansion of its activities. To achieve this company announced an initial public offer of almost half a billion dollars to fund its operations. The success of the company to make high global sale in a time of economic recession has seen the company ranked first with respect to customer loyalty to brand (Cravens, Crittenden & Lamb, 2002).
The company produces a wide variety of products especially in the doughnut variety where it produces over 1000 different types of donuts to give the customers a variety to select from. To survive in the competitive food industries, the company has used tactics such as product diversity and steady marketing to ensure that the company makes high sales. Brand awareness should be emphasized to ensure that customers do not confuse the products from one company for another. The company has a website to improve its sales and advertisement strategy. The company participates in social events through sponsorship to advertise the brand. The company also uses offers to attract customers to company. Using globalization to expand the business puts the organization in a better position to compete adequately in the market compared to organizations that exist in one market.
Competitive advantage
The company’s target market enables the franchise to increase its sales in the market. The company targets an age group of 16-60 in the American market who would like to benefit from the fast services provided by the market. The name attracts kids in the market further busting the company’s sales. The company serves a variety of products which tend to maintain a steady flow of clients. The company also uses a combination of donuts and coffee to increase clients over its competition. Technology has enabled the company to increase it interaction with clients and improve the quality of services offered.
The company uses a lot of money on advertisement as evaluated from it annual cost of advertisement. This enables the company to participate in community based projects and ensure brand awareness in the market. Popularizing the brand name is crucial in maintaining high annual sales in the market. Training of staff to ensure that the company maintains a high level of service to its clients enhances the company’s competitive advantage in the market. The relationship between the workers and the clients governs the client’s perception of the company (Rangaswamy, 2007).
By ensuring quick service and professional handling of the customers, the company is able to maintain a strong relationship with its customers. Creating a strong relationship with the customers promotes loyal customers to the company thus a steady client base. The company has also used a combination of media outlets to ensure that the public is aware of the products sold. The company has used television, radio, printed and social media to ensure that the public is made aware of the company’s products.
The competition in the food industry constantly changes with regards to customer trends in the market. The company has to modify its products to ensure that they align themselves with the changing market trends. The coffee house businesses suffer competition from nationalized coffee house chains and small franchise chains in the market. The competitive advantage by the company is that it is a large distributer by cup compared to its competitors in the market.
Competitors
Dunkin’ Donuts faces competition directly or indirectly from other food distributers in the market. Krispy Kreme is a major competitor of the company with regards to snack foods in the market. Starbucks is the major competitor with regards to coffee sales in the market, while McDonalds is the major competition with regards to breakfast food in the market. The company’s plans to expand after the initial public offer will increase its outlets in America and the global market. Expansion of the franchise will result to increased competition especially between the major competitors in the market. Indirect competition with fast food restaurants will increase as the two organizations will have competing breakfast commodities. Other forms of competition include the nationalized coffee houses in the market, the fast food restaurants and the snack shops (Schermerhorn, 2012).
SWOT Analysis
SWOT analysis analyses the company’s strengths, weakness, opportunities and threats with regard to the internal and external environment in which the company exist. One of the internal strengths of the company is being in the business for over six decades and producing quality products. This enables the company to build on a strong reputation and an already established client base in the market. The company coffee sector dominates the market by offering more coffee per cup compared to other players in the market. This improves the company’s image in the market and enables the company to attract more customers.
The company insists on using pure Arabica coffee which is of a higher quality compared to other beans in the market. The company has qualified staff that are trained to ensure that each customer is silicified with the services and products provided by the company. The company mails it customer’s coupons for discounted prices. This ensures that the clients visit the sales outlet to redeem their coupons. This creates a culture where customers visit the coffee house on a regular basis thus increasing the revenue generated.
The internal weakness facing the company is over investing in advertisement compared to other players in the market. The company allocates a chunk of its revenue to the marketing department which in turn uses a lot of money on creating brand awareness. Brand names such as Krispy Kreme use very little of their resources on advertising and still make relatively high sales in the market. The cost of raw material used to make its products is on the increase causing the company to increase its prices. This will affect the company’s ability to compete adequately in the food market. The company’s reputation is built on quality which has been expensive to attain in the current economy (Sabherwal & Becerra-Fernandez, 2011).
The company faces threats such as competition from the main competitors in the market. The company also faces the threat of a rapidly changing market with people adjusting to consume healthy products which are organic. Entry into the coffee, doughnut and snack market is easy exposing the company to new entrants into the market. The company can use its opportunities to grow to ensure that it increases its revenue. The untapped foreign market can be an opportunity for the company to expand its operations in the market (Werner & Hurdle, 1976).
Sustainable green initiative efforts
With emphasis on global warming and destruction of the atmosphere on the increase, the use of sustainable resources and production methods has been emphasized. The company has been cooperating with other organization to ensure that green living is facilitated. The company uses sustainable building designs in its outlets to facilitate efficient use of natural resources and reduce carbon emissions. The use of these designs has enabled the organization to use sustainable building material and reduced the dependence on artificial lighting. The outlet designs use natural light which reduces the electricity bills and pollution. Some of these sustainable building designs are located in Florida.
It is the company’s policy to ensure that the franchises use the store already existing to reduce the carbon emission and utility bills. The company has also educated it staff on ensuring that sustainable methods of production are followed to reduce cost. The company has also joined with other organizations like CERES which aim at improving sustainability performance across the organizations. By joining this organization, the members have to report regularly on their social and environmental performance as a way to measure continuous improvement (Sidhpuria, 2009).
The supply chain
The company uses three main chains to supply its products to the consumers. The first way is to serve the customers who visit the franchisees to buy the products directly. This comprise majority of the customers and the interaction with the workers determines the ability of the company to maintain high sales. The company also uses online sales to make sales; this is where the company uses its website to sell to the customers. The customers can place their orders with the company and they will be delivered to the client. The company can also sell its products through its franchisees to ensure that the organization captures the market. The company maintains high efficiency in the way that it operates in the market through these supply chains to enable the clients to get the required customer experience (Rosenbloom, 2009).
Corporate social responsibility
Corporate social responsibility refers to the manner in which the organization relates to the community around its outlets and the society. Corporate social responsibility governs the organizations decision making as the organization strives to achieve its goals. Dunkin’ Brands ensures it behaviour is according to the corporate social responsibility statement which guarantees respectable behaviour towards all the stakeholders in the company (Vitale, 2006).
The company’s vision is to serve responsibly all the stakeholders involved in the running of the business. The stakeholders to Dunkin’ brand include the franchisees, workers, society, guests, customers and partners to the company. The company’s priorities include the people, the guests, the neighborhood and the planet. The company has been exercising its social responsibility that ensures sustainable raw material sourcing and diversification of its workers. The company has also set up relief fund aimed at ensuring that all the workers affected by disasters are catered for by the company.
References
Cravens, D. W., Crittenden, V. L., & Lamb, C. (2002). Strategic marketing management cases. Boston [u.a.: McGraw-Hill Irwin.
Rangaswamy, P. (2007). South Asians in Dunkin’ Donuts: Niche Development in the Franchise Industry. Journal Of Ethnic & Migration Studies, 33(4), 671-686.
Rosenbloom, B. (2009). Marketing channels. S.l.: South-Western.
Sabherwal, R., & Becerra-Fernandez, I. (2011). Business intelligence: Practices, technologies, and management. Hoboken, NJ: John Wiley & Sons.
Schermerhorn, J. R. (2012). Exploring management. Hoboken, N.J: Wiley.
Sidhpuria, M. V. (2009). Retail franchising. New Delhi: Tata McGraw-Hill Education.
Vitale, D. (2006). Consumer insights 2.0: How smart companies apply customer knowledge to the bottom line. Ithaca, NY: Paramount Market Publ.
Werner, R. O., & Hurdle, J. (1976). IV. REGULATION OF CHANNELS OF DISTRIBUTION. Journal Of Marketing, 40(4), 114-116.
